.y the lat'i (rovernment under the Carnarvon Terms to construct the Esquimalt-Nanaimo section ; and^ stated that it would cost $4,000,000. ' I am satisfied, Sir, that the hon. gentlemar has placed the cost too high. The result of my enquiries in various quarters, satisfy me that it can be completed and set at work for $2,500,000. I will not trouble the House witli details on this subject at this lato houi. I will, however, under- tnlrc to show how small an outlay of capital and interest will be re- quired to construct the road, which when completed, will only be sixty-eight miles long. It will l)o remembered that the hon. the Minister of Finance, as part of his scheme to provide funds to meet the expenditure of the Dominion Govern- ment, asked and obtained the sanction of Parliament to a resolution authorizint; him to increase the issue of Domiuiou Notes to $20,000,000, on condition ot always holding for the redemption of sucli notes " in gold, or in gold and Do- minion securities guaranteed by the Gov- ernment of the United Kingdom, equal to 2') per cent, of the total amount of notes thenoutstanduig, and that at least 16 per cent, of the total amount of such out- standing notes shall be held in gold." Now, Sir, on tiiis financial basis I pro- pose to submit for the consideration of the House and Government certain state-' ments that will show conclusively that the means to construct the Esquimalt- Nanaimo section of the Pacific Railway are within the easy n ach of the Govern- ment, and that the expenditure will full so lightly on the country as not to make it necessary t» increase appreciably the an- nual charge for interest on expenditure in British Columbia. I estimate that the total cost of the Eaquimalt-Nanaimo sec- tion will be $2,500,000 ; that it may be completed within ifour years ; and that that sum may include the entire sum for working surveys, construction, and in- terest. I will not, however, enter into detail on this branch of the subject, but will direct attention to the following state- ments : Statements of Estimated Expenditure necea- saty to build and complete Esquiinalt- Nanaimo Snd Reservelheld 250,000 Total Go!i Reserve 375,000 Total interest on Gold Reserve paid 37,500 Tot.>l yearlv interest on Gold Re- serve, $375,000 at 4 per cent after completion of £ and N section of Caaadiaa Pacific Railway 15,000 Toval co.st of Esquimalt-Nraaimo section when completed 2,600,000 These statements, Sir, show conclusively how very stiiall an annual expenditure for interest is required to build the Esqui- malt-Nanairao section of the Pacific Bail- way, and to meet the interest on the Gold Rei ;rve after its completiou. Thn amount of the annual charge ia ao 'ns ir-ii- ficant that it can never be felt, whllsi the constniction of ihe Railway will moet ontr condition of the Carnarvon Terms, keep faith with Britiiih Columbia, and fuLiil a solemn obligation too long delayed in its fulfilment. Before leaving this branch of my subject, I will statelhat half of the $760,000 offered by the hon. member for West Durham, when in the late Govern- ment, to British Colnmbia as i» consideration for all futuir de lays — for postponement for an indefinite period — in construction of the Canadian Pacific Railway in that Province, is equal to the total Gold Reserve required to build the Esquimalt-Nanaimo section on the financial basis that I have proposed ; and that the other half would pay the annual interest on the Gold Reserve for twenty- five years aiter its completion, wifhout counting the interest on ii;, if it were in- vested. I will now endeavour, Sir, to show that no increased taxation will be required to pay interest on the money re- quired to build this section of the Pacific Railway ; and further, that the reduced ♦ 1 ♦ I ■m • expenditure for the Mail Service between San Francisco and Victoria, with the in- creased Customs ReceiptSjConsequent on the increase of population on Vancouver's Is- land, incident to the building of this sec- tion of the Railway, will show an aggre- gate gain and saving of several hundred thousand dollars over interest on Gold Reserve. It will be remembered that the Mail Service between Victoria and San Francisco costs annually $54,000 The contract expires on the Ist of July next. The new contract for the Service goes into operation at that date, and will cost only about |1 8,000 a year. That will make a saving of $36,000 per annum, or a total saving, in five years, of '$180,000. I estimate that the minimum increase of the population in Vancouver Island, between 1881 and 1885, if this Railway be constructed, will be 3,000. At $10*42 the present /)er capita of Cus- toms paid by British Columbia, the minimum increase of population 3,000 would, in four years, yield $125,040 additional Customs Revenue over the pre- sent Receipts. The following summary nhows the net aggregate gain and saving between 1880 and 1885 : SUMM.IRV. ■Saviuj;; on San Francisco Mail Sub- sidy during five years, 1880 to 18S5, at 336;000 JISO.OOO Increase in Customs receipts tn in- crease of population, the mini- mum 3,000 at $1042 ^«r capita.. 125,040 Total gross Gain and Saving $305,040 interest on total Gold Reserve of $375,000 from 1881 to 1885— (see prior statement) 37,500 Total net aggregate Gain and Sav- ing, 1880 to 1885 $267,640 From this showing, it is appai'ent that there need be no fear of increasing taxa- tion, or laying a heavy additional burden on the country, in order to build this Section of the Railway, and carry out the Carnarvon Award. On the contrary, it is establislied that there would be a net aggregate gain and saving of $267,640, showing that the construction of the Railway will be a profitable trans- action for the Dominion. I will now direct attention, Sir, to the estimates of Expenditure and Receipts of this section of the Railway, after it shall have been set at work. It is important that the Eaquimalt and Nanaimo Section of the Canadian Pacific Railway should yield enough annually to meet the yearly charge for maintenance, repairs, and operating ex- penses, and leave a net surplus besides. I know of only one railway on the Pacific coast of which the expenses and receipts would give an idea of what the probable expenses and receipts of the Esquimat-Nanaimo Section would be ; that is the Tacoma-Ralama Section of the Northern Pacific Railway, connecting Puget Sound with Columbia River, a dis- tance of 105 miles. Speaking from memory, and subject to correction, for I have mislaid my notes on the subject, the annual expenses of this Railway under all heads, a few years ago, was $105,000<; and the net profits over interest and charges, $37,00U. I give this statement merely from memory, without vouching for its exactness. I will, however, draw your attention to two short railways con- necting with this city of which we have statistics of the cost of maintenance. Re- pairs, and operating expenses in the re- turn of Railway Statistics for 1877-8 laid before Parliament. The first is the Brock- ville and Ottawa Railway, 86i^ miles in length, and cost of maintenance, repairs, and operating charges, $119,126; and secondly, the St. Lawrence and Ottawa, 59 miles in length,'and expenses, $ 11 2,559. Now, Sir, the Esquimalt-Nanaimo Sec- tian will be about 68 miles in lengtli, and I estimate chat the maximum expen- diture for its maintenance, i-epaii-s, and operating expenses will be $100,000. My reason for placing the expenses lower than ths two roads entering this city is, that