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 IN THE MATTER OF ARBITRATION AND AWARD 
 UNDER THE 142nd SECTION OF THE BRITISH 
 NORTH AMERICA ACT, 1867. 
 
 BETWEEN 
 
 THE PKOVINCE OF ONTARIO, IN THE DOMINION OF 
 
 CANADA, 
 
 AND 
 
 THE PROVINCE OF QUEBEC, IN THE DOMINION OF CANADA. 
 
 RECORD OF PROCEEDINGS. 
 
 FIRST MEETING OF ARBITRATORS. 
 
 The Arbitrators appointed under the provisions, of the 142nd Section of RECORD. 
 
 " The British North America Act, 1867," met pursuant to notice in the Com- 
 
 mittee Room, No. 8, of the Parliament Buildings, House of Commons side, 
 in the City of Ottawa, at noon on the Slst day of August, 1869. Present : 
 The Honoraole John Hamilton Gray, the .Arbitrator chosen by the Govern- 
 ment of Canada ; the Honorable David Lewis Macphekson, the Arbitrator 
 chosen by the Government of Ontario; and the Honorable Charles Dewey 
 ^" Day, the Arbitrator chosen by the Government of Quebec. 
 
 The Honorable Edmund Burke Wood, the Treasurer of the Province of 
 Ontario, appeared on behalf of the Province of Ontario, and the Honorable 
 Christopher Dunkin, the Treasurer of the Province of Quebec, appeared on 
 behalf of the Province of Quebec, along with Mr. Ritchie, of Montreal, and 
 Mr. Casault, of Quebec, as his Counsel. 
 
 The Arbitrators ordered that the Commissions appointing t..xe said Arbitrators 
 should be produced antl read, and entered on the minutes ; and they were 
 produced and read accordingly, and are in the words following : — 
 
RECORD. C 2.^ 
 
 (COMMISSIONS.) 
 
 SEAL : MONCK. 
 
 CANADA. 
 
 Patent ap- 
 pointing the 
 Hon. J. H. 
 Gray, arbi- 
 trator, 
 under 142 
 Sec.,B.N.A. 
 Act, 1867. 
 
 -I 
 e 
 
 g ^ 
 
 ■< 
 
 
 Victoria, by the Grace of God, of the United Kingdom of Great 
 Britain and Ireland, Queen, Defender of the Faith -^jc 
 .u ^o^^o^^^^e John Hamilton Gray, of the City of St. John, in 
 the Irovmce of New Brunswick, in our Dominion of Canada 
 iLsquire, and to all to whom these presents shall come, Greeting. 
 
 T^rit,-!I^^S'^M'A ^''^- \^^^ ''"^ hundred and forty-second Section of "The 
 
 mei of th« Hi'?'''''%^''v'f -f ' '' '' '""^'^^ '^^' '^^ di^i«i«" a^d adjust lo 
 
 ?Zj nL r' 1 '' ^^^'ed^V^'u'^^^l'^'"'' properties and assets of Upper Caiada 
 
 and Lower Canada should be referred to the arbitrament of three arbitrators 
 
 one chosen by the Government of Ontario, one by the Government of Quebec 
 
 f.«l""'i ^^1*'" Government of Canada; and that the selection of the arbl' 
 
 trators should not be made until the Parliament of Canada and the Legislatures 
 
 Int nTn^''^^"f^'?^^'^ T ' ^"^ '^^^ '^'^ arbitrator chosen by the Govern- 
 ment of Canada should not be a resident either in Ontario or Quebec. And 
 
 hive met ^ ^'^^''"'""^ ^^ ^^"^^^ ^"^ ^^^^ Legislatures of Ontario and Quebec 
 
 And whereas one arbitrator (to wit: The Honorable David Lewis Mac- 20 
 C;r-^ The nr ' hr'r\^^ the Government of Ontario, and one arbitmtor 
 menT of Quebl ' '^'^ ^^^'^ ^^^ ^''" "^°'^^ ^^ '^^ ^<^^ern- 
 
 And whereas it is expedient that in pursuance of the said hereinbefore 
 recited Act one arbitrator should be chosen by the Government of CaTda fo? 
 the purposes m the hereinbefore recited section of the said Act niendoned 
 and we have thought tit to appoint you the said John Hamiton Gray not 
 being a resident either m Ontario or Quebec, to be such arbitrator. ^' 
 
 JNow Imow ye, that reposing especial trust in the loyalty, abilitv and in- 
 tegrity of you, the said John Hamilton Gray, We of our especM Sacf a^^^^ 3o 
 our good will and pleasure, and by and with the advico o' .ur PrivrCouncU 
 for C^nada^ do by these presents nominate, constitute au. appoii7you Te 
 said John Hamilton Ciray, to be the one Arbitrator chosen by the Government 
 of Canada in pursuance of and under the authority of the said one hundred 
 
 A l^"f ,T^ ^''^;?" °^ "^^^^ ^"^^^'^^ North America Act, 1867 "and for 
 andonbehalf of the Government of Canada, to arbitrate together wUh the 
 Arbitrators chosen by the Governments of Ontario and Quebec resp^cdvelv 
 
 Act i8?7 "ToU'h TrK'T ''''''f}'' ^'i ^y '"^^^ ^r^^^h NorthTmerta 
 Act, 1867, to such arbitrators. And we hereby confer upon you full power 
 
 and authority as such Arbitrator, as aforesaid, to act together wi^h the other 4o 
 
 Arbitrators m the said recited section referred to, in and about the division 
 
 and adjustment of the debts, credits, liabilities, pr(,pertierand assets of'^Ker 
 
 Canada and Lower Canada, and concerning every matter and thing rektLg 
 
 10 
 
 20 
 
 ai 
 h£ 
 cc 
 
 pi 
 
 SOB: 
 A 
 m 
 
 or 
 
 th 
 D 
 ac 
 A 
 
 40fr( 
 th 
 
of Great 
 
 John, in 
 Canada, 
 'eeting. 
 
 of " The 
 d adjust- 10 
 ' Canada 
 bitrators, 
 
 Quebec, 
 the arbi- 
 >islatures 
 
 Govern- 
 !C. And 
 
 I Quebec 
 
 ns Mac- 20 
 
 rbitrator 
 
 Govern- 
 
 5inbefore 
 lada, for 
 mtioned, 
 ray, not 
 
 ' and in- 
 ace and so 
 
 Council 
 ^ou, the 
 ernment 
 hundred 
 
 and for 
 v^ith the 
 ectively, 
 \merica 
 
 II power 
 le other 40 
 division 
 
 ' Upper 
 relating 
 
 10 
 
 thereto ; and to award thereon by virtue of " The British North America Act, RECORD. 
 
 1867," and according to the true intent and meaning thereof 
 
 To have and to hold the said office of Arbitrator during our pleasure. 
 In Testimony whereof we have caused these our Letters to be made Patent, 
 and the Great 8eal of Canada to be hereunto affixed. Witness our 
 Right Trusty and well beloved Cousin the Right Honorable Charles 
 Stanley, Viscount Monck, Baron Monck of Ballytrammon, in the County 
 of Wexford, in the Peerage of Ireland, and Baron Monck of Bally- 
 trammon, in the County of Wexford, in the Peerage of the United 
 Kingdom of Great Britain and Ireland, Governor General of Canada, 
 &c., &c., &c. 
 At the Government House in our City of Ottawa, this twenty-third day 
 of May, in the year of our Lord one thousand eight hundred and sixty- 
 eight, and in the thirty-first year of our Reign. 
 
 By Command, 
 
 Hector L. Langevin, 
 
 Secretai'y of State. 
 
 20 
 
 SEAL 
 
 N. F. Belleau. 
 
 CANADA. 
 
 PROVINCE OF QUEBEC. 
 
 . Victoria, by the Grace of God, of the United Kingdom of Great 
 Britain and Ireland, Queen, Defender of the Faith, &c., &c., &c. 
 To the Honorable Charles Dewey Day, of the City of Montreal, in our 
 Province of Quebec, Greeting. 
 
 Know you that reposing trust and confidence in your loyalty, integrity 
 and ability, We of Our Especial Grace, certain knowledge, and mere motion 
 have nominated, constituted and appointed, and by these presents do nominate, 
 constitute and appoint you, the said Charles Dewey Day, to be, under the 
 provisions of an Act of the Parliament of the United Kingdom of Great 
 30 Britain and Ireland, passed in the thirtieth year of our reign, . ntituled " An 
 Act for the Union of Canada, Nova Scotia and New Brunswick, and the Govern- 
 ment thereof, and for purposes connected therewith," the Arbitrator chosen 
 by the Government of Quebec, for the division and adjustment of the debts, 
 credits, liabilities, properties and assets of Upper Canada and Lower Canada. 
 
 To have, hold, exercise and enjoy the said office of Arbitrator chosen by 
 the Government of Quebec as aforesaid, unto you, the said Charles Dewey 
 Day, with all and every the powers, authority, privileges, emoluments and 
 advantages to the said office by law appertaining, during our royal pleasure. 
 And we do hereby require that you, the said Charles Dewey Day, do report 
 *0 from time to time the result of your arbitrament, with all convenient speed, to 
 the Lieutenant-Governor of the said Province of Quebec for the time being. 
 
 In Testimony whereof we have caused these our Letters to be made Patent, 
 and the Great Seal of our said Province to be hereunto affixed. 
 
 Patent ap 
 pointing the 
 Hon. Chas. 
 Dewey Day, 
 Arbitrator 
 for Quebec, 
 under 142 
 Sec. B. N. 
 A. Act, 
 1867. 
 
 w 
 o 
 w 
 
 o 
 
 St d 
 3 ^ 
 
 o 
 
RECORD. 
 
 S^ltn ''"V V' ^,"d ^«" b^io^ed tho Honorable Sir Narcisse Fortunat 
 Bclleau Knight, Lieutenant-Governor of our said Province of Quebec 
 at Quebec, tuH thirtieth day of January, in the year of our Lord one 
 thousand eight hundred and sixty-eight, and in the thirty-first year of 
 
 By Command, 
 
 P. J. O. Chauveau, 
 
 Recorded 4th February. 1868, Secretary. 
 
 Ill Liber A., folio 28. 
 J. B. Mbilleur, Deputy Registrar. 
 
 10 
 
 10 
 
 Patent ap- 
 pointing the 
 Honorable 
 David 
 Lewis Mac- 
 pherson, ar- 
 bitrator for 
 
 SKAL 
 
 H. W. Stisted. 
 
 PROVINCE OF ONTARIO. 
 
 der 142, 
 Sec. B. N 
 A. Act, 
 1867. 
 
 E 
 
 Victoria, by the Grace of God, of the United Kingdom of Great 
 liritam and Ireland, Queen, Defender of the Faith, &c., &c 
 
 lo the Honorable David Lewis Macpherson, of the City of Toronto 
 Lsquire, and all to whom these presents shall come, Greeting. 
 
 bitrator'for WheReas in and by the one hundred and forty-second Section of the 
 
 Onuno un-Bntish ^^^^^^^^^ Act of 1867, it is enacted th'at the divSn and Id 
 
 justment of the debts, credits, liabilities, properties and assets of Upper on 
 Canada and Lovver Canada should be referred to the arbitrament of th?ee 
 arbitrators, one chosen by the Government of Ontario, one by the Government 
 of Quebec, and one by the Government of Canada ; and that the selectoTthe 
 arbitrators should not be made until the Parliament of Canada and the Legis 
 atures of Ontario and Quebec had met; and that the arbitrator chosen^ 
 the Government of Canada should not be a resident either in Ontario or Quebec 
 ^ cS ,^^^^^«f «^^« the Parliament of Canada and the Legislatures of Ontario and 
 ^ ^ Quebec have met ; and it is righ^. and convenient that the said division and 
 I J adjustment should be proceeded with: Now know ye that repos nrespedal 
 § I tru«t and confidence in the loyalty, ability and integrity of you, the sfid Davfd 30 
 ^ ^ w h' ^^^P^^^f "' We of our especial grace and of our will ^nd pleasure do 
 by these presents nominate, constitute and appoint you, the said David Lewis 
 ^r. Macpherson, to be the Arbitrator for and on behalf of the Government ofTur 
 i^TT X. T°' t°^«^"»g the said matters under the said statute. And 
 we do hereby confer upon you full power and authority as such Arbitrator as 
 aforesaid, to act together with the other arbitrators in the^said recited sectton re 
 ferred to, in and about the division and adjustment of the debts, credits, liabilities 
 properties and assets of Upper Canada and Lower Canada, and concerning 
 every matter and thing relating thereto, and to adjudicate and award thereon" 
 by vrtue of the said British North America Act of 1867, and according to 40 
 Arh,W ^^tent and meaning thereof. To have and to hold the said office of 
 Arbitrator as aforesaid during our pleasure. 
 
 05 
 
 20 
 
 30 1 
 
ie Fortunat 
 of Quebec, 
 r Lord one 
 irst year of 
 
 VEAU, 
 
 Secretary. 
 
 10 
 
 In Tostimony whereof we liave caused these our Letters to be made Patent, RECORD, 
 and the (Jroat Seal of our saitl I'rovince of Ontario to be hereto afhxod. 
 
 Witness, Henry WiUiani Stisted, Companion of tlie Most Ilonoral-lu Order 
 of the Bath, a Major-Oeneral in our Service, and Lieutenant-Governor 
 of our Pi'ovinco of Ontario. At Toronto the thirteenth day of January, 
 in tlio year of oui- Lord one thousand eight hundred and sixty-eight, 
 and in the thirty-hrst year of our Keign. 
 By Conmiand, 
 
 M. C. C.VMKRON, 
 
 10 Secretary. 
 
 of Great 
 
 &c. 
 ■ Toronto, 
 eting, 
 
 on of the 
 a and ad- 
 of Upper 20 
 
 of three 
 )vernment 
 :ion of the 
 the Legis- 
 ;hosen by 
 r Quebec : 
 itario and 
 dsion and 
 g especial 
 lid David 30 
 easure do 
 k^id Lewis 
 nt of our 
 te. And 
 itrator as 
 ection re- 
 iabihties, 
 )ncerning 
 
 thereon, 
 )rding to 40 
 
 office of 
 
 The Honourable Sir John Eose, Minister of Finance of Canada, being 
 
 present, produced and filed with the Arbitrators copies of certain Minutes of 
 
 * See Schedule No. Council in reference to the public debt of the late Province 
 
 1 in Appiiulix. of Canada."' The Treasurers of Ontario and Quel^ec filed a 
 
 Memorandum in relation to the same subject, Avhicli is as follows : — 
 
 " The Treasurers of Ontario and Quebec state that the above Orders in 
 
 " Council have not yet been formally acted upon l)y their respective Govern- 
 
 " ments ; but assent to the same being received, fyled and considered ad interim 
 
 " under reserve of their right hereafter to comnuuiicate to the Arbitrators such 
 
 20 " action of their Governments as shall be taken in the premises. 
 
 "E. B. Wood, 
 "Christ, Dunkin." 
 During the proceedings Mr. Langton, the Auditor-General of Canada was 
 sent for, and questioned as to the matters under consideration. 
 
 After discussion the Arbitrators adjourned until Thursday, the second dav 
 of September, at 10 o'clock a.m. 
 
 SECOND MEETING OF ARBITEATORS. 
 
 Thursday, the second day of September, 1869. The Arbitrators met pur- All Arbitra- 
 suant to the adjournment. Present: The Honourable John Hamilton Gray, *°^s present. 
 30 the Honourable Da\'id Lewis Macpherson, and the Honourable Charles Dewey 
 Day, the Arbitrators ; and the Honourable Mr. W^ood on behalf of Ontario 
 and the Honourable Mr. Dunkin on behalf of Quebec. 
 
 After discussion the Arbitrators ordered that the following statements 
 should be prepared by Mr. Langton, the Auditor-General of Canada, and to 
 be by him submitted and sent as follows : — 
 
 The Arbitrators direct that the following Statements be prepared':— 
 
 "1. A statement in detail by the Auditor-General of the assets enume- 
 ^^ rated m the Fourth Schedule to the British North America Act, 1867, with 
 " such observations in explanation thereof as he may think necessary. 
 
 A* 
 
6 
 
 RECORD. 
 
 Prov.ncos, un.l that thoy bo va\U.\ upon cmHum- to a.lnJt.s correct ^ss a 
 enumcmt.no. the total asset.s to l,o .lividcl uu.lcr the A • o o av 1 Jn^t e 
 
 Onlerof Ar- "^ ^V li ' ' ' '^"'' ^" '^'''^ ^'^ "'" *""^'"<1 't if iieccsHary. 
 
 ;;;l!^-< -Xer^'^H^ ;f'T ":'<';''"f^>'\tl>o statenuM.ts to he prepa.e.l, have 
 
 Au,WorGi.uV,,7' •.l'"> ^""! "•' t"-st ,lay .;t January, TSM:j, up to the fir.st hiy of 
 '"-■"''• " w i^'l. 1^ " 1 '^'■^l'^''"l'r"'.>' ' '^"'' ■^''o^vino. the annual per eentao(> on th,. e af ita 10 
 
 yluch ha. been pa.l on each; with any other .staten.ent of laets bear i 
 
 2ilXSlv'"^"- « rj?v H •' '^'' '''''"^ '''T '" t''^ «"''l «taten.ents ^v^ieh 
 
 " Treas ers of the v ' "^'c^e.s.sary ; an.l these be eonununieate.l to the 
 
 litis uus of the two Provuices an.l to the Arbitrator.s as .s,„.n as pe.ssible ""• 
 
 Septembe^'lHSr" ^'"^ "^^''"''"^'^ ^^' W.ln.saaj, the twenty-seeo\ul day'of 
 Afterwards, an.l before the tAventy-seeond day of S(>ptember 1809 bv mntnnl 
 arransoment betwcn^n the Arbitrators and all parties, thi meeth :.■ fbr i ^t^u? 
 econd day of Septend)er, 1S(50, was postpone.l to ihe seventh"day of Oc o • ' 
 Tsame O^X'" "^'"^'' ^^ay of October, 18.0, to the twent/third ^a;;^oho 
 
 All Arbitra 
 tors i)re.seiit, 
 
 THIRD MEETING OF ARBITRATORS. 
 
 A.'bitration 
 
 J'rocfccled 
 
 vvicii. 
 
 n,o f '^'■^/^^''^tors met at the City of Ottawa, at the place of their former 
 meeting, on the twenty-third day of October, 18(59, purinan^, to a nii. Zn 
 between all parties. Present : The Honorable John llJuniltcn O y the Ho^r^ 
 able David Lewis Macpherson, and the Honorable Charles dJw^v D-n t/u^ 
 AiW,.rs The Hmiorable Mr. ])unkin appeared oVbil alf o ( L'l^e ' am 
 he Honorable Mr. Wood, with the Honorable John Hillyard C'amer m isZ 
 Counsel, appeared on behalf of Ontario. ^ anition as Ins 
 
 The (J.nirt of Arbitration proceede.l with the reference and after heirino- 
 arguments from Counsel in regard to the subject matter . t ' di re n e • ,1 
 
 uay 01 uctouei, 1809, at 11 o clock a.m., at the same place. 
 
 FOURTH MEETING OF ARBITRATORS. 
 
 t^oll^;S:,oetS" ^tn'thrtwen;?«ftl/V ^'7r?' ?"^"^^' ""' '''' ^''^'^' ^^' ''^^'-' f— 
 mLciiugs, on ine twcnty-nttli dav of Octol .^r 18M<> Pi-ocM.if . mi *^i .^i 
 
 Arbitrators. Messr. W ood an.lkmc^ml^^^u^d onl Sf^of^tai;''^^ 
 Messrs. Duukiu and Ritchie on behalf of Quc-bec ^^ntaii.), and 
 
 A he Arbitrators after hearing discussions an.l arguments from C.mnsel r.n 
 both sides, upon the subject matter of the referentx^ adi nu-uTt, To i 
 the twenty-sixth day of October, to meet at the s^p^^a^;! o'dock tm! 40 
 
 Arguments 
 heard. 
 
 10 
 
of tho two 
 
 I'octiiesH an 
 
 lii'f'orc fill! 
 
 •ifrators to 
 
 cial of tilt! 
 er Ciinudii, 
 mot I, Itavt! 
 r.st (lay t)f 
 tlif capital 10 
 bt'arin^' on 
 'iits wliifh 
 iteil tt) tlio 
 [n).ssil)lo.""' 
 'lul (lay of 
 
 l)y mutual 
 10 twenty- 
 t" OetolxT, 
 ii'd (lay of 20 
 
 FIFTH MEETING OF ARBITRATORS. 
 
 RECORD. 
 
 'ir former 
 :inj.5omont 
 10 Hciit)r- 
 Day, the 
 >l)oe, autl 
 "on as his 
 
 r hearing 
 iK'o, and 30 
 onty-fifth 
 
 f former 
 lie three 
 rio, and 
 
 nisei on 
 -'uesday, 
 'ck a.m. 40 
 
 
 The Arbitrators met pursuant to adjournment, at the City of Ottawa, at All the Ar- 
 the place of thcu* former meetings, on the twenty-sixth day of October, 1869. bitrators 
 Pr(3sont: All the Aibitrators. Messrs. Wood and Cameron appearecl for On- P'"*'*^"'- 
 tario, and Messrs. Dunkin and Ilitchie for Quebec. 
 
 Tho Arbitrators proceeded with the reference, and after hearing arguments Arguments 
 and discussions of Counsel on both sides, adjourned to next day, to meet at ^'="'^' 
 the same place at 11 o'clock a.m. 
 
 SIXTH MEETING OF ARBITRATORS. 
 
 10 The Arbitrators on the twenty-seventh day of October, 1869, met at the All the Ar- 
 place and time aforesaid. Present : All the Arbitrators, when the Honorable '5»^™t<""8 
 Mr. Dunkin announced that he had resigned the office of Trer.surer of Quebec, P'"®^®"*- 
 in accordance with the statement made by him informally on Monday last! 
 Messrs. Casault with Mr. Kitchie appeared on behalf of Quebec, and Messrs. 
 Wood and Cameron on behalf of Ontario. 
 
 Mr. Casault stated that the Honorable Mr. Irvine was to have been present, Mr. Dun- 
 but that unforeseen circumstances had prevented his attending ; however he kin's resig- 
 was informed the Honorable Mr. Chauveau, the Premier of the Quebec Govern- ^°-^^^^ ^ 
 ment, intended to be in Ottawa that day, and until receiving instructions from '^/o'T'" 
 
 20 him, Mr. Ititchie and himself declined to assume any definite responsibihty ''' 
 
 in the matter, in consequence of the change in Mr. Dunkin's position. 
 
 Mr. Wood, the Treasurer of Ontario, and Mr. Cameron with him, stated 
 that they were prepared to proceed, on behalf of Ontario, with full responsi- 
 bihty for the Government of Ontario. 
 
 The Arbitrators thereupon adjourned until five o'clock p.m. 
 
 SEVENTH MEETING OF ARBITRATORS. 
 
 At five o'clock on the same day and at the same place as last aforesaid. All the Ar 
 the three Arbitrators met. The Honorable Mr. Chauveau, the Premier of the ^it^tors 
 Quebec Government, and with his Counsel, Messrs. Casault and Eitchie, P"*""^"*- 
 30 appearmg on behalf of Quebec, and Messrs. Wood and Cameron on behalf of 
 Ontario, when after further hearing from both parties on the subject matter of 
 the said reference, the Arbitrators made the following order : — 
 
 " The Counsel for the Provinces of Quebec and Ontario shall prepare and Order. 
 " print their respective cases, and communicate them to each other for such 
 ^1 observations in response as they may deem necessary. The cases shall be 
 '^^communicated to the Arbitrators (together with an authoritative declaration 
 " by the Governments of Quebec and Ontario respectively, of their agreement 
 
RECORD. 
 
 of the As- 
 
 hitrutoTH 
 as t(j print- 
 ing c.'wus 
 and ux- 
 chungo of 
 same. 
 
 8 
 
 '' V^ty ^,°'?""^f Government in the matter of the amount of debt of the 
 
 Province of Canada) on or bdbre th„ fifteenth day of January next 
 .. ««;' ««l";!"loNo. _ Dw Arbitrators may order either mero motu, or upon 
 
 ^. m A„,...,uhx. the 8uggc«tioa of " Counsel, an oral argument upon sSch 
 
 pomts as they 1 my deem necessary. "^^ '^ upon sucn 
 
 th. J''? Arbitrators then adjourned to meet again on the day of the openinir of 
 187(5)! at^^'oc'r i^o""n'<>» ParliHment (the fifteenth day of iSuary, 
 
 EIGHTH MEETING OF ARBITRATORS 
 All the Ar- 
 
 bitrators The Arbitrators met at the City of Ottawa, on the fifteenth dav of Feb- 
 
 preeent. ruary. 1870. pursuant to the adjr,urnmont. All the ArbiS-aS we?e n^P^Pnt 
 
 Quebec. Messrs. Wood and Cameron not appearing on behalf of Ont-irin thl 
 No^progr.. Arb,tmtor, adjourned until Th„..,lay, the ^eTnteeftrdarJi! V^tojJJ;,' ' i87o! 
 
 All the Ar- 
 bitrators 
 present. 
 
 Cases inter 
 changed. 
 
 Definite 
 amount of 
 debt not 
 settled or 
 agreed on. 
 
 Tlie Arbi- 
 trators 
 heard argu- 
 ments of 
 Counsel. 
 
 All the Ar- 
 bitrators 
 :)resent. 
 
 NINTH MEETING OF ARBITRATORS. 
 
 Cifvnf^n?;''^'^'''^'''''' '^*'^' °" *^? seventeenth day of February, 1870. at the 
 BrLl ^"«';y^' P"r«»ant ^o adjournment, in the rooms of the Civil Service 
 nfnlu ^'f iJ'""?e Arbitrators were present. Mes trs. Chauveau, the Premier 
 of Quebec, and Kobinson, the Treasurer of Quebec, and Mr. Drolet Accountant 
 m the Treasury DepaHment of Quebec, and with them their Counfel. Messrs 
 
 ^etn^n b'S^ofTnS' ^" '''''''' ^"^'^^' ^^^ ^^^^ ^^^ ^^ 
 
 f.r-n\!'n ^^"f ""^^^ ^^ ^^'^ ^"^^"'^ ^^ ^^^ ^^^^ Provinces had been respectively in- ^^ 
 terchanged and also sent to the Arbitrators .-is required by the order of the 
 27th of October, 1869, but that no statement had been furnished of anv settl^ 
 
 n Lht' ^'''^"'" 'Jf ^'r ^''T''''' C^--««^ent as to the deLramount 
 01 the debt, as required by that order. 
 
 Mr. Casault then addressed the Arbitrators as to the preliminarv obiection 
 raised as to the jurisdiction of the Arbitrators over the debts aiiHssSs eiu 
 merated m the Fourth Schedule to the British North America Act 1867 Mr 
 Cameron was heard in reply. , ^""«. xyxi. 
 
 The Arbitrators reserved judgment until the next day, to which thev then 
 adjourned, to meet in the same plac.-, at 11 o'clock a.m. ^ ^^ 
 
 TENTH MEETING OF ARBITRATORS. 
 
 The Arbitrators met on the eighteenth day of February, at their last place 
 of meetmg, at 11 o'clock a.m., pursuant to adjournment. All the Arbitrators 
 
 40 
 
9 
 
 were present. The same persons appeared for Ontario and (Quebec respectively 
 as were prf 'rt at the last meeting' ; when the Jlonoral^le Charles Dewey Day, 
 the Arbitratoi chosen by (Quebec, (leliv(;red tiie opinion of the Couit of i\rbi- 
 t^ators on the point argued at the \r. "ions meetinj,', raised ]>y tlie Counsel for 
 Qiu'bec, naniely, "that the Court of uirbitratlon had no Jnrisdirtlon orcr t/ie 
 " suhjeri matter of the assets enumerated in the Fourth Schedule to the J>rithh 
 "North America Act, 18()7," and the following judgment was unanimously 
 pronounced by the Court of Arbitration : — 
 
 "The Arbitrators having heard Counsel upon the ol)jection raisod m 
 
 10 "behalf of the (jovernment of Quebec, to their jurisdiction over the subject 
 " matter of the assets enumerated in Schedule Four of the Jiritish North 
 "America Act, 18G7, and duly considered the question, are of opinion, and 
 "do adjudge, that the assets so enumerated make i)art of the pro})erty and 
 " assets, the division and adjustment whereof has been relerred to them under 
 " the provisions of Section l'42 of the said Act ; and that they have by the said 
 "Act authority to divide and adjust the same." 
 
 Jvlr. Cameron then on behalf of Ontario proposed to go into the argument 
 upon the proposition as to the principle or mode of the apportioiunenl of the 
 excess of dell o'-er and ai,.n'e §G2,r)()(),000 of the late Province <f Cuanda 
 
 ^^ between Ontario and Quebec, and the division between t' vt of the assets be- 
 longing to the late Province of Canada, under the IJritsh North America Act, 
 1867 ; to which Messrs. Casaalt and Kitchic objected, contending tliat such a 
 course vrould be exceptional. 
 
 After hearing Counsel on both sides as to whether the hearing of the argu- 
 ment on that point (the principle and mode of apportionment of the excess of 
 debt and the division of the assets), aud a deci;iion thereon at that stage of the 
 arbitration would or would not expedite the business, the Arbitrators reserved 
 judgment until the next meeting. 
 
 The Arbitrators then adjourned until Monday the twentieth day of Feb- 
 
 SOruary, 1870, at 11 o'clock a.m. 
 
 Ui;C0R[). 
 
 QuoHtioii. 
 
 .Tiiilj^'inciit 
 I'f Ail)itni- 
 toivs. 
 
 Proposition 
 of Mr. Cam- 
 cniii — prill- 
 cipiii •ir 
 mode of 
 (ii\i.siuii. 
 Ol.jrctcd to 
 by iMcssis. 
 ('assiuiltaiid 
 Kitcliie. 
 
 Arguinfciit 
 liuaril. 
 
 Adjoiirii- 
 uicut. 
 
 ELEVENTH MEETING OF iVRBITRATORS. 
 
 The Arbitrators met at the place last aforesaid, on the twentieth day of All the Ar- 
 February, 1870, at 11 o'clock a.m , pursuant to adjournment. All the Arbi- '"^'-'^^o's 
 trators were present. The same persons were present for Ontario and Quebec l^'*^**^'"*- 
 respectively, as were present at the last meeting. 
 
 The Arbitrators declared their oi)inion that it was not desirable to interfere Decision of 
 with the ordinary mode of proceedings in such cases ; and that therefore they Aibitrators. 
 would not at present hear the argument upon the point raised by JNIr. Cunljron 
 and objected to by Quebec. 
 40 By agreement the Counsel proceeded to the argument on the claim of Argument 
 Quebec to charge against Ontario the capitalized portion of the " Indian j"j|j'j|[ *'" 
 
 Annuities." Anm'ii'ties. 
 
 B 
 
 I 
 
10 
 
 EECOKD. 
 
 — for O^S" ^Tho" A ^""^ '"^i'^'' 'T' ^'""'^ ^'' Q"«^^^' ^"^^ ^*Ir. Cameron 
 ^er neuZtome:t^T::^^^^^^^ ^"' ^'^^ Arbitrators adjourned until 
 
 All the Ar- 
 bitrators 
 present. 
 
 Argument 
 heard on 
 principle or 
 mode of 
 division. 
 
 Mr. C.vie- 
 ron heard. 
 
 Counsel for 
 Quebec to be 
 heard next 
 day, 
 
 Arbitrators 
 adjourned. 
 
 TWELFTH MEETING OF ARBITRATORS. 
 
 fi,.cf u"^ :^i;biJrators met at the place last aforesaid, on Tuesday, the twentv- 
 hrst day of February, 1870, at 1 1 o'clock a.m. All the Arbitrators vere present 
 VrJfT f n °".' ""^'^''T'}' ^^"^ ''''^' '^''"^ ^»^« Honorable Mr. Chaive^au the 
 Crown L.md??nrn' T^ '^'' ^.'T'ff. ^^- ^^^"^*'^"' '^'^ Commissioner of 
 ai^r^^d on\d[alto^^^ °' ^^^^^^^- ^^- ^^^^ ^^^ ^'^ Cameron ^ 
 
 and Iwd^Tf. ''^^'^!-^ '''"^ proceeded with the argument as to the principle '" 
 a?icf. mode of the apportioni.ent of the excess of the debt of the late Province 
 of Canada over ami above $62,500,000, and of the divisL of Z assets be- 
 longu^gto the late Province of Canada, under the British No,tZiZT Act, 
 
 Mr. Cameron opened ihe case, and closed his argument on behalf of Ontario 
 contending that the basis of population or the basiJof the origh c" loerdebts' 
 
 :nd^d?^ir:tx{trj^;y::"^^^^^ ^^^ "^°^^^°^ ^^^^^^^^ -^^ apportionii 
 
 Counsel for Quebec to be hoard the next day 
 at II o'clS'a'mf ^'^^'^'^'^^^ adjourned, to meet at the same place next day, '' 
 
 All the Ar- 
 bitrators 
 present. 
 
 Mr.C'assault 
 heard in an- 
 swer to Mr. 
 Cameron. 
 
 Arbitrators 
 adjourned. 
 
 THIRTEENTH MEETING OF ARBITRATORS. 
 1870^n?f/?TT' '^^^^^I'^^^^^^^^^^y, the twentv -second day of February 
 
 nent Aii the Arbitrators were present. The same persons who at the last 
 preceding meeting appeared on behalf of Ontario and Quebec resFecteJ; were 
 
 Mr. Casault was heard in answer to Mr. Cameron on behalf of Quebec 
 rvitj™ir' ""^^ °' '''' apportionment of the excess of deft 1^30 
 
 ^e:^^^!t;'T^^ P^-« - Frida,, the 
 
 FOURTEENTH MEETING OF ARBITRATORS. 
 
 It thdr^f^t^!!1?-*''^"''^ ?" ^'^?^^' ^^'^ twenty-fifth day of Febru.rv. l«70 
 at their last place of meeting, at 11 o'clock a.m., pursuant to adjoumiuent; 
 
 i 
 
11 
 
 Cameron 
 ned until 
 
 3 twenty- 
 ) present, 
 /eau, the 
 sioner of 
 Cameron 
 
 principle 
 Province 
 issets be- 
 nca Act, 
 
 Ontario, 
 sal debts, 
 tionment 
 
 10 
 
 f All the Arbitrators were present, and the same persons who at the last pre- 
 
 I ceding meeting appeared on behalf of Ontario and Quebec respectively were 
 
 I present. 
 
 I Mr. Ritchie was heard in support of Mr. Casault on behalf of Quebec. 
 
 I Mr. Cameron and Mr. Wood were heard in reply on behalf of Ontario, 
 
 and the argument was closed on both sides. 
 
 A The Arbitrators adjourned, to meet next day, Saturday, the twenty-sixth 
 
 I day of February, 1870, at the same place, at noon. 
 
 RECORD. 
 
 ext day, 
 
 20 
 
 FIFTEENTH MEETING OF i^RBITRATORS. 
 
 10 The Arbitrators met on Saturday, the twenty-sixth day of February, 1870, 
 at their last place of meeting, at noon, pursuant to adjournment. All the 
 Arbitrators were present. Counsel and other officials interested appeared as 
 at the last preceding meeting. 
 
 The Arbitrators, after some time spent in the consideration of the questions 
 submitted, agreed that it was necessary to take time to look into the points raised, 
 and the arguments offered for and against the same ; and they intimated that they 
 hoped they would be prepared to announce their decision thereon on the Monday 
 then following, the twenty-eighth day of February, I87O. 
 
 The Arbitrators then adjourned, to meet at the same place on Monday, the 
 
 20 twenty-eighth day of February, I87O, at 11 o'clock a.m. 
 
 All the Ar- 
 bitrators 
 present. 
 Mr. Ritchie 
 heard in sup- 
 port of Mr. 
 Cassault, 
 Messrs. 
 Cameron 
 and Wood 
 in reply. 
 Arbitrators 
 adjourned. 
 
 All the Ar- 
 bitrators 
 present. 
 
 Arbitrators 
 consult and 
 take time 
 for delibera- 
 tion. 
 
 Arbitrators 
 adjourned. 
 
 ebruary, 
 idjourn- 
 tlie last 
 ely were 
 
 Quebec, 
 and the 3^ 
 
 lay, the 
 
 SIXTEENTH MEETING OF ARBITRATORS. 
 
 The Arbitrators met on Monday, the twenty-eighth day of February, 1870, 
 at their last place of meeting, at 1 1 o'clock a.m. All the Arbitrators were present. 
 Counsel appeared on behalf of Ontario and Quebec respectively. 
 
 The Arbitrators declared to the Counsel and Treasui-ers of the two Provinces 
 that they were not prepared to give a decision on the points argued ; and that 
 they should adjourn, and would notify the Counsel at some future diiy when they 
 would be prepared to meet again. 
 
 The Arbitrators adjourned accordingly. 
 
 All the Arbi- 
 trators 
 present. 
 ArV)itrators 
 not prepar- 
 ed to give a 
 decision, and 
 adjourn to 
 meet at 
 some future 
 dayj 
 
 -, 1870, 
 'nment. 
 
 30 
 
 SEVENTEENTH MEETING OF ARBITRATORS. 
 
 The Arbitrators met at the City of Montreal, on the twenty-sixth day of ^^' the Ar- 
 May, 1S70, for consultation on the points and arguments submitted on the^'^^^'^^"!^^ 
 principle md mode of the apportionment of the excess of debt over and above Meeting for 
 
 consultation 
 
RECORD, 
 
 Letter of 
 Messrs. C as- 
 sault and 
 Ritchie as to 
 two pamph- 
 lets. 
 
 Minute of 
 Arbitrators 
 on the 
 pamphlets. 
 
 Copy of 
 Minute 
 forwarded to 
 Counsel for 
 Ontario and 
 Quebec. 
 Discussion 
 Jimoug the 
 Arbitrators 
 1 y them- 
 selves. 
 Arbitrators 
 adjourned. 
 
 12 
 
 $62,500,000, and the division of assets belonging to the late Province of Canada 
 pur.suant to ammgement between tlis Arbitrators, all of whom were present. ' 
 A letter from Messrs. Casault and Ritchie, addressed to the virbitrators, was 
 received enquiring whether two printed pamphlets, one purporting to be "Mr. 
 Wood s Argument before the Arbitrators," the other styled " Proceedings of the 
 irovincial Arbitrators Ontario ..nd Quebec," are to be received by the Arbitrators 
 secondly : Whether the publication of the latter had been authorized by them, 
 andjvhether such Report is correct ? Whereupon the following minute was agreed 
 
 « T. \}' T^^^^ *^^^ ^'"^ pamphlets had been received, but had not been accepted 10 
 
 oy the Arbitrators as part ot the proceedings before them. 
 a A ^•^'' "^^^'^V?^^^ publication of the pamphlet styled ' Proceedings of Provincial 
 ^^ Arbitrators Ontario and Quebec" was not authorized by them, and that they 
 
 are not prepared to enter into a comparison of the alleged Report with their 
 
 Record of proceedings. 
 
 u j"/^" P^'^f. ^ ^^^^ °^ ^^^^^ minute be forwarded to the Counsel both for Ontario 
 and Quebec. 
 
 The Arbitrators then proceeded to discuss among themselves the questions 
 and arguments submitted on the said princi[)le and mode of apportionment of debt 
 and division of issets, and severally read and commented upon their various 20 
 opinions which they had reduced to writing. 
 
 The Arbitrators adjourned at six o'clock p.m., to meet the next day. 
 
 EIGHTEENTH MEETING OF ARBITRATORS. 
 
 The Arbitrators met on Friday, the twenty-seventh day of May, I87O, pur- 
 suant to adjournment, all being present ; and continued their investigations and 
 discussions, and adjourned at six o'clock p.m., to meet the next day. 
 
 NINETEEN TH MEETING OF ARBITRATORS. 
 t^mrotthe ^.Tlie Arbitrators met on Saturday, the twenty-eighth day of May, 1870, and 
 
 Hrouralle ^'^"^^'^"^'^ ^^^'^l'^ ^"V<^^''tlg<^<^10n^^ 
 
 Charles ■'"hG Honorable Charles Dewey Day submitted the following propositions :— 30 
 
 Dewey Day. ^ '^^1. It i>^ proposed that the relation of Upper and Lower Canada, created by 
 
 the Union Act, of I8i0, be regarded as an association in the nature of a universal 
 
 partnership ; and that the division and adjustment of the debts and assets under 
 
 ^^ the Lritish North America Act, I867, bo made according to the rules which 
 
 govern in such associations, in so far as they can be made to apply. 
 
 " 2. It is proposed that the state of indebtedness of each of the Provinces of 
 
 ^" Upper and Lower Canada at the time of the Union in 1841, be taken into consider- 
 
 • tion by the Arbitrators, with a view to charge the Provinces of Ontario and Quebec 
 
13 
 
 of Canada, 
 present, 
 trators, was 
 to be " Mr. 
 dings of the 
 Arbitrators. 
 ;d by them, 
 ! was agreed 
 
 len accepted 10 
 
 f Provincial 
 id that they 
 t with their 
 
 for Ontario 
 
 le questions 
 lent of debt 
 leir various 20 
 
 ay. 
 
 I87O, pur- 
 gations and 
 
 1870, and 
 
 itions : — 30 
 created by 
 a universal 
 3sets under 
 rules which 
 
 rovinces of 
 to consider- 
 and Quebec 
 
 10 
 
 " respectively with the debt due by Upper Canada and Lower Canada respec- 
 " tively, at that time ; and that the remainder of the surplus debt (excess of 
 " debt of the late Province of Canada over and above $62,500,000) after such 
 «' debts have been deducted from it (and charged to the respective Provinces), 
 " be equally divided between the said Provinces. 
 
 " 3. It is proposed that the assets specified in the Fourth Schedule to the 
 "British North America Act, 1867, and all other assets to be divided and ad- 
 " justed under the authority of that Act, be divided equally, according to their 
 "value." 
 
 Upon the question on the first proposition of the Honourable Charles 
 Dewey Day being put, it was negatived as follow- : For the proposition, the 
 Honourable Charles Dewey Day; against it, the Honourable David Lewis 
 Macpherson and the Honourable John Plamilton (J ray. 
 
 Upon the question on the second proposition of the Honom-able Charles 
 Dewey Day being put, it was negatived as follows : For the second proposition, 
 the Honourable Charles Dewey Day ; against it, the Honourable David Lewis 
 Macpherson and the Honourable John Hamilton Gray. 
 
 Upon the question on the third proposition of the Honourable Charles 
 Dewey Day being put, it was decided in the negative as follows : For the third 
 20 proposition, the Honourable Charles Dewey Day ; against it, the Honourable 
 David Lewis Macpherson and the Honourable John Hamilton Gray. 
 
 So the whole three propositions of the Honourable Charles Dewey Day 
 were rejected. 
 
 The Honourable David Lewis Macpherson then submitted the following 
 grounds of dissent to the above propositions of the Honourable Charles Dewey 
 Day, which were entered on the Minutes of the Proceedings of the Arbitrators, 
 viz. : 
 
 " 1. Because, in his opinion, the Union of 1841 between Upper Canada 
 
 " and Lower Canada was not analagous to an ordinary association or partnership 
 
 30 " between individuals, and that the rules of law applicable to the latter are not 
 
 " applicable to a political union, effected by the authority of a Parliamentary 
 
 " power, between two Provinces. 
 
 " 2. Because, in his opinion, the Arbitrators have no authority to inquire 
 " into or consider the financial condition of Upper Canada and Lower Canada 
 " respectively, anterior to or at the time of their union in 1841, with a view of 
 " rectifying, at the expense of Ontario, any supposed advantage alleged by the 
 " Counsel for Quebec— alleged unjustly, in his (Mr. Macpherson's) opinion— to 
 " have accrued to Upper Canada under the Union Act of 1840. 
 
 "3. Because, in his opinion, if the 7\T-bitrators were to do so, they would 
 40 " transcend their power, and would inflict gross injustice on Ontario, by imposing 
 " upon that Province eleven-fourteenths of the whole surplus debt (that is, the 
 " excess of the debt of the late Province of Canada over and above 162,500,000), 
 " or reducing it to figures, and assuming the excess of debt to be $10,500,000, 
 "it would cast upon Ontario the sum of $8,250,000, and upon Ouebec 
 "$2,250,000. r -<, 
 
 ^ "4. Because^ in his opinion, while the propositions of the Honourable 
 Charles Dewey Day profess to favoiu- an equal division of the debts and assets, 
 
 C 
 
 EECORD. 
 
 1st proposi- 
 tion nega- 
 tived. 
 
 2nd proposi- 
 tion nega- 
 tived. 
 
 3rd proposi- 
 tion nega- 
 tived. 
 
 Whole 
 three propo- 
 sitions nega- 
 tived. 
 
 Grounds of 
 dissent of 
 David Lewis 
 Macpherson 
 to the pro- 
 positions of 
 the Honour- 
 able Charles 
 Dewey Day. 
 
 £• r^v. 
 
 I 
 
14 
 
 RECORD, "the result of a division under them would be most unequal and unjust, 
 "masmiicu as Quebec would get one-half the value of the assets, while required 
 
 Proposition 
 of the Hon- 
 ourable 
 Davitl Lewis 
 Macplit'rson 
 nejiatived. 
 
 Reasons of 
 the Honour- 
 able John 
 Hamilton 
 Gi-ay fur dis- 
 senting from 
 the proj)osi- 
 tiona of the 
 Honourable 
 Charles 
 Dewey Day. 
 
 Proposition 
 submitted 
 by the Hon- 
 ourable 
 JohnHamil 
 ton Gray. 
 
 Affirmed. 
 
 Memoran- 
 dum of the 
 Honourable 
 David Lewis 
 Macpher- 
 son. 
 
 "to bear only three-fourteenths of the surplus debt." 
 
 The Honourable David Lewis Macpherson then submitted the following 
 proposition, namely :-^ 
 
 "That the division and adjustment of the surplus debt, and of the assets 
 " owned conjomtly by Ontario anrl Quebec, be upon the basis of the population 
 "ot those Provinces as shown by the census of 18G1." 
 
 Upon the question on this proposition being put, it was negatived on the 
 loUowuig decision :— For the proposition, the Honourable David Lewis Mac- 10 
 pherson ; against it, the Honourable Charles Dewey Day and the Honourable 
 John Hamilton Gray. 
 
 So tlie proposition of the Honourable David Lewis Macpherson was rejected. 
 
 1 he Honourable John Hamilton Gray then expressed his reasons for dissent- 
 ing from the propositions laid down by the Honourable (Charles Dewey Day, which 
 were entered on the Minutes of the Proceedings of the Arbitrators, as follows :— 
 
 "Because, for the reasons already assigned, he thinks the Union of Upper 
 "and Lower Canada by the Imperial Act of 1840 cannot be likened to a part- 
 " nership or mercantile association of any character, and that the Arbitrators 
 1^ have no power and ought not to enter into the consideration of the political 20 
 " or financial state of Upper and Lower Canada previous to the Union, or the 
 . " equivalents or inducements influencing the Imperial Government or the Pro- 
 "vmces, which led to it. That the Union of 1841, in pursuance of that Act, 
 ^ concludes all enquiry into matters antecedent thereto, and that from that 
 '' time, for all purposes now under their consideration. Upper and Lower Canada 
 " must be regarded as one, and the present division and adjustment be decided 
 "on grounds entirely irrespective of the position of either Upper or Lower 
 " Canada at the time of the Union." 
 
 He then submitted the following proposition : — 
 
 " That the division and adjustment of the surplus debt and assets, owned 30 
 conjomtly by Ontario and Quebec, and enumerated in Schedule Four of the 
 /'British North America Act, 1867, be based upon the origin of the debts, and 
 I' that the expenditure made in creating each of said assets be taken as the value 
 '' thereof; the Arbitrators having no right to enquire into or adjudicate upon 
 "the pohc- or advantages of expenditures made by authority of Parliament." 
 ^ 11 '^P°*^,.^^^® question on this proposition being put, it was affirmed on the 
 tollowmg division :— For the proposition, the Honourable John Hamilton Gray 
 and the Honourable David Lewis Macpherson; against it, the Honourable 
 Charles Dewey Day. So the proposition of the Honourable John Hamilton 
 Gray passed m the affirmative. 
 
 f 11 '^•^^ Honourable David Lewis Macpheison at the same time submitted the 
 tollowmg Memorandum, to be entered on the Minutes of the Proceedings of 
 the Arbitrators, which was accordingly done, viz :— 
 
 "That while adhering to his preference for population as the basis for 
 a djvision and adjustment of the debts, credits, liabihties, properties and assets 
 "of Upper Canada and Lower Canada, he nevertheless assents to Colonel 
 " Grays proposition, with .o yjew of arriving at a basis, and believing that under 
 " It a just award may be made." 
 
 40 
 
,m\ unjust, 
 ile required 
 
 e following 
 
 ' the assets 
 population 
 
 ived on the 
 .ewis Mac- 10 
 lonourable 
 
 as rejected, 
 for dissent- 
 Day, which 
 follows : — 
 I of Upper 
 1 to a part- 
 f\.rbitrators 
 le political 20 
 lion, or the 
 jv the Pro- 
 t" that Act, 
 
 from that 
 er Canada 
 be decided 
 
 or Lower 
 
 ets, owned 30 
 our of the 
 debts, and 
 s the value 
 icate upon 
 liament." 
 led on the 
 ilton Gray 
 [onourable 
 Hamilton 
 
 mitted the 
 eedings of 
 
 basis for 
 md assets 
 o Colonel 
 -hat imder 
 
 40 
 
 15 
 
 It was then ordered that the following Judgment be communicated to the RECORD. 
 Counsel of both Provinces. 
 
 Judgment 
 JUDGMENT. ordered to 
 
 bo coinniu- 
 
 The Arbitrators under the British North America Act, 1867, having care- '''''''*^'^- 
 lully considered the statements made and the propositions submitted respectively 
 by and on the behalf of the Provinces of Ontario and Quebec, and having heard 
 Counsel at length thei-eupon, do award and adjudge as follows •— 
 ,. " 1st. That the Imperial Act of Union, 8rd and 4th Victoria, Chapter 35, did Judgment. 
 ^^ not create m fact or m law any partnership between Upper and Lower Canada, 
 10 nor any sudi relations as arise from a state of co-partnership between individuals, 
 ^nd. Ihat the Arbitrators have no power or autliority to enter upon any 
 enquiry into the relative state of the debts and credits of the Provinces of 
 Upper and Lower Canada respectively at the time of their Union in 1841 into 
 the Province of Canada. 
 
 "3rd That the division and adjustment between Ontario and Quebec of the 
 » S'T A f^rtl^^'i $62,500,000-for which, under the 112th Section of the 
 " £: I' ^•,^^^' 1^5' ^".^''^^o and Quebec are conjointly liable to Canada, shall 
 ^^ be based upon the origin of the several items of the debts incurred by the 
 ^^ creation of the assets mentioned in the Fourth Schedule to that Act, and shall 
 ^^ be apportioned and borne separately by Ontario and Quebec as the same may 
 
 - fi ^VJ"l'f' ^ Jo have been originated for the local benefit of either ; and where 
 « f K .1 1. ^ •'^®'' incurrt 1 in the creation of an asset for the common benefit* 
 
 ot both 1 rovinees and shall be so adjudged, such debt shall be divided and 
 borne equally by both. 
 
 » "4th. That where the debt imder consideration shall not come" within the 
 ^^ perview of the Fourth Schedule, whether the same shall or shall not have left 
 
 an asset, reference shal be had to its origin under the same rule as in the last 
 
 preceding section laid down. 
 
 ^0 - A r ^i^'^^^''^^}\^ ^^""^^^ enumerated in the Fourth Schedule to the B. N. A. 
 .<\' i^^l """^ declared by the 113th Section to be the property of Ontario 
 " .?lf awS.Mn'^'' conjoint y, shall be divided and adjusted, and appropriated or 
 allowed for, upon the same basis. 
 
 - «linli^i,o 7^^ ^^'^ expenditure made by the creation of each of the said assets, 
 "amomt nnt'^l^n k' 7f "' ^^^T^J f"'^ ^^"'"^ "^ ^''^^ ^as been left, the 
 "Sf ? P / f ^^ v^'?" ""^ ^^'^ ^^''* incurred-the Arbitrators having no 
 " arflV^ '" i7'' ^^-ll^^'^ate upon the policy or advantages of expenditures 
 
 or deb s incurred by authority of, and passed upon by, Parliament 
 "ih. n 1 \- therefore ordered that, in accordance with the above decision 
 
 - "iiTei^rpii^e Zr' ^"^^"^^^ °^' ^^"^^"^ ^^^ Q-^- '^ p--^ -t^ 
 
 20 
 
 "Montreal, Ma- 28, 1870." 
 
 "J. H. Gray, 
 
 "T>. L. Macpherson." 
 
 Judge Day dissentient. 
 
 to bellLpd'^n ''^'''' '^^'' adjourned to meet at Montreal on some future day Arbitrators 
 "e agieea on, . adjourned. 
 
16 
 
 RECORD. The Honourable Charles Dewey Day, subsequently to the adjournment, 
 
 requested that the decision arrived at should not be communicated to counsel 
 _. , until he could be heard from in a few days. 
 
 the Hon. Subsequently, the Honourable Charles Dewey Day sent to the other two 
 
 Chas.Dewey Arbitrators, to be entered upon the Minutes of the Proceedings of the Arbi- 
 Day- trators, his dissent from the foregoing judgment or decision, which is as 
 
 follows : — 
 
 DISSENT 
 
 of the Honourable Charles Dewey Day to the foregoing decision of the 
 Arbitrators. 10 
 
 " The undersigned Arbitrator dissents from the foregoing award and judg- 
 " ment of the Hon. D. L. Macpherson and the Hon. J. H. Gray, two of the 
 "Arbitrators appointed under the B. N. A. Act, 1867. 
 
 " 1st. Because the said award and judgment purports to be founded on 
 " propositions which, in the opinion of the undersigned, are erroneous in fact 
 " and in law, and inconsistent with the just rights of the Province of Quebec. 
 
 " 2nd. Because the relation of the Provinces of Upper and Lower Canada, 
 "created by the Union of 1841, ought to be regarded as an association in the 
 " nature of a universal partnership, and the rules for the division and adjust- 
 " ment of the debts and assets of Upper and Lower Canada, under the autho- 20 
 " rity of the said Act, ought to be those which govern such associations, in so 
 ' " far as they can be made to apply in the present case. 
 
 " 3rd. Because the state of indebtedness of each of the Provinces of Upper 
 "and Lower Canada, at the time of the Union of 1841, ought to be taken into 
 "consideration by the Arbitrators, with a view to charge the Provinces of 
 " Ontario and Quebec respectively with the debt due by each of the Provinces 
 " of Upper and Lower Canada at that time — and the remainder of the surplus 
 " debt of the late Province of Canada ought to be equally divided between the 
 " said Provinces of Ontario and Quebec. 
 
 " 4th. Because the assets specified in Schedule Four, and all other assets 30 
 " to be divided under authority of the said Act, ought to be divided equally, 
 " according to their value. 
 
 " 5th. And therefore the undersigned presents an award and judgment based 
 " upon his foregoing propositions and upon the reasons assigned in his printed 
 " opinion (marked B.) in the- terms following, which in his view of the case ought 
 " to be rendered, namely: — The Arbitrators, under the B.N. A. Act, 1867, having 
 " seen and examined the propositions submit ted on the part of the Provinces of 
 " Ontario and Quebec respectively, for the division and adjustment of the debts 
 " and assets of Upper Canada and Lower Canada, under the authority of the said 
 " Act, and having heard Counsel for the said Provinces respectively upon each of 40 
 " the said propositions, after due consideration thereof, are of opinion that the 
 " propositions submitted on behalf of the Province of Ontario do not, nor does 
 " either of them, furnish any legal or sufficient rule or just baris for such division 
 " and adjustment ; and they do award and adjudge that the said division and 
 
 " QfJinafTnonf r»ilf»Vif fr» he rnaiia annnT'i}ir\ct fr\ tVio T<nloa iirliipV! r^r^\To■r•rt flio rjOfj-iHrir! 
 
 " of the debts and property of associations known as universal partnerships, in 
 
17 
 
 idjoumment, 
 id to counsel 
 
 he other two 
 of the Arbi- 
 which is as 
 
 ision of the 
 
 rd and judg- 
 , two of the 
 
 10 
 
 founded on 
 iieous in fact 
 of Quebec, 
 wer Canada, 
 nation in the 
 
 and adjust- 
 er the autho- 20 
 ations, in so 
 
 2es of Upper 
 »e taken into 
 Provinces of 
 bie Provinces 
 ■ the surplus 
 between the 
 
 other assets 30 
 ided equally, 
 
 gment based 
 a his printed 
 le case ought 
 1867, having 
 Provinces of 
 of the debts 
 :y of the said 
 upon each of 40 
 lion that the 
 lot, nor does 
 such division 
 division and 
 the partition 
 tnerships, in 
 
 ■ "so far as such rules can be made to apply. And the Arbitrators having also RECORD, 
 "heard Counsel ibr the Provinces of Ontario and Quebec i espectively, upon the 
 "objection made in behalf of the former Province to the jurisdiction and author- 
 
 1 "ity of the Arbitrators to enquire into the state of the debts or credits of the 
 "Provinces of Upper and Lower Canada prior to the Union of 1H41, or to deal in 
 
 - "any way with either the debts or credits with which either Province came into 
 "the Union at that time, and duly considered the same, are of opinion that the 
 "said objection is unfounded, and that they have authority and are bound by the 
 " provisions of the said Act to enquire into the state of the debts and credits of 
 
 ^ 10 "the Provinces of Upper and Lower Canada, existing at the time of the Union 
 "of 1841, and so to deal with them as may be necessary for a just, lawful and 
 "complete division and adjustment of the debts and assets of the said Provinces. 
 
 i "And thereupon it is ordered that the Counsel f()r the Provinces of Ontario and 
 
 • "Quebec do proceed, in accordance with the foregoing judgment, to submit such 
 "statements in support of their respective claims as they may deem expedient. 
 
 "C. D. Day, 
 
 ' Arbitrator!' 
 
 TWENTIETH MEETING OF ARBITRATORS. 
 
 The Arbitrators met at the City of Montreal, in the room of the Court of 
 20 Appeals, on the fifth day of July, 1870, pursuant to agreement and notice to all 
 parties. All the Arbitrators were present. There appeared on behalf of Quebec A-H the 
 the Honourable Mr. Robertson, Treasurer, the Honourable Mr. Chauveau, the ^^J^^^ 
 Premier, the Honourable Mr. Irvine, Solicitor-General, and Mr. Ritchie ; and on 
 behalf of Ontario, the Honourable J. Sandfield Macdonald, Premier, the Honour- 
 able Mr. Wood, Treasurer, and the Honourable J. Hillyard Cameron. 
 
 The Honourable John Hamilton Gray submitted a communication from the ^°^- ^\^- 
 Government of Quebec, that had been addressed to each of the Arbitrators ^jj^ted a 
 separately, which was road, and is as foilows : communica- 
 
 " Copy of a Report of a Committee of the Honourable the Executive Council, tion from 
 30 " approved by His Excellency the Lieutenant-Governor in Council, on the 6th ^^^^^^J^"^"^' 
 "day of June, 1870. , , , . . . ..Quebec. 
 
 " No. 131. " On the requirements of the British North ^merica Act ot copy of 
 " 1867, respecting the Judgment of the Arbitrators. Report of a 
 
 " The Honourable the Treasurer of the Province reports that it is the opinion Committee 
 " of the law officers of the Crown that, whereas the 142nd section of the B. N. A. g^^^'j^i^.g 
 "Act of 1867 enacts that the division and adjustment of the debts, credits, lia- council of 
 " bilities, properties and assets of Upper Canada and Lower Canada sb.all be Quebec. 
 " referred to the arbitrament of three arbitrators, it is essential to the validity of 
 "any decision to be given by such arbitrators, that their judgment should be 
 40 " unanimously concurred in. He, therefore, recommends that a despatch be 
 " transmitted to His Excellency the Governor-General with the views of this 
 " Government, and requesting that no judgment of the said Arbitrators which 
 " is not so unanimovisly concurred in be received. 
 
 " The Committee concur in the foregoing report, and submit the same for 
 " the Lieutenaut-Governor's approval. " Felix Fortier, 
 
 " C. E. C." 
 
RECORD. 
 
 Letter from 
 the Asst. 
 Prov. Sec. 
 Quebec to 
 Hon. J. H. 
 Gray. 
 
 Discussion. 
 
 Arbitrators 
 adjourned. 
 
 18 
 
 [Copy.] 
 
 " Province of Quebec, 
 "^Ti. T1.0. ,1. u ^^"^^^^^T's Office, Quebec, 6th June, 1870 
 
 " I have the honour to be. Sir, 
 
 " Your most obedient servant, 
 
 "T. J. JoLICCEUR, 10 
 
 " To the Hon. J. H. Gray." "^^'*- ^'''^- ^^'" 
 
 All the 
 
 Arbiti'ators 
 
 [)resent. 
 
 TWENTY-FIRST MEETING OF ARBITRATORS. 
 
 Arbitratoi-s 
 called upon 
 to give 
 decLsion. 
 
 Demand 
 that before 
 decision, 
 Counsel for 
 Quebec 
 should bo 
 heard on 
 question of 
 'unanimity.' 
 Ojiinion.s of 
 Arl)itrators. 
 
 Majority in 
 
 favour of 
 
 Quebec. 
 
 Arguments 
 
 heai'd. 
 
 Arbitrators 
 
 adjourned. 
 
 .houlll'llZuS ,Sr e^^-'^ ^^P"--" ™^ "' "P'"- that't tS 
 ounwrcwirn"" "^n" H?™"'™ «ray concurred in the views of the Hon- 
 
 w,. pro3cd';!th"'"'« " '"""^ "' "" P'-"P°*'- °f Q"*ec, the a^^ment 
 
 Can. Jq:,rS rSrofXta^-:-3 ^ ^^t ^r^LTlL^eX' ' ^^ 
 The Arbitrators then adjourned until the n-^-t ^^ JA . , , , '" ^^P^^- 
 
 J «iu_u uiiwi wie li^At uajf itL tun o clock a.m, 
 
19 
 
 TWENTY-SECOND MEETING OF ARBITRATORS. 
 
 RECORD. 
 
 1870. 
 py of an Order 
 3r of this Pro- 
 mitted to His 
 
 [EUR, 10 
 
 ist. Prov. Sec" 
 
 ion took place 
 hich consider- 
 irrived at. 
 )lace the next 
 
 ting on Wed- 
 the Arbitra- 20 
 sspectively as 
 
 topronounce 
 of February, 
 ivered at the 
 
 ion on these 
 on the point 
 ng argument 
 leir opinions 30 
 
 uld be heard 
 aid decision, 
 the decision 
 
 of the Hon- 
 3d, the argu- 
 
 le argument 
 
 and Messrs. 
 d in reply. 
 :k a.m, 
 
 40 
 
 ! 
 
 The Arbitrators met at the place of their last meeting on the seventh day All the 
 of July, 1870. Present : All the Arbitrators and all the parties as at the las"t A^'l>'t"ito"» 
 preceding meeting. I)re8ent. 
 
 The Arbitrators stated that, in consequence of the Honourable Charles A.i.itrators 
 Dewey Day not feehng very well, they should adjourn until the next day at ton '^'ij"'»"'3cl. 
 o'clock a.m. 
 
 i TWENTY-THIRD MEETING OF ARBITRATORS. 
 
 I The Arbitrators met at the place of their last meeting on the eighth day of 
 
 |OJuly, 1870, at ten o'clock a.m., pursuant to adjournment. Present: All the 
 I Arbitrators and all parties as at the last preceding meeting, with the exception 
 ; of Messrs. Robertson and Irvine. 
 
 1 The Arbitrators announced that there was a difference of opinion between 
 
 I ^^6"^ respectmg the delivery of any preliminary judgment ; the Arbitrator for 
 I Ontario contendmg that the judgment should be delivered; the Arbitrator 
 ^ lor Quelle, on the other hand, being of opinion that it should be reserved 
 - until the hnal hearing of all arguments on both sides, when it might be delivered 
 or not, as rendered necessary or unnecessarv by the points raised being other- 
 wise disposed of, or remaining to be adjudicated upon. The Arbitrator ap- 
 %0 pointed by the Dominion thereupon desired an adjournment until next day at 
 # eleven o clock, to determine as to the course to be pursued ; and an adjourn- 
 ment took place accordingly. 
 
 All the 
 
 Arbiti'atora 
 
 preaent. 
 
 Difference 
 of opinion as 
 to delivery 
 of judgment. 
 
 Arbitratoi-a 
 adjourned. 
 
 TWENTY-FOURTH MEETING OF ARBITRATORS. 
 
 T 1 T^^^^^;fr^^<^^^tors met at the place of their last meeting on the ninth day of All the 
 , July, 1870, at eleven o clock a.m., pursuant to adjournment. All the Arbitrators Arbitrators 
 
 were present, and all parties as at the last preceding meeting. present. 
 
 The Honourable John Hamilton Gray, the Arbitrator appointed by the 
 
 -Dominion, then read the following opinion respecting the delivery of the 
 .judgment or decision of the Arbitrators on the points argued in the month of 
 «" February last, as follows :— 
 
 Opinion of the Arbitrator appointed by the Dominion Government. 
 
 f ^^ " In deciding on the point of difference between my two colleagues, it is Opinion of 
 , ^, necessary briefly to recur to certain facts. In the arguments that took olace ^on. J. H. 
 at Ottawa, in February last, upon the different modes for the adjustment and ^'^^• 
 aivisiou 01 the debts and assets relerred to us under the 142nd Section of the 
 
 I 
 
20 
 
 RECORD 
 
 '' B. N. A. Act, the Arbitrators wore callofl upon })y tlie Counsel for Ontario to 
 "dispose of, in the fii-si in.suuicu, tiu* lund.iuuiL i^uusLiuii of partnerslii'* raised 
 "by the Counsel for Quebec. This was objected to by the latter, tud, after 
 " consideration, the Arbitrators on the following day sustained th. objection. 
 " The arguments were then continued for several days by the Counsel on both 
 " sides, and the several modes of divisicm suggested by Ontario ami Quebec 
 " including tl)e above question of partnershi{), were fully discussed, some of the 
 " members of the (jovernment of each of those Provinces being present each 
 '' day ; and the Arliitrators, at the close of the argument, were urgently pressed 
 " l)y the Counsel on both sides to determine and declare the mode under which 10 
 " 'ho division and adjustment should proceed, as preliminary to any further 
 ^^ action, notwithstanding that the Arbitrators had previously expressed their 
 " opinion that decisions on these preliminary ])oints were not desirable, but that 
 " it would be btitter to go on, enter fully into the case on both sides, and decide 
 " upcm the whole as ultimately might be deemed right. 
 
 " In accordance with the wishes expressed both by Ontario and Quebec, 
 " and solely in accordance with those wishes, the Arbitrators did proceed to 
 " consider the questions submitted and the arguments, and after a long and 
 '' laborious consultation, extending over several days, held at Montreal in May | 
 " last, came to a decision, but which decision was not unanimous. That decision 20 ' 
 " was by the three Arbitrators ordered to be entered in the minute book, and 
 " to be communicated to the Counsel for the two Provinces respectively. At 
 " the subs(([uent request of the Arbitrator for Quebec, made to the other two 
 " Arbitratoi-s separately after their adjournment on the 28th May last, that 
 "communication was delayed for a short time, and was, on further request 
 "still further delayed. The decision was entered as directed. About the 
 " 16th June last, the Arbitrators severally received from the Government 
 " of Quebec a Minute of Council of that Government, expressing the opinion 
 '• of the law officers of that Government, that it was essential to the validity 
 " of any decision by the Arbitrators that their judgment should be unanimously 30 I 
 " concurred in. ' 
 
 " The communication of the decision arrived at on the 28th May last, was 
 " therefore postponed until the action of the Arbitrators could be determined 
 " on this point at their meeting, which was to take place at Montreal, on the 
 " first Tuesday in July, though the Arbitrator for Ontario demanded that the 
 " Counsel of both Governments should have the decision communicated to them 
 " in obedience to the order made in that behalf, and unanimously concurred in 
 " by all the Arbitrators. 
 
 " On the first day of the meeting in July, at Montreal, the fact of the 
 " receipt of this communication from the Government of Quebec was announced. 40 
 "A demand was then made on behalf of the Government of Quebec, that 
 " Counsel should forthwith be heard on that point ; and after denial by the 
 " Counsel for Ontario of the right of the Government of Quebec to make any 
 " communication to the Arbitrators which was not at the same time made to the 
 " Counsel or Government of Ontario, and a demand made that a decision arrived 
 " at in May last should be first declared, the question was submitted, and the Arbi- 
 " iratorsdecidedbyam.ajority thatQuebec should bfihft.ard on the pointof unanimity. 
 
 
 "fi 
 "a 
 "b 
 "ti 
 "01 
 "ill 
 "n 
 "h 
 10 " cl 
 "tli 
 "hi 
 "sj 
 "m 
 "pi 
 "ct 
 "tv 
 
 20 
 
 ISO 
 
 40 
 
 n( 
 
 "lu 
 "lo 
 
 "sii 
 " fo 
 
 "be 
 "pf 
 "wi 
 "lu 
 
 "is 
 
 "or 
 
 " di 
 
 "re 
 
 "lei 
 
 "pr 
 
 " CO 
 
 " ad 
 "or 
 
 "an 
 "wl 
 "no 
 "sic 
 "nii 
 
for Ontario to 
 nershi'i raised 
 ;ter, tnd, after 
 tbi objection, 
 uinsol on both 
 ) autl Quebec 
 J, some of the 
 present each 
 i^ently pressed 
 i under wliich 10 
 
 any further 
 ^pressed their 
 rable, but that 
 es, and decide 
 
 1 and Quebec, 
 lid proceed to 
 ^r a long and 
 ntreal in May 
 That decision 20 
 te book, and 
 lectively. At 
 the other two 
 [ay last, that 
 rther request 
 
 About the 
 
 Government 
 
 f the opinion 
 
 o the validity 
 
 unanimously so 
 
 Vlay last, was 
 e determined 
 ntreal, on the 
 ided that the 
 ;ated to them 
 concurred in 
 
 3 fact of the 
 s announced. 40 
 [Quebec, that 
 enial by the 
 to make any 
 3 made to the 
 :;ision arrived 
 and the Arbi- 
 of unanimity. 
 
 '10 
 
 i 
 
 '20 
 
 '30 
 
 40 
 
 21 
 
 " After full arfjfinnont, the .'\ibitrators adjourned until the 7th, and then RECORD. 
 ' further adjcJuriied 'intil the Hth. At tne meeting' on the Ht'i, the Arbitrator .~ — 
 'appointed by the Dominion, announced that there wa.s a ditterenco <)f opini()n oE'''7 
 ' between hi.s colh^i'-ues. That the .Arbitrator for C^uel)ec (expressed his objec- "" "*"*' ' 
 'tion to -he announcement of the deci.sioii arrived at t)n the I'Hth May last, 
 ' or of any other preliminary decision hereafter, and reiterated the views on tlie 
 ' impolicy of such a ccmrse, already stated by him, but which cour.se at the 
 ' recpiest of the Counsel on both sides had l)een departcid fi-om ; further addiiifjf 
 ' his belief that .such announcement would tend to prevent a haruKMiious con" 
 'elusion. That the Arbitrator for Ontario, on the contrary, coiif-nded tliat, at 
 ' the recpiest of both parties, thoy had come to a decision ; that the decision 
 ' had already been communicated unofficially by both Arbitrators to their re- 
 'sjjective Governments ; that those Governments had a right to its anncmnce- 
 ' ment, and that it was the duty of the Arbitrators to make the communication 
 ' previously ordered. That all efforts to produce an agreement h(>tween his 
 'colleagues had failed, and that it was therefore necessary for him to take 
 ' twenty-four hours to con.sider the course he should pursue. 
 
 " A di.scussion, as you are aware, arose on this statement, but resulted in 
 ' no amicable arrangement, and I have now to decide. 
 
 'I If this was a private matter there would be no difficulty about it. Parties 
 ' having agreed to a reference, and having requested a decision, whether inter- 
 ' locutoiy or final, must take i^. unless by consent it is abondoned. 
 
 " The point now to be considered is, whether in an imjMrtant jniblic matter, 
 .such as this arbitration between Ontario and Quebec, sufficient grounds exist 
 for a depaiture from the ordinary mode. 
 
 " I have "xhausted every effort to bring about an agreement on this point 
 between ni two colleagues, and have delayed giving any opini(m until com- 
 pelled by ti ( '^" ?ssity of the arbitraticm being either abandoned or proceeded 
 with. A week has elapsed in unavailing efforts to do so, and I am most re- 
 luctantly compelled to decide. 
 
 " I have to observe that the decision )f the '2Sth May last is not final. It 
 is not like an award of the Arbitrators on the division and adjustment. It is 
 only an opinion of the majority of them as to the best mode to proceed in the 
 division. If in working it out it is found to opei-ate unfairly, it is o})en to be 
 reviewed and rescinded, and such other mode adopted as may be shown to 
 lead to a fairer result. It is admitted by the Arbitrator for Quebec that in 
 proceeding under this mode, the enquiry will necessarily expand itself into tin; 
 consideration of much that would be embraced under the view (jf jjartnership 
 advocated by himself ; but it does not admit the existence of a pai-tnership, 
 or limit the investigation to the rules which would govern a partnershi}). 
 
 " No appUcation has been made to ^ave the matter re-heard or re-argued, or 
 any grounds taken or alleged to set n^ule the decision, or any reason assigi'u d 
 why it should not be pronounced at this meeting, s.nve that one party does 
 not wish it, and that its delivery may tend to p- . larmonious conclu- 
 
 sion. If both parties would assent to this, the .be an end of the 
 
 matter, for clearlv everv effort should be made to au, ui that end 
 
 " The third Arbitrator undoubtedly has a discretion, but the exerjise of 
 
opinion — 
 Continuei/ 
 
 22 
 
 RECORD, "that .liscretion must bo on roa.sonahlo frnrnwU. ft sliould not ho tho nioro 
 ^ oxpress.oiv (.f an arbitrary will. ()no r)arty domands tho cKsbvory of the 
 ^lerAHum at thv.uwi^tuxff as part of tho compact on which tho arLMimonts woro 
 heard and tho (bs(ni.sHi..n took i)hieo. The other admits tho compact, but ob- 
 jects to Its bem^' carried out. 
 ^^ "Tho power to withhold jii(l}r,„onts ready to ))o pronounced is freouentlv 
 exercised by trd)unals and jml-cs, v/hen it is manifest the interests of tho 
 I)arties concerned wdl be promoted ; but it is generally l)y consent, ami ,iever 
 against tlie will of one of tho parties, without good cause shown. 
 ^^ " Iho decision in this case; was communicated by both Arbitrators to their 10 
 ^^ respective Governments unollicially, and I cannot see any objection to doin.^ 
 ^^ openly what each one has in that respect undertaken to do in his individual 
 capacity, 
 
 u J' ^l\^^^ ^'^° judgment is formally pronounced, it will then be optional witii 
 either (Tovernment to assign the grounds of objectiim, and move for a re- 
 hearing or rescinding. 
 
 ^ "No party will go on with a reference or argument if after both paitios 
 
 have agreed to tho submission, and have been heard-one may render it nu-m- 
 
 tory, the moment he learns tho result. 
 u A ''.J lif vo beo» most desirous to concur with the views expressed by the 20 
 
 Arbitrator for Quebec ; but I have sought in vain for some rational ground 
 wou.r . M fomnoUed to decide, a refusal to announce the decision on the 
 
 28th of May last could ])e based. 
 
 „ . " T cannot find that the decision will inflict any wrong on the party o])ject- 
 » ;nS- It is not conclusive. It is a mere mode of enquiry, and open to correc- 
 tion I he decision made by us is no iron rule, but simply in tho light of a 
 "guide to be construed Hberally. "^ « ' "^ 
 
 ^^ "It is now earnestly to be hoped that, in view of the great interests at 
 ^^ stake tho parties will proceed witluMit further delay, and that both will unite 
 m en.leavouring to effect a just distribution by the mode rocomniended, or 30 
 lailing that, by some other mode. 
 
 ''t1>p'9iWM''''?^?"'''i;'^'^I\¥'"-.^'''l',l'''''""' ^'^^^ ^^'^ ^l««'«'''n «"-"^ed at on 
 tlie 28th of May last, should bo formally announced to the Counsel and Pro- 
 vinces concerned. 
 
 "J. H. Gray." • 
 
 Hon. C. D. 
 Day resigns. 
 
 His resigna- 
 tion received 
 by Quebec. 
 Decision of 
 28th May 
 read. 
 
 Dissent also 
 read. 
 
 Dav^^tPrl H?J 1 ^ ?i ^?'''"" "*^ "^1""^"' ^'^^ Honourable Charles Dewey 
 JJay St. ted that he could no longer act in the arbitrati. m he could not am-ee 
 m the decision ; and that he had, therefore, that mornin- iM< (-.i his rosi .,adon 
 m the hands of the Government of Quebec. He th( - .^p'oi hande^to M 's is 
 Macpherson and Gray a written notice to that effect, and withdrew 40 
 
 ablP cL ?'fn "''"'' ^n" f ^^^^'- ^^^-^ ^'' Government had received tho Honour- 
 able Chaiies Dewey Day s resignation. 
 
 read "^dj^^Z^^j" """ ^""^^'"' '''' ^''''''^ '' ^'^ ^Sth May was formally 
 Tho i? on. s^r 1 le Charles Dewoy Day's dissent thereto was also read. 
 
 10 
 
 ;20 
 
 30 
 
ho tUo moro 
 vory of tho 
 imniifs worn 
 act, but ob- 
 
 H frociuently 
 rests of tho 
 ;, and jiovor 
 
 tors to thoir 10 
 on to (loiiiji; 
 s individual 
 
 itional with 
 vo for a re- 
 
 •oth pal ties 
 [ler it nuga- 
 
 isod by tlio 20 
 )nal ground 
 ■iion on the 
 
 irty object- 
 II to correc- 
 ! hght of a 
 
 interests at 
 1 will unite 
 nended, or 30 
 
 rived at on 
 j1 and Pro- 
 
 Y." • 
 
 •les Dowey 
 1 not agi'ee 
 'esi..,'iacion 
 to Messrs. 
 
 40 
 
 e Honour- 
 -s formally 
 ead. 
 
 Mcinornn- 
 ilimi cf Mr. 
 liilc'liio lis 
 to the (IJH 
 i|nulili('iiti(»i 
 "f Hon. J. 
 
 23 
 
 Mr. Ilitchii! then presented and reiiuestod the following nuui 'anduni to HKCokd. 
 be Hied : 
 
 "The undersigned, of Counsel for the I'lovime (.f (^u/b.-c, herel y respect- 
 " fidly repro.sents that the Honourable John Hamilton (iray. the Arbitrator 
 I'iinpointed by the (rovernnu'nt of Canada, under the Provisions of the R N. 
 "A. Act, 1H(;7, h;,, become and now is dis(pialified to act as Arbitrat(»r, inas 
 "nuich as the said the lb nonrable ,I(.lin l{amilt(.u (Jray is now, and for a con 
 " sidcrable time |)ast has beeti, a resident of Ontario : and prays that all pro- ^^- 0™y 
 " ccedings upon this arbitration be stayed until the (Jovernment of Canada shall 
 10" have appointed a duly (pialilied Arbitrator in the jdace and .stead of the llon- 
 "ourable .John Hamilton Gray, .so di.scpialiHcd as aforesaid. 
 
 "T. W. RlTCIIIK, 
 
 "M(mtreal, 0th July, IH7()." "Of Coun.sel for guebec." 
 
 Mr. Ritchie also presented the following memorandum, rofiuesting it to be 
 filed, it being as follows : — 
 
 "The Province of (Quebec respectfully excepts to the decision now n ndercd 
 ^'by the Hommrable John Hamilton (h-ay and David Lewis Maepherson, uvo 
 " of the Arbitrators, as not being a valid judgmeut--not being that of the 
 " Arbitrators. 
 
 i^O ^^ "T. W. RiTciiiK, 
 
 " Montreal, July 9th, 1870." " Of Coun.sel for Quebec." 
 
 p.m 
 
 The Arbitrators then adjourned to meet again the same day at four o'clock 
 
 Memomii- 
 iluiH iif Mr. 
 Hitcliii!. 
 Kxccption 
 l»y QuelHiO 
 tn ilt'ciHion 
 of Hon. J. 
 H. Gniv luid 
 Hon. D. L. 
 Macpliorson 
 
 Arbitrutore 
 adjourned. 
 
 TWENTY-FIFTH MP:ETINCx OF ARBITRATORS. 
 
 The Arbitrators met on the same day as the last preceding meeting, at four 
 
 - .. m. Present: 
 
 ■esent : Ihe Honourable David Lewis ifon. J. H. 
 
 o'clock p.m., pursuant to adjournment. 1 ^..^ .,„ 
 
 Maci)herson and the Honourable John iramiltonGray. Messrs Wood -md 
 Cameron, and the Attcn-ney-General for Ontario, were present on behalf of 
 Ontario, and Mr. Ritchie appeared on behalf of Quebec. 
 " ,. "l^'it; Att(,a-ney-General for Ontario proposed to proceed with the investic^a- 
 tion Ihe Arbitrators declined to take further proceedings that day aiid 
 decukul t_,o adjourn, to meet again at Montreal, on some future day to be aVrreod 
 upon and to be notified to all i)arties. ^ " 
 
 (iiav and 
 Hon. D. I.. 
 MacpherHon 
 
 Arbitrators 
 dei'Hnod to 
 take ftirtiier 
 proceedings 
 and 
 adjourned. 
 
 TWENTY-SIXTH MEETING OF ARBITRATORS. 
 
 the twPrltv fi^'TI^"' f'^T f 'YJ^- L'-^wrence Hall, in the city of Montreal, on Arbitrate. 
 the twenty-first day of July, 1870, at two o'clock p.m., pursuant to notice duly I'-Bent: 
 given to all parties. T],e Arbitrators present were the Honourable David Lewi^ "'^■" ^• 
 Maepherson and the Hononmhlfl .Tnhn Wo,v,Uf,.,. n_ ^^ "*^i ';i^i« -i^av a l^e^is^j^ ,3, 
 
 L. 
 
 lerson 
 
 Maepherson and the Honourable John Hamilton Gray. The Honourable John l?'^::: 
 
 J. H. Gray. 
 
24 
 
 RECORD. 
 
 Notice to 
 attend ine:'t 
 ing of Arbi 
 tratora 
 given to 
 Hon. C. D. 
 Day. 
 
 Notice to 
 Que 
 
 Judgment 
 on question 
 of ''unani- 
 mity" called 
 for. 
 
 Communi 
 
 cation in- 
 forming Ar- 
 bitrators 
 that resigna- 
 tion of Hon. 
 C. D. Day 
 accepted by 
 Quebec. 
 
 Revocation 
 of Hon. C. 
 D. Day's 
 appoint- 
 ment as Ar- 
 bitrator for 
 Quebec. 
 
 10 
 
 ' ' [ Arbitrators, 
 as Counsel for 
 
 HiUyard Cameron, the Honourable John Sandfield Macdonald and the Honour- 
 able E. B. Wood were present on behalf of Ontario, and the Honourable George 
 Irvine, Solicitor-General, and T. W. Ritchie, Esq., apneared on behalf of Quebec. 
 The notice to the Honourable Charles Dewey Day of the meeting to be- 
 held that day was then produced and read ; the same having been duly posted 
 and is as follows : — j t ' 
 
 " Toronto, July 12th, 1870. 
 " Dear Sir,— We beg to notify you that we shall meet at the St. Lawrence 
 "Hall Hotel, in Montreal, on Thursday, tlie twenty-first instant, at two o'clock 
 " 111 the afternoon, to })roceed with the arbitration between Ontario and Uuebec 
 " under the B. N. A. Act, 1867. 
 
 " We are, dear Sir, 
 
 " Yours very truly, 
 
 "D. L. Macpher£ 
 "J. H. Gray, 
 A similar notice at the same time was sent to Mr. Ritchie 
 Quebec, which he admitted he had received. 
 
 Mr. Cameron then called for the delivery of the judgment of the Arbitra- 
 tors on the question of " unanimity," which had been argued before them at a 
 previous meeting in Montreal. 20 
 
 The Arbitrators then stated Lhat they had severally received, from the (xov- 
 ernment of Quebec, a communication, which was read and is as follows :— 
 
 " Province of Quebec, 
 "Secretary's Office, Quebec, 19th July, 1870. 
 "Sir,— I have the honour to inform you that His Excellency the Lieutenant- 
 ^' Governor has been pleased to accept the reiiignation of tlie Hon. Chas. Dewey 
 1^ Day as Arbitrator of the I'roviiice of Quebec, under the 142n(l Section of the 
 ^^B. i\. A. Act, 1867, and request tliat you will be pleased to stay further pro- 
 " ceedings until sucii time as you receive notice as to their intentions from the 
 " Government of this Province. 30 
 
 " I have &c 
 "The Hon J. H. Gray, Ottawa." '"F.'j. O. Cuauveau. 
 
 Mr. Ritchie thereupon handed in the revocation, by the Government of 
 Quebec, of the Honourable Charles Dewey Day's appointment, requesting the 
 same to be filed. It is as ijllows :— 
 
 " N. R Belleau. 
 : Seal. : 
 
 " Province of Quebec. 
 
 " Victoria, by the Grace of God, of the United Kingdom of (ireat 
 " Britain and Ireland, Queen, Defender of the Faith, &c. 
 
 " To all to whom these presents shall come, or whom the same may concern, 40 
 " greeting. 
 ^^ " Whereas in and by our certain Letters Patent, bearing date, at our City of 
 " Quebec, the 30th day of January, in the 31st year of our reign, we did nomi- 
 "nate, con.stitnte and appoint the Honourable Charles Dewey Day, of the City 
 " of Montreal, in our Province of Quebec, to be, under the provisions of ^n Act 
 
 20 
 
25 
 
 the Honour- 
 irable George 
 If of Quebec, 
 leeting to he 
 
 duly posrerl, 
 
 h, 1870. 
 St. Lawrence 
 t two o'clock 
 and Quebec, 1<> 
 
 rbitrators. 
 3 Counsel for 
 
 the Arbitra- 
 )re them at a 
 
 20 
 
 •om the Gov- 
 Uows : — 
 
 uly, 1870. 
 ) Lieutenant- 
 Uhas. Dewey 
 ection of the 
 further pro- 
 [)ns from the 
 
 30 
 
 aiAUVEAU. 
 
 vernment of 
 questing the 
 
 om of Great 
 th, &c. 
 
 nay concern, 40 
 
 t our City of 
 ve did nonii- 
 , of the City 
 QS of ^n Act 
 
 " of the Parliament of the United Kingdom of Great Britain and Ireland, 
 " passed in the tliirtioth yeav of our nugn, entitled ' An Act for the Union of 
 " ' Canada, Nova Scotia and New Brunswick, and the government ihereof, for 
 " ' the purposes connected therewith,' the Arbitrator chosen for the Government 
 " of Quebec for the division and adjustment of the del)ts, credits, liabihties, 
 " pi-operties and assets of Upper Canada and Lower (.'anada during our royal 
 "pleasure: And whereas the said Charles Dewey Day has tondenMl his re.sig- 
 " nation of the said ofHce, which has been accepted by us, and for divers otlier 
 "good causes us thereunto moving, we have been pleased to determine our 
 10 " royal will and i)loasure in relation to the said letters patent : Now know ye, 
 " that we do hereby cancel, revoke and make void the said letters patent, and 
 "do hereby discharge the said Charles Dewey Day from the office t Arbitra- 
 " tor of the Government of Quebec as aforesaid. 
 
 "In Testimony whereof we have caused these our L tneis toben.ai.: 
 
 " Patent, and the Seal of our Province to be hereunto affixed. 
 
 " Witness, our Eight Trusty and Well-Beloved the Honourable Sir Narcisse 
 
 " Fortunat Belleau, Knight, Lieutenant-Governor of our said Province of 
 
 " Quebec, at our Government House, in our city of Quebec, in our said 
 
 " T'rovince, this twentieth day ■ f July, one thousand c'ght hundred and 
 
 20 " seventy, ami in the thirty-fourth year of our reign. 
 
 " By command, 
 
 "P. J. O. Chauveau, 
 
 " Secretary." 
 
 Thereui)on Mr. Irvine rose and protested aguinst further action being taken 
 by the Arbitrators, stating that he considered the Arbitration determined, and 
 that he and Mr. Ritchie would withdraAv from all further {noceedings. 
 
 The Attoi-ney-( reneral of Ontario and Mr. Cameron stated that they con- 
 sidered the Arbitration in full force, and in no way affected by the resignation 
 of the Honourable Charles Dewey Day, or the revocation of his authority, and 
 •'0 that they were ready, and demanded that the proceedings shouM go on. 
 
 The Arbitrator chosen by the Dominion thereupon read the judgment of 
 himself and Mr. Macpherson upon the (question of the necessity of unanimity 
 raised and argued before them on the 0th day of July, 1870, and which is as 
 follows : — 
 
 Judgment upon the Qu:::sri0N or "Unanimity." 
 
 "At our last meeting a question was raised by the Counsel for Quebec, under 
 "instructions from their (rovernment (a copy of the Order in Cour.cil having been 
 " transmitted to each of the Arbitrators) which would then have been decided but 
 "for the abrupt withdrawal of Judge Day, and our suksecpient immediate adjourn- 
 " ment, namely :—' That it is es.sential to the validity of any decision to be given 
 " 'by the Arbitrators that their judgment slnmld be unanimously concurred in.' It 
 " remains for me now to express the decision of the Arbitrators on tliat qucvstion. 
 
 " It is to be regretted that a position of this important character should not 
 " have been taken before it was known that there was a division of opinion be- 
 " tween the Arbitrators ; and it may well be assumed that it vvoukl hardly have. 
 " escaped the attention of so accomplished a jurist as Judge Day, the Arbitrator 
 
 RECORD. 
 
 Revocation 
 
 — Continued 
 
 Protest by 
 Quebec 
 against fur- 
 ther action. 
 Demand by 
 ("iitario that 
 ])ro('ee(!iiigs 
 should goon. 
 
 Jlldgnient 
 on tlie (jues- 
 tion of 
 'unauiinitv.' 
 
 40 
 
 I 
 
26 
 
 RECORD. 
 
 .Ju<lj,'nu'iit 
 —Vontivucd 
 
 "of Quebec, had he .leomed it tenable, and in such case that he would under the 
 " aSX: "' The' f-'--' "»;'-^tedly have brought it to the nSe of hi 
 ''exMm.«nf ?^ 1 he learned Judge heard the argument, but left with us no 
 " Su V ew l;.of ?^'""'"' Tv '^''\ '^"' Arbitration was one of a public nature 
 '< (n « onT ' ^^'"^^*^'t', ''T ^^el'^'^^ed are those of the remaining two Arbitra- 
 tors, and consequently of a majority. ^luiud, 
 
 " In matters of private reference the law is plain, that unless the terms of 
 " oiytnlTZCbf ,''"' Vr^'^''^ Huay ruh^all must agree in thelwarS " 
 " out ar^rb t ?H, n T^""^- V'' ""P^-'-^^^icability in private aflTairs of working 
 '• •! leases o ; ^^Uf ""'"'™'^^ ''^' .^'^««"tial, led to the adoption, in almost 10 
 -■inmrnAn tT !■' ! *\" "^'^.'""ty clause, or the alternative provision of 
 "tl s rom/Hr''"?f^'^ successful conducting of an arbitration has 
 
 '' elrenr ,; f fl"! ? "•■*l"!''^^y ^o»'«^^of arbitration bonds, or of rules of 
 etcience, one cf these clauses is almost always found inserted. Without su"h 
 " r^r' ir'"'" ^"'^^f ^t^''»'^t is admitted unanimity is requisite. The po t now 
 s Does the same rule apply to ,,ublic references or arbitrations? to which clas^ 
 " c 'Zr '^'' ^rr\ '''T'^ belongs-the 142nd Section of the B N. A 
 '' Mr rvv^ h' Q V'-f '";^^^'^tion is held, containing no such clause. " 
 " quesdon J"E p^^^.^'"'"-^^'"^"^ ''' Q^^^' '-« P-P-^^ --wed the ^ 
 "V 2J^o^l^i^'' argument for Quebec, cited Cal.lwell on Arbitration, ^^ 
 " to t ;; m P 1 V H Tr^f ^''*- P^'^^^r ^' ^'' P^'^^^^^^^ arbitrations. In the note 
 " Tin t^ ^^y % '" n ^^'"^^^ ^^^itor, who republished the work in the 
 United States, we hnd the following remark — 
 
 " ' r-onfwl^^ff !' '' '"^'m- ^'^'^^^"^^t'"" to be observed between the case of a power 
 
 " 'ciScis?,! wlnl^irtl T'^ '' T^'^'f °" '''^^'^^ persons, it must be jointly 
 cxeiciscd, wlule in the former it may be exercised by a majority.' ^ 
 
 ' ' mus 'S ine.?:,;; iT^' T' ^'' '''^^' '^'''\ ''^'''''' ''^PP"'"^^^ under a statute 
 " ' S 1.1 nl ' ^.^rt f '' ?T;''''' '• "' ^'.^*^ ^^^^^^'^'^^" of t^^« "^^yority will be 30 
 " aSics. '*^""^^"^''^« ^f ^^^^«« ^'«^^« i« sustained by the citation of many 
 
 " far'bacl''fs 1MH)^> ^'''i'" TT'\ f '""'"' Jol^"^""'^ New York Rep., p. 88, as 
 lai oack as 181(); it is clearly laid down : f > f , ^^^ 
 
 " ' When an authority is confided to several persons for a private Durnose 
 all niust join in the ac-t ; alif.r in matters of public concern. '^Thlpson^J- 
 A controversy b(>twe(m these parties was submitted to five arbitrators The 
 
 awaid. All the arbitrators met aid heard the proofs and allegations of tbe 
 -biudlm;^' ^""'^r'"^ on thea^^ard made. And wliether^lr^^db"40 
 " 'counsel whPrn "ow befijre the court. \o case has been cited bv the 
 
 " 'fie Hint fn , "^ '^ T ''"'^ •^^''" ^'"'""^'^ '^''''^'''^- I '^"^' l>owever, satis- 
 hcd that as a submission to arbitrators is a deligation of power /or a mere 
 priva,epurpn,,,n ,s necessary that all the arbitrators slumld concur ii the 
 ward niiless It is otherwise provided by the parties. In matters of ,mb c 
 concern a difhn-ent rule seems to prevail ; there the voice of the ma jo tv shaH 
 govern. In the case of Grimily vs. Barker, 1 Bos. and Pul. 236 Eyre^f J 
 
27 
 
 10 
 
 20 " 
 
 30 
 
 40 
 
 says—' It is now pretty well established that when a number of p*-' sous are RECORD. 
 
 ' entrusted with power not of mere private confidence, but in some rusi)ects of 
 
 ♦a general nature, and all of them are reguhirly assembled, the majority wi]l_fr")^"*^ 
 'include the minority, and their act will be the act of the whole.' The same '"'* 
 
 principle was recognized by the Court df K. B. in the case of King vs. Beaton, 
 3rd Term Eep. 592. See also Paley on Agency, 3rd Am. Ed., pages 177-8* 
 Note G. ; and Croker vs. Crane, 21 Wendell, 211-18. In ex parte Rogers' 
 7th Vol. Cowen U. S., Rep. 52«, and Note A. pages 530 and 53r7, the whole 
 position IS ably and thoroughly reviewed ; and in a long note citing the Enghsh 
 authorities, as well as the American, bearing upon the same point, the distinc- 
 tion between pubHc and private reference and tlie duties and powers resulting 
 therefrom, are clearly shown, and the power of the majority to decide clearly 
 established. The Enghsh cases upon the point are not so direct, but in the reason- 
 ing of those which have been cited, or can be found, the same princii)le clearly 
 manifests itself In the Courts of the United States, decisions are constantly 
 found bearing upon circumstances similar to those in our own Dominion 
 The varied nature of the business of that country, the different aspects under 
 which questions arise, from their position as a congregation of Stat^., the daily 
 development of new conflicts of rights arising from the expanding nature of 
 tlieir society, raise questions which do not come up in England, but the solution 
 of which, after all, in the absence of any particular local statutory piovisions 
 IS governed by the law of England. Under these circumstances our courts are 
 in the habit of taking those decisions as guides. These then determine that 
 in matters of Public Arbitration and Reference, though provision to that effect 
 be not specifically made, the decision of a majority shall be incident to the 
 reference. T'le 142nd Sec. of the B. N. A, Act, 1807, must come within this 
 rule. \\ ere it not so intended, the section would be superfluous, because any 
 one party m a great question of public importance could prevent a decision 
 
 " To work out the reasoning of the Counsel of Quebec to its legitimate 
 conclusion would place absolute power in the hands of the third or Dominion 
 Arbitrator. I have supposed that, on points on which Ontario and Quebec 
 were agreed, it was my duty at once to assent, and that under such circum- 
 stances, whether I differed or not, was of no consequence ; but as the powers 
 ol all the Arbitrators must be co-equal, if unanimity is essential, I mio-ht by 
 simply disagreemg, prevent an award, even when both Ontario and Quebec 
 the parties interested, had agreed upon it. Such a position is untenable Mr' 
 Macpherson and myself are, therefore, of opinion that the decision of a maio- 
 rity must govern. "^ 
 
 "Montreal, July 21st, 1S70." "'^" ^' ^"'^^" 
 
 The Arbitrators then adjourned until the next day at ten o'clock a.m. 
 
 TWENTY-SEVENTH MEETING OF ARBITRATORS. 
 
 The Arbitrators met on the twenty-second day of July, 1870, at ten o'clock 
 
 Arbitrators 
 adjourned. 
 
RECORD. 
 
 Present 
 Hon. J. H. 
 (iray and 
 Hoii. D. L. 
 Mncpher- 
 8on. 
 
 Discussion 
 on the part 
 of Ontjirio. 
 
 Arbitrators 
 adjourned. 
 
 • 28 
 
 l^'I^'iA /1'!^!"m *^^ Hon«uraWe T^hn Hamilton Gray and the Honourable 
 Pnt I'rrA.?^''''^ r^'"""";^'!.' Hon^'^^'-^We Charles Dewey Day not being pres- 
 neLd n?it TT?fr''^ for Ontario, and Messrs. CameroA and Wood ap- 
 peal ed on behalf of Ontario. No one appeared on behalf of Quebec 
 
 Thp Arhi^T''^''r^''^^'' V'^^ l»e^'i«J^eJ '"i adjournment until two o'clock p. m. 
 si tW whin M 'ir''''''^'^ accordingly; and at two o'clock p.m. resumed their 
 dfscnf; hi 1 h ^fTn ^'^T"^'^ ^" '^'' ^^'^ «f Ontorio. to submit to and 
 looarnnrnilt '^f^'^^'"'^'^'^' ^\^ respective debts of Ontario and Quebec for 
 nrincir?f ti ^'^^^^.^^^^^ of bringing the debts in both Provinces within the 
 SKn^lcriLi^"^^^^^ ^'^"" ''''^''' "^^^^' '''' Arbitrators adjourned 10 
 
 Present 
 Hon. D. L. 
 
 Maejilierson 
 anil Hon. J. 
 H. Gray. 
 
 Arbitrators 
 ann(junced 
 service on 
 tlieni of 
 Writ of Pro- 
 hibition. 
 
 TWENTY-EIGHTH MEETING OF ARBITRATORS. 
 
 .1 • A^A^ "^"J't f """f o'Jn^ ""^ ^^'^ P'^^^ °^ ^^^^^ fo™er meeting on the twenty- 
 third day of July. 1870, at ten o'clock a. m. pursuant to adjournment. Pres- 
 ent : the Honourable David Lewis Macpherson and the Honourable John Ham- 
 ilton Gray-the Honourable Cha.les Dewey Day not being present. Messrs. 
 Cameron and Wood and tne Attorney-General for Ontario, appeared on behalf 
 ot Ontario. No one appeared on behalf of Quebec 
 
 The Arbitrators stated that, after the adjournment last evening, they were 20 
 several^ served with a Summons, or Writ in Prohibition, issued by order of 
 Judge Beaudry out of the Superior Court of the Province of Quebec, Avhich with 
 th^. papers annexed thereto were read. The Writ appeared to be issued on 
 affidavit^ severallymadeby the Honourable George Irvine, Solicitor-General 
 for Quebec, and T. W. Ritchie, Esq., Counsel for Quebec ; which affidavits and 
 Writ severally bore date the twenty-second day of July, 1870. The affidavit 
 made by the said the Honourable George Irvine, is as follows :— . 
 
 " Canada. 1 
 
 " Province of Quebec, I 
 
 " Diiitrict of Montreal. ) 
 
 In the Superior Court. 
 
 30 
 
 Affidavit of 
 Hon. Geo. " 
 Irvine. u 
 
 o "TbeHonoura.ble George Irvine, of the City of Quebec, Her Majesty's 
 and sf '"^^"'''''' Province of Quebec, being duly sworn, doth depose 
 
 " That on the ninth day of July instant, at the City of Montreal, in the 
 said Province, the Honourable Charles Dewey Day, the Honourable John 
 Hamilton Gray and the Honourable David Lewis Macpherson, Arbitrators 
 
 Vw.'ff 1 f,P'"^''- -"' ''^^H^ ^^-"^^ ^^^^^"^ °^ t'^^' I^^tish North America Act 
 1807, held a sitting, and that then and there the said the Honourable Charles 
 Dewey Day, who was the Aibitrator chosen by the Province of Quebec did 
 as this deponent is credibly informed and believes, notifv the said oMmr Arbi- io 
 trators that he had resigned his office of Arbitrator, and should no longer act ' 
 
 M 
 
! Honourable 
 lot being pres- 
 md Wood ap- 
 bec. 
 
 I o'clock p. m. 
 esunied their 
 mbrnit to and 
 id Quebec for 
 ces within the 
 3rs adjourned i^' 
 
 RS. 
 
 a the twenty- 
 ment. Pres- 
 e John Ham- 
 !nt. Messrs. 
 red on behalf 
 
 jg, they were 20 
 I by order of 
 3, which with 
 le issued on 
 citor-General 
 iffidavits and 
 rhe affidavit, 
 
 30 
 
 er Majesty's 
 doth depose 
 
 treal, in the 
 Lirable John 
 Arbitrators, 
 .nierica Act, 
 able Chailes 
 Quebec, did, 
 other Arbi- 40 
 o longer act 
 
 29 
 
 " upon the said Arbitration, and thereupon he withdrew from the said sitting 
 " of the said Arbitrators, 
 
 "That afterwards, upon the said day, the said the Honourable John Ham- 
 " ilton Gray and the Honourable David Lawis Macpherson, as this deponent is 
 "credibly informed, adjourned to a future day to be named, and thereafter 
 " notified the Government of Quebec that they would meet and proceed with 
 " the said Arbitration at the St. Lawrence Hall in Montreal aforesaid, on the 
 " twenty-first day of July instant. 
 
 " That the resignation of the said the Honourable Charles Dewey Day was 
 10 " duly accepted, and his commission and appointment as such Arbitrator was, 
 " on the twentieth day of July instant, revoked and annulled by the Govern- 
 " ment of Quebec. 
 
 " That on the said twenty-first day of July instant, the said the Honourable 
 " John Hamilton Gray and the Honourable David Lewis Macpherson met at 
 " Montreal aforesaid, and assumed to proceed with the said Arbitration, and 
 ^' although they were then and there duly notified that the said tlie Honourable 
 '' Charles Dewey Day had resigned his office as Arbitrator, and that his resignation 
 " had been accepted, and his commission and appointment as such Arbitrator had 
 "been revoked and annulled by the said Government of Quebec, they the said 
 20 "the Honourable John Hamilton Gray and the Honourable David Lewis Mac- 
 " pherson did sit as Arbitrators upon the said Arbitration, and did proceed with 
 " the same, and did then and there, notwithstanding the said Province of Quebec 
 1^ protested against any further proceedings being had, render a certain judgment 
 "or decision as Arbitrators, and did declare their intention to go on with the 
 " said Ar'bitration,and did for that purpose adjourn and continue their said sitting 
 "until the twenty-second day of July instant, at ten o'clock in the forenoon, at 
 " Montreal aforesaid ; and further deponent saith not, and hath signed. 
 " Sv/orn and acknowledged at Montreal, ) 
 
 " twenty-second day of July, before us, } " G Irvine " 
 
 30 " L. J. A. Papineau and J. S. Honey, P. S. C." ) 
 
 The affidavit made by T. W. Ritchie, Counsel for Quebec, was in substance 
 the same as that of the Honourable George Irvine. 
 
 Appended to the writ was the petition of the Honourable Gedeon Ouimet 
 Attorney-General for Quebec, to the Chief Justice and Justices of the Superior 
 Court, setting forth tlie facts stated in the foregoing affidavits, and praying for a 
 Writ of Prohibition against the Honourable John Hamilton Gray and the Hon- 
 ourable David Lewis Macpherson to restrain them from further proceeding upon 
 the said Arbitration. The Writ of Prohibition commanded the said two Arbi- 
 trators to refrain from further proceeding in the said Arbitration, and required 
 40 them to show cause why they should not so refrain on Thursday, the first dav 
 of September then next. 
 
 The Arbitrators, after reading the foregoing papers, adjourned until Thurs- 
 day, the fourth day of August then next, to meet at Osgoode Hall, in the City 
 ot loronto, at tv^elve o'clock noon, to proceed with the said Arbitration, and 
 they directed that due notice of the time and place of such meeting should be 
 given to the Honourable Charles Dewey Day, and to T. W. Ritchie, Esq., the 
 Counsel for Quebec. 
 
 RECORD. 
 
 AfBdavit — 
 Continued. 
 
 Affidavit of 
 Mr. Ritchie 
 same as Mr. 
 Irvine's. 
 Petition an- 
 nexed to 
 Writ. 
 
 E 
 
 Arbitrators 
 adjourned, 
 and directed 
 notice of 
 next meet- 
 ing to be 
 given to 
 Quebec. 
 
30 
 
 RECJORD. 
 
 Present : 
 Hon. J. H. 
 Gray and 
 Hon. D. L. 
 i! acpher- 
 Bon. 
 
 Hon. C. D. 
 Day being 
 absent. 
 Notice to 
 Arliitrator 
 and Counsel 
 for Quebec 
 to meet in 
 Toronto. 
 
 10- 
 
 Jurisdiction 
 of Suj)erior 
 Courts, Que- 
 bec, over 
 Arbitrators 
 argued. 
 Arbitrators 
 adjourned. 
 
 TWENTY-NINTH MEETING OF ARBITRATOKS. 
 
 The Arbitrators met at Osf-oode Hall, in the City of Toronto, on the fourth 
 day .. August 18^0, pursuant to notice. Present- The Aibitrators, the Hon- 
 ourable Jolni Hamilton (>ay and the Honourable David • Lewis Macpherson ; 
 the Honourable Charles Dewey Day not being present. Messrs. Cameron and 
 Wood app<"ared on behalf of Ontario; no one appearing r,n behalf of Quebec. 
 
 Mn Cameron produced a notice which he stated he had personally pc.sted 
 to the Honourable Cliarles Dewey Day, to the Honourable George Irvini. Soli- 
 ci or-Cxeneral for Quebec, and to T. W. Ritchie, Esq., Counsel for Quebec, 
 which notice is as follows : — it. 
 
 "In the matter .if the Arbitration 
 
 , . " l^t>tween the Drovinces of Quebec and Ontario, 
 ihe undersigned Arbitrators in the above matter, have adjourned until 
 Ihursday, the fourth day of August, 1870, then to meet at Osgoode Hall, 
 loronto, at twelve o clock noon, to proceed with the Arbitration 
 "Montreal, twenty-third day of July, 1870. 
 
 " D. L. Macpherson, 
 "J. H. Gray." 
 
 Endorsed on tlie back were these words, " Mailed from Toronto on the 
 twenty-eighth day of July, 1870. J. H. C." 20 
 
 . A7^'' Honourable John Hamilton Gray reported that after the adiournment 
 at Montreal, on the twenty-third day of July last past, just before leaving Mon- 
 
 WhI rl n^ ""r""^' ^l'""'"!' ^'? '"'"' '""'"^^ ^'y "" ^^'"^'ff «^ Sheriff's Officer, with a 
 Writ of Quo- Warranto to show cause by what authority he exercised the office 
 ot an Arbitrator— he, having become a resident of Ontario 
 
 ihe Arbitrators waited an hour, and, no one appearing on behalf of Qu ■ 
 bee, expressed their desire to the Counsel for Ontario, to hear argument 1 a 
 Uie subject of the jurisdiction of the Superior Courts of (^lebec, by Writ of 
 1 rohibition, to restrain them from proceeding with the said Arbitration ; where- 
 upon Mr. Ca eron proceeded to argue the question. After which the Arbitra- 3fl 
 tors adjourned until next day at twelve o'clock noon, to meet at the same 
 place. 
 
 Present : 
 Hon. J. H. 
 Gray and 
 Hon. D. L. 
 Macpher- 
 son. 
 
 Hon. C. D. 
 Day being 
 absent, 
 
 THIRTIETH MEETING OF ARBITRATORS. 
 
 The Arbitrators met on the fifth day of August, 1870. Present- The 
 Honom-abb John Ilami ton Gray and the Honourable David Lewis Maq.her- 
 son-the Honourable Charles Dewey Day not being present. Messrs. Cam- 
 Quebec ' '^PPe^^-ed on behalf of Ontario; no one appearing on behalf of 
 
 The Arbitrators stated that they were ready to deliver their opinion upon 
 
 
 .M 
 
RS. 
 
 ), on the fourth 
 iitors, tlie H oil- 
 is Macplierson ; 
 !. Cameron and 
 lalf of Quebec, 
 rsonally pcjsted 
 ^j?e Irvine, Soli- 
 el for (Quebec, 
 
 10 
 
 no. 
 
 • Ijourned until 
 Osgoode Hall, 
 m. 
 
 ;rson, 
 foronto on the 
 
 e adjournment 
 e leaving Mon- 
 Officer, with a 
 cised the oflHce 
 
 Jehalf of Qm ■ 
 irgunient v a 
 tec, by Writ of 
 •ation ; wliere- 
 h the Arbitra- 30 
 t at the same 
 
 Present: The 
 !\vis Macpher- 
 Messrs. (:!am- 
 ? on behalf of 
 
 opinion upon 
 
 I 
 { 
 
 # 
 
 31 
 
 the question of the authority and power of the Superior Courts of Quebec, to RECORD 
 d? before "' l'''^^"'^'^""^ ^'^'""^ proceeding in the said Arbitration argued the ' 
 
 Opinion of the Honourable David Lewis Macpherson. 
 
 ''The two Arbitrators now present meet under circumstances calhng for o„i„ion of 
 u T? S"'" • t'lrciinispection and thoughtfulness. "^ tl.e Hono«r- 
 
 " i, P^^'^'i»te of Quebec is not represented before them al^le David 
 
 "The Counsel for Ontario calls upon them to proceed with the evidence ^r''' ^^' 
 and to make their award. pheison. 
 
 ^^ "The retirement of the Arbitrator for Quebec, sanctioned bv the Govern- 
 ment of tiiat I rovince, was formally communicated to the Arbitrators when 
 they met at Montreal, on the twenty-first July last, by an official letter from 
 the Premier jiiid Secretary, the Hoi.oural)le Mr. Chauveau, in which he fur- 
 ^^ tner preferred the extraordinary request that the remaining Arbitrators ' will 
 ^^ ^ be pleased to stay further proceedings until such time as they receive notice 
 "of Ouebe"" "'^^"**""*^ *"^"""^ ^^^^ Government of this Provhice,'— the Province 
 
 "A request to stay proceedings until the Government of Quebec should 
 determine whether they would appoint another Arbitrator, was shortlv after- 
 vv^-ds made by the Counsel for that Province, and was, upon consideration, 
 
 _^ e used by the Arbitrators ; whereupon the Counsel for Quebec declared that 
 the 1 rovince would no longer be a party to the Arbitration, and withdrew. 
 
 ^ J^urtlier, each of the two Arbitrators now present was, since the retire- 
 
 ment of the Arbitrator for Quebec, served, while in the City of Montreal, 
 
 " ,^ rn in I'-'T' -^ "'"' ,^ -f • ^l'^'"''''' ^^'^"^"* ^»^" tl'^ Pi'ovince of tiuebec, the 
 ^^ pu port of which IS to proliibit them from the furtlier exercise of their functions 
 
 lint la new Arbitrator should be named for that Province, or to show cause 
 
 to the contrary on the hrst September next. 
 ".,n,il'.w ^^'^'j^yf^^rf noticed that neither the letter of Mr. Chauveau nor the 
 
 <ip hcation of the Counsel for Quebec named any time within which it was 
 
 expected such new appointment would be made 
 
 "The retirement of the Quebec y\rbitrator took place on the 9th of July 
 
 n^i ed ^nT™' ^%'l '^'''''^ *^? '^''' ''^*^' '-^'^^^ *'" tlie 22iid the writ was ol- 
 ' W Iv 7f-V ^"^ ■"!' ^'^ ^'"'^ "'"'"^"^ t]ie Arbitrators are not informed 
 
 't f(Won''''^^Vf^^^^^^ "^ ^'''^ ^'"'^t it is the intention of 
 
 the Government of Quebec to make a now api>.)intniont 
 
 '•mother A rhin'T'^'^''/^"-" ^>^"'1''V ^\^'' P<>^^'^>^' under th(> statute to appoint 
 'Z r^.;nn ;^^^^ '•^™" "^'™^'^"> ^'^ ^lo so, they have ha(l more 
 
 ' abh^^ cSr 1 ' ''n "' '''" ■ ^''''^'.''''' '''''' ^'»^"' '^^'^'n^tance of the Honoui- 
 ' dehv as n 1 f. """7 I -^"^ ? '■osignation. Tt was the indefinite character of the 
 _ delay asked for, which induced the Arbitrators to refuse it. The writ which 
 
 'n?te auTi-i;!; TTl ''^'"''''^ immediately after that refusal is ecpiallv indefi- 
 ■ o '!^f aVd r '"1 . • "'"'"'' '^'' /'"Pression that delay in compk^tiuL^ the 
 ^ ti^ obje^' ed^S^:^' " "'"'"'^' '""^ '' ^'^'^""^ ''''''''' Arbitrator^ was 
 
 .»t* 
 
32 
 
 RECORD 
 
 „ ; ," ^^ appears to me, who am unskilled in legal technicalities, taking an equit- 
 
 Opinion of ,, f,^^ ,;-oWi!;!^Hr' Y7 "*" ^^'' ^"^T^"^"' ^" ^" ^"^^^^^ reasonable doubt that 
 Hon D. ]. ^^ 10 p ovnicuil tr bunal has or can clann, any jurisdiction to examine into or 
 Macpher- decide any question referred to arbitration by the 142nd Section of the British 
 
 S-^ ;: Smjr2if,*^'', T' ^"' l\ "^^ \^ T^'^^'^'y .sseSrat1he"m^;eS 
 
 ^^ parliament intended the award to be absolutely final. But other and nit un- 
 
 " if £siS nrlTTH^'f .^''''" '^ ??' ""^"^ ''^^""^^) P^««^"^ themselves which, 
 It insisted on, must be determined by some competent tribunal 
 
 "thp'.i^r """""^ \^t Arbitrators, who has undertaken and entered upon 
 " ltlSv%tHrf "^ by the Statute and who is under no mental or pliysLl 10 
 disability, retire trom or abandon these duties before their completion ^ This 
 
 " an'opiiln. ''''^ °''' ^'' ''^"'^' '^'' "'^''' Arbitrators can be expected to express 
 
 " 7)op/h!o iTJf;! «"?"^c<^ed with the, perhaps, more strictly legal enquiry : 
 "?rhff.. n 1. the Imperial Parliament authorize the withdrawal of an 
 
 Arbi rator with or without the. concurrence of the party who appointed him « 
 ''T} fr A\'^rV'^' ^"[ the substitution of another in his pkcerAgaTn,' 
 
 are the Arbitrators, who (though respectively appointed by the Govern- 
 
 ''Zr «.M f ^f""'"".r r^ «f ^l^e two ProvLes) derive ail their power 
 
 and authoriy from the Imperial Statute, amenable to any provincial or 20 
 '' dutfef J " ""'^"''^ falling strictly within the scope of thei? powers and 
 
 " llie statute itself does not in terms confer any authority whatever, with 
 ;; regard to the reierence, on any tribunal but the Ai^itrators. ^ Can theT; t™ 
 
 " thp'Zi.'? Th"''' ^ ^T'''' ^,^^^7' '^^"'.^^ "^'-^'^ ^^ '^o exercised as to defeat 
 Uie object of the enactment ? The parties interested are the Provinces of 
 
 ^^ Ontario aiid Quebec. Can either of them, as a matter of legal or moral 
 justice, call upon one of its own Courts to interrupt or control th? proceedings 
 
 " as ^:^i^t::^jz^f ^°^^ ^^^^^^^ ^^ ^^^^^^^-^^ -^^'^'^ -^ ^-^--'^ 
 
 " If so, the authority must belong equally to the Courts of either Province 30 
 and what would be the effect of a not impossible conflict between thrmS 
 their directions to the Arbitrators or other',M^e ? 
 
 ;' These and perhaps other questions, are opened by the events above stated. 
 
 '' H,of in f ? ^^'^ seriously and dispassionately considered, and not the less 
 
 that their determination may involve personal responsibihties to an extent 
 
 "thpr «?Z^ Tl TV^' ^nt^^^Pated when the Arbitrators accepted 
 
 ^ their appointment. I feel, however, that the first duty of the Arbitrators 
 
 "mPnf'wlnvAi'^'''^ award; that they are not responsible for the embarrass- 
 "^f^^tlv hU'I.'' present state of things has given rise to, and which adds 40 
 "dori ht ^"''Sponsibility, whde it mcreases, if possible, their anxietj' to 
 
 "By simply performing what they believe to be their duty, if they do 
 anything (while impartia ly exercising their best judgment), that may be 
 
 " If rnl'2l°fnr.r?P^'''^^ '° ' r ^"''^^^^^ ^^ ^"^^^^ ^^ ^'^^ ^«l"»tary absence 
 of Counsel for that Province, the just responsibility cannot be chaiged upon 
 
 30 
 
33 
 
 " If, in proceeding, they act illegally, their award will not be binding and RECORD. 
 
 "can do no injury. If it should bo binding, tho Ions of the judgment and 
 
 " assistance of an Arbitrator for the Province of Qnebec, however nujcli tlie Vr'"""n f 
 ^^ reniannng Arbitrators may regret it, and especially that they are deprived of M.'lhn-^on 
 tlie valuable aid of the Arbitrator who has resigned, is not tlioir fault. T\w —Continue^/ 
 " withdrawal was his act, and it has been deliberately adopted by his Oovern- 
 " ment, who have taken legal steps in one of their own (Jourts, by their Aaorney- 
 " General, to stop further proceedings. They have thus placed the Arbitrators 
 " m the invidious position of either retracting their refusal to grant indefinite 
 
 10 " delay to the Province of l^uebec, or of being placed in conflict with one of the 
 " highest tribunals of that I rovince. 
 
 " As a public functionary in the matter, as well as in my private capacity, 
 "I desire to evince in every proper way my profound respect for the (Jourt 
 " whose process has been served on the Arbitrators. But it appears to me they 
 " cannot, without a virtual abdication of their functions as Arbitrators, acce{)t 
 "as a justification for a departure from their previously declared opinion the 
 "preliminary order of prohibition (which I venture to think will not bo finally 
 "confirmed) of a tribunal of that Province whose Arbitrator's course has un- 
 " necessarily brought about this complication. I am of opinion that the Arbi- 
 
 20 " trators will best discharge the trust reposed in them by proceedino- with the 
 " reference and making, without unnecessary delay, an award which .sliall divide 
 "and adjust the debts, credits, liabilities, assets and properties of I Jpner and 
 " Lower Canada. ^ ^ 
 
 " As already pointed out, if they have under the circumstances no power 
 " to make an award, the attempt to make one will create no prejudice to either 
 " party. ^ '' 
 
 ^^ "If they have the power, the duty arising under the Statute from an ac- 
 ceptance ot their appointment imperatively recpiires them not by any act of 
 " theirs to sufter the time occupied and the cost occasioned by the proceedin.^s 
 30 so for taken to be utterly wasted, or to unnecessarily postpone the rendering 
 of a final award. ^ ^ r h 
 
 ^^ "The Government of the Province of Quebec, and the Arbitrator ap- 
 pointed by them have had due notice that the present meetino' would be 
 held tor the purpose of proceeding with business, and that it Would be 
 competent tor the Arbitrators, therefore, to proceed, in accordance with well 
 estabhshed rules. 
 
 u T .i"-^!" "^'J^^' liowever, to remove any possibility of misapprehension or doubt 
 
 ^^ i tliink It better, under the peculiar circumstances, that notice should now be 
 
 .. u ^7^^^ ^^ ^^^^ i'roviuce of Quebec and to the Honourable Charles Dewev Dav 
 
 iO ^^ of the intention of the Arbitrators to proceed in accordance with the opinion.s 
 
 just expressed, and that the Arbitrators should adjourn until Wednesday tho 
 
 17tii instant giving notice to all parties to the reference, that on that day thev 
 
 will proceed, should the (^ovei-nment of Quebec not think proper to be repre- 
 
 " sented or to assii^n 
 
 ■ Que Dec not think proper 
 iiy new or sufficient reason for their absence. 
 
 "D. L. Macpherson, 
 
 ., rr. . A ^ - ^-^ „ " AbHtrator. 
 
 xoruuto, August 4>, lb70. 
 
RECORD. 
 
 34 
 
 Opinion of the IToNouRAnLE John Hamilton Guay. 
 
 Iliiinilti/u 
 Gray. 
 
 Opinion of << at ii i t i • 
 
 the Honour- ^ ^^^J coHeaj^mo, tho Arbitijitor tor Ontario, havin;^' exprc sod a (leHJre to 
 ai.ie.Toh.; '^ wljourn tor a week or Urn days, in order to attbrd time for a i. Mtication to the 
 OovorniiK'i.t of guolu'c that the Arbitrators woid.l cortaiidv proceed in tlie 
 absence ot Arbitrator or Counsel on their part, unh'ss at Un. next meetin- 
 ^^ they are represented—I .shall nu,st eertaiidv ccmcur. I think we should 
 exhaust every reasonable effort to i-duee eo-operation in this matter- but in 
 (;rder to prevent the delay, which is now yranted, bei' - in any way attributed 
 to a doubt as to the power or intention of the Arbitrators to proceed, it is as 
 we to explani with distinctness the view^ ..f the Arbitrators on the authoritv m 
 or the power ot the Courts of any of the I'n.vinces to prohibit or restrain their 
 proceedin^rs. with the hiohest respect for the Courts of Quebec on any 
 ^^ rrmter coinin- within their jurisdiction, it is plain this Arbitration does not 
 ^^ It derives its authority fn^n an Iini)erial Act. The (;.)veniinent and Province 
 01 Quebec, ot which those C!ourts form a constituent part, is simply a party to 
 ^^ the Arbitration ; miother Province, whose Courts and Ooveriiinent are eutirely 
 ^^ mdei)endent of and beyond the jurisdiction of the Courts of (.^lebec, is the 
 other party; while the Dominion C^)vernnient simply appoints the third 
 Arbitrator by the authority of the Imperial Act. These constitute the tri- 
 ^ bunal. How is it possible that a subordinate part of one of the two Provinces 20 
 ^ —because the Courts are only parts of the whole machine of Government- 
 can control the action of another Province and Government, and of the 
 ^^ Arbitrator appointed by a third Government, in a matter of submission to 
 winch the Province (whose Courts assume the authority) only appoints one'out 
 ot three co-eciual Arbitrators ( Hov^ can the Courts of (Quebec restrain the 
 1^ 1 rovmce ot Ontario, or the Arbitrator apjiointed bv the Government of that 
 Irovmce, or the Arbitrator appointed by the Dominion Government in a 
 'matter in which the whole proceedinos may bo carried on <nitside of the Pro- 
 '' vince or the territorial jurisdiction to which their process can possibly run 'i 
 ^^ n so, the Courts ot the other Provinces must have equal jurisdiction ; and how so 
 ^ absurd would it then be for the Courts of Ontario to come forward and punish 
 ^ the Arbitrators t(n' not proceed inj,^ -for not discharging the duties they had 
 ^^ undertaken !— punished by C^ieliec for going on !— punished by Ontario for not 
 going on ! Can any construction of the language of the Imperial Statute 
 sanction such a contiict of jurisdiction i But even if the procee.lings were 
 Jield withm the limits of the territorial jurisdiction of the Courts of one of the 
 " 1 rovmces, the subject matter itself, and the parties proceeding therein may 
 ' be and are, as regards the subject matter, entirely exempt from that jurisdic- 
 ' tioii. Apart trom the common-sense view of such a question, which must 
 ^^ strike every man, the Courts of law in England have left no doubt upon the 40 
 
 point, ihe highest authorities, both in Chancery and Cimmion Law have 
 " decided that even where proceedings in arbitration were carried on within the 
 ^1 locality over which the (Joints had jurisdiction, and in which their process had 
 lull torce, yet the (courts would exercise no jurisdiction to restrain an Arbitra- 
 I' tor from making his award, unless there was something in the conduct of 
 " ihe parties to the reference which rendered sucli interference necessary The 
 
 30 
 
 40 
 
 w 
 
a (Icsiro to 
 cation to the 
 )coe(I in tlie 
 cxt iiioetinjf 
 
 wo should 
 ittei" : but in 
 y attributed 
 :eed, it is as 
 lie authority jo 
 ustrain their 
 bee, on any 
 on does not. 
 nd Province 
 ly a party to 
 are oiitiivly 
 'bee, is the 
 ^ the tliird 
 ute the tri- 
 Trovinces 20 
 vernnicnt — 
 and of the 
 •mission, to 
 ints one out 
 restrain the 
 lent of that 
 iment, in a 
 of tlie Pro- 
 ssibly run ? 
 1 ; and h(nv 30 
 and punish 
 3s they luid 
 ;ario for not 
 "ial Statute 
 (line's were 
 ' one of the 
 lerein, may 
 at jurisdie- 
 vhich must 
 t upon the 4o 
 Law, have 
 
 within the 
 •rocess hat) 
 in Arbitra- 
 eonduct of 
 sary. The 
 
 35 
 
 "prinriph, bein- us hiid down by Kerr nn Injunctions, pa-o 14L>, that 'th(.rc is 
 
 "'lo;csu'l';nrx"r?''; "^.^''''^'<'"'-^ j- ^''" "^^^ure of^wnt'of pruhib/tion 
 . cMiain an Arbitrator from proc,>cdn.- to n>akc an award.' Mr. Cameron 
 
 c ted a oTcatMuiny cases n.wlnrh this p,,sition is ilh.stratcd and sustained 
 • anions others the Kinn. ,. Hi.nicll and others, :, A. ,Sc K ,„,-.,. (;P> • I , V 
 
 "l)^i^m^ Ir '4k'' ^''p'^^ i'^>m.si<.nen Py. Co. .. th.> HIst.T b'y. Co., H 
 
 lONoked the amh<.rity of then- Arbitrator and notified the .h-fcndant, and their 
 
 10 Arbitrator had rcfusc-d to act, but the other Arbitrators had notwi 1 s an in.^ 
 
 roceeded an.l n.a.ie their awani, the Court r..fuse.l to restrain the .l-.fVM dani 
 
 mm actmn. upon the award--the Vice-ChanceHor sayinj, : 'As n .. , vse 
 
 there ,s nothrnu^ whatever to show that the power whidi the phii ■( ^s nad 
 
 «'ven to the Arbitrator was revokc.l uj.on any Just or rcaso,.ab e .!r i 
 
 am boun.l to conclude the revocation was a want<u. and capricioi^s e^. .sc 
 
 "The'iv t'n' ^ "l-ntlu'.r parts, and consequently the motion mustl,e ,^W' 
 
 Ihe ie.if.1 mtion of the Honourable Charles J)ewev Day and the revocati n of 
 
 '' P; V ii^e'of On . ;( T ^^'/T'"""' '"1^' V' ^I'^'^'^^^^re diflicult to see why t e 
 
 '' U oi t.H bv t IC^'^"^ :' Preiu.liccd by that act, or >yhy the Arbitrator 
 
 .ipI)o nted b> the (government of Ontaiio or the Arbitrator anooinfrwl bv thn 
 
 ''P-i tcs.m sfv;- F t ^ ^^''•!'''''"'^ ^^'.^'^"'■^. ''IJ'). .iurinK the arounient, Judge 
 
 1 attcson sa. s . Is there any instance m which the Court has interferc.l to oi^e 
 
 vent an Arbitrator makin.. an award after revocation i T le ta nny bo a 
 
 'nullity when made, but that is a different point ' IM-of Vpnlt 1 i ^^i 
 
 ;; 'be CMi made for precedents, but none halo^'e:^; f<m nd ' "l^ u'kst^^'c'ir 
 
 " mentarics, vol. :3, edition of isoi', un»o 117 s-.vs • ' \ ,un Yr ^ J 
 
 ;; ;issuin, ,.operly ,mly out of the Coiu^fof ! u^^X^ien^ .' ll' 'i:;:,:;;.^:::^ 
 
 out of the Court of ( hancery, (."ommon Pleas, or Kxche„uer directed toTl p 
 
 judge and parties of a suit in any inferior court, c.mn.uu ,1 , o th -m /Use 
 
 " ' illv '' T'^'fT ' '^""**' "1*'"^ ^ ^^"^'«-^t'*»» that eith'.-'^he an e ,ri ' 
 
 " ' icL? Int to' H ''"' ''■'''^'' ""'T^ '^''''''''' '^''^'^ »"t belong to t aJ -^ 
 cliction, but to the cognizance of .some other court' Tf <>hi i>i. ,'•'"". 
 
 "still law,-and the Imp'erial Act, JVitisl N r 1 A e Jca Act H^-^l' rir'' 
 
 " ArbU;rt/'"nV^ '''. ^''r-' c<:^.t\;an';:;;i^ig See : '"h^ 
 
 ;;f^pt&r7^^^^^^ 
 
 "bunal created under authority of an ImixMi-.l '^f-.l U *• ° ; •*" 
 "mattnr f>vr.ln.iv„K. ..ruu;,. ;./..:_'•",. ^'"l''''''\'^.t'^t"te, acting on a sub eci 
 
 M RECORD. 
 
 Opinion of 
 Hon. J. II. 
 (J ray — Cun- 
 tinned. 
 
 20 
 
 ?,?!f,i .SL'!..?';"!!"!"' •- >:eS''^'"«l llmt .1,0,0 «,,.s „„ ..u„„.ol-.-;„ t ''he 
 
 en 
 e 
 
 "case of the mmnin.ity (luestion-to ar<>T^ e ot^er ^h W f "\ *'' 
 ;; remarked by my collogue, that is not m • fU It K \l^^ le ^^ .n^i;'' ^''' 
 "to be raised on every (K-casion, it was ma- ifestlv of f ho 1. f/ ^ ' '"''' 
 
 ;; that the Honourable Charles De^.jl^:^^^^:^',^::^:^ ^'\^^^^ 
 He did not resign-so far as we know- because ho differed wit iAiscoi;;^;^ 
 
1U':( ;()Ri). „ 
 
 . II 
 
 Opiiiioii (if 
 Hon. J. II. " 
 Oiiiy — " 
 
 Conliniinl. It 
 
 36 
 
 inrond.Hlin,. that tlw dori.^ions of tho Arbitrators noorl not be unanimous 
 •t fis .,...;. J :''''-''^ 1""' •^"''•^•''l>'""tl.V looIaMl into the anthonti'^..s 
 
 " "■■!»" "«■„,• ,. ,„',i,., i.„L,;!;i,.;;;. ;:;;!;;, ™'.' ''""'''■• '■" "" 'i"-"""-- "» 'i'<=y 
 
 "Toronto, AiifOLstSth, 1H7()." ".T. IT. GnAY, ^^ 
 
 aS:',,,. .. ,,,,,];';';,,!";'";™;« ';;■;''■>, »■";" >l'"> ma.ln: -That .l„. ArWtnUnrH ,lo a,lio,„.„ 
 ,.„.„, ,, |-v.;r"".c". .u„l (;„u„.,„l or (i„„|,eo, and „„ tl.„ iroLmlnuIlo Chri,,:! i'Coy 
 
 1 
 
 LO 
 
 thiuty-kikst meetinc; of aubituators. 
 
 Hall,''!" ti,:''d';'r'.f ^I'Mo'^uir'^vri.', ''"^ "•' '"'«""'' ■""- "* "»«»«'« 
 
 Cliauvoau, Pi-ovineial Secretary for O i™ ^mVl' wLu! ?"''™'-"''l° M'- 
 Que|«, an,i s.ate.1 that no auLer S' tiL.rleeiv^i bfaS;; v'y'rf'tt 
 
 " In the matter of Arbitration 
 
 .. "Between the Provinces of Ontario an.l Queber. gn 
 
 •' tr-ttion t > W?''r""f '^r'^'t^^^^'^'-'^ 1^^^^'^: adjourned the proceeding's of the Arbi- 
 " ; t >« w ^^T' ^P '"' '^''^^^"t^^^ntii (lay of August instant, at two o'dock 
 
 p.m., a Osooo, e Hall, Toronto; and the Governments of tho P.'ovinces of One 
 
 "D. L. Macpherson, 
 " Toronto, .,th An,,., 187.,." " "'• «' '"''\^^,,^„ 
 
 ^?;:™r day alt' eilrsru ^''t^^rt :'tthetUptr" ""j"™'"' •""'• ™" « 
 
 Pri'Hont : 
 Hon. .'. H, 
 Gray mid 
 Hon. D. L. 
 Mii(;|)li('r- 
 Hon. 
 
 Hon. C. D. 
 Day being 
 al)s(!nt. 
 Notice of 
 meotiiig of 
 Arbitrators 
 to Hon. C. 
 1). Day and 
 Govcrii- 
 monts of 
 Queliec and 
 Ontario 
 Herved. 
 
 20 
 
 40 
 
37 
 
 Ho unanimous, 
 ^stion ^avo no 
 ion ; nlth()uj,'h 
 the iiiithoriti(!s 
 vjiH on other 
 tho rcninininj,' 
 i.stions iiH thoy 
 
 T. Okay, 
 
 10 
 
 ra do adjourn 
 , and |)r(K;eed 
 ■fcvvod on tlio 
 harhiH Dowcy 
 
 >, at ()s<,'oode 
 wljnurnment. 
 uablo David 
 oinf,' present. 20 
 no appearing 
 
 aving posted 
 lourablo Mr. 
 , Counsel for 
 11 a!'.y of the 
 words and 
 
 30 
 of the Arbi- 
 
 two o'clock 
 nces of Que- 
 
 Prohibition 
 he consider- 
 3ove named, 
 
 PERSON, 
 
 " Arbitrators. 
 
 I until next 40 
 
 10 
 
 TiriFlTV SECOND MKKTFN(} ()1< AUIUTIIATOUM. 
 
 The Arl)itrat()rs mot on the oightoonth day of Augu.st. I'resent: The same 
 Arbitrators and parties as at the last preceding meeting. 
 
 Tho Arbitratois stated that thoy had that morning received a communica- 
 tion from the Undersecretary of .State at Ottawa, ondosing a copy of a despatch 
 from tho Lioutenant-Oovernor of (,)iioboc to tho Governor-Oeneral on tho subject 
 ol the proc(!odmgs of tho Arbitrators, which documents were ordered to be road 
 and entered upon tho Minutes of tho Proceedings, and are as follows:— 
 
 " Department of the Secretary of State of Canada. 
 „Q Ti I . " Ottawa, l(5th Augu.st, 1870. 
 
 .. u . ~T ^"^" . ^' honcmr by connnand of the (iov(!riior-(>eiieral to trans- 
 mit to you herewith copy of a protest received by His Ivxcellency from the 
 Lieu onant-(,oNornor of the Province of (,)uebec agai.ist th- course which you 
 and tJio Ilonourablo David Lewis Macpiun-son have notifio.l the 'Jovernor of 
 that 1 rovinco that you proposed taking in tho matter ..f the Arbitration 
 between the Trovmccis of Ontario and (j)uobec. 
 
 " T have tho honour to bo Sir, 
 
 " Your most obedient servant, 
 
 " E. Pakent, 
 
 „ T-i TT 1 1 T T r . . „ " fender SeoreJan/. 
 
 Ihe Honourable J. H. Gray. 
 
 A similar letter inufatis mutandis was addressed to and received 'by the 
 Honourable David Lewis Macphorson. 
 
 The protest by tho Lieutenant-Governor referred to is as follows : 
 
 RECORD. 
 
 I'rtsHerit : 
 Hon J. H. 
 (irwy und 
 Hon. D. L. 
 Mac|)h«r- 
 Hoii. Hon. 
 C. D. Day 
 being absent 
 Statement 
 of Arbitra> 
 tors. 
 
 Letter from 
 tlie Unilor 
 .Secretary of 
 .State for 
 the Do- 
 minion to 
 I ton. J. H. 
 (iray. 
 
 Similar let- 
 ter to Hon. 
 D. L. Mao 
 phenton. 
 
 30 " 
 
 40 
 
 (Translation.) 
 
 '• Government House, 
 ,, Q Ti .u . "Quebec, 8th August, 1870. Piot«Ht by 
 
 feiR,— 1 Have tfie lionour to transmit, for the irdormation of His Excellency ^'« l^'«"*- 
 the Governor-Gen(;ral, copy of a document signed by the Honourable Messrs Governor of 
 Gray and Macphorson, which has been receive.l by the Secretary of this ^"^^ 
 Provmce. '' 
 
 " I deem it my duty at the same time to call the attention of His Excel- 
 lency the Governor General and of tho Federal Government to the unjust and 
 Illegal course jointly adopted by the Arbitrator appointed by the Federal 
 Government and the Arbitrator for the Province of Ontario, and respectfully 
 to request, on behalf of the Government of this Province, the intervention of 
 the 1 ederf>^ Government. 
 
 " I have the honour to be, 
 
 Your most obedient servant, 
 
 ,< r- . ^ "N- F. liELLEAU, 
 
 T-^ *u TT 1 1 ri.1 o Lieutenant-Governor of the Province of Quebec " 
 
 To the Honorable The Secrofary of State "^ '*^'**°*^ 
 
 " for tho PiavincGi. O taw.i." 
 
RECORD. 
 
 Notice re 
 f erred to 
 same as at 
 Slnt meet- 
 ing of 
 Arbitrators. 
 Subject of 
 Arbitration 
 discussed. 
 Arbitrators 
 adjourned. 
 
 38 
 
 noo„;'l'„^ittT.r S™.!'" ''"-'"'^- *"'-".-""■■" -la.V of Aug,.,, a, 
 
 THIETY-THIRI) MEKTING OF ARBITRATORS. 
 
 Present : 
 Hon. J. H. 
 Gray and 
 Hon. D. L. 
 Macpher- 
 son. Hon. 
 CD. Day 
 being ab- 
 sent. 
 
 The Auditor 
 General 
 subpoenaed. 
 Arbitratoi-s 
 adjourned. 
 
 The Arbitrators met at tlie place uf their last inecwIiiiL' meethiL. mi the 
 
 ImWW.lL, *""™'™> "f <!'inada, to appear bef,>re them aiul ^ive evidence 
 and that they were mforn.jd he would be in attendance the next (lav m7,],«l 
 
 twZf ■'■*""''' "'j""™'" ■™^* "' ""■ ™>- 1*.- ■rthe'^rr,':; 
 
 10 
 
 Present ; 
 Hon. J. H. 
 Gray and 
 Hon. D. L. 
 
 Macpher- 
 son. Hon. 
 CD. Day 
 being absent 
 Arbitrators 
 adj nrned. 
 
 THIRTY-FOTTRTH MEETIN(1 OF .\EBTTRATORS. 20 
 
 day o?ld?|'f870 Tl "' ' Y r'"'' ''' ^^^'"" "^^^*'"8' <^" ^'^^ twenty-fourth 
 S M.^^ 1 1 T ' ''tt*'''*' "'"'*'''''' I*- "^^ P"''«"i"it to adjonnnncut Present • 
 D^ers^n tT' h'^"''" Kanilton Gray and the Ftonourable Dayid T ewL Mac^ 
 Pn^. 1 Honourable Charles Dewey Day not bein- pres.^it Messrs 
 
 Cameron and Wood appeared on belnlf <if n,it.,,>,Vv v Pi'-^'"i-. i>ie.ssis. 
 
 half of Quebec. *f'''*^'"'*^ *'" '^^ '^'^'^ <^t Ontario. Ao one appearinf,^ on be- 
 
 the nixt d^w ' thr^'^rLfr, ^^''^J^«. ^"■"^'^^'' ^^^^^ Arbitrators adjourned until 
 o\3lock p m! ^^^^^"^-^-fif^'^ ^l'^^^ '^f August, to meet at the same place, at two 
 
 2(t 
 
 THIRTY-FIFTH MEKlTNa OF ARBITRAT; RS. 
 
 fp^ fm.2:t^^^ %^.u"tv' ?^'^" last at^^resaid on the twenty- 
 iastiueeuug ' ^h^~^^ i-i .'. t re&ent . int; .•same as at last pi'(!('ed,njj nieetint'-. 
 
 30 
 
39 
 
 c notice of the 
 ;■ of tlu! seven 
 
 us items fonn- 
 
 of August, at 
 
 S. 
 
 eting, on the 
 nt to adjourn- m 
 e Honoiu-able 
 )ay not benig 
 one appeared 
 
 , the Auditoi'- 
 jive evidence, 
 day, and that 
 p next dav at 
 
 ^S. 20 
 
 wenty-fourth 
 nt. Present : 
 I Lewis Mac- 
 nt. Messrs. 
 earing on he- 
 
 i(nn'ned until 
 place, at two 
 
 .•JO 
 
 the twenty- 
 ^ meeting. 
 
 \ir *]''■ ^'i^"o^'^"' ^^^^ Auditor-General having arrived, and being present, Mr. Auditor- 
 n ood, on behalf of Ontario, proceeded with his case and argument General 
 
 The Arbitratois adjourned to meet the next day at the same place, at^fr^V 
 
 twelve O clock, noon. Arbitrators 
 
 adjourned. 
 
 THIRTY-SIXTH MEKT1N(4 OF ARBITKATOKS. 
 
 The Arl)itrators met at tlu- time and place aforesaid, on the twenty-sixth 
 day uf August, 1870. Present : The same as at the last preceding meeting. 
 
 Mr. Wood resumed his avgument, and continued until six o'clock pm 
 wiien the Arl)itrators adjourned to meet the next dav at half-past one p m 
 
 10 
 
 TlilUTY-SEVENTH MEETING OF ARBITKATOKS. 
 
 The Arbitrators met on the twenty-seventh day of August, 1870. Present- 
 Mr. Langton. 
 
 Mr. Wood resumed his argument and closed it. 
 
 Prewent : 
 Same as at 
 la.st meeting 
 
 Argument 
 resumed. 
 Arbitrators 
 adjourned. 
 
 Present : 
 Same as at 
 last meeting 
 Argument 
 closed. 
 
 20 
 
 THIRTY-EIGHTH MEETING OF ARBITRATORS. 
 
 Monday, 29th August, 1870. j^^^'**"^*^ 
 Arbitrators met for consultation. .Adjourned to (next day) to-morrow. ArbitrZrs; 
 
 ' Hon. C. D.' 
 
 'i'ii««^l'kV, 30th August, 1870. aw'^^ 
 .-Arbitrators met tor consultation. Adjourned until (next day) to-morrow. 
 
 . , . Thursday, 1st September, 1870. 
 
 .Arbitrators met tor consultation. Agreed upon the substance of the 
 
 Award, and initiated the draft of the terms thereof Adjourned until (next 
 
 tlay) to-morrow. ^ 
 
 . , ., , ,,. , , Friday, September 2nd, 1870. 
 
 Arbitrators met. Discussed the foim ,)f Award. Adjourned until (next 
 day) to-morrow. ^ 
 
 Saturday, September 3rd, 1870. 
 ArlHtrators met. Re-examined the award, and finally completed and Award 
 executed the same, m the presence of Christopher Robinson, Es(|. of Toronto ^^^de, 
 Barristcr-at-Eaw, an.l Mr. Fre<lerick Finch, of the same place, Law Stationer.' 
 •^ I'o same having been executed by a majority only, viz.: by the Honourable 
 -J. li. Gray, and the Honourable I). L. Macphorson —the Honourable Charles 
 I cney IJay not being present, (.r havmg attended the meetings of the Arbitra- 
 tors since his withdrawal in July last (1870), which Award is as follows :- 
 
■"Bl^ 
 
 RECORD. 
 Award. 
 
 40 
 
 AWARD. 
 
 To all to whom these Presents shall come— 
 
 * See Schedule No. 4 in 
 Appendix. 
 
 The Honourable John Hamilton Gray, of the City of St. John, in the 
 Irovniee oi ^ew Brunswick, and the Honourable David Lewis 
 Macplu-rson, of the City of Toronto, in the Province of Ontario 
 feend (.Treetmg- : 
 
 "Whereas by the British North America Act, 1867, it is enacted that the 
 division and adjustment of the debts, credits, liabilities, properties and assets 
 of Upper Canada and Lower Canada, shall be referred to the arbitrament of 
 
 "tliree Arbitrators, one chosen by the Government ofio 
 " Ontario, and one by the Government of Quebec, and 
 " one by the Government of Canada •"' 
 " And whereas the said John Hamilton Gray was duly chosen under and 
 in accordance with the provisions of the said Act, as arbitrator, by the Gov- 
 ernment of Canada the said David Lewis Macpherson by the Government of 
 Ontario, and the Honourable Charles Dewey Day, of Glenbrooke, in the said 
 Province of Quebec, by the Government of Quebec ■ 
 
 ''Now therefore the said Arbitrators having taken upon themselves the 
 burden of the said Arbitration, the said John HaT>iilton Gray and David Lewis 
 Macpherson being a majority of the said Arbitrators do award, order and ad- 20 
 judge of and upon the premises as follows, that is to say •— 
 ^^ " I That the amount by Avhich the debt of the late Province of Canada 
 exceeded, on the thirtieth day of June, one thousand eight hundred and sixtv- 
 „ seven, sixty-two milions five hundred thousand dollars, shall be and is hereby 
 ., divided between and apportioned to, and shall be borne by, the said Provinces 
 of Ontario and Quebec respectively, in the following proportions, that is to 
 say.-the said Province of Ontario shall assume and pay such a proportion of 
 the said amount, as the sum of nine millions eight hundred and eight thousand 
 ^ seven hundred and twenty-eight dollars and two cents, bears to the sum of 
 ^^ eighteen millions five hundred and eighty-seven thousand five hundred and 30 
 twenty do lars and fifty-seven cents; and the said Province of Quebec shall 
 a,ssume and pay such a proportion of the said amount, as the sum of eight mil- 
 lions seven hundred and seventy-eight thousand seven hundred and nin?ty-two 
 ^^ dollars and fifty-five cents bears to the sum of eighteen millions five hundred 
 and eighty-seven thousand five hundred and twenty dollars and fifty-seven cents 
 li. 1 hat the assets hereinafter in this cause enumerated shall be, and the 
 same are hereby declared to be the property of and belonging to the Province 
 01 Ontario, namely: 
 
 " I. Debt from the Ui)per Canada Building Fund to the late 
 " Province of Canada, (enumerated in the Fourth Sche- 
 " dule to the .said British North America Act, 1867, as 
 " Upper Canada Building Fund, Lunatic Asylums 
 " ' Normal Schools',)— Lunatic Asylums $30,800, Nor- 
 
 " mal Schools )i^6,000 ". $3« HOG 00 
 
 Debt from the Law Society, Upper Canada, "to" the 'late 
 " Province of Canada 156 015 61 
 
 40 
 
 9 
 
 10 
 
 .20 
 
 ^0 
 
John, in the 
 
 David Lewis 
 
 of Ontario, 
 
 ited that the 
 !s and assets 
 bitrament of 
 t^ernment of 10 
 Quebec, and 
 
 n under and 
 by the Gov- 
 vernment of 
 i, in the said 
 
 jmselves the 
 David Lewis 
 ^der and ad- 20 
 
 ! of Canada 
 !d and sixty- 
 id is hereby 
 id Provinces 
 i, that is to 
 roportion of 
 ht thousand 
 
 the sum of 
 undred and 30 
 >uebec shall 
 3f eight mil- 
 I ninety-two 
 ve hundred 
 seven cents. 
 
 be, and the 
 le Province 
 
 40 
 
 $3« HOO 00 
 156,015 61 
 
 10 
 
 20 
 
 41 
 
 " 3. Debts to the late Province of Canada under the Consoli- RECORD. 
 
 "dated Municipal Loan Fund of Upper Canada 6,792 136 39 
 
 " 4. Debt from the Agricultural Society, Ui)per Canada, to rZTlZ, 
 
 "the late Province of Canada .....!. . 4000 ^^(^^'^^"'^'^■ 
 
 " 5. Debt from the University Permanent Fund to the late 
 
 '' Province of Canada 1 220 63 
 
 ^ "in. That the assets hereinafter hi this clause enumerated shall be, and 
 the same are hereby declared to be the property of, and to belong to the 
 Provmce of Quebec, namely : 
 
 " 1. The debt from the Aylmer Couit House to 
 
 " the late Province of Canada for six per 
 
 "cent. Provincial debentures issued on ac- 
 
 " count of the said Court Plouse and assumed 
 
 " by the Dominion of (Canada, and charged 
 
 " m the debt of the late Province of CJanada. .?2,000 00 
 
 " And for certain charges paid by the said 
 
 " late Province of Canada in respect of the 
 
 " said Court House 1239 70 
 
 3 239 70 
 
 " 2. Debt from the Montreal Court House to the 
 
 •' late Province of Canada for six per cent. 
 
 "Provincial debentures issued on account 
 
 " of the said Court House and assumed by 
 
 " the Dominion of Canada, and charged in 
 
 "the debt of the late Province of Canada... 95,000 00 
 
 " For advances made to the said Court House 
 
 " by the said late Province of Canada 18,996 21 
 
 114 596 '^1 
 
 " 3. Debt from the Kamouraska Court House to the late 
 " Province of Canada for balance of certain changes in 
 " respect of the said Court House paid by the late Pro- 
 " vmce of Canada ^^^ ,^„ 
 
 "4. Debt from the Royal Institution, otherwise the ivicGili "' 
 
 " College, to the late Province of Canada, of the balance 
 " of a loan made by the said late Province to that Insti- 
 " tution 7 70(i 
 
 "5. Debt under the Consolidated'Municipal Loan Fund" of 
 
 ^^ "Lower Canada to the late Province of Canada 2 939 429 97 
 
 6. Advances made in excess of the Legislative School Grant ' ' 
 (described in the Fourth Schedule to the said British 
 1; North America Act, 1867, as 'Lower (Canada Legisla- 
 
 "'tiveGrant') " -28 4cu 7'? 
 
 " 7. Debt to the late Province of Canada under tiie'Ouebec 
 
 "lire Loan •>04.>-4 «- 
 
 " H. Debt to the late Province of Canada for advances made ~ ' '^'^ 
 to or on account of certain municipalities in the county 
 
RECOKD. 
 
 Award — 
 
 Ccmtimied. 
 
 42 
 
 " of Temiscouata, (described in the said fouith .sc;lieduli> 
 
 " as ' Temiscouata Ad\ ance Account.') :^ (k)(> oo 
 
 " 9. Debt from the Education Office in Lower Canachi, to "the 
 " late Province of (Canada for the balance unpaid of a 
 " defalcation in the said office to the said late Trovince 
 ''(described in the said Fourth Schedule as VEchication 
 
 ^'ISt) , .^y^ Ijl 
 
 "10. Debt from the lUiildino; and Jury Fund, Lower Canada, 
 " to the late Province of Canada for k)ans and advances' 
 " made to it by the said late Province of ( 'anaihi IK; 47;-j 51 lo 
 
 " n. Debt from the Municipalities Fund of Lower Canada to 
 " the iate Province of Canada, for advanc^es made to or 
 " on the credit of tliat fund (described in the said tburtli 
 " schedule as ' Municipalities Fund.') 4S-t 224 :33 
 
 " 12. Debt from the L( )wer Canada Superior Education Income 
 "Fund to the late Province ,f Canada, for advances 
 " made from time to time by the said late Province 2:{4 •>«! 4<) 
 
 "13. Montreal Turnpike Trust 188,00(1 00 
 
 "IV. And as to the said Montreal Turnpike Trust, the said Arbitrators 
 ' further find, award and adjudge as follows : — ,.(, 
 
 " Whereas the said sum of one hundred and eiohtv-eii-ht thousand dollars ^ 
 ' IS secured by debentures issued upon the credit of the s'aid I'l-ust and ^n\iXY- 
 ' anteed by the late Province of Canada, and the said l>ust has hitherto*' met 
 ' the payments upon such debentures, and the payment thereof has therefore 
 ' not been assumed by the Dominion of Canada, nor has the said sun. of one 
 'hundred and eighty-eight thousand dollars been charg(>d bv the said Domin- 
 •lon m the debt of the kite Province of (Canada, which' charu'e, if made wcmld 
 'mcrease by (me hundred and eighty-eight thousand dollars the excess of the 
 ' said debt on the thirtieth day of June, one thousand eight luindred and sixtv- 
 ' seven, above sixty-two millions five hundred thousand dolhn-s ; Know there- m 
 'fore, the said Arbitrators having assigned the said 'rriist as an asset of the 
 'said Province of (^lebec, do hereby adjudge and award that the said Province 
 'of Quebec shall hereafter indemnify, protect, and save harndess the said Do- 
 ' mmion and the said Province of Ontario, against any (diarge upon or payment 
 ' by the said Dominion in respect of the said debentures, or the said <>uarantee 
 '■ or in respect in any way of the said Trust. '^ 
 
 " V. That the following Special, or Trust Funds, and the moneys thereby 
 ■ payable, including the several investments in respect of the same or any of 
 them are, shall be, and the .same are liereby declared to be the property of 
 and to belong to the Province of Ontario, for the purposes foi- which they were w 
 established, namely : — 
 
 " 1. Upper Canada (jramn.ar School Fund. 
 " 2. Upper ( 'anada Building Fund. 
 " 3. Upper (Canada Municipalities Fund. 
 
 "4. Widows' pensions and unconunuted stipends, Upper Canada subject 
 " to the payment of id! legal clmrges thereon. 
 
 •■^n ,, 
 
43 
 
 :],{){){) 00 
 
 290 10 
 
 ll<5,47o ol 10 
 
 484,224 :33 
 
 2:{4,2ST 4« 
 188,000 00 
 
 J Arbitrators 
 
 20 
 
 usand dollars 
 ist, and guar- 
 hitherto met 
 has therefore 
 1 suiii of one 
 
 said Domin- 
 niade, would 
 excess of the 
 ed and sixty- 
 Know there- a(i 
 asset of the 
 iaid Province 
 
 the said I)o- 
 !, or payment 
 id guarantee, 
 
 neys thereby 
 lie or any of 
 3 property of 
 ieh they were ui 
 
 flO 
 
 1 
 
 " 2. 
 "3. 
 "4. 
 
 "5. 
 "6. 
 
 lada. subject 
 
 "5. Upper Canada Grammar Scliool Income Fund. 
 
 " 6. Upper Canada Improvement Fund. 
 
 " 7. Balance of special appropriations in Upper Canada. 
 
 " 8. Surveys ordered in Upi)er C!anada, before 30th June, 1867. 
 
 " 9. Amount paid and paya])le by Up])er Canada to the Canada Land and 
 
 " Emigration ( "ompany. 
 "VI. That the following Special, or Trust Funds and ^he moneys thereby 
 I payable, including the several investments in respect of the same or any of 
 them are, shall be, and the same are hereby declared to be the property of 
 and to beoiig to the Province of Quebec for the pur jioses for which they 
 " were established, namely :-- • 
 
 Lower Canada Su])eri()r Education Fund. 
 Lower Canada Superannuated Teacher's Fund. 
 Lower Ciinada Normal School Building Fund. 
 
 Widows' pensions and uncommuted stii)ends. Lower Canada, subject 
 ' to all legal charges thereon. 
 
 Balance of special appropriations in Lower Canada. 
 Surveys ordered in Lower Canada before 30th June, 18(j7 
 
 on « T " ?"'''^^ ^'"T- ^'''^ ^ ''>""n'^» S^'liool I'und, as held on the thirtieth day of 
 
 20 ,)une, one thousand eight hundred and sixty-seven, by the Dominion of Canada 
 amounting to one million seven hundred and thirty-three thousand two hun- 
 dred and twenty-four dollars and forty-seven cents, (of which fifty -eight 
 •^ thou.sand dollars is invested in the bonds or debentures of tlie(,)uebec Turnpike 
 Trust, the sjiid sum of fifty-eight thousand dollars being an asset mentioned in 
 ., ^le fourth Schedule to the British North America Act, 18(}7, as the Quebec 
 ^^ lurnpike Irust , the sum of one hundred and twenty-four thousand six hundred 
 and eighty-hve dollars and eighteen cents shall be, and the same is hereby taken 
 and deducted and place(l to the credit of the Upper Canada Improvement 
 ■M ., '^"n/J' the .said sum of <me hundred and twenty-four thousand "six hundred and 
 eighty-five dollars and eighteen cents, ])eiiig one-fourth part of moneys received 
 by the late Province of Canada, between the sixth day of March, one thousand 
 eight hundred and s,xty-one,and the first day of July, one thousand eight hun- 
 dred and sixty-seven, on account of Common School lands sold between the 
 ^^ fourteen h day of June one thousand eight hundred and fifty-three, and the 
 said sixth (hiy <,f March, one thousand eight hundred and sixtv-one 
 
 Vlll.l hat the residue of the said Common School Fund, with the in- 
 vestments belonging thereto, as aforesaid, shall continue to be held by the 
 Dominion of ( anada, and the income realized therefrom, from the thirtieth 
 day of June one thou.sand eight hundred and sixty-seven, and which shall be 
 to lereafter i-eahzed therefi-om, shall be apportioned between and paid over to 
 the respective Provinces of Ontario and Quebec as directed bv the fifth sec- 
 tion chapter-twenty-six of the Consolidated Statutes of Cana.la, with regaTd 
 to the sum of two hundred thousand dollars in the said section mentioned 
 u .1 • .},' : '^\^r ""'"'-^^ received by the .said Province of Ontario .since the 
 t iir leth day of June, one thousand eight hundred an.l sixty-seven, or wh ch 
 shall hereafter be received by the said Province from, or on acvnn^t Tit 
 ••(onuu.m Scliool lands set apart in aid of the Common Schools of the late 
 
 RECORD. 
 
 Award — 
 
 Continued, 
 
44 
 
 BECORD 
 
 Award — 
 
 Continued. 
 
 "Province of Canada shall he paid to tlie Dominion of Canada to be invested 
 ''as provided by section three of said (diapter twenty-six of the Consolidated 
 " Statutes of Canada, and the income derived tii(;refrom sliall be divided, appor- 
 " tioncd, and paid between and to the said Provinces of Ontario and Quebec 
 '' respectively as provided in the said fifth section, chapter twenty-six, of the 
 " Consolidated Scatutes of Canada with regard to the sum of two hundred 
 'thousand dollars in the said section mentioned. 
 
 " X. That the Province of Ontario shall be entitled to retain out of such 
 ''moneys six per cent., for the sale and management of the said lands, and 
 "that one-fourth of the proceeds of the said lands, sold between the fourteenth lo 
 '^ day of June, one thousand eiglit hundred ami t^fty-three, and the said sixth 
 ''day of March, one thousand eight ;- S»d and sixty-one, received since the 
 "thirtieth day of June, one thousa.. I ". hundred and sixty-seven, or which 
 "may hereafter be received after deck ■ ag tlie expenses of such management 
 " as aforesaid shall be taken and retaineil by the said Province of Ontario for 
 " the Upper Canada Improvement Fund. 
 
 "XI. The " Crown Lands Suspense Account," amounting to one hundred 
 '' and twelve thousand seven hundred and forty-eight dollars and sixty-three 
 " cents, and the Crown Lands Department, amounting to two hundred and fifty- 
 " three thousand and eighty-nine dollars and seventy-six cents, being the items 20 
 " so described in the Public Accounts of the late Province of Canada, having 
 " been omitted respectively from the statement of the debt of the said Province 
 "in such accounts, and from the assets in the Fourth Schedule to the British 
 '' North Anierica Act, 1867, the said Arbitrators award and adjudge that the 
 " said Province of Ontario shall satisfy all claims, and receive all moneys in re- 
 " spect of the sai ' '^'rown Lands Suspense Account, and the said Crown Lands 
 " Department connected with or arising from lands situate in the said Province 
 " of Ontario, and that the said Province of (Quebec shall satisfy all claims and 
 '^^ receive all moneys in respect of the said Crown Lands Suspense Account and 
 " the said Crown Lands Department connected with or arising from lands situate .30 
 " in the said Province of Quebec. 
 
 " XII. As to the Montreal narbour the said Arbitrators find that the debt 
 " due on account of four hundred and eighty-one thousand four hundred and 
 " twenty-five dollars and twenty-seven cents" secured by debentures issued by 
 " the Montreal Harbour C^ommissioners has not been charged in the statement 
 " of the debt of the late Province of Canada. And they award, direct, and ad- 
 " judge that should the Dominion of Canada hereafter pay anything by reason 
 " of the hability of the said Dominion on account of the said debentures, the 
 " said two Provinces shall repay to the said Dominion any sum so paid in the 
 " same proportions respectively, as the said Provinces are hereinbefore directed 40 
 " to bear and pay the excess on the thirtieth day of June, one thousand eight 
 " hundred and sixty-seven, above sixty-two millions five hundred thousand dol- 
 " lars of the debt of the late Province of Canada. 
 
 " XIII. That all the lands in either of the said Provinces of Ontario and 
 " Quebec respectively, surrendered by the Indians in consideration of annuities 
 " to them granted, which said annuities are included in the debt of the late 
 " Province of Canada, shall be the absolute property of the Province in which 
 
 1(1 
 
 33 
 
 40 
 
to be invested 
 3 Consolidated 
 livided, iippor- 
 io and Quebec 
 ity-six, of tlie 
 two hundred 
 
 in out of such 
 id lands, and 
 the fourteenth lo 
 the said sixth 
 ved since the 
 !ven, or which 
 I management 
 )f Ontario for 
 
 ) one hundred 
 nd sixty-three 
 ired and fifty- 
 jing the items 20 
 mada, having 
 said Province 
 to the British 
 idge that the 
 moneys in re- 
 Crown Lands 
 said Province 
 ill claims and 
 Account and 
 . lands situate 30 
 
 that the debt 
 hundred and 
 ires issued by 
 :he statement 
 irect, and ad- 
 ng by reason 
 bentures, the 
 o paid in the 
 ifore directed w 
 lousand eight 
 :housand dol- 
 
 Ontario and 
 
 of annuities 
 
 »t of the late 
 
 ince in which 
 
 45 
 
 " the said lands are respectively situate, free from any fui-thcr claim upon, or 
 •' charge to the said Province in which they are so situate, by the other of the 
 "said I'rovinccs. 
 
 " XIV. As to all the i)ers()nal [n'operty being the joint property of the said 
 "Provinces of Ontario and Quebec, not hoieinbiifore speciuUv mentioned, or 
 •' dealt with, and not appropriated by the said British North Anrerica Act, ]h'«7. 
 'Mncludmgthe library of Piirliament at Ottawa, tlie Arbitiatois find that it is 
 "not expedient to divide the said properties or to divert them Imm the public 
 "purposes for which they are used and icfpiired l)y tin; r)()mini(m of Canada. 
 10 1^ They, therefore, find and award that the vahie of the said pioperties is anij 
 ^^shall be taken to be two huudied thousand dollai-s, and that the Donn'nicm of 
 ^^ Canada may retain and accpiire the same ])r()})erties on payment to the said 
 " Provmces of the said sum of two hundred thousand dollars in the same pro^ 
 "poi'tnm as is nuintioned in the first i)aiagriii)h hereof in respect to the excess 
 'S)f debt of the lute Province of Canacla on the thirtieth day of June, one 
 I' thousand eight hundred and sixty-seven, above sixty-two millions five; hundred 
 " thousand doUars, that is to say, to Onlui'io the sum of one hundred and five 
 ''thousand five hundred and fi)rty-<«ne dollars, and t()(,)uebec the sum of ninety- 
 '^fimr thousand four hundred and fify-nine dollars, and upon such payment the 
 •-^0^^ l^)()ninu()n of (Canada shall beeonu! the absolute owner of the said properties. 
 " Jint should the Dcmunion of Canada not .so arcpu're the said projxTties within 
 "two years from the date of this award, the Province of Quebec may ac(piire the 
 I' said properties by the payment to the Pi-ovince of ( )ntai-io, within thi'ce months 
 "lromtheexj)irati()n of the .said two years, of the sum of ()n(! hundred and iho 
 " tliou.sand five hundred and forty-i.ne dollar.s, and should tlu; l»rovince of (,)ue- 
 " bee not so ac<piire the said projicrties within the time afinvsaid, the Province 
 ^'of Ontario shall, within three months next thereafter, pay to the Province of 
 'I Quebec the sum of ninety-four tliou.sand four hundred and iiftv-nine uollars 
 "and shall thereupon become the absolute owner of such proi)crties. 
 3:1 " XV. That the said several sums awarded to be paid, and the several mat- 
 
 ters and things awarded and directed to be done bv or M'itli regard to the 
 '' parties to this reference respectively as aforesaid, .shall respcctivdy be paid 
 received, done, accepted and taken as an<l fin- full satisfiiction and di.schaigei 
 'and as a final end and determination of the several matters aforesaid 
 
 " In witness whereof, the .said John Hamilton (xiuvand David Lewis Mac- 
 'plier,son, two of the said Arbitrators, have hereunto set their hands this third 
 ' day ol September, in the year of our Lord one thousand eight hundred and 
 seventy. 
 
 " J. IL Okay. 
 
 40 
 
 " D. L. Magpherson. 
 
 " Signed and i)ublishe(l the third day of September, 1870, 
 " in the presence of : 
 
 " Christopher Kobinson, of the City of Toronto, Barrister-at-Law ; 
 "Frederick Finch, of the City of Toronto, Law Stationer." 
 
 G 
 
 RECORi). 
 
 Award — 
 Ciiidiituidi 
 
40 
 
 RECORD. 
 
 Schedule 
 No. 1. 
 
 (Appendix.) 
 Schedule No 1. 
 
 A. 
 
 Memorandum of Informal Confkrence held at Montreal the 24th July, 
 18(>!) (Saturday), on the subject of the Debt of the late Provinee of 
 Canada. 
 
 Present : Sir George E. Cartier, Honourable Mr. Sandfiold Macdonald, 
 Honourable Mr. Cluiuveau. Honourable Mr. Dunkin, Treasurer of Quebec, 
 Ilonourable Mr. Wood, Treasurer of Ontari(j, and Honourable Mr. Rose, Minister 
 of Finance of (Janada. 
 
 Mr. Ko.se called attention to the Statement of Account on pages 72 audio 
 73 of part III of tiie Public Accounts of 18(58, and thought the better way would 
 be for the Treasurers of Ontario and Quebec, lespectively, to indicate any objec- 
 tions they might have to any of the items composing the balance. 
 
 Some discussion then arose as to the following items on the Debit side of 
 the Statement as shown at page 70, Mr. Dunkiu claiming' that they should stand 
 as assets, and be submitted to the Arbitrators, and that the liabilities should be 
 correspondingly increased, viz. : — 
 
 Isi. Upper Canada Building Fund Debenture Account... $36,800 00 
 
 2nd. Lower Canada Sup. Education Fund : — 
 
 A. lnc(nne Fund 230,(581 4«j 20 
 
 B. L. C. Legislative Grant 28,494 73 
 
 C. Education East 290 10 
 
 Mr. Hose and Sir George Cartier on the part of the Dominion, and Mr. 
 Sandfield Macdonald and Mr. Wood on the part of Ontario, thought the mode 
 proposed of stating the account reasonable, and it was agreed to accordingly. 
 
 A discussion then took place with reference to the items to be deducted 
 from the debt, Mr. Dunkin and Mi-. Wood claimiug that the debt as shewn in 
 the statement in question should be reduced by the total of the following items, 
 on the ground that they are either Bank Balances, or securities for money : 
 
 1st ThcBankofU. C 31,150,000 01 30 
 
 2nd. City of Hamilton Coupons 22,240 89 
 
 Quebec Turnpike Trust 20,000 00 
 
 McGill College Mortgage 40,()00 00 
 
 Lord Selkirk and Boulton Mortgage 1 3,900 00 
 
 I^oulton do 9,828 00 
 
 Markland do 5,882 00 
 
 Bank of U. C. Stock 750 00 
 
 3rd. Tliey also claimed the following items as being securities for money ; 
 viz: 
 
 A. Grand Trunk Bonds $243,406 00 40 
 
 B. Northern do 243,333 00 
 
 • C. do do , 30,976 00 
 
 , a 
 
 10 
 
 lai( 
 
 dec 
 !)la 
 
 30t 
 
 iter 
 
 on 
 
 W(!l 
 
 (lef( 
 
 ■# Stat 
 '■| 20 the 
 enc 
 
■St 
 
 24th July, 
 Province of 
 
 Macdoiiald, 
 
 of Quebec, 
 
 )sc, Minister 
 
 i<,'es 72 and lo 
 r way woidd 
 te any objec- 
 
 )cbit side of 
 should stand 
 3s sliould be 
 
 ,800 00 
 
 (581 46 
 404 73 
 290 10 
 
 on, and Mr. 
 lit the mode 
 [lordingly. 
 )e deducted 
 as shewn in 
 )wing items, 
 noney : 
 000 01 
 240 89 
 000 00 
 000 00 
 900 00 
 828 00 
 882 00 
 750 00 
 for money; 
 
 406 00 
 333 00 
 E)76 00 
 
 20 
 
 30 
 
 40 
 
 (Appendix. ) 
 
 (A- — Conlinued.) 
 
 4:7 
 
 4th. Debt <hie by the Great Western Kailway. EECORD. 
 
 5th. Also the irvdraidic llents, and other items enumerated in the Return 
 
 laid l)ef'()re I'arliamcnt during the last Sessicm. No i' -J' 
 
 Mr. Ro.so and Sir (fcorge ('artier stated that they could not agree to the //w. '^' 
 d(Mlu('tions claimed, and after a lengthy discussion the consideiation of the best 
 olan of adjusting these i)oints of difference was deferred till Monday, the 26th. 
 
 The discussion then proceeded on the tran.sactions entered into since June 
 30th, 1867, and charged against the Provinces. 
 10 1. Objection was taken by the Trea.surers of Ontario and Quebec to the 
 
 item chai'ged for Military Stores, 
 
 It was claimed that payments made after June 30th for stores then actually 
 on hand, or which had been ordered by the Province of (!anada, but which 
 w(!re rciceivcd by the Dominion afterwards, slumld not be charged against the 
 I'rovinces, but be borne by the Dominion. 
 
 A final decision on this point by Sir G-eorge Cartier and Mr. Rose was 
 deferred. 
 
 2nd. The Treasurers of Ontario and Quebec agreed in the same form as 
 stated in the letter of the Minister of Finance to the Treasurer of Ontario of 
 20 the 19th December, 18()8, to the general fairness of the rule ]-h\ down in refer- 
 ence to transactions since 1st July, 1867. 
 
 3rd. The Treasurer of Quebec claimed the balance of the unpaic' appropria- 
 tion for Superior Education as stated under letter A. of his communication to 
 tlie Minister of Finance of the 8th June, 1S69. 
 
 This was objected to, and after some discussion he agreed that this item 
 should stand over for his future consideration. 
 
 4th. Surveys Kast,— as stated under letter B. of the same communication. 
 
 It is understood that any items within tlie balance of approi)riation which 
 either Province may have paid since June 30th, 1867, in consequence of 
 3(1 the previous orders of the Province of Canada, shall be paid by the Domi- 
 nion, cind charged to the Province as arrears on proper accounts being 
 rendered, 
 
 5th. The item claimed in Mr. Dunkin's communication above referred to 
 I under letter C. for the Board of Agriculture and Board of Arts and Manu- 
 I factures. 
 
 It is understood that if this sum is authorized by statute, or has been actu- 
 ally vote(l, it may be paid, but if not, that the claim is inadmissible. 
 
 6th. The Treasurers of Ontario and Quebec refused to recognize the gratui- 
 ties paid under vote of the Senate. 
 
 The Conference then adjourned until Monday, the 26th. 
 
 Monday, 26th July. 
 Present : The same as on Saturday, with the addition of the Honourable 
 M Mr. Ouimet. 
 
 After much discussion on the different items which the Treasurers of 
 Ontario and Quebec claimed to Lave deducted from the debt, the following pro- 
 
48 
 
 ( Appendix. ) 
 
 Schedule 
 No. 1— Cotj 
 limced. 
 
 A — (C'tmlinueif.) 
 
 2. Also the (rranil Trunk Mond.s $24:},4<»<>. 
 
 3. Tlio Hydraulic Konts, and other sums due at such JJalance.-; as niav be 
 ascertained to have been due on tlie 1st July, 18(57 * 
 
 SatuniaJ.^'''^ ^^'^ ^^'^'^""'^ Htores shall bo treated as proposed in the minute of 
 
 «. . ^; ^^^f^ ?' \'' *''^ Northern (Mn, the (luestion whether it shall be deducted ^^ 
 or not, and at what am(,unt. shall stan<l for future c(msideration ''''''''''-'^ 
 
 b. riie securities hel.l for the Sinkin- Fund t.. be taken at i.ar. 
 
 7. Ihat as to the Bank of Upper Canada debt, the J'inance Minister in 
 conjunction with the Treasurers of Ontario an,l (,)uebec sludl illv(^st at wi h 
 the assistance of the Trustees, the value of the assets, and en.leav, nr t" -'ome to 
 a conclu^sion as to the real worth of the debt, and the tioure at which i shSl be 
 allowed by the Dominion to the late Province of ( 'ana.la 
 
 fiv. fV^""^ ""''""."'^ ''^''^^''' ^''''" *^^''^ *''^-^ «''«"' ^^i^l' ^I'o assent of their respec- 
 n Ihi l"f',' "n?" ■'""^'' ""^i«"^''-^'»t person of hi,!, sfandino. as a liSee 20 
 111 winch case it shall be competent for the Provinces not only 7o ask t nt tlu' 
 
 donf th^^hS^t^d'^'^T^r''^^"^^*'^"/^^^ ^"*"^^'"'' - ^'^^rtei^^fi^: 
 
 8. That the Great Western debt shall be retained as an absolute asset of 
 the Dominion, and not be deducted from the Debt Husomic asset ot 
 
 hntnf 1 ^^'f •"'•^ securities connected with Hoads and Harbours not of <jeneral 
 but of local interest such as embraced in .:,e return laid before Pml:\S 
 last Session, shall be valued outlier between the two I'rovinces and the iCi 
 
 Sifted S:;;rS;^^::^^^'--^^'^"^- - "'-^^-^-^ i^wVrtide'kt/rde:. 
 
 It was accord iiif'lv 
 
 agreed 
 
 n^, ^ - -— „.^, ..„.^vv. that the j'entlemen representing the sevpnl 
 
 ronferT' r'';r''' ■^"^'""^^^'^ foresoiuf^'proposal with the inu c^ of thi 
 Conference, for he approval an.l action of their i^^spective (Unenin um ud 
 that, If approved o, a statement of debt framed in accordr.nce thereS sho Id 
 be prepared for submission to and the early action of the Arbitr tor 
 
 t\ 
 til 
 
 10 
 
 (( 
 
 (( 
 
 20 
 
 30 
 
 T> i. rr.1 Tuesday, 27th Julv ISfJO 
 
 A M.?r u ^'1 same gentlemen as yesterday, and the H.mourable Sf^John 
 A. M£U'd(mald and the Honourable Mr. McDouoall 
 
 ITie question of the Bank of Upper Canmhruebt was aaiin discussed .n,l 
 
 f;;XV;"^"'>'''^^' "/ f'\f'^^' -^^--"^^ "^^-"tioned in the" di rerof^ester 40 
 day, the I ommion and the Provinces shouM now agree on a sum at which the 
 
 rthJ^um"?^??(K OOoT' T'-^''^^"^ ^-t^o.. discissions, it w^uScS 
 U1..0 ine sum < t 5i.o(l(),(M)0 was a fair iimount .t which it should be taken and fh..t 
 Viat sum should accordingly be d.educted from the debt as a final scttiixnenVbe- 
 
 1 
 
 "I 
 "t 
 
 "k 
 "u 
 
 "( 
 
 "1 
 
 40 
 
 "i: 
 
 "1( 
 
a in dispute 
 H enuiueratod 
 
 !e>; JUS may be 
 
 the minute of 
 
 be deducted 
 
 10 
 
 e Minister in 
 •stif^ate, witlj 
 ir to (jome to 
 cli it shall be 
 
 their respec- 
 s a lieferee, 20 
 ask that the 
 -'0 heretofoi-e 
 Dominion as 
 
 'lute asset of 
 
 it of ^^eneral, 
 Parliament 
 the Domin- 
 
 ', and be de- 30 
 
 the several 
 utes of this 
 mient^, and 
 with should 
 
 s. 
 
 , 1S(59. 
 
 •le Sir John 
 
 cussed, and 
 I's of yester- 40 
 t which the 
 understood 
 ■n, and that 
 element; be- 
 
 ( Appendix.) 
 
 A- — (^Concluded.) 
 
 49 
 
 tween the Dominion and the Provinces of Ontario and Quebec, in respect of Schedule 
 that account. ' No. \—Con- 
 
 ^■^■^^— ^— ^^— ■■ ^— — tinned. 
 
 10 
 
 20 
 
 30 
 
 40 
 
 B. 
 
 'Copy of a Report of a Committer of the Honourable the Privy Council, on 
 
 " the 17th Au^'Uht, 18(59, 
 
 "The Committee have had befi^re them a memorandum df^ted 4th August, 
 ' 1HG9, fnmi the Honourable the Miui.ster of Finance, submittinj,' for the consid- 
 ^enition of Your Excellency in Council a statement of the debt of the late Pro- 
 ' vince ()f Canada, to bo submitted to the Arbitrators in accordance with the 
 'Order in Council of the i!9th ultimo, approving of the minutes of the C^infer- 
 ' ence held at Montreal on the 24th and subsecpu'ut days of Jul} last. 
 
 "The Minister of Finance states that the points involving questicms of prin- 
 ' ciple, which were reserved for future consideration, were the securities of the 
 ' Northern and Grand Truidc Ruihvay Companies luild by tiie GovernnuMit. That 
 I with reference to the s ;curities of the Xorthern Railway, amounting to the .sum 
 ' of |243,833.()(), he reports that it was rec^eived hy the late Province of (Canada 
 ' under the circumstances stated in the Act 2;]r(l Vic, Chaj). 105, and is there- 
 'm referred to as the bonds of ,£o(),0ao sterling, being 2n(l Preference Bonds. 
 
 "That the original advance of .£47r),(>(K) sterling, and the sum of .£.-)() OOO 
 I .sterling, represented l^}' the 2ix\ Preference Bonds, class B., to be issued under 
 'the ol.st Vic, Chap. 8(5, are apart and di.stinct frMin the first mentioned .sec(md 
 'Preference Bonds of .£5(),()(>() sterling, held by the late Province of Canada 
 
 " That with reference to the securities of "^the (iraud Trunk Railway Com- 
 ' pany of Canada, amounting to the sum of !ii!24:j,4(»0.(»(>, the circumstances under 
 which they came into the hands of the Government, he states, are detailed in 
 the Report of the Auditoi-, and the Minute of the Executive Council of the 
 late Province of Canada, dated the 18th October, 18(;(), a copy of which Re- 
 port, and of the minute j.assed thereon, are submitted with his memorandum. 
 
 " J he questions whether these se\eral securities, (u- either of them, are to 
 be treated as tlie al)solute property of the Dominion, in terms of the 108 Sec- 
 tion of the British North America Act of 1807, and as coming within the cate- 
 gory of Public Works and property specified in the Schedule No. :} of the said 
 Act, or whether they are to be regarded as securities under the 107th Section 
 of that Act, and to be taken in reduction of the debt of the Province at the 
 Union, and, if so, at what amcnmt, he submits for the consideration of Yovr 
 Excellency in Council. 
 
 " The draft statement of debt submitted will, he states, be varied according 
 to the decision at which C'ouncil may arrive. 
 
 " The Committee are of opiuion that, under the circumstances in which the 
 two iten-s of i^-2i'3;,m and $24:J,40(), came into the hands of the late I'rovince 
 ot Canada, they are to be regarded as securities for money under the 107th 
 Section of the Ji N. A. Act of 1807. and ought to be taken at their face in 
 reduction of the debt of the Province ..f Canada, but that the other items be- 
 long absolutely to the Dominion. 
 
 " Certified. '< W, H. Lee, Clerk, P. C" 
 
 Minute of 
 Privy Conn- 
 uil oil tliu 
 (loltt of the 
 lute Pro- 
 vince of 
 ('aiiivda. 
 
50 
 
 RECORD, 
 
 Ht'hedule 
 
 ( Appendix. ) 
 
 B,—( Conceded. J 
 
 Statement of Debt ok late Phovince. 
 
 No. 1- 6W.- f^'^.:'^;';''.;^"'y «t im, an per statement III, 5p. 71 $72001 701 o. 
 
 tinned. l/- ( • BuiMiM^r Fund Dchentnms .....\ \aJl^!. 
 
 Hftiternent '^"P- '<'• lucoiJlo Fuild, 1,. C 
 
 oidohtof U»<,n.sl;itive Grant 
 
 Into Pro- Education East 
 
 viiice of 
 
 C/'aimila hy 
 Privy 
 
 (Council. I^^ess Bank .)f U. C |50(),()(M) 00 
 
 louHolidated Fund Securities 120 599 14 
 
 (}. T K. and N. K. R ^^^{'J.^^ ^<j 
 
 Jsorthern Special 3o,97G 70 
 
 Uit ;ua(| ui property 6,684 54* 
 
 Hydraulic and other rents 104,784 44^» 
 
 .'J(),800 00 
 
 230,081 40 
 
 28,494 73 
 
 290 10 
 
 $72,357,978 49 
 
 10 
 
 Subsequent debits 
 
 Less freight, page 37, P.' A." 1868, 
 
 r-K.v^' ^'^TtV: •'^3'943 17 
 
 i^lotlnng and Equipments, p;ige 38, 
 
 w,„ !*• 'V« • ^»i*,582 95 
 
 Improved fire-arms, p. 40 p. Ill 19,068 08 
 
 $2,876,131 84 
 
 - $1,246,684 48 
 $71,111,303 01 
 
 20 
 
 Less subsequent credits. 
 
 282,594 20"' *The items mark- 
 _ ed thuH are subject 
 
 $2,593,537 64 ^ ^''"««'*'ion. 
 
 674,949 91 
 
 L 
 
 ess, 
 
 $2,018,587 73 
 
 30 
 
 $73,129,890 74 
 62,500,000 00 
 
 Net debt to be divided $10,629,890 74 
 
 .•^corfS"''"'' """ "'" "' "«'""""' * ™'- "f «» K»<1 -curitie, when 
 
 20 
 
 30 
 
( Appendix. ) 
 
 51 
 
 72.061,721 20 
 
 .'5«,H00 00 
 
 2y 0,081 40 
 
 28,494 73 
 
 290 10 
 
 Schedule No. 2. 
 
 72,357.978 49 
 
 10 
 
 Sl,246,684 48 
 1,111,303 01 
 
 20 
 
 The items mark- 
 thuH are subject 
 verification. 
 
 ^.018,587 73 
 
 30 
 
 3,129,890 74 
 2,500,000 00 
 
 ),629,890 74 
 urities when 
 
 RECORD. 
 No. 2. 
 
 Statement (>f the Assets enmnci'atcd in the Fourth Sclicdulo of tho 
 British North America Act as they stood June 30, lati?, with 
 explanatory remarlvs. 
 
 1. Upper Canada Buildinj,' Fund Debenture Account »30,800 00 
 
 2. Aylmer Court House Debenture Account, 6 per cent... 2,000 00 
 
 3. Aylmer Court House Debenture Account, 
 
 ^P^rcent $19,074 97 
 
 As the hite Province is only liable for the amount which 
 
 10 may be collected, and tho collection of the income is in the 
 
 hands of Quebec, it has been muti -lly agreed to strike the item 
 
 out of the account, reserving a question for the Arbitrators 
 
 mentioned below. ' 
 
 4. Aylmer Court House Account, Current, per cent 1,239 70 
 
 This amount has arisen from the accumulation of interest 
 
 on the 12,000, 6 per cent. Debentures remaining unpaid the 8 
 per cent. Debentures being the first charge upon the income. 
 
 6. Montreal Court House Debenture Account 95 (JOO 00 
 
 6. Montreal Court House Account Current I8 996 21 
 
 [20 .7. KamouraskaCourt HouseDebenture Account .1^8,955 00 
 
 This is exactly in the same position as the Aylmer's 8 per 
 cent. Debentures. 
 
 8. Kamouraska Court House Account Current 201 27 
 
 Before the building and Jury Fund was established cer- 
 tain charges for maintenance of the Court House had to be 
 paid by the Government out of this Fund, besides the amounts 
 distributed in the 8 per cent. Debentures, this balance is a rem- 
 nant of these charges. 
 
 9. Law Society U. C. Debenture Account 1 6 000 00 
 
 t30 10. Law Society Account Current 140 015 61 
 
 The cost of the Law Society's Buildings, &c., were origin- 
 
52 (Appendix.) 
 
 RECORD, ally met by the issue of Debentures on the credit of the Law 
 
 Schedule ^''®^^' ^'"*' "^ ^^^^^^ ^'""^ redeemed as many of the Del)entures as 
 No. 2~Con- "^6 could get, and charged them against the account current, 
 thiued. and ail subsequent advances for the Building, &c., have been 
 charged against this account. 
 
 1 1 . Montreal Turnpike Trust .$188,000 00 
 
 This sum represents the Debentures issued on the credit 
 
 of the Trust, with the guarantee of the Province. As the 
 Trust always pays its interest regularly, it has been mutually 
 agreed to strike this item out, reserving a point for the .Vrbi- 
 trators, as above mentioned under the head of Aylmer Court 
 House. 
 
 12. University Permanent Fund $1220 63 
 
 This amount was charged against the University imprc^perly, 
 
 and the debt is repudiated by it. The item was written off to 
 Consolidated Fund before (Confederation, by order of the Min- 
 ister of Finance. It is to be observed with regard to this item, 
 and some others which do notai)pear in the statement of affairs 
 of June 30, 18t>7, that the framers of the Act had onlyir their 
 hands the Public Accounts of 1865, from which the Schedule 
 was drawn, but in the meantime the items had been otherwise 
 treated in our books. 
 
 13. Royal Institution $7,790 00 
 
 Otherwise McGill College. — This was the first loan of $8,000 
 
 to that institution, deiLicting $10, which from time immemorial 
 had stood at its credit in our books. It was transferred to 
 Consolidated Fund Investment Account before Confederation, 
 under the impression that it was covered by a mortgage given 
 after the second loan was made, which forms part of that 
 account. 
 
 14. Consolidated Municipal Loan Trust, U.C. 
 
 Capital Account $7,300,()00 00 
 
 Less at credit of Sinking Fund. 429,548 63 
 
 6,870,451 37 
 Less Capital of Indemnity Account 2,218,555 39 
 
 15. Consolidated Municipal Loan Fund, U. 
 
 C. Interest Account $3,517,018 32 
 
 Short charged, vide P. A. 1868, iii., p. 5. . . . 65 94 
 
 3,517,084 26 
 Less Interest Account Seigniorial Indem- 
 nity 1,850,017 91 
 
 10 
 
 30 
 
 4,651,895 98 
 
 40 
 
 :2o 
 
 2,166,466 35 
 
(Appendix.) 
 
 10 
 
 20 
 
 SO 
 
 4,651,895 98 
 
 40 
 
 2,166,466 35 
 
 The deductions of the Sinking Fund and Seigniorial Indem- 
 nity which, in the statement of affair,?, stand amongst liabiH- 
 ties, have been mutually assented to, but in one respect, I have 
 made a difference in this statement from that previously pub- 
 lished. I think the present statement to be the coirect one, for 
 the reasons stated in a report to the Minister of Finance, of 
 which I add an extract :— "The Upper Canada Indemnity is 
 '' by the Act to be paid annually to the credit of the Municipal 
 " Loan Fund. As it is not in any way to extingriish the debts 
 10 '' of the individual Municipahties, the Municipal Loan Fund 
 ''Account must be kept just as if this Indemnity did not exist ; 
 " but it must be kept as a parallel account, and ought to be 
 '^ treated exactly in the same way as the account to Avhich it is 
 ^'an offset. Now the Municipal Loan Fund is annually 
 '^ charged with five per cent, interest on the capital, being the 
 ^' amount which we have to pay on the Debentures issued. 
 '' Before 1860, it was charged six per cent, but, as at that date 
 " we refused to pay more than five, we have onlv charged what 
 "^ we paid since that time. But under the general Act, we con- 
 |20 '' tmue to charge six per cent, on all arrears. Now, of these 
 " two parallel accounts, the one increases by five per cent, and 
 '^ the other by six per cent, on the capital, a difference which I 
 '' think right to maintain, because there is no connection be- 
 '' tvveen the reasons which regulate those amounts of interest, 
 "except that they are the amounts wti actually pay. But 
 '' in other respects these two accounts ought to be treated in 
 " exactly the same way. If the annual pavment had been carried 
 ^1 to the credit of the Municipal Loan Fui.d in li(piid:itiou of it, 
 " there T/ould have been so much less interest chargeable oii 
 iO '' the arrears, and though it cannot be so treated as the indivi- 
 '' dual Liabilities are to be retained, the result as far as the Fund 
 '' as a whole is concerned, ought lo be the same, so that if ever 
 " the habihty on that account is cleared off; the annual payment 
 ^^ sliould go as provided by the Act, to the Municipalities Fund. 
 "But no interest has ever been allowed to the Indemnity 
 " Account, which has only been credited with the ecpiivalent to 
 ^^ the annual payments to Seignieurs. I think that it ought to 
 "be allowed at the same rate as is charged to the parallel 
 1' ^cc )unt, viz : six per cent. This would make a diffei-ence of 
 " ^264,923.75 in the nominal amount, but the dift'eience which 
 ^' It would make in the settlement, generally dei)ends upon the 
 " manner m which the account, whatever its amount may be is 
 "treated." "^ ' 
 
 The words of the Act are that "as soon as the Province 
 " ceases to be under advances to the said Loan Fund " the 
 balance is to go to the Municipalities Fund. If it is iield that 
 this means advances for both capital and interest, and 1 think 
 
 H 
 
 53 
 
 RECORD. 
 
 Schedule 
 No. 2~Coii- 
 tinned. 
 
54 
 
 (Appendix.) 
 
 RECORD. It should bo SO held, because we have redeemed the original 
 Schedule -L'ebentures and it does not seem to affect the question, how 
 No.2-Con- we raised the money to do so, then the additional interest which 
 tinned. 1 propose above should be allowed, does not at all affect the 
 settlement. As the indemnity is not included in the liabilities 
 ot the late Provmce, but made an offset from the assets, it does 
 not enter into the question of the debt for which Ontario imd 
 Quebec are responsible. Neither does it affect the availability 
 ot the as.set.s handed over to Ontario, for the liability of the 
 individual Municipalities is not reduced by it. It is merely 
 what It was always intended to be, a piece of book-keepin<T of 
 no value except in the case of an almost impossible contin-^ency 
 Whether the change would in any way affect the distribution of 
 tlie debt between Ontario and Quebec, will depend upon the 
 basis adopted by the Arbitrators, and I need not trouble you 
 at)Out ttiat. For that reason, however, I think it proi)er to sub- 
 mit this statement to the Arbitrators. 
 
 16. Consolidated Municipal Loan Fund, L. C. 
 
 Capital account §2 428 140 ()() 
 
 Less— Sinking Fund $27l,:3y9 33 
 
 Short credited, vide P. A. 
 
 1858, iiip. 4 113 53 
 
 271,452 86 
 
 4Q4 J/m w."' t'le above sum are two loans, Terrebonne, 
 $94,(00, and Ottawa County, $131,000 respectively, respecting 
 which in 1861 an O. C. was passed releasing thos/Municipali 
 ties but no 1 arliamentary Authority has ever been given for 
 writing them off the books. 
 
 17. Consolidated Municipal Loan Fund L 
 
 C. Interest. '... $782,735 .34 
 
 Short charged, vide P. A., 1858, iii p. 5. . .. 7 49 
 
 00. Jn ^'"^ ''T\ '^ ^««l"'^ed the arrears of Terrebonne, $86,- 
 394 89 and of Ottawa, -8120,993 98. 
 
 18. Agricultural Society, IJ. C. 
 An advance made in 1858. 
 
 19. Lower Canada Legislative Grant 
 
 _ Upon an examination of the Education Accounts in' 1*856 
 It became apparent that the grants had been erroneously divided' 
 an( that Lower Canada had over expended this amount, Imt as 
 under existing circumstances the annual expenditure could not 
 be diimmshed, a separate account was opened for the over 
 
 10 
 
 20 
 
 $2,156,687 14 
 
 782,742 83 30 
 
 4,000 00 
 28,494 73 
 
 40 
 
 20 
 
10 
 
 20 
 
 5(5,687 14 
 
 82,742 83 30 
 
 4,000 00 
 28,494 73 
 
 40 
 
 ( Appendix. ) 
 
 draft, for future setl lenient. In the statement formerly sub- 
 mitted by me, I treated this as a deduction from the Superior 
 Education Fund, because by hiw, any unexpended balance of 
 the Grant is carried to the credit of that Fund, and this amount 
 might in any year have been deducted from such balances, or 
 it might have been made a deduction from the balance of ap- 
 propriation for schools, Avhich is included in the debt of the 
 late Province ; but as the item was named in the Schedule, it 
 was decided to submit it to the Arbitrators as an asset for them 
 10 to divide. 
 
 20. Quebec Fire Loan 
 
 This is the amount which stands in our hooks, but in 1863 
 
 there was legislation upon the subject, making certain deduc- 
 tions from the original debt for prompt payment of part of the 
 ari-ears. No statement has ever been sent n^e of the extent to 
 which the Act was taken advantage of. The item will certaiidy 
 have to be reduced, and the officer in charge of the account at 
 Quebec should be called upon for a statement. 
 
 21. Temiscouata Advance Account. 
 
 20 This item stood in the Public Accounts of 1865 at 13,000, 
 being an advance to certain Municijjalities in the County of 
 Temiscouata, on account of the Seigniorial Indemnity coming 
 to these townships. In 18(57 it was transferred to the account 
 of the Seigniorial Indemnity to townships, wdiich was then reg- 
 ularly opened. We have never been ;:ble to get proper ac- 
 counts from the persons to whom the money was eiitrusted, 
 shewing which Municipalities benefited by the advance, and as 
 some of it at least appears to have been distributed in the 
 Seigniories which had no claim on the Fund, it would probably 
 
 30 be better to restore it to the assets of the late Province to be 
 dealt Avith by the Arbitrators. 
 
 22. Quebec Turnpike Trust 
 
 This by mutal consent was treated as a deduction from 
 Sundry Trust Funds, being interested on their investments, 
 which we had given them credit for, but never had collected. 
 
 23. Education East 
 
 A balance of defalcations in the Education Office. In 
 previoua statements I treated it as a deduction from Educa- 
 tion, but it was restored to the assets for the reasons given under 
 40 the head of L. C. Legislative Grant. 
 
 24. ' Building and Jury Fund L. C 
 
 Advances made to the Fund on the credit of its income 
 
 55 
 
 RECOBD. 
 
 Schedule 
 No. 2— Con- 
 til/ itcd. 
 
 $264,204 65 
 
 29,580 00 
 
 290 10 
 
 116,475 51 
 
( Appendix. ) 
 
 56 . 
 
 RECORD. 25 Municipalities Fund L. C 
 
 '""'■ yet been p^S ^uZoyer "vt o's -' '^^^f'f ^l'""' ^"^ has not 
 capital of the Sei'i oHes o* ^/ l^ ^Seignional Act. of the total 
 be chamed on SSl^,^ ^Sulp.ce only .|;14(),()()() was to 
 
 was nndP , In ' f""*'' '"^*^ ^he balance |196 419 66 
 
 mv t L '^''^'■^'\^g'"n«t this Fund, but until it w^s able to 
 
 Addinterestonwytinent;;;;;;;;;;::;; ^""J^l^ 
 
 $484,244 33 
 
 10 
 
 — 234,281 46 
 
 20 
 
 mo'^^n/Zn^'tr!: ^^Pf"d.t..re of the (unci sin^; 
 
 $11,200,685 60 
 
 included in the Schedide. '"'^'^^^^^^ '^^^ the above, which should have been 
 
 City of Hamilton Interest Account «q'> Atux • *i, 
 the Quebec Turnpike Trivst be n- intPvl; ' '' ^^^ ^""^^^ counterpart of 
 ha.l not been paid. It is nnu ofe fo t! I "^vestment of Trust Funds which 30 
 deduction from the funds ' But a tl iT r"^ '^ '^^'"^ ^^ay, making it a 
 come Fund has now been repl u-od t\Y V'^"''''''' ^"^"I^^" ^^ Education In- 
 
 rangement will have to be ma e Th^ > ''T'S' '\'''^'^^^ revision of this ar- 
 disappear fron. the a.se it whor^is ^\J ooo '"^^.1"'^""? ^^^^""^ -'^1 
 
 ductions from tlie Upi)er Cam .hlr innit 4 /'f' '^^^*'^^'^* '^'" ^^^^ "'^^»e de- 
 Caiuula Building F, ^ri-esm^hjrfr l i ''*^ ^"r""" *^^"^'^ ^''^ ^'^^ Upper 
 the Lower C^anada «uper or^E d c'l I'., n "'i"^" 1 '^^'^''^^ ""^^^ ^« ''^^'^''^^l ^ 
 above given. ^ i^ducation Income lund, making it $234,281.46 as 
 
 Kegistratioii Service, L. C Ji^-> 5->4 -^a rhi. „ 
 "1 1865, from the statement of nftV,v..'i~^ I '^^•^*'""<^ ^^^s not m existence 40 
 out, but it is exactly an2gouf inl^oiti^^^^^^^ the Schedule was drawn 
 
 on the credit of a special fun.l Tf t Z^ ^ . ^ '*^.'"^''"' ^'^'"- advances made 
 which has the admfidslri!; ,f h Zul'^i'^/'" '" ^'^ "^* ^^ ^^"'^^-' 
 ^^dl^^^lndemnity to Kevenue Ins^s' u' 0:1^^41" ^ g^^SiTw 
 
$484,244 33 
 
 10 
 
 234,281 46 
 
 20 
 
 11,200,685 60 
 
 are two other 
 Lild have been 
 
 ounterpart of 
 Funds which 30 
 ^ making it a 
 Education In- 
 on of this ar- 
 Accoiint will 
 
 be made de- 
 id the Upper 
 
 be added to 
 J34,281.46 as 
 
 "n existence 40 
 e was drawn 
 vances mode 
 I) to Quebec, 
 
 old account 
 (wen up to 
 
 tinued. 
 
 { Appendix. ) 57 
 
 In the foregoing remarks I have mentioned three of the assets enumerated, RECORD. 
 
 which, by mutual consent, have been struck out, together with their corre- 
 
 spending liabilities, reserving a point for the Arbitrators to settle, namely :— Schedule 
 Aylmer Court House 8 per cent. Debenture Account, Kamouraska Court N»- 2-^>'o 
 House, and Montreal Turnpike Trust. As to the two first, the Dominion can- 
 not relieve itself of its responsibility to pay to the Debenture holders the pro- 
 ceeds of the Local Tax. Should Quebec, which has the collection of the tax, 
 fail to do so, and recourse is had upon the Dominion, is the Dominion to have a 
 claim upon Quebec alone, or upon Ontario and Quebec, and in what propor- 
 10 tions ? Similarly the Montreal Turnpike Trust always has paid its interest, and 
 therefore, the asset and corresponding liability have been struck out But if the 
 Trust fails to pay, and recou ie is had upon the Dominion, in what proportion is 
 it to fall back upon Ontario and Quebec, which have been relieved from the 
 amount in computing the debt 1 
 
 Tiiere are two other items which, as not forming part of the asset, do not 
 strictly belong to the statement I am called upon to make, but which so closely 
 resemble the preceding ones, that it may be as well to mention them here. 
 
 The Montreal Harbour Commissioners borrowed $481,426.27 with the Pro- 
 son ^'"^^^^ guarantee, and as they have always paid their interest, the amount is not 
 -" included in counting the debt ; but if the Dominion is at any time called upon 
 under its guarantee, in what proportion is it to fall back upon Ontario and 
 Quebec ? The other item is one which stands only in the liabilities, viz :— The 
 Crown Lands Suspense Account, standing nominally at $112,748.63, but really 
 being a much less amount. This it has been agreed to leave out of the d( bt 
 upon the ground that the great bulk of it which will ever have to be paid will 
 be paid m land, the property of Ontario and Quebec. It is understood that 
 Ontario and Quebec each assume the responsibility of paying all just claims 
 arising in their territory, either in land or money, but if they fail to do so, and 
 recourse is had upon the Dominion, in what way is it to recover from Ontario 
 30 and Quebec ? 
 
 There is still another item which, thoug' «ot enumerated in the Act is a 
 joint asset of Ontario and Quebec. All the other Trust Funds which form a 
 part of the liabilities of the lat- Province, belong either to Ontario or Quebec 
 oi to mdividual bodies or institutions withn them; but the Common School 
 Fund IS the joint pr .perty of t e two. The ScliedulM in questii n only dealt with 
 the assets of the Province which were to be abandoned to the two Sections of 
 It ; but this IS a liability of thc> I rovince and now of the Dominion, which thus 
 becomes a joint asset of those two Sections. If the Act creating the Common 
 School I unci had ben strictly acted upon, the Annual SchooKirants wouhl 
 40 fiave been charged against it as ftir as its income would have covered them • but 
 they have always been charged against Consolidated Fund, and the Common 
 fechool fnnd has been allowed to accumulate at compound interest As far 
 therefore, as that part of the Fund is concerned, more than half of the whole 
 amount it would appear that it should be divided as the Grants were divided 
 which should have been charged against it, viz :— acccn-ding to population The 
 present amount of the Fund, deducting the invc^^tments, i.s ei,(;io 644 47 and 
 the lands already sold, but not paid for, amount to as much or, perhaps rather 
 
58 
 
 (Appendix.) 
 
 liKCOKI). „j„r,. xhis further dimcuhy, liowevor, arises out of th(; division of this Fund, 
 Sclicdu!,- ^'"^t the investments, (^)uebee Turnpike Trust Bonds, amounting to !ii!r)8,0()0 
 N... 2-(,'<>«-caiin(.t wdj be divided, I believe, however, that they are worthless, or nearly so, 
 liiumi. and that, l)y the Legislation of the late Province. 
 
 John Lanoton, 
 
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 (Appendix ) 59 
 
 Notes to Statement. RECORD. 
 
 U. C. Building Fund ) An amount of principal was paid during the period whidi I have de- j^"- ^~^'^"" 
 
 Law Society . / ducted on both sides. nnued. 
 
 MoNTRKAL Court House... ] Besides the interest on the debt, tV.ere is some expenditure chargeable 
 
 Law Society I aj;ainst these accounts which 1 liavt; not deducted from the Income. 
 
 Building AND Jury Fund...) In tlie case of the Montreal Court House and Law Society, tlii.s 
 
 expenditure is not of mucli importance. But in the case of the 
 Building and Jury Fund, tlu; regular annual expenditure charge- 
 able against the Fund, irrespective of the advances which may be 
 considered capital, is very large, amounting on the jjcriod to 
 $ If this wen^ deducted fiom tlie income, what would 
 
 remain available for repa\ ing tiie advi.nce of capital would be only 
 $ or equivalent to ll.r)8 p. c. 
 
 Quebec Fire Loan... Large payments were made in iSGi, to enable the debtors to take ad- 
 vantage of tli(* partial remission secured to them by the Act. This 
 materially affects the average rate of income. If the year 1804 is 
 left out intii-ely, the average on the other years which may be 
 considered average years, would be l.'J8 per cent. It nnist, how- 
 ever, be remembered that the cap'tal is stated too large in our 
 books since 18G3, though to what extent I cannot now ascertain. 
 
 L. C. Superior Education. In 1866, $i)2,58.'5 83 was added to the capital of the Superior Educa 
 
 tion Fund, and $72,084 84 went to the credit of the Income 
 Fund for Seigniorial Com[)ensation. As the interest on this counts 
 back before 1803, the average income is unduly swelled. It is 
 also to be observed that a considerable amount of the Income of 
 the Fund arises from annual grants of the Legislature, amounting 
 during the period to $308,600 38, which I have omitted in this 
 statement. 
 
 MUNICIPALITIE.S Fund, L. C. Of these receipts, $88,446 were capital and only $23,328 19 or $70,- 
 
 910 80 and $18,065 34 interest. If the receipts on capital are 
 excluded, the per centage will be 1.14. 
 
 John Langton. 
 
60 
 
 (Appendix.) 
 
 RECORD. 
 
 Schedule 
 No. 3. 
 
 Schedule No. 3. 
 
 STATEMENT OF CASE OF THE PROVINCE OF ONTARIO. 
 
 The Province of Ontario submits the following statement of Case to the 
 S./ ^''^'"'"" "' '''''''''''' "^^^^ the reso?,tion adopt^Lt tlLL las? 
 
 The Province of Ontario has in the preparation of the Case arranged the 
 subjects for consideration under the following heads • ^inangea tne 
 
 1. Tlie whole debt of Canada, at the time of the Confederation and M,p 
 excess of that debt beyond the sum of 162,500,000, allowed by 1^/2^^ Se ion 
 
 Nc^Jh Imlf L\niS?^ ^^^^•"^'"^"^' '' ^^^ '' ^-' ^'^- ^' -"^^ the bS .0 
 BritisUorthTmericrlct^rs^'"'"" '' ""^^ ""'^^ Schedule Four of the 
 pose'oSe^::;^^::i:!:::l^StS* ^^ ^-^^^^ --^^^ ^^ the local pur- 
 poses^f^re^e^e^ufprolint^?^^^^^^^^^^ Canada, created for the local pur- 
 Quebec ^XSi^"" '' ^'" ""^^ '^^""^^"^ ^« ^^^ ^---- ^f Ontario and 
 
 Provfnc^;'SdoliVeb^^^^^^ '''' ''^'"' '''''''''''' ^^^^^^^^ ^^^^0 
 Quebec.^^^'^ '^''''''°" ""^ ^^"^ ^'''^' ^^^'^''"^ ^^^ Provinces of Ontario and 
 
 8. The question of the School Lands. 
 
 9. Claims arising out of the Seigniorial Tenure Arrangement. 
 
 No. l.~The whole debt 0/ Canada at the time of Confederation and the 
 
 excess beyond $62,500,000. " 
 Upon this head, Ontario contends that the whole debt of Canada at the 
 time ol the Confederation shall be taken at the sum of $73,039 553.92, as ,„ 
 
 ^'nTSo /ri^of ^ ^- ^^^'''i ^^'^ ^^""'^ ^^y«"d $62,500,000, at the sum of ^° 
 $10 539 553.92 leaving this latter sum as the amount to be dealt with by the 
 Arbitrators m the adjustment of the debt between the Provinces. 
 
 No. %—The amount and specification of assets under Schedule four of the 
 British North America Act, 1867. 
 
 The amounts and specifications are shown in the Schedule hereto marked A 
 
 110 
 
(Appendix.) 61 
 
 Nos. 3 and 4. — The proportion of the whole debt of Canada, created for RECORD. 
 the local purposes of the I'rovince^ of Ontario and Quebec respectiveiv. ,. 
 
 lliese several proportions arc shown ni the Schedules hereunto annexed, No. 3— Con- 
 and marked for the Province of Ontario B., and for the Province of Quebec C. tinued. 
 
 No. 5. — The proportion of the assets tinder Schedule Fovr, belonging to 
 the Provinces of Ontario and Quebec respectively. 
 
 These several proportions are shown in the Schedules hereto annexed, and 
 marked D. for the Province of Ontario, and E. for the Province of Quebec. 
 
 No. 6. — The dirisions of the excess of debt beyond the sum o/ $62,500,000 
 ElO between the Provinces of Ontario and Quebec. 
 
 The excess of debt beyond $02,500,000 being assumed by Ontario at 
 $10,559,553.92, the Province of Ontario submits to the A.rbitrators its view of 
 the manner in which that excess should bo apportioned. 
 
 According to the Schedules B. and C, showing the debts created for local 
 purposes in the Provinces of Ontario and Quebec, the amount of those debts is 
 $17,735,579.52, of which $9,833,733.33 are of the Province of Ontario, and 
 $7,401,046.19 of the Province of Quebec, and the Province of Ontario is willing 
 that the proportion that it shall bear of the excess of debt above $62,500,000 
 shall be determined by a charge against it in a ratio of either its debt created for 
 120 local purposes to the excess, or of the pojmlation of Ontario and Quebec re- 
 spectively, according to the last census, or apportioned to the value of the assets 
 of Quebec and Ontario, capitalized at six per cent, on the average rate of inter- 
 est they produced for the last four years aud-a-half ; but such interest not to be 
 allowed beyond six per cent, where the average has been more than six per 
 cent. The result of each of these modes upon the basis offered by the Province 
 of Ontario would be as follows : — 
 
 No. 1. — Proportions of Local Debts. 
 
 Debts of Ontario and Quebec for Local purposes, $17,735,579.52. 
 
 Local debt of Ontario : $9,833,733.33 
 
 50 Local debt of Quebec 7,901,046.19 
 
 Excess of debt of Canada 10,539,553.92 
 
 As the total local debt, $17,735,579.52, is to the excess of debt, $10,539,553.92, 
 so is the local debt of Ontario, $9,838,733.33, to the amoimt of debt of Canada 
 to be hereafter borne by Ontario, and the same as to Quebec, producing the fol- 
 lowing results : 
 
 Total Local Debt. Excess of Debt. Local Debt. Result 
 
 Ontario $17,735,579.52 : $10,539,553.92 : : $9,833,733.33 : $5,845,416.01 
 
 Quebec 17,735,579.52 : 10,539,553.92 : : 7,901,046.19 : 4,694,137.91 
 
 and thus making the Province of Ontario liable for $5,845,416.01 and the Pro- 
 [40 vince of Quebec liable for $4,694,137.91. 
 
"^ (4i)peiidix.) 
 
 REOORD. No. 2.--PR()P0IiTIONH OF PoPlJLATION. 
 
 Schedule 'I'''t' P"P"''*^f'<'» of the Piovim-oH of Onfnin ..n.i n„<.v.„ I- 
 
 Total Population ., -n^ «-- 
 
 Poimlation, Ontario ..'....'■■;;.;. T^am 001 
 
 Population, Quebec ''1 ?'.'^i 
 
 Excess of Debt i,iil,j)b(J ^ 
 
 • )?10,539,»53 92 
 
 and this proporti^rni will be as the total population to tl.e excess of debt so will 
 
 ToU l>„,,„!„ib„. Ex.,™ „f Debt. L„c»l P„|,„l„ti„„, R„,„„ 
 
 0"'*'"» 2,607,«o7... «10,:>3»,55:l,92 ... 1 ;ji)(l (Kjr <,^^ 8(17 71« 4<! 
 
 Q"^^""" ^-»"7.«87... *i..,5.,.,f..«:i.2... i;ni;5««:;;-|4:o76;8i5:« 
 
 oi QuebeclbC fo^.tS^Mu'S."'" '"""^ '"^ »'.««7.««.«. a„,l the Province 
 No. 3.— Pkoportion of Capitalized Assets. 
 
 of both Provinces 
 $7,017,604.35, and 
 
 E. hereto. These 20 
 f^.i.r years and a hall; ^^'p^.^m\,r^;^'^'Tl'^ ?Tt\ ^^"^^^^he last 
 produce for Ontario k 1 17,3^0.09 a nd V (S^ //"^^ ^■' TT^d 
 
 ^^4,204,322.1. Tddng this as a basis, the case till .land^' ^'•^'' "' ^ '''''^ '^ 
 
 Total capitalized assets... ^^ ^ . 
 
 Capitalized assets, Ontario ::;:;:;;:; ^t'^^ifPl 
 
 Capitalized assets, Quebec ::::::::::::::::: ivslii 11 
 
 Excess of debt .. -,o«7,001.13 
 
 i<),539,r)53.92 
 
 and the proportion will be as the total r"iin>.,i,-.,„ i 
 
 assets of each Province, so is the exSis S d^^^^^^^^^^ vT; '? '^ capitalized 
 
 Province, as follows : ^""^^ '*' ^^'^ '^^^*^ ^^ ^« ^""^e bjeach 30 
 
 Total Capitalized Ass.te Local Capitalized Assets. Excess of Debt, Result 
 
 Ontario .s4,204,322.12. .$2, J17,320.09,..$lo,a39.553 9-> S5 304 ft44i 
 Quebec. !:?4,204 322 12 ,«>(»«7 noi t^ 01// -o^--, — ^^».«504,184.41 
 ^ '^'-"^"^'^-^^•••^^t>o7,001. 13. ..^10,039.553.92. .$5,235,369.51 
 
 thus making the Province of Ontario liable for t', qo4 iftd 41 1 .1 t^ • 
 of Quebec liable for $o^zSo;Sm.51 fo, 304, 184. 41, and the Province 
 
[Appendix.] 
 
 Tho Piovinoo of Ontario is unahlo to suijf^oat, for tl"» oonsidoration of the 
 Arbitrators, j.ny other b.i.sis upon \vhii!» a division of <i"l)t could Justly he nuulo 
 and the reu.sons of each iiodo of apportionment are as follows : 
 
 No. 1.— It is clear that of tho whoh' (h'ht of tli(> hito ['rovineo of Canada, 
 |l7,73"),r)l{>..')2 lias l)een incurred for the local purposes of Ontario and (,hH>l)cc ; 
 of this sum, in thechai^'o a^'ainst the Dominion (loveri.mrnt df !i!!(52,.")()(),0(H», 
 $7,ld('},{)'2'\i\{) has been absorbed, leaving' oidy !?l(>,r);!0.').'>:l{)2 to he provided tori 
 and it seems a fair distribution of this sum that it siiouid be borne by the re- 
 spective; Provinces in th(> proi)orti()!i in which they received the moneys raised 
 10 for local purposes, and of which it formed a part. 
 
 No. 2. — The Parliament of Canada itself adoj.'ted this apportiomnent aecor- 
 dinj,' to population, when dealiui^ with the Municipalities Fund for lJpi)er Can- 
 ada, and that fund is still so divided ; also as to the Conunon School (Jrants. 
 This basis of division would seem to carry (mt the juinciple of No. 1, and would 
 have the concurrence of two things ; the larger population, and the receipt of 
 the greater amount of money for local purposes. 
 
 No. 3. — This basis of apportionment of the assets was suggested since tho 
 commencement of the Arbitrati(m, and c;in only be used as by agreement; but 
 it was considered a ju.st i)roposal, as these assets arose from and formed j)art of 
 20 the debt of the late Province of ('anada, and were not for general but local ])ur- 
 poses, that their value slumld be ascertained through the annual average income 
 for four years and a-half prior to :30th June, 1807^ derived from the institutions 
 owing the several debts which formed the assets, and thus be made the basis 
 for apportioning the debt itself. 
 
 No. 7. — The aivmoti of the assets heUvcen the Prounees of Ontario and Quebec. 
 
 By Schedules A, D, and E, the Province of (Ontario has submitted to the 
 Arbitrat(n^s statements of the assets to be divided, and the manner of division. 
 
 In })roposing this division, the iVovince of Ontai-io has left each asset with 
 the Province in which it arose, and to which it seems muurally to behjng, and 
 30 it is believeil that no more fair or just division can be arrived at. The actual 
 value of the assets, if taken according to the ])ro[)().sal of cai)ita!izatioi. on the 
 average income of four years and a half, as sJiown by Schedules T) and E, is 
 eqrially favourable to the fairness of this division, as, although the nominal par 
 value of the assets, as stated in those Schedules, show.<^ an excess for Ontario of 
 $2,82(5,571. 40, the actual value so capitalized, gives (mlv $30,310.80 more to 
 Ontario than to Quebec. 
 
 No. ^.—The School Lands. 
 
 These lands are derived altogether from the Province of Ontai-io, arul thnt 
 Provmce claims the whole balance, whether of lands or money, that remained 
 40 at the time of Conf^der tion. 
 
 These lands were set apart for a capital for a Coiumon School Fund by 
 Statute of Canada 12 Vic. ch. 200, sec. 1, and were to produce an income of 
 $400,000 per annum. By the second section of the same Act the ca})ital of 
 the fund was to be invested as therein mentioned to i)roduce this annual in- 
 
 03 
 
 RKrORD. 
 
 H.hedule 
 No. .1- 
 Continneii. 
 
« 
 
 ^^ ( Appendix. ) 
 
 a 
 
 RECORD, come. The fund dcM-ived from those hinds was never so invested bv the Pro- 
 Schodule ^""r^' '!^ ; '«"Ji\'«H, hut was earned into the ^'eiuMal account, and ho ha.s" become a 
 N». .1-C«»- r»i" ot the (U'l)t ot Canaihi, but the une.\[)en(hMl balano of the hinds and fund 
 (inued. amountm^r to $h()7 ,im.i)'y, rcunaiuH to be (hjalt with bv the Arbitrators Under 
 section 109 of the JJritish North America Act, 1807, all lands, &c., and monevs 
 ansm^r from lands, &c., belon-in- to the several Provinces, shall belong to the 
 several I rovinces in which the same are situate or Juis(^ subji-ct to any trusts 
 existing in respect thereof, and to any interest other than that of the Province 
 m tiic -;;une Hie Province of Ontario submits that there is ro trust existini; 
 in respect oi these lands, iku- any other interest in them, otiier than that of the id 
 Province of Ontario. While the Union )f (Canada existed, tluj tund received 
 tromtheselamls was appropriated, and therefore no objectioa is made to the 
 manner in whicl. Canada dealt with those funds receivcil before Confederation 
 '.vhich were iillowed t(, form part of tlu; K.'n'^i"il <lobt, but the Province of On- 
 tar:o conten.ls that since Confederation the resi.luo of the lands, and the funds 
 derived luciuuo'u belon- wholly to her, and that the terms of the enactment 
 appropriating the lands and providing for the a[)portioument of the fund, such 
 as the apportioninent of the gi-.nt in aid of the fund, and the grant from the 
 Consohdated Revenue of Canada to make up the deficiency in any year, are 
 incondistent with any trust or interest other than that of Ontario alone. 20 
 
 No. 9.— Claims arising out of the Seigniorial Tenure Arrangement 
 
 •Under this head, Ontario claims against Quebec the following sums • 
 
 1. Interest oi' the Municipal Loan Fund of Upper Canada 
 
 over-paid by Indemnity Account $5-2 089 04 
 
 2. Arrears of Debt of Lower Canada on tiie Municipal 
 
 Loan Fund of Lower (Canada ... 782 742 83 
 
 3. Jesuits Estates carried to credit of Superior Education in 
 
 Lower Canada, with interest fiom 4th May, 1859, at (5 per cent. 92 583 83 
 
 4. guint and arrears of Quint with interest from 4th May 
 
 1859, at 6 per cent .' 103 544 00 30 
 
 5. Part of Capital of St. Sulpice, with interest as above 196719 66 
 
 6. Indemnity to the Eastern fownships with interest as 
 
 ^^°^?-; ^-T- ••.-••;• 756,710 00 
 
 7. Income Fund, hupenor Educn.tion, L. C 47 689 04 
 
 8. Difference between capitalization of estimated receipts 
 from beigniory of Lauzon and Tavern Licences and of actual 
 
 receipts ^^ 25g 99 
 
 9. Five-ninths of tlr; actual capital from item 8, the revenues 
 from Lauzon, and the Tavern Licenses remaining now with 
 
 Lower Canada.... 422,880 80 40 
 
 I he Province of Ontario contends that its claim to these 
 several items is sustained on the foUowin- grounds : 
 As to Item 1, 
 
 The Indemnity Capital for Upper Canada for the Seigni- 
 orial Fund was „.,= ,. = .... 2,218,555 39 
 
 I 
 
 20 
 
fAppendix.) 
 
 il by tho Pro- 
 has huconio u 
 ids an<l lund, 
 toiu Uiulor 
 , aiul inonoyH 
 l)i'l()n{,' to tlu) 
 to any truHts 
 tlu; Piovincu 
 Liust existinjf 
 n that of tho lo 
 und reeeivod 
 nuido to the 
 Dufodefation, 
 ivinco of On- 
 nd tho funds 
 10 enactmont 
 le fund, such 
 iint from tho 
 my year, are 
 lone. 20 
 
 emeni, 
 
 sums : 
 
 $0-2,089 04 
 
 782,742 83 
 
 92,583 83 
 
 103,544 00 30 
 196,719 66 
 
 756,710 00 
 47,689 04 
 
 73,258 90 
 
 422,880 80 40 
 
 Tho interest thereon 
 
 95 
 
 .$1,350,617 91 RECORD. 
 
 :io,555 
 
 rtr\ 
 
 ^, ^ $3,569,173 30 ?;''"'^'"'« 
 
 The Interest on tho U. C. Municipal Loan Fund was 3,517,084 26 timer "' 
 
 Difforenco $52,089 04 . 
 
 for which Ontario ha^ received no compensation. 
 On tho Item 2, 
 The arrears of interest on the Municipal Loan Fund of Upper Canachi 
 jjhaviuf,' been ciiarged as aj,'ainst her, tho arrears of Lower Canada on the simihir 
 account, umountin«,' to $782,742.83, should bo charjied against Lower Canada. 
 On tlie Item 3, 
 Tho fund from the Jesuits Estates was carried to the crodif of Superior 
 Education in Lower Canada, to the amouut of $92,583.83, for which Upper 
 Canada has had no equivalent. 
 As to Item 4, 
 
 The capital and arrears of Quint were included in tho general capital of 
 the Seigniorial Arrangement, but were not ascertained, and the amount has 
 now to be accounted for to Ontario to the extent of $103,544.00. 
 ) As to Item 5, 
 
 Part of the capital of Seigniories of St. Sulpice, $196,719.66, wa.s, by the 
 Act of 1859, made a charge against the Lower Canada Municipalities Fund, 
 and not against the Consolidated Revenue Fund; but it was provided that until 
 the Municipalities i'und was able to pay the interest thereon, it should be iiaid 
 out of the Consolidated Revenue Fund, and as this Fund is not now, nor is over 
 likely to be able to pay it, Ontario is entitled to compensation for it. 
 As to Item 6, 
 
 Under the Seigniorial Act, there was set apart for the Eastern Townshii)s 
 of Lower Canada, as not being interested in the Seigniorial (Jommutation, and 
 as their equivalent therefor, the sum of $754,710.00, but as tliose Townships are 
 a part of Quebec, and Ontario has had no equivalent for that sum, it now claims 
 compensation for it. 
 
 As to Item 7, 
 
 This stands upon the same footing as item 3, and Ontario claims compen- 
 sation therefor. ^ 
 As to Item 8, 
 
 The estimated annual receipts of Seigniory of 
 
 Lauzonwere | 12,951.65 
 
 •' from Tavern 
 Licenses , 37.115.01 
 
 The actual receipts were 
 
 Lauzon $11,897.47 
 
 Licenses 33,773.66 
 
 Total $50,066.66 
 
 -$45,671.13 
 
"•1*1, 
 
 RECORD 
 
 Schedule 
 No. 3— CO?*. 
 tinned. 
 
 (Appendix.) 
 
 The capital produced by the former is $834,444.40 
 
 ^^ ^1^« Matter 761,185.50 
 
 As to Item l"! ^' ^""^^^^^^^^^ ^o Ontario iT^;^^^ 
 
 License: SgiP6?t8"^^^^^^^^ 'T^ '''^'^ ^^^^ -^^ ^he Ta. ern 
 
 gone to creditor Canada^ beh^' now n th '*'"'' '''''^'' ^^"^^^ ^'^^^^J^l l^ave 
 entitled to five-ninths of2"a^itaUr"422 88?^""" '' ^"^'^^' ^^^^^^ ^ 
 
 the conTicSoroftife^St^^^^^^^ ^^t^^T'^^^'' -^^^- "-- lo 
 now set forth, or in answer to a veto ^^^^ either on its chum 
 
 counsel any statements or arguments LStvhL"''' '^"^ ^° "^^^^^ by its 
 the case hereby presented, or\o aCertLTa^^r S^^^^^^ 
 
 J. HiLLYARD CamEHON, Q. C., 
 
 Counsel for Ontario. ' 
 
 10 
 
 AA. 
 
 Statement Showing ihe Debt of the late Province 
 
 of Canada. 
 
 LIABILITIES. 
 
 ''''"]8?fp:grr'..'^.^''"'°'°" ''''' •^"-' ^«^7, Public Accounts, 
 Indirect Debt assumed by Dominion'asfbllows'- 
 
 Upper Canada Building Fund Debentures..." 
 
 Montreal Court Houk3 do 
 
 Law Society Jq 
 
 Aylmer Court flouse do 
 
 »62,734,797.63 
 
 20 
 
 SPECIAL FUND BEARING INTEREST. 
 
 Indian Fund 
 
 Common School Fund.'.". !'.".;'. !'.".'. aVf^'Vp^y VV 
 
 Less one-fourth of Receipts for Common ''-^•*' 
 bchjol Lands sold during the exist- 
 ence of the Upper Canada Improve- 
 ment Fund, from the day of the 
 abolition of that Fund to Ist July, 
 
 • » 124,685.18 
 
 36,800.00 
 
 95,600.00 
 
 16,000.00 
 
 2,000.00 
 
 1,810,110.61 
 
 150,400.00 
 
 30 
 
 Less investments, (Quebec Turnpike Trusty" 
 
 Arrears of Interest, 
 
 - 1,608,539.29 
 
 58,000.00 
 29,580.00 
 
 ■ 87,680.00 
 
 40 
 
 Carried forward. 
 
 >«••* • • • < 
 
 1,520,959.29 
 & ^ ^Si] ofiQ on » r>« " — in- 
 
 30 
 
 I 
 
 50 
 
ticl the TaA ern 
 h should have 
 ec, Ontario is 
 
 matters upon lo 
 • on its clt'im 
 5 make by its 
 r to elucidate 
 f Quebec. 
 , Q. C, 
 Ontario. 
 
 anada. 
 
 »62,734,797.63 
 
 20 
 
 150,400.00 
 
 30 
 
 40 
 
 '2,385,197 63 
 
 ( Appendix. ) ^7 
 
 Brought forward | 3,331,069.90 $62,885,197.63 RECORD. 
 
 Upper Canada Grammar S.hool Fund 36-' 769 04 
 
 Less Investments ( City of Hamilton Debentures)'.".".'.'.".'.' 50,000.00 
 
 Upper Canada Building Fund 1579 808 96 ~ 
 
 Less Investments (City of Hamilton De- ' ' " 
 bentures) 30,000.00 
 
 Arrears of Interest 10,800.00 
 
 Amount charged in error to 
 [10 Consolidated Fund ex- 
 pended 6n account of 
 Lunatic Asylum Build- 
 ings, Toronto, in the 
 year ended 30th June, 
 1866 and 1867 65,617.55 
 
 312,769.04 
 
 106,417.55 
 19,400.00 
 
 Lower Canada Superior Education Fund.. 
 
 Less Investments (Huron and Bruce De- 
 bentures) 
 
 [20 Less Investments (City of Hamilton De- 
 
 ^^^'"'•es) 10,000.00 
 
 Normal School Building Fund fiTTfiTfil 
 
 Superannuated Teachers' Fund "..".".*.".".'.".".','.'.'.!.'. 2 700 88 
 
 377,251.53 
 
 29,400.00 
 
 1,472,391.41 
 
 347,851.53 
 
 64,462.72 
 
 Compensation to Seigniors (capital) q 1 tj inn no 
 
 Seigniorial Indemnity to the Townships (capital).. ".".■■.".".■■.■.■.■.■.■.■.■.".*.■"■.■■" 756 710 00 
 
 Widows' Pensions and Uncommuted Stipends, Upper Canada 
 
 ■^^ ° do Lower Canada ... 
 
 756,710.00 
 
 50,143.84 
 4,126.31 
 
 MISCELLANEOUS LIABILITIES-PAYABLE IN CASH. 
 
 Court Houses, Lower Canada 
 
 Montreal District Council """""'!" 
 
 Public Works (special) ... 
 
 Municipalities' Fund, Upper Canada".'"'.;..';.;^';;; 
 
 Upper Canada Grammar School Income Fund 
 
 Less arrears of Interest on Investments (City of "Ham- 
 ilton Debentures) 18,000.00 
 
 Upper Canada Improvement Fund (prior 
 
 to abolition of Order in Council; ... 5,180.04 
 
 Less Receipt in former years reversed... ' 60 96 
 
 36,167.65 
 
 4,061.20 
 
 3,912.0) 
 
 12,711.95 
 
 302,553.66 
 
 18,167.65 
 
 1-4 receipts of Common School Land sold 
 during the existence of the Upper 
 Canada Improvement Fund from 
 50 the day of the abolition of that Fund 
 
 to Ist July, 1867 124,685.18 
 
 1-0 receipts on Crown Lands so sold and 
 
 money so received 10177168 
 
 5,119.08 
 
 226,456.86 
 
 23I..')7.5.94 
 
 Carried forward. 
 
 Schedule 
 No. 3 — con- 
 tinued. 
 
 9,398,35462 
 54,270.15 
 
 I 
 
 $572,982.45 «72,337,822.4G 
 
68 
 
 Schedule 
 No. 3- 
 
 thmed. 
 
 con- 
 
 W 
 
 ( Appendix. ) 
 
 RECORD. 
 
 Brought forward 
 
 Compensation to Seigniors, arrears 
 
 Balance of special appropriations, (Ontario) 
 
 Do "do (Quebec) 
 
 Amount paid by Ontario for Surveys ordered prior to Ist July, 1867. 
 
 Amount paid by Quebec for Surveys ordered prior to Ist July, 1867. 
 
 Ten per cent, on purchase money ($181,062.50) of the 
 Canada Land and Emigration Company to be re- 
 paid to the Company as per agreement for the con- 
 struction of roads ... 18,106.25 
 
 Less paid thereon by the Province of Canada 5,177.88 
 
 Seigniorial Indemnity to the Townships. 
 
 Banking accounts, 30th June, 1867, assumed by Dominion 
 
 Public Works, special, debited to Public Works 
 
 Capitalization of Annuities 
 
 Discount at which £73,000 stg. Debentures take i from the Bank of Mon- 
 treal at par per agreement were placed in the Sinking Fund 
 
 Less premium at which £42,501 13.4 due to the Sinking Fund, 30th 
 June, 1867, might have been invested 
 
 Expenditure on Account of the late Province of Canada to the 30th 
 
 June, 1868. Public Accounts 1868 
 
 Less Militia clothing and equipments and improved fire 
 
 arms 278,651.03 
 
 Unexpended warrant, cancelled 64.05 
 
 This sum twice included ... 2,044.80 
 
 Gratuities to officials and other employees of the Senate 
 
 charged in said expenditure 22,819.10 
 
 DEDUCTIONS. 
 
 Consolidated Fund Investaent Account, being excess at 
 par value of ( 'onsolidated Canadian Loan Debentures 
 assumed from the Bank of Upper l,'anada 
 
 Expenses of Delegation to England 
 
 Keceipts of the Dominion on account of the late Province 
 of Canada to 30th June, 18G8. Public Accounts, 
 1868 
 
 Consolidated Fund Investments 
 
 Composition Bank of Upper (;anada Debt .. 
 
 Northern Kail way Special Account 
 
 Cataraqui Property 
 
 Hydriiuiic and other Rents 
 
 Itiiads and Harbours 
 
 Sinking Fund of Imperial Guaranteed Loan... 
 
 do Canadian (Consolidated Loan 
 
 Cash and Banking Accounts transferred to Dominion... 
 
 5 353.33 
 12,000.00 
 
 491,743 01 
 
 997,666.72 
 
 500,000.00 
 
 30,976.70 
 
 6,584.54 
 
 101,784.44 
 
 202,377.63 
 
 681,333.32 
 
 1,207,222.26 
 
 1,461,250.61 
 
 Allowed by British North America Act 
 
 Excess over $62,500,000.00. 
 
 $572,982.45 $72,337,822.40 
 
 72.25 
 
 218,473.37 
 
 99,482.20 
 
 7.074.01 
 
 7,651.53 
 
 12,928.37 
 130,347.39 
 
 46,184.66 
 30,807.42 
 
 1,535,675.43 
 
 303,578.98 
 
 10 
 
 1,049,011.57 
 
 3,096.415.22 
 
 7,288.05 
 
 999,835.55 
 
 20 
 
 15,377.24 
 
 1,232,096.45 30 
 
 $ 78,737,846.48 
 
 40 
 
 50 
 
 5,698,292.56 
 
 73,039,553 92 
 62,600,000.00 
 
 % 10,539,553.92 
 
(Appendix.) 
 A. 
 
 69 
 
 RECORD. 
 
 Scliedule 
 
 Assets under Schedule Four of British North America Act. 1867. n°- 3-co«- 
 
 iinued. 
 
 UPPER CANADA BUILDING FUND. 
 Lunatic Asylum and Normal School Debentures 
 
 COURT HOUSES, 
 
 LOWER CANADA. 
 
 Debenture Account ) a i f 
 
 Account Current | Aylmer j 
 
 Debenture Account j ] 
 
 10 Account Current | Montreal J 
 
 Ai- ount Current, Kamouraska. 
 
 $ 2,000.00 
 
 1,239.70 
 
 95,600.00 
 
 18,966.21 
 
 201.91 
 
 LAW SOCIETY. 
 
 UPPER CANADA. 
 
 Debenture Account .... 
 Book Account, current 
 
 MUNICIPAL LOAN |FUND. 
 
 UPPER CANADA. 
 
 16,000.00 
 
 140,015.61 
 
 20 Capital Account 17 
 
 300,000.00 
 
 Less at Credit of Sinking Fund _\, 429 548 63 
 
 ^ . , „x , . 6,870,451.37 
 
 Less Capital 01 Indemnity Account 2 218 555.39 
 
 Interest Account $3,517,018.32 
 
 Short charged 65.94 
 
 4,651,895.98 
 
 30 3.517,084.26 
 
 Less Intereston Indemnity Account 1,350,617.91 
 
 2,166,466.35 
 
 MUNICIPAL LOAN FUND, 
 
 LOWER CANADA. 
 
 Capit 1 Account.... 
 Less Sinking Fund 
 
 2,428,140.00 
 271.452.86 
 
 40 Interest Account, 
 
 2,156.687.14 
 782,742.83 
 
 AGRICULTURAL SOCIETY. 
 
 UPPER CANADA. 
 
 Advance. 
 
 $ 36,800.00 
 
 118,037.82 
 
 156,015.61 
 
 6,818,363.33 
 
 2,939,429.97 
 
 4,000.00 
 
 Carried forward $ 10,072,645.73 
 
70 
 
 RECORD. 
 
 Schedule 
 No. 3 — con- 
 tiniud. 
 
 ( Appendix. ) 
 
 Brought forward $10,072,645.73 
 
 LEGISLATIVE GRANT, 
 
 LOWEE CANADA. 
 
 Advance 28,494.73 
 
 QUEBEC FIRE LOAN, 
 
 LOWER CANADA. 
 
 Advance - 264,254.65 
 
 EDUCATION, 
 
 LOWEE CANADA 
 
 Advance ' 1^ 
 
 BUILDING AND JURY FUND, 
 
 LOWEE CANADA. 
 
 Advance Account 116,47551 
 
 MUNICIPALITIES FUND. 
 
 LOWER CANADA. 
 
 Advance Account 484,244.33 
 
 SUPERIOR EDUCATION. 
 
 LOWER CANADA. 
 
 Advance Account 234,:i81.46 
 
 REVENUE INSPECTORS' ACCOUNT, 20 
 
 UPPER CANADA. 
 
 Amount of Account 2,426.41 
 
 REGISTRATION SERVICES. 
 
 LOWER CANADA. 
 
 Amount of Account... Snrt 
 
 Temiscouata Advance Account a.uuu.uu 
 
 $11,208,637.30 
 
 Debt of Canada created for Local Purposes. 
 
 B. 
 
 ONTARIO. 
 
 UPPER CANADA BUILDING FUND, 
 
 Debentures issued for Lunatic Asylum and Normal School 
 
 Carried forward 
 
 30 
 
 $36,800.00 
 
 $36,800.0U 
 
20 
 
 10 
 
 20 
 
 30 
 
 ( Appendix.) 71 
 
 Brought forward $36,800,00 EECORD. 
 
 LAW SOCIETY. Sch^ 
 
 Debentures issued | 16,000.00 f°- l~''^' 
 
 Book Account advance 140 015.61 ttnuea. 
 
 '■ 156,016.61 
 
 MUNICIPAL LOAN FUND. 
 
 Capital Account 7,300,000.00 
 
 Less at Credit of Sinking Fund , 429 548 63 
 
 T r. . , .. r , . 6,870,451.37 
 
 Juess Capital of Indemnity Account 2.218 555.39 
 
 , , ^ , 4 651,895.08 
 
 Interest Account | 3,517,018.32 
 
 Short charged 65 94 
 
 _ _ 3,517,084.20 
 
 Less Interest on Indemnity Account 1.360 617.91 
 
 '- 2,166,466.36 
 
 6,818,362.13 
 
 AGRICULTURAL SOCIETY. 
 Amount advanced _ _ 4 000 00 
 
 INDEMNITY ACCOUNT, 
 
 I'nder Seignioral Act, 1854 , 600 000 00 
 
 Under Seignioral Act, 1859 2,218,555.39' 
 
 '■ '■ 2,818,555.39 
 
 9,833,733.33 
 7,901,046.19 
 
 $ 17,735,579.52 
 
 30 
 
 0. 
 
 QUEBEC. 
 
 COURT HOUSES. 
 Amount advanced | 11803718 
 
 MUNICIPAL LOAN FUND. 
 Amount advanced 2 939 429.97 
 
 SEIGNIORAL TENURES. 
 40 Capital to Seigniors 3,715,538.26 
 
 Carried forward $6,773,005.41 
 
73 ( Appendix. ) 
 
 RECOKD. Brought forward $5,773,005.41 
 
 Schedule MUNICIPALITIES FUND. 
 
 No. 3 — con- . , 
 
 tinned. ^'^^''^oe 488,244.33 
 
 Advance 
 Advance 
 Advance . 
 Advance . 
 Advance . 
 
 8UPE5LIOR EDUCATION, 
 QUEBEC FIRE LOAN. 
 HUILDING AND JURY FUND. 
 LEGISLATIVE GRANT. 
 
 EDUCATION. 
 
 234,281.46 
 
 264,254.65 
 
 116,475.51 
 
 10 
 
 28,494.73 
 
 290.10 
 
 I 7,901,046.19 
 
 ONTARIO. 
 
 ASSETS. 
 
 U. C. Building Fund 
 
 Law Society, U. C 
 
 Consolidated Municipal Loan Fund, U. C... 
 
 Priucipal $4,651,895.98 
 
 Interest 2,166,466.35 
 
 Agricultural Society, U. C. (This is put down 
 as yielding nothing, yet it is a good asset for 
 the amount, the Society being able to pay) 
 
 Revenue Inspectors, U. C. 
 
 Assets of Quebec. 
 
 Amount. 
 
 $36,800 
 156,015 
 
 00 
 61 
 
 6,818,362 
 
 33 
 
 4,000 
 
 00 
 
 2,426 
 
 41 
 
 7,017,604 
 
 35 
 
 4,191,032 
 
 95 
 
 % 11,208,637 
 
 30 
 
 Average rate per 
 cent, for 4J years. 
 
 6 
 .14 
 
 1.69 
 
 Value capitalized 
 at 6 per cent. 
 
 $36,800 
 150,015 
 
 1,920,505 
 
 4,000 
 
 2,117,320 
 
 2,087,001 
 
 $ i.204,322 
 
 00 
 61 
 
 38 
 
 00 
 
 99 
 13 
 
 12 
 
10 
 
 ( Appendix. ) 
 
 E. 
 
 QUEBEC. 
 
 ASSETS. 
 
 Aylmer Court House Debenture Account, 6 
 per cent 
 
 Aylmer Court House Account Current 
 
 Montreal Court House : 
 
 Debenture Account $9.5,(100.00 
 
 Account Current 18,996.21: 
 
 Kamouraska Court House Account Current' 
 8201.91. There are $8,P55— 8 per cent. ;i 
 Debentures forming a first charge on tliu inJ 
 come. Ten per cent, would pay the interest' 
 on the Debentures, ar ' leave ample to wipe' 
 
 out the Account Cunont $201.91 
 
 Consolidated Municipal Loan Fund, L.C.: i 
 
 Principal $ 2,1 i(>,(387 14 
 
 Interest 782,742.83; 
 
 Superior Education, L. C. : 
 
 Legislative Grant 8 28,494.73 
 
 Balance of deficit in Edu- I 
 
 cation OflSce 290.10, 
 
 Income Fund 234.281.46 
 
 Quebec Fire Loan 
 
 Building and Jury Fund, L. C 
 
 Municipal Fund, L. C ..i 
 
 Registration Services, L. C J 
 
 Temiscouata Advance Account 
 
 Assets of Ontario 
 
 Amount. 
 
 J2 000 
 1,239 
 
 114,596 
 
 201 
 
 2,939,429 
 
 263,066 
 264, '^54 
 116,475 
 484,244 
 2,524 
 3,000 
 
 4,191,032 
 7,017,604 
 
 00 
 
 70 
 
 21 
 
 91 
 
 97 
 
 29 
 65 
 51 
 33 
 
 38 
 00 
 
 95 
 35 
 
 $ 11,208,037 30 
 
 Average rate per 
 cent, for 4^ years 
 
 $47.42 
 
 2.88 
 
 14.30 
 1.98 
 
 11.58 
 
 1.14 
 
 3,910.60 
 
 Value capitalized 
 at 6 per cent. 
 
 $114,596 
 
 201 91 
 
 1,410,926 
 
 263,066 
 87,204 
 
 116,475 
 
 92,006 
 
 2,524 
 
 2,087,001 
 2,117,320 
 
 $ 4,204,322 
 
 21 
 
 38 
 
 29 
 03 
 51 
 42 
 
 38 
 
 13 
 99 
 12 
 
 73 
 
 RECORD. 
 
 Schedule 
 No. 3— con- 
 tinued. 
 
u 
 
 (Appendix.) 
 
 RECORD. 
 
 Scliedule 
 No. 3.— 
 Continued. 
 
 ANSWER TO THE CASE OF ONTARIO. 
 
 EXCESS OF DEBT. 
 
 The Province of Ontario, in the ease submitted on its lielmlf, suggests three 
 modes of dividing the excess of debt:— 1. Proportiim of local debts; 2. Popu- 
 lation in 1801 ; 3. Proportion of capitaUzed assets. 
 
 1. Proportion of Local Debts. 
 
 To arrive at the amount of these local debts, Ontario finds it convenient to 
 hmit their enumeration to the assets in Schedule Four, taken at the face value 
 put upon Items .similar in name in the Public Accounts, and to wliat it states 
 as bemg tlie expenditure for tlie Seignioral legislaticm. This suggested investi- 
 gation, by the origin of debt, is partial and incomplete ; it wholly ignores the lo 
 large expenditure made, during the Union, for the local advantage of the re- 
 spective Provinces and which have left no assets to rejjresent such outlay. 
 
 It must have escaped the mind of the framer of the case for Ontario : 
 
 1. That the debt of Upper Canada, at the Union in 1841, was a local 
 debt ^5,925,779 54 
 
 2. That the interest on the same was also a local debt 7,578,744 65 
 
 3. That the Upper C'anada Improvement Fund Avliich had 
 in fact no counterpart in Lower Canada, which was the proceeds 
 
 of Public Lands and produced during the six years of its existence 425,527 62 
 wa'. also a local debt. 
 
 4. That the excess of the proceeds of the Municipalities Fund 
 in Upper Canada over that in Lower Canada, which were both 
 proceeds of Public Lands, should also have been noted as a local 
 debt or expenditure 
 
 It stands thus : U. C $3,493,514 88 
 
 do. L. C 300,747 50 
 
 20 
 
 Difierence . 
 
 3,192,767 38 
 
 Making altogether. 
 
 .617,122,819 19 30 
 
 Amount which should have been added to wliat is stated in the case of 
 Ontario as its local debt, and which would have raised it from $9,833,733.33 
 amount therein stated, to -1526,956,552 'i2. > > ■ , 
 
 Assuming for a moment the figures of Ontario to be correct, its share and 
 that of Quebec, in the excess of debt, Avould thcMi be : — 
 
 Ontario $8,150,591 34 
 
 Quebec 2,388,962 58 
 
 40 
 
20 
 
 ( Appendix. ) 75 
 
 Many other similar cases of expenditure could be referred to, but it is not «KCORD. 
 necessary to oo into further details to demonstrate tlie unfairness of the first ^,TT 
 mode su^'oested by Ontario. Tf the ori^nu of the debt is to bo taken as a guide, No" V-L , 
 ^^rec<)urse must be had, as aheady stated for Quebec, to the true and real origin li.imi 
 
 ot the whole deht, not to that which is the work of mere fancy." This seems 
 to be impracticable ; if however this method of dividing the excess of debt is 
 adopted, (Quebec will be pieparod to show that it will make its position still 
 better than the adoption of that suggested in its case. 
 
 2. Population. 
 
 10^ It has already been shown, in the case for the Province of Quebec, that 
 I^To take the population as a guide, without taking into account the respective 
 ^^ financial position of the parties when first united in 1841, or inquiring in whose 
 " interest and in what proportion for each the subsecpient indebtedness was 
 "mcurred, would be most unjust." That view was sustained by the statement 
 of the di.sproportion of debt in 1841, which was there established to have been 
 agamst Lower (Canada, 68,715,«:J().(5(). It was Mt that the consideration of 
 expenses mcurred during the Union, from 1841 to 18(57, could only be partial, 
 limited and incomplete, and on that ground Quebec, in its case, men- 
 . tioned none, but as Ontario has referred to a few special debts created since, 
 20 and ottered them as the guide in the divisicm of the excess of debt, a short 
 reference to those incurred immediately after the Union, or incideiit thereto, will 
 demonstrate that this disproi)oition was much larger, and will make still more 
 manifest and apparent the injustice of the adoi)tion of this second mode, sug- 
 gested by Ontario, for the division of the excess of debt. 
 
 Keferring to the first session of the first Parliament of the United Canadas, 
 which was held but five months after their Union, it will be found that the fol- 
 lowing appropriations were voted for each former Province. 
 
 Upi)er Caniida. Lower Citiiarla. 
 
 4 and 5 Vic, chap. 28 (a)..Stg., £1,465,682 Stg., £153,400 
 
 30 
 
 Cy., £1,628,585 11 1 £170,555 U 1 
 
 chap. 34 Cy., 500 
 
 chap. 44 Cy., 447 4 2 
 
 chap. 46 Cy., 6,801 14 If 
 
 chap. 50 (b)....Cy., 39,649 16 6 Cy., 8,436 13 4 
 
 .£1,676,934 5 lOf £178,992 4 5 
 
 (a) £28,000 for works on the Ottawa, and £1,500 for a road from L'Orignal 
 to the St. Lawrence, have been omitted. 
 40 (b) £1,666 13s. 4d. for Geological Survey are omitted. 
 
 Making for Upper Canada .$6,704,137 18 
 
 For Lower Canada • 715,908 88 
 
 But as the |)0])ulation of Lower Canada was then one-half 
 larger than that of Upper Canada, the share of appropriations of 
 
76 (Appendix.) 
 
 RECORD, the former, if pojmlutioii had been taken as agui(U% should have 
 
 a,~~r been 8{),r)r»r», 18;") ns 
 
 No.:)_LV«- Less appropnatcti as ;i hove 7l5,9<)b H8 
 
 tinni'd. 
 
 Dim'ivnce 18,830,210 70 
 
 A(hling' to this disproportion that of thr debt a.s above 8,7ir),()3(( 00 
 
 iVnd the simple interest (thouffh (^uoIhc mi^ht charge com- 
 j)onnd interest, and reserves its rigii! to do ro, i! the ori}.;in of the 
 de]>t is f,^one into), from lOtli February, 1841, to 30tli June, 18(57, 10 
 
 on the debt wiiicii Upper Canada brought in 7,578,744 05 
 
 The whole amounts to the large sum of $25,133,591 95 
 
 Can this inuuinise disj)ro})ortion in the financial position of ti)o two Ca la- 
 das be ignored, in the consideration of this (picstion, without glaring injustii^o 'i 
 Yet if the second mode suggested by Ontario foi' the Division of the excess; of 
 debt is adopted, this will be its residt. 
 
 Common School Grants and Municipalities Fund, for Upper Canada, the 
 . two examples quoted fiom the previous legislation, are not in point. The Muni- 20 
 cipalities Fund, Upper Canada, is not divided according t(» population, but, be- 
 tween the different municipalities, according to the number of rate-payers whose 
 names aj)pear on the assessment roll ; a very different thing. As to Common 
 School (h'ants, they could only be made according to population; the educational 
 wants of the country being, of necessity governiMl, by the number of its inhabi- 
 tants. 
 
 3. Proportion of Capitalizkd Assets. 
 
 The assets which are ca[>italized, being the same as those used by Ontario 
 to arrive at what it calls the propoilion of local debts, and thereby to the first 
 mode ol division it suggests, the same objections apply to both ; but this third 30 
 mode is less admissible still, and is based on data more erroneous, if possible. 
 It is altogether illusory and leased upon n()})rinciple. The glaring disproportion 
 in the value set down in Schedule D, under the plan of the Consolidated Muni- 
 cipal Loan Fundi^ of Upi)erand Lower Canada respectively, is a sufficient illus- 
 tration of this. 
 
 It may be said that Ontario's case libels that rich Province; when, in the 
 ca})italization of assets, it rates it as unable to pay more than .§1,920,505.38 out 
 of 87,i»83,220.14 it owed, (m the first of July, 1807, to the Municipal Loan 
 Fund ; and that Quebec should almost feel obliged for the good opinion therein 
 exi)ressed in its faA'our, when rated as able to pa\ .§1,410,920.38 out of the 40 
 $2,939,429.97 it owed that fund at the same date. 
 
 The Treasiu-er of Ontario is not so despondent. In his last Budget Speech 
 (pamphlet, page 15), while bearing this Arbitration in mind, he says, s})caking of 
 the Municii)al Loan Fund of Upper Canada, "this Fundis a permanent source 
 oj rerevne and might be brought to f/ield $200,(^00.00 per annum," which at six 
 per cent, makes a capital of $3,333,'333.33. 
 
( Appendix. ) 
 
 l"! 
 
 10 
 
 Moreover, m this capitalization of assets, the value of those which seem to RFOOtD. 
 have ariHcn in Lower Canada is set down, in the ca.se submitted for Ontario, at „ , 
 
 hL 1 ) "^ "' 't^ ^'T' ^^ ^'- ^'"'^'^^" ^^ ^^«^ ^^^ ^al«e ■' though, taking Vo^'^ln. 
 
 t" " i^,^';. ;\'"^ ^Ir^J^angton states, one million of them are indebtedness of ^^^^T"" 
 t a( part ol tlie lato l»rovinee, and therefore no real assets ■ and others, such as 
 tl e Quebec lire Loan, are known to be for the most part worthless. On tho 
 other hand, those in Upper Can la, which, ac .rding to (he same, are almost 
 all viUid assets, arc capitalized ai less than one third the same fuo value 
 '^ dealin w/^Tth d b °^^"^ '^^ ^^^"'^ ''' ^^^^ ^"^^ unsoundness of this third mode of 
 
 The School uands. 
 
 ,,nnn?rT'''i'''''"n^'^V'''T.^^^""'^^'^^ ^^''^'^^ Lands and Lho balances due 
 upon til. ^ lands .sold. Tins claim cannot be allowed. 
 
 n -lni!l'f 'r'^'.^'' *'''' ^^'' (Consohdated Statutes of Canada, ch. 26) cannot leave 
 a doubt as to its creating a tru.st. 1,()00,(>()() acres of land were, under the law 
 set apait and appropriated by the Govei ^x in Council for Common Schools • 
 
 vZZJl Y^ '""'^ ^J ^^' ^'««^f^i««ionei of Crown T^nds, and the proceeds 
 whethev im-: 4ed or not, were to form the Common Sc hool Fund, which was to 
 
 2^' ^mm,n. '"" f^' ''7^"" ¥'>^ ''«<!«• <J<^- ^hc capital of the Fund to yield that 
 amount yearly would . quire to be $6,666.66(i '56. It is also enacted that the 
 I unci .,r Income .ier(>ot shall not be ali. nated for any purpose whatever but 
 shal remain a perpetual fund for th. ,pport of CommoS Schools and the 
 n?m of J!"'". township or parish libruiies. Until the fmid produced $200,- 
 
 001 .00. thuL amount was to be completed from the Consolidated Eevenue Fund 
 and divided (according to population by the antorior census) between Upper and 
 ™ ' panada. It IS evident that, until the amount above mentioned $6,666 - 
 666.«>b IS created from the lands in question, the unsold lands and the arrear's 
 due on those sold ar ■ ^ubj-ct to a trust under the terms of the Statute, in con- 
 
 ^ foninty with t e lOinh Section of the British North America Act, IhW. H^s 
 not Lower Canada as direct an interest in both the lands and tlie amounts due 
 by the purchas. rs of the -ume as Upper Canada? Such is, at all vents the 
 opinion of the Tn^asurer of Ontario^' In ' s Budget Speech (pan let p 16) 
 speaking of the Common School Lands, he sax. : "0/ f,,e purchase Iney ule 
 Joj tliese lands, there remains uncollected, f ■ina:>al and interest, |1,260 000 00 
 OJ this amount, J assume that Ontario is cnutled to nve-ninths;' (about the or, - 
 portion of its population in 1861 to that of Quebec). The Assembly of Ontar 
 may moreox -r be said to have assented to this statement by im silence • none of 
 Its menii; having expressed a contrary opinion. ' 
 
 Claims arising out of the Seigviohial Tenure Are • vgement. 
 
 40 Under this head, the Province of C.ario has assumed to go iito an investi- 
 
 gation of the orioin of a part of the debt of the late Province of Cana.Ja for the 
 purpose of urgn, a large claim against Quebec, composed of the (litfere'>t items 
 set down. It tins is intended as a .separate and distinct dfiman'l on tl,, r^o^t of 
 
 L 
 
 ^ 
 
78 
 
 ( Appendix. ) 
 
 Schedule 
 No. 3 — cotir 
 Hntud. 
 
 20 
 
 RECORD. Ontario, the Arbitrators have no jiiiisdictioii to deal with it, as it is not a 
 "debt" nor an " asset" of Upper or Lower Canada, within the meaning of the 
 142nd Section of the British Noith Atn(Tiea Act, IH()7. If iiitcudcid to be us(d 
 in the division of the excess of ilebt by its ori;.,Mn, this mode involves not only the 
 consideraticm of these isolated items but a thorou},'li investij,'ation and analysis 
 of the Public Accounts durin[( the Union, and of a financial jxisition of each 
 Province when they joined. 
 
 Quebec might, with equal justice, allege that, su[)poHing Lower Cauada to 
 have benefited by that Legislation to a larger amount than Upj'er Canada, it was 
 but a small compensaticm for $7,578,744.05 int(;rest pai<l by United Canada on lo 
 the debt of Upper Canada since 1H41, for the $3,102,7<)7.I5H excess received by 
 Upper Canada from its Municipalities Fund, for $425,527.02 which Upper 
 Canada drew, under the name of " U})per Canada Improvem'nit Fund," from 
 what should have been common. These three sums amoiuuing together lo 
 $11,197,039.05 and for which, as well as for many similar om , Lower (janadu 
 received no compensation whatever, can fairly be opposed tc Jiat claim. 
 
 It is moreover contended that, the Legislature of C-anada having made what 
 it then considered a fair compensation to Urper Canada for the burden which 
 the abolition of this Tenure threw upon the Canadian Treasury (Consolidated 
 Statutes, Lower Canada, ch. 41, sec. 37 and 87), and that part of the Province 
 having, by its members in both Houses and in tlic J'^xecutivo, agreed to and ac- 
 cepted the bargain, it cannot, under a new state of things, set out other claims 
 foi" pretended inequality in the then legislation which was final. 
 
 Quebec reserves to itself the light to enter into a special examination of 
 the ditterent items of this claim, if the origin of the debt is incpiired into, but 
 cannot dismiss its present consideratiim without noting : 
 
 1. The enormity of a [)retention, which would give Upper Canada (or 
 Ontario) over $0,000,000.00 of indemnity for a legislatior^ Avhich ajipears, by tlie 
 statement of liabilities, to have been altogether, including the indemnities to 
 Upper Canada and the townships, a charge of little more than $5,000,000.00 30 
 on the Consolidated Fund. 
 
 2. Upper Canada was credited for the full amount of its seigniorial indem- 
 nity, which, in Schedules A and B in the cnse of ( )ntaro, is not only credited to 
 reduce its share of local debts, and thereby, by the mode it sugg- sts, its share 
 of the excess of debt, but even apportioned on the capital and interest of the 
 Municipal Loan Fund, contrary to what it has always been in the Public Ac- 
 counts, and that to reduce the balance by ^204,923.75. 
 
 3. Items 2and5,LiterestonMunicipal LoanFund,LowerCanada,$782,742.83, 
 and part capital of Seigniories of St. Sulpicc !?190,719.00, form part of the items 
 Municipalities Loan Fund, and Municipalities Fund in Schedule C, containing, as 
 pretended by Ontario, an enumeration of the lo;al debts of Lower Canada. After 
 having used them in said Schedule C to diminish its own share of the excess of 
 debt, Ontario claims their full amount against Quebec, as a debt for which it 
 received no compensation. And these two amounts, being assets in Schedule 
 Four made, by the Act, the conjoint property of Ontario and Quebec, it will also 
 have its share of them as such. These three operations would certainly be 
 profitable. 
 
 to 
 
( Appendix. ) • 
 
 79 
 
 \. The ciipitiil of Quint was not a drlit duo to nor paid by Government, RECORD, 
 but Jill uinount deducted tVoni the indemnity duo the Seiifniors for the abolition ~; — 
 of their ri^dits. 3.;hrdule 
 
 T). The receipts from th(; Sei^'uiory of Lauzon. and from tavern and other iM~'^ 
 hceiise.s were, as by law directcid, capitalized on their yearly average during the 
 previouH five years. To aigut; that, because the amount of the proceeds fell 
 afterwards, a compensation should bo given to Ontario, is nmintaining that legis- 
 Iati(m founde 1 on sound basis, should nevertheless be changed every year as 
 these sources of reveiuie diminished or augmented. Would Ontario contend that 
 
 lo(^iel)ec, in the lattiT case, would have been entitled to a compensation ? 
 
 The Arbitrators having no jurisdiction over the " Statement of debt of the 
 Proviiu-e of C'ariada," the undersigned think it useless to alluile to that made out 
 by Ontario in its Case. 
 
 UnLil the Arbitrators have decided the question raised by Quebec, as to 
 their Jiuisdictioii ov(>r the assets in Schedule Four of the Act, its Counsel will 
 refrain, as already mentioned in their case, from any remark respecting them, 
 save that the mode, suggested by Ontario, <>f leaving each asset with the Pro- 
 vince in which it arose, would be contrary to the intention of the legislature, and 
 to tlie law. If such an ajtpfU'tionment had been contemplated. Section 113, 
 
 20 instead of making them the conjoint property of Ontario and Quebec, would 
 have as for the lands in Section 1 ()'.>, made them the property of the Province in 
 
 . which they wen; situated or arose. 
 
 The Provi. CO of Queliec again claims the right to urge any further matter 
 upon the consideration of the Arbitrators, either in answer to the case of Ontario 
 or to any other claim which the latter may be allowed to advance hereafter, and 
 also to submit on its own behalf any furth(^r demand which the circumstances of 
 the case may suggest, and also to offer by its counsel any statements or argu- 
 ments V Inch may be necessary to elucidate the whole or any point of its claims 
 or its answers. 
 
 30 
 
 N. Casault, 
 
 Thos. W. Eitchie, Q.C, 
 
 Coumelfor Quebec. 
 
80 
 
 ( Appendix. ) 
 
 RECORD. 
 
 Scliedulo 
 No. 3 — C07i- 
 tinned. 
 
 MEMORANDUM SUBMITTED ON BEHALF OF THE PROVINCE OF 
 
 QUEBEC. 
 
 I. — Functions of the Arbitrators. — Nature and Extknt ok thkir 1\)WI':rs. 
 
 By the 142nd Section of " The British North America Act, 18(57," it is pro- 
 vided tliat "the division and adjustment of the dobts, credits, liabilities, properties 
 " and assets of Upper ('anada and J^ower C^anada .shall be referred to the aibit- 
 " rament of three Arbitrators, one chosen by the (iiovernmeut of Ontario, one 
 " by the Government of Quebec, and one by the Government of (Janada." This 
 brief enactment contains the oidy r(>ference made in the Act to the arbitration 
 between the Provinces of Quebec and Ontario, for the settlement of the impor- 10 
 tant matters pending between them. It places in terms within the jurisdiction 
 of the Arbitrators the division and adjustment of the "debts, credit.s, liabilities, 
 properties and assets" of Upper Canada and Lower Canada, but the section is 
 limited by others in the same Act. kSection 107 ])rovides that all " stacks, cash, 
 bankers' balances and securities for money" belonging to ea(;h Province at the time 
 of the Union, except as otherwise provided by the Act, shall be ti)e }>roperty of 
 Canada, and shall be taken in reduction of the amount of the res[)ective debts 
 of the Provinces at the Union. The public works and [)roperty ol" each I *rovinc(;, 
 enumerated in the Third Schedule of the Act, are also declared, by Section lOH, 
 to be the property of Canada. It is submitted for the dec;ision of the vXibitia- 2i) 
 tors whether they have jurisdiction over the ai^sets enumerattnl in the Fourlh 
 Schedule of the Act. These assets are declared by the 1 llJth Section of the Act 
 to have belonged at the Union to the " Province of Canada," and are not, it 
 would seem, included in the assets, &c., of " Upper and Lower (Canada," men- 
 tioned in the 142nd Section. The assets, &c., referred to in the last mentioned 
 section, were not, indeed, assets of the Province of Canada, but were, on the 
 contrary, principally, if not wholly, liabilities of the late I*rovince. The Act 
 has assigned the assets enumerated in Schedule Four to Ontario and (|Juebec, and 
 determined that they shall be theirs conjointly. The assets, &c., inttiuded to 
 be arbitrated upon are those belonging to each section of the late Pj ovince of 30 
 Canada, and which the Act has not specitied nor sjjecially assigned. 
 
 It is no doubt the interest of both Ontario and (Quebec that all matters in 
 issue between them under the Confederation Act should be brought to a speedy 
 settlement. The question as to the jurisdiction of the Arbitrators over the as- 
 sets set down in Schedule Four, is not raised for the purpose of causing embarass- 
 ment, but to draw attention to a point of great importance, and to ensure the 
 rendering of an award which shall be in all respects binding upon b(jth I'ro- 
 vinces. 
 
 From the year 1791 to the year 1841, — a period of 50 years, —the Province 
 
(Appendix. ) 
 
 81 
 
 of Lower Canada and Upper Canada, which had prior to the first mentioned RECORD. 
 y(!ar formed one Province under tlie name of the " Province of Quebec," had a „ ~~r 
 separate existence and distinct (Tovernnunjts. In the year 184U the Imperial n.. 3' crm- 
 Act (:J & 4 Vi(!., c. ;jr)) intituled : "An Act to reunite the Province of Upper HnuM. 
 and Lower Canada, and for the (lovernment of Canada," was passed and came 
 into force, by I'rodamation, on the 10th day of February, 1S41, after which the 
 two Provinces formed one Province of Canada. By the 5()th Section of the Act 
 a ('onsolidated Revenue Fund was formed, to be composed of the duties and 
 revenue, ov(T which the resj)ective Legislatures of the two Provinces h-vd, [)re- 
 10 vious to the Union, the power of appropriation. The f>()th Section charfj;es the 
 Province of (.'anada with the respective debts of Upper and Lower C!anada, the 
 interest thereon being nuidc, after j)r()vision for expenses of collection, &c., the 
 first charge upon the Consolidated Heveinu) Fund. 
 
 The British North America Act, 1H()7, has dissolved the partnership which 
 cxi.stcMJ for ui)wards of twenty-six years between the late Provinces of Ujjpcr 
 and I ')W('r Canada. The surplus of their debt, and all the assets, credits, liabi- 
 lities and properties of U[»per and Lower Canada are now to bo divided and 
 adjusted under Section 142 of the Act of 1H()7. 
 
 II. — Division ok the Sukplus Deijt. 
 
 20 One of the most important tasks which the Arbitrators will have to i)er- 
 
 form is to divide the surplus debt of the late Province of C'anada bctwcu'ii 
 ()ntai-i() and (.^ucb(>c. Tlui 112th Section of the ('onfederation Act makes 
 Ontario and Quebec; ccmjointly liable to Canada for the amount by which the 
 debt of the Province of (!anada exceeds at the Unicm )i?62,r)()(),(K)(> ; these Pro- 
 vinces being chargeable with interest at 5 per cent, per annum ui)on such 
 surj)Iiis debt. 
 
 This debt is to be apportioned by the Arbitrators between Ontario and 
 Quebec. 
 
 It has been suggested that this division should be according to the popula- 
 
 30 tion of each, as it stood eitlier when the ConfecUiration took place, or at the lust 
 census of 1H()1, or according to the origin of the debt. 
 
 I. To take the population, whether that of 1H<)1 or that of 1807, as a guide, 
 without taking into account the respective financial i)ositions of the parties 
 when first united in 1H41, or enquiring in whose interest uud in what proportion 
 for each the subsequent indebtedness was incurred, would be most unjust. It 
 might free from its just proportion of the debt the party which had profitted 
 the most by it, and charge it to tlu; one which had the least interest in its be'mg 
 incurred, or which derived from it the smallest benefit. The injustice of this 
 method will be made apparent by reference to a few facts and figures taken 
 
 40 from the public returns. 
 
 The debt of Upper Canada on the 10th F'ebruary, 1841, was 
 
 1" Debentures (as per Appendix No. 3 vol. 5, 1847, 
 
 KKK.) cy £1,398,855 9 10 
 
 Equivalent to $5,696,421 97 
 
82 
 
 RECORD 
 
 Schedule 
 No. 3 — con 
 tinutd. 
 
 ( Appendix. ) 
 
 2" Floating debt, being balance of expenditure over re- 
 ceipts from. 1821 tn 1841 (same appendix) 330,357 57 
 
 Mak in, gr together $5,925,779 54 
 
 Debt ot Lower Canada, 10th February, 1841 : 
 
 1° Debentures (same appendix) £96,748 4s. 7d. 
 
 Loss Montreal Harbour (the debt due by 
 the same not being charged against Ontario 
 and Quebec in the statement of affairs, on the 
 
 ground that it is only a contingent liabiUty and 10 
 
 that the fund always paid its interest) '. £81,499 4s. 7d. 
 
 £15,249 Os. Od. 
 
 Equal to $60,996 00 
 
 But Lower Canada had at its credit, (being 
 excess of receipts over expenditures from 1791 
 to 1841,) (Appendix KKK, of 1847) $250,302 41 
 
 From which deducting above debt ... 60,990 00 
 
 20 
 
 It IS found that instead of having any debt 
 it had then at its command $189,306 4i 
 
 Striking out this amount is equivalent to m a^ldition to t\w, 
 debt of Upper Canada 189.30*5 41 
 
 Which would then stand at $6,115,085 95 
 
 Taking the poptdation of each at that date, Upper Caiiada^ 
 (see census 1851, vol. 1, p. xvii) was 465,377, and Lower Can- 
 ada (making it as near as anterior and subsequent census per- 
 mit, to wit : census of 1831 and 1844, there being none for that so 
 Province in 1841) was 663,258, -it establishes that, to be on an 
 equal footing according to population. Lower Canada should 
 
 have entered the Union with a debt of. $8,715 630 60 
 
 Must not such disproportion be taken into account in the division' of the 
 debts, credits, properties and assets ; and the more so, since it existed at a time 
 when improvements of all kinds were so much needed, and money expended in 
 roads and other public works, would, no doubt, have given to Lower, ^s it did 
 to Upper Canada, an impetus which would have given an immense augmenta- 
 tion of population, resources and wealth ? 
 
 II. The other mode suggested, if its adoption was possible, would be more 40 
 consonant with the requirements of justice. But to be so, recourse -Unistbe had 
 to the true and real origin of the debt, not to that which is the work of mere 
 tancy. It would require to go back to the Union of the two f Panadas take 
 their respective debts and credits at that time, examine in detail all the expen- 
 ses incurred since, note specially the I»rovince for which, or in Avhose interest 
 It was incurred, and determine thereby the share of each. Such a work would 
 
 20 
 
( Appendix. ) 
 
 83 
 
 10 
 
 20 
 
 30 
 
 not only entail an amount of labour, and a consideration of circumstances which Record. 
 
 the Arbitrators are not expected to undertake, but would also require a minute 
 
 examination of all the administrative acts of the different Governments since No 3- 
 184], and an accurate appreciation of the- same. In fact, the adoption of this timed ""'" 
 mode IS impracticable. 
 
 To take the assets as a guide would be most fallacious, and the more so if 
 only a part of them were taken into consideration. It has often occurred that 
 very important and advantageous outlay for the part of the Province in which 
 it was made, was the most unproductive to the treasury. For instance, the 
 10 roads in Upper Canada, on which very large sums of money were expended, 
 which tended as much if not more than any other expenditure to open up and 
 colonize Ontario, and thereby create its wealth ; Government, nevertheless, felt 
 it its interest to surrender for a nominal consideration to private companies or 
 to the several municipalities within which they lie. The assets are silent on that 
 head. Again, the amount set down as the value of pubhc works retained by 
 the Dominion may be fairly contested as between Ontario and Quebec. To the 
 Dominion they are worth their present value ; but in determining the origin of 
 the debt, it is not their present value but their original cost which should be 
 considered. 
 
 20 III. The plainest, easiest, and it may be said the only just and practicable 
 way of settling the question, is to treat the case as one of ordinary partnership, 
 and apply the rules which govern the partition of partnership estates, rules 
 which are the same in the old Roman, and in the modern English and French 
 law. 
 
 Adopting this principle, the Arbitrators would treat the union of the two 
 panadas, from 1841 to 1867, as having been equally advantageous to both, or, 
 in other words, as if each had derived the same benefit from it. Considering 
 that Ivoww (Janada, which came into the Union in 1841 with a large sum at its 
 credit, and a population about one half larger than that of Upper Canada, left 
 
 30 it ' } Xf)7 with comparatively limited resources, and that although Upper Canada 
 Pill ; it with an exhausted treasury and a small population, it left with a much 
 lar^' »%«»*ber of inhabitants, an annual subsidy which exceeds by $237,620, re- 
 presenting a capital of $3,960,333.34, that of its sister Province, and ^eat 
 wealth, it will be admitted that this hypothesis is not partial to Quebec. It will 
 however do away with what has been shown above to be impracticable, the mi- 
 nute inspection and appreciation of all the accounts of the Province of' Canada 
 during the twenty-six years of its existence, and will leave only the consideration 
 of the financial poHition of Upper and Lower Canada, when they became united, 
 and the debts, credits, properties or assets, the partition of which is rendered 
 
 40 necessary by the dissolution of their partnership. 
 
 Accor(iing to this method of division, each Province ought first to assume 
 from the excess of debt a sum equal to its own debt, when it entered the Union, 
 in 1841, and the balance ought lo be equaily divided. 
 
 Whatever may be urged againpt th:« nKjde. it is nevertheless the only just 
 and reliable one. It has this advantage over all other modes, that being the 
 rule which governs the relations lA man with man in similar positions, it cannot 
 
 I 
 
84 
 
 ( Appendix. ) 
 
 RECORD. 
 
 linuid. 
 
 g'V6 "se to grounds of complaint nor to suspicions of favour, imfairness or in- 
 
 Schedule J^^^^^f . . , 
 
 No. s—con- Assuming It to be impossible, as above demonstrated, to ignore the relative 
 financial positions of the two Provinces in 1841, even if population were taken 
 as a basis for the division of the surplus debt, the following concise statements 
 will prove that the adoption of this arbitrary rule, namely population, would free 
 Quebec from a larger amount of the debt. 
 
 Debt of Upper Canada in 1841 (as above stated, p. 4) : 
 
 1. Debentures $5,595,421 97 
 
 2. Floating debt 330,357 57^^ 
 
 Debt of Lower Canada in 1841 : 
 
 1- Credit $250,302 41 
 
 Less debentures 60,990 00 
 
 ),925,779 54 
 
 $189,306 41 $ 189,306 41 
 
 Striking it off makes, as already stated, debt of Upper Can- 
 ada, equivalent to $6,115,085 95 20 
 
 Surplus debt payable by Ontario and Quebec on terms agreed 
 upon at the Montreal Conference $10,424,853 87 
 
 Deduct for Upper Canada its debt in 1841 6,115 085 95 
 
 Balance $4,309,767 92 
 
 Divided equally, it gives each Province $2,154 883 96 
 
 According to population in 1861. 1867. 
 
 It gives Ontario $2,399,382 48 $2,512,650 89 
 
 Quebec 1,910,385 44 1,797,117 03 30 
 
 $4,309,767 92 $4,309,767 92 
 So that, by the mode suggested, Ontario would on the surplus of debt be 
 charged with $244,498.52, less than according to its population in 1861, and 
 with $357,766.93, less than its share by its population in 1867. 
 
 III. — Assets appearing in Statement of Liabilities, &c. 
 
 The statement of liabilities contains several items which must be specially 
 considered. They are heads of indebtedness on the part of the Dominion and 
 are said in the statement of affairs to be either payable in cash or subject to be 
 retained in the hands of the Dominion at interest. All those which are payable 40 
 directly, either to individuals or to corporations, whether publit or private, need 
 not be considered. The Federal Government will have to pay them to the cre- 
 ditors wherever they are and irrespective of their domicile or of the Province 
 where they reside. They have a private and direct claim against the Dominion 
 which could not free itself by handing over the amount to the Province to which 
 such creditors are presumed to belong. 
 
30 
 
 ( Appendix. ) 
 
 85 
 
 But others are due and payable by the Dominion to the Governments of Onta- RECORD, 
 rio and Quebec, to be made part of their own s'eneral funds and either employed ^ , TT" 
 
 - - ii i , 1,1 ., . , . " . _ . - - . . I . J . Scii'du:e 
 
 
 as first contemplated or otherwise as their respective Legislatures shall think fit. ^^ ' g. 
 They are balances of sources of pubhc revenue, or the proceeds of pubhc proper- <mw«(;, 
 ties (which is the same thing) of the late Province of Canada, set apart for special 
 services of a general nature and whicli would have been defrayed out of the 
 common treasury, had not Government made, for purposes of its own, special 
 provisions for them and affected for tlieir requirements certain special heads of 
 public revenue. 8o nuich so, that in some instances (and amongst others the 
 
 10 Common School Fund), the sums required for ihis special service were, upon a 
 vote of the Legislature, taken from the Consohdated Fund, whilst the special 
 fund affected to the same service was allowed to accumulate. They are to be 
 viewed in the same light as sums of money voted for a special service and whicih, 
 not being recjuired or employed, tall into the public common chest. No indivi- 
 duals or corporations could legally receive them from the Government of the 
 Dominion, which nmst pay them to the Government of either Province to be 
 en.ployed for general or special purposes as their Legislature may decide. They 
 are not mentioned in the British North America Act, 1867, except that they 
 constitute the only creditti which Ui)per or Lower Canada ever had or could 
 
 20 have had since 1841, distinct from those of the Province of Canada. They 
 therefore fall under section 142 of the Act, and are to be div'ded and adjusted as 
 all other credits, properties, assets, debts and liahillties. 
 
 Common School Fund : 
 
 It is admitted that this Fund has to be divided. It consists of : 
 
 1. Amount in liabilities $1,733,224 47 
 
 2. Outstanding mstalments on lauds sold $1,704,738 00 
 
 3. 8,959 acres of land unsold. 
 
 (The two last items taken from IMr. Langton's Report, p. 8.) 
 The other items are : 
 
 -con- 
 
 30 
 
 Municipalities Fund, Upper Canada 
 
 This fund is the proceeds of the sale of Clergy Reserve Lands. Consolida- 
 ted Statutes of Canada, chapter 25. 
 
 When the Clergy Reserves were abolished, it was enacted that the proceeds 
 of the lands which had been set apart for the maintenance of a Protestant Clergy, 
 deducting the charge on the same, namely : the stipends and pensions, should 
 be api)ortioned amongst the different Municipalities, in proportion to the rate- 
 payers, by the Govermnent of tlie late Province of Canada which, on the first 
 of July, 1867, appears to have had the amount in its treasury. Their proceeds 
 were therefore j'ub!!<: property of the Province of Canada, and the balance now 
 40 in the hands oi the Dominion, when divided and apportioned, will be part of 
 the Consolidated Fund of the Province receiving it. But there is a special 
 reason. The principal and interest of the Municipal Loan Fund are assets in 
 fSchedule Four, whicji the Act made the conjoint property of Ontario and Que- 
 
 M. 
 
 I 
 
8^^ ( Appendix. ) 
 
 RECORD, bee, and by law the ;liaro of the Municipai Fund which nii!>ht t)thenvi.se be 
 
 Sclieth.le P'^P^^^^ t'^ a Municiijality, in airoars to the Municipal Loan Fund, is to hv- an 
 
 No. 3~con. ""«ot agauist .said arrears, so lonj.- as the whole indebtedness of said Municipalitv 
 
 hmccl. to the Municipal Loan Fund shall not have been paid. It would seem to have 
 
 ^'cn treated so, and that pait of the balance now due to the Municipalities Fund 
 
 by tlie Dominion is composed of amounts retained for arrears ; an.l in it, taere- 
 
 iore (»)uebec independently of any other reason lias an interest. 
 
 U. (J. iMPiiOVEMENT FUND : 
 
 By the School Lands Act C. S. C, c. 26, s. 7, tlie Governor in Council may 
 reserve one fourth of the proceeds of t'lo sch(X)l lands in any coimty, and one lo 
 Mth ot un«pj>ropriated Crown lands in the same for public improvements within 
 the county. The funds so realized are to be expended under the direction of 
 the (governor m Council, and an account oi them laid before Parliament every 
 year. This fund was therefore under the immediate control of the Executive 
 and was to be appropriated by it for worhs winch it approved. Its destination 
 IS a public one ; no one can receive it but the Government of either Province 
 and It will then form part of its general or consolidated fund. 
 
 U. C. Grammar School Fund, and L. C. Superior Education Fund : 
 
 These funds arc identical, and nr.ist both bo treated as the other funds 
 above enumerated. 20 
 
 U. C. Grammar School Income Fund : 
 
 This Income Fund needs no special notice as it must be governed by the 
 same rules as the fund which produced it. 
 
 U. C. Building Fund (Consohdated Statutes U. C, ch. 70) : 
 
 This is also an amount remaining beyond wliat was required for a spec'-d 
 public service (Section 3). The interest of which, when paid by the Domiaiiin 
 will be employed in the manner directed by a vote of the Legislature of the Piv- 
 vmce receiving it. (Section 2. ) 
 
 It is clearly a credit for general purposes, the construction of public build- 
 ings, and necessarily falls under section 142 of B. N. A. Act. 18(57. 30 
 
 Balances of Special Appropriations : 
 
 ^^^f^o $218,473 37 
 
 Quebec $99,482 20 
 
 Less, services anterior to 30th June, 18G7, 
 
 paid by Quebec since 6,724 94 
 
 T. ,., . . '- .f 92,757 26 
 
 Expenditures on appropriations for local purposes should, and must have 
 been stopped after the 30th June, 1867. Their remaining unexpended shows 
 
20 
 
 30 
 
 (Appendix.) 87 
 
 that thoy were not required for the special oLjecl iui* wliicli they were Voted. llfiCORD. 
 Far from there being any obligation on the part of the Government of either ^ "77 
 Ontario or Quebec to employ them for the special services for which they were No 3-c<^«- 
 originally intended, they could not do so without authority from their respective tinml 
 Legislatures. The amount Avill, of necessity, fall into and. form part of their res- 
 pective consohdated funds. Having been included in the statement of debt, 
 they become joint credits of Upper and Lower Canada, and must under section 
 142, B. N. A. Act, 1867, be divided and apportioned between them. 
 
 t 
 
 Widows' Pensions, &c., U. C. : 
 l<^ Do do do L. C. : 
 
 Tlicse items are to be governed by identically the same rule as the Munici- 
 palities FuikI, U.C. ; for the accumulated amount of the funds, after all charges 
 payable by lav/ out of them have tallea in, are to be paid to the Municipalities 
 Fund. 
 
 Court Kousks, L. C, and Montreal District Council : 
 
 Must follow the rule adopted for the others whatever it is. 
 
 Crown Lands Suspense Account : 
 
 TJie amount of this account is stated in the statement of 
 liabilities, at §112,748 6.3 
 
 ^^ Crown L^mos Department : 
 
 The amount of this account is stated in the statement of 
 liabilities, at $253,089 76 
 
 Trust Advance Account : 
 
 The amount of this account is stated in the statement of 
 liabilities, at ^ 1^468 60 
 
 These three last amounts are to be divided according to the principle 
 adopted for the division of the other assets. 
 
 "Montreal Harrour $481,426 67" 
 
 This amount has been struck out of the statement of liabiUties, because the 
 30 Trust has always paid its interest. The contingency of the Dominion ever 
 being called upon to make any payment under the guarantee of the late Pro- 
 vince must, however, he provided for by the Arbitrators. 
 
 The securities or investments on account of Trust funds, being part of the 
 funds themselves, must be treated as the funds to which they belonf^ 
 
 There may be other assets than the above which will require* to be dealt 
 with. Should any others appear, the undersigned reserve the right to submit 
 them to the consideration of the Arbitrators. 
 
88 
 
 ( Appendix. ) 
 
 RECORD. 
 
 Schedule 
 No. 3 — con- 
 tinned. 
 
 IV. — Indian Annuities. 
 
 The British North America Act, 18G7, reserves to the Parliament of 
 Canada the exchisive legisktive aiithority in mattcivs relating to Indians and 
 Indian lands ; its Executive has the suiierintendence of all Indian affairs. This 
 rendered necessary the charge in the statement of liabilities of the principal of 
 annuities payable to Indians as a compeji.sation agi-eed upon, both by deeds and 
 treaties, for the lands in Upper Canada which they sun-eadered to Government. 
 The annuities amount to !iii31,0r)4, and have, since the smiender, been a per- 
 manent charge on the Canadian budget. They are capitiUized at 5 per cent, 
 forming $021, 280, and are, as just now stated, the price or consideration stipu- lo 
 lated by the Indians for the surrender of large tracts of land in Upper Canada. 
 Information as to the quantity of these lands remaining unsold and the arrears 
 due on the 3()th June, 18(37, on tliose previously sold, will require to be 
 obtained. T)ie undersigned have been, as yet, unable to obtain a statement of 
 these unsold lands and arrears. 
 
 By section 109 of the above Act all lands are made over to the Province, 
 within which they are situated, su/>Jert however to any truai existing in re^'pect 
 thereof and to any interest other than that of the Province in the same. Tliese 
 annuities being the price unpaid of the lands tliemselves are a charge on them. 
 The contract between Government and tlie Indians ouglit to be governed by the 20 
 same rules as similar contracts between individuals. Tlie lands, being within 
 the Pi-ovince of Ontario, became, under said section 109, the property of that 
 Province, subject however to the interest of the Indians on the same. This 
 interest is the payment of the annuities stipulated as a compensation for the 
 lands ceded. It might also l)e called a trust, the administration of which is left 
 to the Dominion, the legal guardian of the Indians. Ontario, receiving the 
 lands and the arrears due for those sold, is sulyect to all legal and equitable 
 claims which may exist on them. It should therefore be charged with the prin- 
 cipal of the annuities. 
 
 It would be manifestly unjust to require Quebec to .share in paying for 30 
 these lands, which will be the effect of the capital being allowed to remain in 
 the statement of liabilities, unless compensation is required from Ontario from 
 the lands and arrears representing the capital of thos(i annuities. 
 
 V. — Assets in Schedule Four. 
 
 The 113th section of the " British North America Act, 1867," provides that 
 the assets enumerated in the fourth schedule to this Act, belonging, at the 
 Union, to the Province of Canada, sliall be the property of Ontario and Quebec 
 conjointly." These assets are set down in the fourth schedule as follows : 
 Upper Canada Building Fund. 
 Lunatic Asylums. 
 Normal Schools. 
 Court Houses in Aylmer, 
 
 Montreal, ]■ Lower Canada. 
 Kamourasl^fa, 
 
 40 
 
( Appendix. ) 
 
 Law Society, Upper Canada. 
 
 Montreal Turnpike Trust. 
 
 University Permanent Fund. 
 
 Royal Institution. 
 
 Consolidated Municipal Loan Fund, Upper Canada. 
 
 Consolidated Municipal Loan Fmid, Lower Canada, 
 
 Agricultural Society, Upper Canada. 
 
 Lower Canada Legislative Grant. 
 
 Quebec Fire Loan. 
 10 Temiscouata Advance Account. 
 
 Quebec Turnpike Trust. 
 
 Education, — East. 
 
 Building and Jury Fund, Lower Canada. 
 
 Municipalities Fund. 
 
 Lower Canada Superior Education Income Fund. 
 The question of jiu'isdietion in reference to these assets has been already 
 referred to. Until it is decided by the Arbitrators, the undersigned will abstain 
 from any remark respecting these assets. They reserve the right, however, to 
 submit a short memorandum respecting them, should J:, be determined that the 
 20 award of the Arbitrators is to include the division and adjustment of the assets 
 in the Fourth Schedule. 
 
 In conclusion, the undersigned desire to state that the foregoing is little 
 more than a synopsis of the propositions of the Province of Quebec. They 
 will be prepared to sui)i)ort the pretensions advanced in this memorandum by 
 oral arguments upon the Avliole of the subjects involved in t'lis Arbitration, or 
 upon such points as it shall please the Arbitrators to hear them. 
 
 89 
 
 RECORD. 
 
 Schedule 
 No. 3 — eon- 
 tinued. 
 
 Quebec, December, 1869. 
 
 N. Casault, 
 Ths. W. Ritchie. 
 
90 
 
 ( Appendix. ) 
 
 RECORD. 
 
 Rcliodiile 
 No. ;i~con- 
 tiiiued. 
 
 ANSWER OF PKOVTNCE OF OXTARIO TO THE STATEMENT 
 OF CASE OF PROVINCE OF QUEBEC. 
 
 I 
 
 No. 2.— Division ok the .Suuplus Dkht. 
 
 The Province of Ontario objects to tlie statement raado liy the Pj-ovinco of 
 Quebec under this liead, on the ground tliat the Arl)itratois have no jurisdiction 
 nor anthcn-ity to inquii-e into the state of th(! delts or credits of tlie I'rovinces 
 of Upper and Lower Canada prior to tlie Union of 1841, nor to deal in any way 
 with either the debt ov credit with which either Piovince came into the Union 
 at that time. 
 
 The Province of Ontario offers tliio objection, as preliminary to any consid- in 
 eration whatever, by tlu; Arbitrators of this hcatl of the case of the I'rovince of 
 Quebec; as, if it be possible that the Arbitrators can feel themselves justified 
 in entering into the consideration of the matter olijected to, the Province of On- 
 tario will claim the right of going into that vdder tie], I which will be opened up 
 by an examination into the origin of the del:)ts, and the charges of each Pro- 
 vince upon, and tln^ contribution of each Pi-o\-ince to, the general revenue of 
 Canada, however tedious or impracticable sueli aii examination may seem to the 
 Province of Quebec. 
 
 The Province of Ontario will be prepared to argue fully this joreliminary 
 objection, and will ask for the decision of the Arbitrator? upon it before enter- 20 
 ing upon any discussion of the general subjects of their case. 
 
 The Common School Fund. 
 
 The Province has put forward its views of this Fund in its own statement, 
 and has made no admission that this Fund shall be divided. 
 
 Municipalities' Fund, U. C. 
 
 This Fund belongs to Ontario alone, and Quebec lias no interest i'l it. It 
 is derived from lands within Ontario, and is applicable to objects within Ontario 
 solely. All the Mmiicipalities in arrear for interest to tiie Municii)al Poan 
 Fund, up to Confederati<m, have had such ariear charged against tlieir propor- 
 tions of the annual payments from this Fund, and (Quebec has no claim upon 30 
 any portion of it. 
 
 U. C. Impkovement Fund. 
 
 U. C. Grammar School Fund. 
 
 U. C. Grammar School Income Fund. 
 
 U. C. Building Fuxd. 
 In all these funds Ontario has the sole interest. 
 
"^ M ^JKt 
 
 conr 
 
 tinued. 
 
 ( Appendix. ) 91 
 
 Balan<e of Special Appia.RiAiioNs. record. 
 
 ( a. 10 claims ilio ])alaiico of the special appropriauoiis for Upper ^^^*'!J^'' 
 C ana ,i, i:„.'..'j 
 
 ^''nows' Pensions, U. C. 
 
 Ai'.' on the sai, foo 'mo' ;. Upper C'anada Municipalities iMind. 
 
 i.lu< V i.vxD Suspense Afcoi'NT. 
 Cromn J \ads Department. 
 Trust Advance Account, 
 
 ila\ all 1 .11 struc;k out, and are, tlier(^fore, removed from the considcra- 
 10 tiou of the Arbitrators l)y agreeincnt. 
 
 Indian Annuities. 
 
 The larger portion of T -^so annuities, amounting to S2(),G04, existed prior 
 to 1H41, and arose out of surrender fron^ time to time by the Indians of the 
 greater part of the lands oi (Tpper Canada, which were afterwards sold, and 
 the moneys received frcmi their sale went into the general revenue, in Avhich 
 Lower Canada participated after tlie I on, to an amount that would have 
 created a cai)ital fund that would luue paid ten times the amijunt of these an- 
 nuities, and in 184G they were made, by the Statute passed that year, a special 
 charge, in I'ichedule B., upon the ( 'onsolidated iievenuc, and the lands released 
 20 from them thereby. The remaining annuities for Upper Canada lands are 
 64,400, ehnrgeable under the treaty i.f surrender made by the Honourable W. 
 B, Eobinson, and for them an equivalent Avas made to Lower Canada by the 
 setting a|.art upwards of 2'00,00() acres of the Crown Lands there for the In- 
 dians, and l)y a charge annually upon the general revenue of $4,400, or an 
 amount similar to that appropriated lor Upper Canada under Mr. Robinson's 
 treaty. Under these circumstances, Ontario denies any separate liability for 
 the principal of these annuities. 
 
 Assets in Schedule Four. 
 
 The Province of Ontario considers that these assets are clearly and distinctly 
 sovrithiii the power of the .\rbitrators for division, and that the declaration that 
 these are assets of llu; Pro\inces of Oiitario and (Quebec (•ovjoivtlii,\ does not 
 mean that they belong to the Provinces of Ontario and Quebec in equal por- 
 tions, but the Arbitrators must determine the princii)le of tl ir division. 
 
 John Hillyard Cameron, Q.C, 
 
 Counsel for Ontario 
 
^Ti 
 
 
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 23 WEST MAIN STREET 
 
 WEBSTER, N.Y. 14580 
 
 (716) 872-4503 
 
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 ^. 
 
 
 C^.^ ^^ 
 
 

 t^^ 
 
 fA 
 
 
 I 
 
92 
 
 ( Appendix. ) 
 
 RECORD. 
 
 Schedule 
 No. 4. 
 
 Schedule No. 4. 
 
 Copies of all Correspondence between the Dominion Government and 
 the Governments of Ontario and Quebec respecting the Arbitration 
 and Award under the 142nd Section of the British A^orth America 
 Act, 1867, together with the Report of the Minister of Justice in 
 respect of the same, and an Order of the Privy Council thereon. 
 
 (Translation.) 
 
 Government House, 
 a T- , . „ . Quebec, 11th July, 1870. 
 
 biR,— For the mformation of His Excellency the Governor-General, I have 10 
 tne Honour to inform you that the Honourable Charles D. Day has tendered his 
 resignation as Arbitrator, appointed by the GoAcrnment of the Province of • 
 Quebec, under Section 142 of the British North America Act, 1867, and to pray 
 that His Excellency will direct the two other Arbitrators to suspend their labours 
 until the Government of Quebec shall have come to a decision on this resigna- 
 tion, which is at present under its consideration. 
 
 I have the honour to be. Sir, 
 
 Your obedient servant, 
 
 N. F. Belleau. 
 ^ ,, ^^ , , ^ Lieut.-Governor of the Province of Quebec 20 
 
 lo the Honourable Joseph Howe, 
 
 Secretary of State for the Provinces, Ottawa. 
 
 (Copy.) 
 
 ^ ^, , ' Montreal, 9th July^ 1870. 
 
 biR, — 1 have the honour of transmitting hercAvith my resignation of the an 
 pointment of Arbitrator, under the 142nd Section of the British North America 
 Act, 1867 ; I do so with regret,' but 1 am satisfied, from the broad and irrecon- 
 cilable diflferences of opinion which exist between my colleagues and myself on 
 points of essential importance, that I cannot hope to be of any further service 
 in the business of Arbitration. The course which they propose to follow appears 30 
 to me necessarily to lead to great injustice, and is so entirely contrary to my 
 couA-iction of what the pubhc interests require, that I cannot concur or consent 
 to take part in it. 
 
 I have the honour to be. Sir, 
 
 Your most obedient servant, 
 
 Charles D, Day 
 To the Honourable P. J. O. Chauveau, 
 
 Provincial Secretary, &c., &c., &c. 
 
3nt and 
 itration 
 .merica 
 5TICE in 
 hereon. 
 
 ( Appendix. ) 
 
 93 
 
 (^opy-) KECORT). 
 
 Montreal, 9th July, 1870. / 
 
 .SiR,--I have the honour to declare my resij,matioi) of the appointment of ^ ^^® 
 Arbitrator by the Government of Quebec, under the 142nd Section of the British timed '""' 
 North America Act, 1867, and respectfully to request that His Excellency the 
 Lieutenant-Governor will be piea-od to accept the same. 
 
 I have, &c., 
 
 T. ., TT , . , Charles D. Day. 
 
 lo the Honourable P. J. O. Chauveau, 
 
 10 Provincial Secretary, &c., &c., &c;. 
 
 70. 
 
 , I have 10 
 ered his 
 dnce of • 
 to pray 
 labours 
 resigna- 
 
 Quebec 20 
 
 (347.) 
 
 (Trandation.) 
 
 Department of the Secretary of State lor the Provinces, 
 
 Ottawa, ?3th July, 1870. 
 SiK,— 1 have the honour to acknowledge the receipt of your Despatch of 
 the 11th July instant, stating, for the informati«>n of His Excellency the Gover- 
 nor-General, that the Honourable Cliarles D. Day has tendered his resignation 
 <jt the office of Arbitrator, api)ointed bv the I'rovince of Quebec, under Section 
 142 of the British North America Act, 18(J7 ; and praying His Excellency to 
 20 direct that the other Arbitrators should suspend their labours until the Govern- 
 ment of Quebec shall have come to a decision on sucli resignation. 
 
 I have, &c., 
 
 E. A. Meredith, 
 
 „„,,,, Cinder Secretary of State 
 
 Ihe Honourable Sir N. F. Belleau, 
 
 Lieutenant-Governor, (Quebec. 
 
 '0. 
 
 the ap 
 merica 
 rrecon- 
 self on 
 service 
 ppears 30 
 to my 
 onsent 
 
 Y, 
 
 (Translation.) 
 (49/70.) 
 
 Government House, 
 ^^ ^ ^ , ^ , Quebec, 19th July, 1870. 
 
 >iiR,— 1 have the honour to enclose for your information a copy of an order 
 m Council accepting the resignation of the Honourable Charles D. Day as Arbi- 
 trator, appointed by the Province of (Quebec, under Section 142 of the British 
 North America Act. 
 
 I have, &c., 
 
 N. F. Belleau, 
 Lieuienant-Governor of the Province of Quebec 
 The Honourable ^ • 
 
 The Secretary of State for the Provinces, Ottawa. 
 
 N 
 
94 
 
 RECORD. 
 
 Schedule 
 
 No. ^— con- 
 tinued. 
 
 (Appendix.) 
 
 (Trandaiion.) 
 (No. 1(H) 
 
 Copy of the Repoht of a Committee of tlio Iloiioiirable the Executive Council, 
 ai.[.iove(l by the Licutcnant-dovoinor in Council, on the U)th July, 1870, 
 On the resi<rnati()n of tlie Honourable C. I). Day, Aibitratoi-, (,)uebec. 
 
 The Honourable the Secretary, in nienioranduni dated the lOtii July, instant, 
 1870, recommends that tlie resij-nati.in offered by the Honourable Jud<>e Charles 
 Dewey Day, as Arbitrator, appointed by the Province of Quebec, nv "cr Section 
 one hundred and forty-two of "The British North America Act, 1807," be ac- 
 cepted. IQ 
 
 The Committee concui- in tiie above recommendation of the Honourable 
 the Secretary, and submit it for the approval of the Lieutenant-Governor, 
 
 Certitied, 
 
 Felix Foktier, 
 
 rn TT 11,.^ Clerk Executive Council. 
 
 Ihe Honourable the Secretary of the Province, 
 &c., &c,, &c. 
 
 (354.) 
 
 (Translation.) 
 
 Department of the Secretary of State for the Pvovinces, 20 
 
 „ ^ ^ , Ottawa, L>lst July, 1870. 
 
 fern,— 1 have the honour to acknowlecige the receipt of vour Despatch tmder 
 date the 10th July, instant, transmitting, for the information of His Excellency 
 the Governor-General, a copy of an order of your Executive Council, accepting 
 the resignation of the Honourable- CMiarles Dewey Day, =is Arbitrator appointed 
 by the IVovmce of (j)uebec, under the one hundred and forty-second Section of 
 the British North America Act. 
 
 I have, &c., 
 
 E. A. Meredith, 
 
 mi XT , , ^ Under Secretary. 30 
 
 The Honourable Sir N. F. Belleau, 
 
 Lieutenant-Governor, Quebec. 
 
 (Tranalatio'ii.) 
 
 Government House, 
 
 Quebec, 8th August, 1870. 
 Sir, — 1 have the honoiu- to transmit, for the information of His Excellency 
 the Governor-General, a copy of a document signed by the Hon. Messrs. Gray 
 and Macpherson, which has been received by tlie Secretary of this Province. 
 I deem it my duty at the same time to call tlie attention of "His Excellency the 
 Governor-General and of the Federal Government to the unjust and ille<>aHO 
 course jointly adopted by the Arbitrator appointed l)y the F(Ml("'ral Government 
 
Jouncil, 
 
 S, 1870, 
 
 instant, 
 Charles 
 kSection 
 ' be ac- 
 
 ourable 
 
 [•. 
 
 R, 
 
 'ouncil 
 
 10 
 
 20 
 
 [870. 
 1 iinder 
 ellency 
 iepting 
 jointed 
 ;tiou of 
 
 tary. 
 
 30 
 
 (Appendix.) • 95 
 
 and the Arbitrator for the I'rovinee of Ontario, and I'espeetfully to re<iuest on KECORD. 
 
 behalf of the Government of tliis Province the intervention of the Federal 
 
 Government. Schedule 
 
 T 1 p No- 4 — con- 
 
 Ihave, &c.,- ^,;„„,^. 
 
 N. ¥. Belleau, 
 Lieutenant-Governoi- of the Province of Quebec, 
 lo the H(moural)le 
 
 The Secretary of State for the Provinces, Ottawa. 
 
 In the matter of the Arbitration between tlie Provinces of Ontario and Quebec. 
 
 The under.signed Arbitrators liave liad adjourned the proceedings of the 
 Arljitration t(> We(hiesday, the 17th Aiigust, at 2'p.ni., at Osjioode Hall, Toronto, 
 and the Governments of the Provinces of (Quebec and Ontario are notified tinit' 
 notwithstanding the writ of prohil)ition served up )n the Arbitrators, the ur.der- 
 signed will proceed with the consideration of the matters of the Arbitration on 
 the (U'y and at the i)lace above named pcremptoril} . 
 
 D. Maci'herson, 
 
 ^ , . J. H. Gray. 
 
 Torori^o, nth August, 1870. 
 
 20 
 
 {Till nii'dilon.) 
 
 Government House, 
 
 c, -,. , . ^ Quebec, 11th July, 1870. 
 
 Sir,— l^or the niformation of His Excellency the Governor-General, I have 
 the honour to enclose a copy of an Order passed by the Executive Council of 
 the Provmce of Quebec, under date the 7tli July instant, on the subject of the 
 Arbitrators appointed foi- the division and ailjustmeut of the debts, credits 
 liabilities, properties, and assets of Ui)per and Lower Canada, and to beg His 
 Excellency to give his attention to the representations contained in the said 
 Order. 
 
 I have &c., 
 
 30 N. F. Belleau, 
 
 Lieutemmt-Governor, Province of Quebec. 
 Ihe Honourable Joseph Howe. 
 
 Secretary of State for the Provinces, Ottawa. 
 
 .870. 
 ellency 
 >. Gray 
 ovince. 
 icy the 
 
 illegal 40 
 
 nnient 
 
 (No. 157.) 
 
 Copy of a Kei>ort ok a Committee of ^'^e Honourable the Executive Council 
 
 approved l)y His Excellency the Governor in Council on the 7th July 187o' 
 On the dis(iualitication of the Hon. J. H. Gray to act as Arbitrator under the 
 
 British North America Act of 18(57. 
 
 The Honourable the Treasurer of the Province reports, that it is the opinion 
 
96 
 
 ( Appendix. ) 
 
 RE(!ruil). of Njijioloon Ciisiiult, Ks(i., (). (I. (which said h'«;al opinion was ai)})rovt'(l ami 
 HcLwlule t'<»»finv?' ^^y ^''^' ''^^ olliuu-s oftho Crown), that, whereas tlie ]4'2iu\ section of 
 
 No. 4- 
 tinwd. 
 
 -riiH- 
 
 • ' .-..._ ^ -y, «>■■«««', ....v^Kvi-ft' via v> ■■*.aai* > >v^V' a.'a«/xa v^a 
 
 the liritish North America Act of 1H(J7 enacts, that the division and adjustment 
 of tlu> del)ts, credits, h'abihties, jjropei'ties, and assets of Upijer Camuhi and 
 Lower Canaihi, shall be referred to the arbitrament of tln-ee Arbitrators, one 
 chosen by the (lovernment of Ontario, one by the (rovernnKnit of (Quebec, and 
 on(> l)y the (lovernment of Canachi; and thr: the Arbitrator chosen by the 
 (lovernuKMit of Canada shall not be a resident eitlier in Ontario or in Quebec ; 
 and that whereas the llonoinable J. II. Cray has resided for more tlian one 
 year, and lias become a resident in the Province of Ontai-io, and has become lo 
 thereby dis(|ualifie(l to act as such Arbitrator, it has become the duty of this 
 Province to object to the said Ifonourablo John Plamilton (Iray ac^ting us such 
 Arbitrator. 
 
 The Honourable 'J'reasurer reconnnends that a despatch be transmitted to 
 His Excellency the Oovernor (leneral, acquaint int,^ His Excellency witli the 
 vievys of this ( ioveiinnent, and recpiestin",' the appointment of another Arbitra- 
 tor in the ])lace of the said Ilonimrable John Hamilton Gray. 
 
 The Committee concur in the forejjfoin.i? Report, and .submit tlie same for 
 the TJeutenant-Cirovernor's a])proval. 
 
 Certified. 20 
 
 Felix Foktieu, 
 
 Clerk Executive (/ouncil. 
 
 (J>H<) (m 2,144— y2.) 
 
 Office of the Secretary of State of Canada, 
 Ottawa, 'Unh July, 1870. 
 Sii!, I am directed to enclose Copy of an Order passed by the Executive 
 Council of the Province of Quebec on your disqualification to act as Arbitrator 
 under the British North America Act of 1807, transmitted to Government of 
 the Dominion for irs information and consideration by the Lieutenant-Governor 
 of the said Province. 30 
 
 I am further to inform you that the ( '-overninent of Quel>ec has accepted 
 the resignation of the Honourable Charle i). Day as the Ai-bitrator appointed 
 by the above Government. 
 
 I am, &(',.. 
 
 E. Pahent, 
 
 u. s. s. 
 
 The Hommrai'le J. H. Gray, 
 
 Arbitrator of the Dominion, Ottawa. 
 
 (Trandation.) 
 
 Government House, 
 
 Quebec, 14th Septeuiber, 1870. 
 Sir, — For the infornuition of His Excellency the Governor-General, to 
 whom you are requested to communicate these presents, I have the honour to 
 
 40 
 
(Appendix. ) 
 
 t'<l iuid 
 t:ti()u of 
 istment 
 <la and 
 n'H, one 
 3c, and 
 by the 
 (uobec ; 
 an one 
 become lf» 
 of this 
 IS such 
 
 tted to 
 ith the 
 irbitra- 
 
 me for 
 
 d7 
 
 transnnt licrovvith copy of an Order passed by the Honourabhahe Executive HEUORD, 
 
 Council of tlie iVovnicc of (,)ucbe(!, the l-Jth Si'ptcinbcr instant on the pre- 
 
 tended awaro pronounced by tlie IIonoura))k! J. II. (Irav and the Honourable ?'""'"'" 
 D. K. MacpI.erson, two of the Arbitrators ai>pointed for the division and adjust- J,";,*"'''^' 
 ment ot the debts, credits, liabilities, properties, and assets of Ui)i)(>r and Lower 
 Canada. 
 
 I avail myself oi the circumstance to inform His Excellency that 1 entirely 
 concur m th.; view^ expressed by my Ministers in the .said Order in Council 
 and that with tluMn T protest against an award wliich I consider unjust, ille-aj 
 10 and vexatious. ' ' " 
 
 1 have, &c., 
 
 N. F. Belleau, 
 Lieutenant-Governor, Province of Quebec. 
 The Honourable Joseph Howe, 
 
 Secretary of State for the Provinces. 
 
 20 
 
 il. 
 
 ada, 
 
 Bcutive 
 itrator 
 lent of 
 vernor 
 
 cepted 
 tointed 
 
 >. 
 
 30 
 
 40 
 
 -i70. 
 •al, to 
 our to 
 
 Copy of a Kepoui' ok a Committee of the Honourable the Executive Council, 
 
 approved by the Lieutenant-Governor in (Jouncil, or. the 12th of 
 
 September, 1870, 
 
 On the pretended judgment or award rendered and made by the Honourable 
 
 u J. H. Gray and the Honourable I). L. Macpherson, two of the Arbitrators 
 
 appointed to decide as to the division and adjustment of the debts, credits, 
 
 liabiHties, &c., of Tipper and J.ower Canada. 
 
 The Honourable tlu^ 'Jj-easurer of the Province, in his Keport, dated the 
 ninth of September instant (IS7o), sets forth, that a copy of a pretended judg- 
 ment or award, rendered and made ])y the Honourable J. H. Gray and the 
 Honourable I). \j. Macpherson, two of the Arbitrators appointed to decide as 
 to the division of the debts, credits, liabilities, properties, and as.scts of Upper 
 Canada and Lower ('anada, bearing date at Toronto, the third day of September 
 instant, and signed l)y the said i)aities, has been forwarded to the Honourable 
 
 30 Provincial Secretary, for the information of the Quel)ec Government. 
 
 That, inasmuch as the Quebec Government have already, by intimation to 
 the Federal Government, and by legal ])roceedings before the law tribunals of 
 the country, protested against the said two Arbitrators proceeding with the 
 Arbitration when tluire was no Arbitrator appointed by the Province of Quebec, 
 and against any further action on the part of the said Honourable J. H. Gray' 
 on account and because of his residing in the Province of Ontario, against the 
 true spirit and intent of the British North America Act of 1867 ; and, inas- 
 much as the Quebec Government did not and does not acknowled"e the ri^ht 
 of the said two Arbitrators, jointly to act, or of the said Hcmourable J. If. 
 
 40 Gray, individually, to act in tlie i)remises, and that all the acts and proceedings 
 of any kind whatsoever had or done l)y them, or either of them, are illegal, nu?l, 
 and void, and of no force or effect whatsoever in law or equity. 
 
98 
 
 KKCOHI) 
 
 Seliediilo 
 No. 4 — cmi- 
 fill III')/. 
 
 ( Appendix. ) 
 
 AiKJ, iimsmucli as tlic siiid pretended Jud^^'uieiil or jivvard, (even if the .said 
 two Arhitrators luid a ri<.l,t to act without uii Arbitrator for tlie Provineo of 
 Quel)ee, and if the said Honourable J. |[. (Jrav were not dis(iualified bylaw 
 from Hittino- or acini^ as Arbitrator) is nianifestlv unjust to the Province of 
 (Quebec, and manifestly and clearly HMidovd and made in the interests of 
 Ontario, (Quebec havin- too larj-e a portion of the surplus debt to pay, and 
 beinc.' awarded less than her just and e(iual share of the assets mentioned in said 
 British North America Act of 1H<J7, it is therefoin^ unjust, iUe-al, null, and void. 
 
 1 he ^Honourable Treasurer tlierefor(^ recommends tliat, on behalf of the 
 Quebec Cxovernment, a (h,'si)atch be forwarded to the Federal (Jovernment, pro- 10 
 testm^r against any force or validity beino' given to the said pretended judgment 
 or award of the said two Arbitrators ])y the Fedeial authority, and advising of 
 the intention of the Quebec Government to ai)peal for redress and justice in 
 every constitutional mode which it is the privilege of British subjects of th(> 
 Hritish Ch'own to exercise when suffering under injustices or wrong from the 
 hands of any. 
 
 The Honourable Treasurer also recommends that the receipt of the said 
 pretended judgment or award from the said two Arbitrators be acknowledged, 
 at the .sanie time prote.sting against it as not being rendered and made in good 
 faith, or 111 accordance with law and ec^uity, and as been manifestly rendered 20 
 and made m the interests of Ontario and the prejudice of Quebec; and that 
 the said Arbitrators, being duly notified by the Quebec (rovernment of the 
 objections taken and held previous to their so acting without the Arbitrator 
 from Quebec, that their judgment or award is niili and void, and nor, recognised 
 as valid by the Government of Quebec. 
 
 The Committee concur in the foregoing report and submit the same for the 
 Lieutenant-Governor's approval. 
 
 Certified, 
 
 Felix Fortiek, 
 Clerk Executive Counsel. 30 
 
 (No. 399.) 
 
 SlR,- 
 
 (Translation.) 
 
 Department of the Secretary of State for the IVovinces, 
 
 Ottawa, 21st September, 1870. 
 -I have the honour to acknowledge the receipt of your despatch 
 under date of the 14th instant, transmitting for the information of His 
 Excellency the Governor-Geiu^ral a copy of an Order passc-1 by the Executive 
 Council of the Province of Quebec, on the lL>tli September "instant, on the 
 award delivered by the Honourable J. H. Cxray and the Honourable D. L. 
 Macpherspn, two of the Arbitrators appointed foV the division and adjustment 40 
 of the debts, crerlits, &c., of Upper and Lower Canada 
 
 I have the hcniour to be. Sir, 
 
 Joseph Howe, S. S. P. 
 The Honourable Sir N. F. Belleau, 
 
 Lieutenant-Governor, Quebec. 
 
10 
 
 he .said 
 iiu'o of 
 by liiw 
 ince of 
 
 L'HtS of 
 
 y, 'and 
 in said 
 fl void, 
 of tlio 
 It, pro- 
 Ij^inent 
 sin<jf of 
 ;tico in 
 of tlic 
 )m the 
 
 lO .said 
 edged, 
 1 good 
 idered 20 
 d that 
 of the 
 itrator 
 "iii.sed 
 
 for the 
 
 i.sel. 30 
 
 ( Appendix. ) 
 
 ( Tninslatiom.) 
 
 (lovernnient House, 
 (^uc;l;e(', :i2nd December, 1H7(». 
 
 99 
 
 RECORD. 
 
 Hohethile 
 
 Siu,--I have the honour to .state for the infoi-ination of J[i.s Exee'liency the ^,;!;,J~'^''"' 
 
 (Tovernor-Cieneral. tliat there has been |»re.sente(l to jiie by th(^ fA'gi.shitive 
 
 Couiiril and Legislative Assembly of tlii' Trovinee of C^iiebei;, an"ad,lnsH 
 
 praying me to transmit to I lis Kxeellency the (iovernor-deneral an address in 
 
 relivtion to tin; Arl)itration for the division and adjustment of the debts habili- 
 
 ties, er(!dits, pro[)erties and assets of Upper and T-ower Canada, under the pro- 
 
 10 visions of .Section 142 of the JJritish North America Act, 1H()7. 
 
 I beg, therefore, to request that you will, with as little delay as possible, 
 
 .submit to Hi.s Kxeellency this iuldress, which has been adopted jointly by the 
 
 Legislative Council and the J.egislative As.sembly of this Province. 
 
 I have, &c., 
 
 N. F. Belle A u, 
 
 Lieut. -Governor, Quebec. 
 Ihe Honourable Josejjh Howe, 
 
 Secretary of State for the I'rovinces, Ottawa. 
 
 To His Excellency the Honourable Sir Narcisse Fortunat Belleau, Knight, 
 20 Lieutenant-Governor of the Province of (Quebec. ' ° 
 
 May it please Your Plxcellency, — 
 
 We, Her Majesty's true and loyul subjects, the Legislative Council and 
 Legislative Assembly, pray that Your Excellency would be i)learied to transmit 
 to His Excellency tlu> Governor-CTcneral, the J()int Address of the Legii-lative 
 Council and Legislative Assembly, concerning the Arbitration. 
 
 ('. B. DE BoUCHKHVILLE, 
 
 Speaker of the Legisl, :ive Council. 
 
 J. G. Blanchet, 
 Speaker of the Legislative Assembly. 
 
 ^70. 
 ipatch 
 [• His 
 cutive 
 n the 
 D. L. 
 tment 40 
 
 30 To His Excellency the Right Honourable John, Baron Lisgar of Lisgar and 
 Bailieborongh, in the County of Cavan, Ireland, in tlie Peerage^of the 
 United Kingdom of (Jreat Britain and Ireland, one of Her Majesty's Most 
 Honourable Privy Council, Knight Grand Cross of the Most 'Honourable 
 Military Order of the Bath, Knight Grand C^ross of the Most Distinguished 
 Order of St. Michael and .^aint (r(Mn-ge, Goveriun-Genei-al of Canada, and 
 Governor and Commander-in-Chief of the Island of Prince Edward 
 c, &c., &c.. 
 
 May it i)lease Your Excellency : 
 
 We, Her Majesty's dutiful anil loyal subjects, the Legislative Council ami 
 40 Legislative Assembly of the [Province of (.Quebec, in Provincial Legislature as- 
 
100 
 
 ( Appendix. ) 
 
 Sl^' «emble(l humbly appicacl. V..ur KxitIIoik-v for the purpose of reprenentini? :- 
 
 Hclicdiile 
 No. 4 — cmi 
 tinned. 
 
 lhat,.m"t'or(lni^^ to tho provisions of tlu« on(> humlrcd aiid I'ortv-second Sec- 
 tion of the lirifish North Aniorini Aft, 1S<;7. tli.. division and adjuslnicnt of 
 tu^ d(|l)tM, crodits, hahditics, prop,>rti."s. and assets of Upper and I, ./vver Canada 
 MliouM have been referred to the arbitrainent of three Arbitrators, one ehosen 
 by tfio Cxovernment of Ontario. ..ne by tin^ (iov(>rnn.ent ..f (,).iebee, and tlie 
 third by tfio (xovernment of (^ana(hi, tlie last mentioned not to l)e a resident 
 eitfier m Ontano or in Queljee. 
 
 That the Honourable Charh's Dewey Day havin- been appointed Arbitra- 
 tor by the Provmeo of Quebee, the H.mourable Davi.l L,.Nvis Maepherson bv in 
 the I rovmeo of Ontario, and the Hononral)le John Hamilton (Irav by the Vjov- 
 ernmentof Canada, and the hist named Arbitrator havin- taken iii) his resi- 
 dence in Ottawa, the (Government of the Province of (,)Meb,.e have deemed it 
 incumbent on them to protest aj-ainst liis continuinj. in oflie(>, and to ex- 
 press both to tlie Government of Canada and to the A.i.iiratc.rs themselves 
 their firm conviction, that to carry .mt the trn(> intent and mcanin- ..f the British 
 JSorth America Act, the decision of the Arbitrators should be imanim(ms 
 
 Ihat subsequently, on the ninth day of July last, the ironourabi,. Charles 
 Dewey Day, the Arbitrator api>()inted by tlie Province of (Quebec, differintr in 
 opinion with the other Arbitrators respectini-' a pivliminaiv jnd-m(Mit, which aj)- -^o 
 peared to him based upon pretcnsii.ns at once unfounded "iii fact and in law and " 
 deeming tiat, by the rendering of that judgment, the examination of the ques- 
 tion would be restricte<l by the iuHexible rule of an erroneous jud.nnent and 
 tliat It would be, therefore, impossible to arrive at an e(piitable and .siitisfactorv 
 conclusion, felt it to be his duty to resign his office. 
 
 That such resignation having becm accepted bv the (Jovernmcnt of the 
 1 rovince of Quebec, notice thereof was immediatelv given, to wit, on the eleventh 
 day of July last, to the Government of CJanada, and to Messrs. Gray and Mac- 
 pherson; the (iovernnient of the Province of (,>ueb(>c, at the same time pro 
 testing against any ulterior action on the part of the Arbitration (Jommi'ssion so 
 wnicli was thus rendered incomplete. 
 
 That, notwithstanding the representations so made to them, Messrs Gray 
 and Macpherson entered upon the examination of the questions submitted by 
 the two Provinces, without the I'rovince of Quol)ec being in any way represen- 
 ted, and on the third day of Sq)tenib(;r last, rendered a pretended award 
 against which his Kxcellency the LieuttMiunt-Gov(M'nor of the Province of One' 
 bee, by despatch, dated the thirleeiith day of Sei)tembei- last, and addressed t*. 
 His Excellency the Governor-General, protested as unjust and illegal. 
 
 That the injustice (>f the said pr(!tended award Is evident, from the s-ime 
 having been rendered wh.)lly in the interest of the Province of Ontario and ^n 
 from the ftict that, while Messrs. (Jray and Macplierson refused to take into' con- 
 sideration the relative financial positions of the two Provinces at the time of the 
 Union, they have taken into consideration the object and nature of certain items 
 of expenditure as having l<oen incuri-ed in one or the other section of the Prov- 
 ince of Canada from tho period of the Union to Confederation : that the said 
 pretended award is further unjust, inasmuch as the division of the credits pro- 
 perties, and assets of the late Province of Canada, doos not even proceed upon 
 
tin^' :— 
 11(1 Sec- 
 
 IIH'llt of 
 
 ('iiiiiida 
 
 clioHcn 
 
 111(1 tho 
 
 'sidont, 
 
 Vihitia- 
 I'soii by i(» 
 le Gov- 
 lis resi- 
 mied it 
 to ex- 
 I solves, 
 British 
 
 ■i, 
 
 'harles 
 riiif,' in 
 ich a{)- 20 
 w, and 
 ) ques- 
 it, and 
 "actory 
 
 of the 
 3Vonth 
 I Mac- 
 
 ission, 30 
 
 Gray 
 ed by 
 resen- 
 -Wiird, 
 
 sod to 
 
 same 
 ), and 40 
 ) con- 
 r»f the 
 items 
 Prov- 
 3 said 
 , pro- 
 upon 
 
 (Appendix.) loi 
 
 ielaZ' hl'S l"'' P''"7!r'^ f /»'"-^^' ^''i^»^ '^PP^'ar to have been adopted in RECORD. 
 
 relation to he division of the balan(-e of the debt, and does not rest n, on anv 
 
 principle whatsoever, but is j.urely arbitrary, and favours the Province of On ?'1"'« 
 tario at the exiunise of tiu. IVoviiu-e of (^uebee ; that, lastly, the prov sio. s ^^ J-'"'" 
 of the said preten<le. awanl fully justify the apprehensions of the distJu-n Xl 
 
 ZZ em^ r ^^y^T^^'^T'' f.it\A'l>it'atoi, and the firm and inde^enS 
 line of con luet which he adopted in the interests of justice 
 
 Ihat the said pretended award is absolutely ille^'al, null, and void, for the 
 reasons hereuibeforo set forth, and also as having been I'endeml by two Arlitm 
 
 10 tors, who, by the resignation of their colleague, remained without any power or 
 .lurisdiction, and that, therefore, the intentions of tho British NortJi America 
 Act have not been carried out, an.l no valid title has \mm conferred upon either 
 1 rovince in relation to the credits, properties, and assets, which it was the duty 
 ot the said Arbitrators to apportion and divide between the two Provinces 
 r.r..Jf . Trovmce of Quebec can neither submit to its property beinL' dis- 
 posed of, or to any sum whatever beinff exacted from it, nor can it accept anv 
 property, credits, or assets in virtue of the said pretended award, and that ft is 
 bound o resist, and will resist by all means within its power, the execuiion of 
 the said pretended award, claimin- as it does that justice be done, and that its 
 
 20 nglits^ as recognized by the British North America Act, be maintained 
 
 Wherefore, we humble pray that Your Excellency will be pleased to adopt 
 such measures as are best calculated to insure justice to this Province. 
 
 C. B. DE BOUCHERVILLE, 
 
 Speaker of the Legislative Council. 
 
 J. G. Blanchet, 
 Speaker of the Legislative Assembly. 
 
 (Translation.) 
 
 Department of the Secretary of State for the Provinces, 
 qn Qt^ t 1, .. 1, , . Ottawa, 24th September, 1S70. 
 
 \ . ,^',-^ ^^^^ ^°"""^ *^ acknowledge receipt of your Despatch, 1 494 
 dated 22nd instant transmitting an Address passed jointly by the Legislative 
 Council and Legislative Assembly of the Province of Quebec, concerning the 
 Arbitration for the division and adjustment of the debts, liabilities, proijerties 
 and assets of Upper and Lower Canada, under the provisio. s of Section 142 
 of the British North America Act, 1867. 
 
 I shall without delay, submit the Address for the consideration of His 
 Excellency the Governor-General. 
 
 I have, &c., 
 
 Joseph Howe, 
 
 ^ri, TT ui o- ^T T. T. „ Secretary of State for the Provinces. 
 
 The Honourable Sir N. F. Belleau, 
 
 Lieutenant-Governor, Quebec. 
 
102 
 
 RECORD. 
 
 (Appendix.) 
 
 Toronto, September 5th, 1870. 
 ~~r SiK, — As Arbitrators under the British North America Act, 1867, we have 
 
 N„,''4L*on- ^^® honour herewith to enclose for the GovernnAent of the Dominion of Canada 
 tinued. tho award made by us. 
 
 The award has been made in triplicate, and sent also to the Governments 
 of Ontario and Quebec. 
 
 Wo have the honour to remain, Sir, 
 
 Your obedient servants, 
 J. H. Gray, 
 
 D. L. JtlACPHEISOM. 10 
 
 To the Honourable 
 
 The Secretary of State for the Dominion of Canada. 
 
 (For Award see page 40.) 
 
 Copy of a Report of a Committee of the Honourable the Privy Council, 
 approved by His Excellency the Governor-General in (youncil on the 
 27 th February, 1871. 
 
 The Committee of Council have had under consideration the annexed 
 Memorandum, dated 25th February, 1871, from the Honourable the Minister 
 of Justice, to whom was referred the matter of the Arbitration under " The 
 British North America Act, 1867," between the Provinces of Ontaiio and Que- 20 
 bee, and ihey respectfully report their concurrence in the opinion expressed in 
 the said Memorandum, and advise thdt the same be adopted and communicated 
 to the respective Provinces of Ontario and Quebec. 
 
 Certified. 
 
 To the Honourable 
 
 The Secretary of State for the Provinces. 
 
 W. H. Lee, 
 
 Clerk Privy Council. 
 
 In the matter of the Arbitration under " The British North America Act, 1867," 
 
 between the Provinces of Ontario and Quebec, referred to the under- 30 
 signed, he has the honour to report : — 
 
 That under the 142nd Section of the said Act, the following Arbitrators 
 were appointed, viz. : — 
 
 The Hon. David Lewis Macpherson, by the Government of Ontario ; 
 
 The Hon. Charles Dewey Day, by the Government of Quebec ; and 
 
 The Hon. John Hamilton Gray, of St. John, New Brunswick, by the Gov- 
 ernment of Canada (his appointment dating from 21st March, 1868). 
 
(Appendix.) 
 
 103 
 
 870. 
 e have 
 !!!anacla 
 
 iments 
 
 N. 
 
 10 
 
 ouncil, 
 on the 
 
 inexed 
 'inister 
 "The 
 i Que- 20 
 3sed in 
 licated 
 
 ouncil. 
 
 1867," 
 under- 30 
 
 ;rators 
 
 3 Gov- 
 
 -fO/'' 
 
 That by a Despatch from the T.ieutenai't-dovenior of Quolioc to thu Socro- Record. 
 tary of Statu for the Provinces, heariii}^ dato the 1 Itli .July last, an ( )r«lcr of tlio —7 
 Executive Cour -I of that I»rovince was transmitted for the coJisidcmtion ofji, 4 
 His Excellency th^ Governor-fJeneiai, wiiich Order in Council sets forth, that ///iiw. 
 " Whereas the Hon. J. H. Gray has resided for more than one year, and has 
 become a resident in the Province of Ontario, an<l has heconu therel.y ilis(,iiidi 
 fled to act as snch Arbitrator, it has becimie the di \y of this Province to object 
 to the said H(m. John Hamilton Gray acting? as such Arbitrator." 
 
 That by a Despatch of the same date, th(! Lieutenant-Ciovernor transmitted 
 
 10f,vo letters, dated 0th July, from the Hon. Charles Dewey Day, addressed to 
 the Provincial Secretary of Quebec, resigning his appointment as Arbitrator 
 under the Section above cited. 
 
 That by a sid)se^iuent Despatch of the 19th July, the Lieutenant-Governor 
 submitted a copy of an Order of his (U)uncil, accepting the resignation of Mr. 
 Day, as the Arbitrator named for the Province of Quebec. 
 
 That by a letter, dated the 5th of Septembei-, Messrs. Gray and Macplier- 
 son, tlie other two Arbitrators transmitted a copy of the awan'l made by them 
 under . vjsaid Act, stated that snch award had been made in triplicate and sent 
 also to the Governments of Ontario lad Quebec. 
 
 20 That the award is signed only by Messrs, Gray and Macphers. n, and after 
 reciting that the three Arbitrators were appointed by the sev(>ral Governments ns 
 above menti.med, pro(!eeds to state that " the said Arbitrators having ti.ken upon 
 themselves the burthen of the said Arbitration," the .said John Hamilton Gniy 
 and David Lewis Macpherson, being a majority of the said A rbitrators, do 
 herel)y award, order, K.nd adjudge of and upon the premises, as follows, that is 
 to say, &c., &c., &e 
 
 That by a Despatch from the Lieutenant-Governor of Quebec, dated the 
 14th September, a copy of an Order of the Executive Council of Quebec- was 
 transmitted, protesting, for the reasons therein given, against any force or valid- 
 
 30 ity being given to tlie pretended judgment or award of tlie said two Aibitrators 
 by the Federal Authority, and advisiiig of the intention of the (lovernment "to 
 appeal for redress and justice in every constitutional mode which it is the pri- 
 vilege of British subjects under the British Crown to exercise when suffering 
 under injustice or wrong from the hands of any," 
 
 That by a subsequent Despatch, dated 22nd December last, from the 
 Lieutenant-Governor, he transmitted an Address from the Legislative Council 
 and Legislative Assembly of the Province of Quebec to His l^xceliency the 
 Governor-General, setting out— That the Hon. J. II. Gray having taken up his 
 residence at Ottawa, the Government of Quebec having deemed it incundient to 
 
 40 protest against his continuing in office, and to express their conviction that the 
 decision of the Arbitrators should be unanimims ; that the Arbitrator appointed 
 by the Province of Quebec resigned his office, tLjt, such resignation was ac- 
 cepted, and that the Government of Quebec at the same time protested against 
 any ulterior action on the part of the Commission which was thus rendered in- 
 complete. That Messrs. Gray and Macpherson, notwithstanding such represen- 
 tation, entered upon the examination of the questions submitted by the two 
 Provinces, without the Province of Quebec being in any way represented, and 
 
 N 
 
104 
 
 ( Appendix. 
 
 RECORD, made theu' award, against which the Lieutenant-Governor of Quebec protested 
 Schedule lY ""-J"^^ '"^'^ V • "^/- ^''^'^^ ^^'^ injustice of the pretended award is evident from 
 No. 4 -con- tlie tacts stated ni the Ad(h-ess. That tlio pretenchnl award is absohitely illegal 
 titmed. null and void, for the reasons therein set forth, and as liaving been rendered^'by 
 two Arbitrators, who, by the resignation of their colleague? remained wirliout 
 power or jurisdiction. That, therefore, the intention of "The British North 
 America Act" had not been carried out, and no title has been conferred 
 upon either Province in relatio.x to the credits, proi)erties and assets, which it 
 was the duty of tlie said Arbitrators to apportion and divide between the two Pro- 
 vinces. That the Province of (Quebec can neither submit to its property being 10 
 disposed of, or to any sum whatever being exacted from, nor can it accept any 
 property, credits or assets in virtue of the pretended award, and will resist by 
 . all the means within its power the execution of the said pretended award • claim- 
 
 ^^'^' ^1 ^Vr^^^'^f ' ^}^^^ J"*^^'^'^ ^® ^^*^"°' ''^"^^ ^^^^^ ^^« ^■^y'its as represented by the 
 British North America Act be maintained. They, therefore, pray that His 
 Excellency the Governor-General will be pleased to adopt such measures as are 
 best calculated io ensure justice to that Province. 
 
 The case now stands thus : — 
 
 The Government of Ontario maintains the validity of the award— The Gov- 
 ernment ot Quebec contends that it is altogether illegal and void, and declares 20 
 Its intention of appeahng for redress and justice in every constitutional m.ode 
 and the Legislature of Quebec, also protesting against its vahdity, asks the Gov- 
 ernor-General to adopt measures to protect the rights of that Province. 
 
 Now the Government of Canada has no power or means of intervening be- 
 tween the parties, of enforcing the award as valid, on setting it aside as invalid 
 or of granting the redress, or the measure of protection sought for by the Legis- 
 lature of Quebec. It is for the Government of Ontario, if it desires to enforce 
 the award, to take such steps as it may be advised that the law allows for that 
 purpose ; and it is for the Province of Quebec to take the necessary legal steps 
 to resist any action on the part of that of Ontario. 30 
 
 If the (Question of the validity of the award becomes a matter of ^'tigation 
 eitner Province will have the power of carrying it by appeal from the decision 
 ot any inferior tribunal to the Judicial Committee of the Privy Council as the 
 Court of last resort. 
 
 If the Governments of the two Provinces were to agree on a statement or 
 special case, with the view of submitting the question of the validity of the 
 award to the Judicial Committee, it would be the duty cf His Excellency the 
 Governor-Geneial, on being i)rayed so to do, to transmit such special case to the 
 Secretary of State for the Colonies, with a request that it shall be submitted to 
 such Judicial Committee for their opinion, under the 4th clause of the Inmerial an 
 Act, 3 and 4 William IV., chapter 4L ^ 
 
 If the two Governments do not agree upon a joint submission of the case, 
 It will be in the power of cither Government to pray Her Majesty to refer the 
 case, as stated by it, t'oi- the opinion of the Judicial Committee. 
 
 As it is obvious that if the Governor in Council were to assume to decide 
 the questions in dispute, the Province against whom such decision would be • 
 
 30 
 
jtested 
 it from 
 
 illegal, 
 ;red by 
 rirhoiit 
 North 
 iferred 
 hich it 
 ro Pro- 
 ' being 10 
 pt any 
 sist by 
 claim- 
 by the 
 it His 
 as are 
 
 e Gov- 
 jclares 20 
 mode, 
 bGov- 
 
 Qg be- 
 ivalid, 
 Legis- 
 tiforce 
 r that 
 steps 
 
 30 
 
 Ration 
 cision 
 
 LS the 
 
 snt or 
 )f the 
 y the 
 to the 
 cd to 
 perial 40 
 
 case, 
 r the 
 
 ( Appendix. ) 
 
 105 
 
 SfoTce whatever the nnl'"^'"'^*^ ''' ^°^ ^? ^"^^ ^^"^^^^ ^^"1^ have no RECORD. 
 
 be i^ivpn b^ wL T' ? "n^ep'gned recommends that no expression of opinion 
 
 si^nerlTpflXn f ^^"^"^^.^^^ ^^ Council, and for the same reasons the Cder S''^'"'' 
 
 John A. Macdonald. 
 
 (Translation.) 
 
 10 118. 
 
 Department of the Secretary of State for the Provinces, 
 No. 624. Ottawa, 28th February, 1871. 
 
 of Yot'^'aJvernment ^aTo.v V'^^'SV" ^«"' f^^^^^^^h, for the information 
 
 I have, &c., 
 20 CI Joseph Howe, 
 
 The Honourable Sir N. F. Belleau, '"'^^'^ ^^ ®'^'' ^°' ^^' Provinces. 
 
 Lieutenant-Governor, Quebec. 
 
 ^^^' ^ffi<^^ of the Secretary of State for the Provinces 
 
 No. 624. Ottawa, 28th February, 1871. 
 
 of yot'^'^olemmenr ^aTTv ' f''"' nV' ^7;,^^^^^'^' ^«^ '^' information 
 
 isift^ K f subject ot the Arbitration under the British North AmenVa A^f 
 1867, between the Provinces of Ontario and Quebec America Act, 
 
 ^^ ' I have, &c., 
 
 Joseph Howe, 
 
 The Honourable W. P. Howland, C.B., ^""'^^^'^ ^^ ^^^^e for the Provinces. 
 
 Lieutenant-Governor, Toronto. 
 
 ecide 
 Id be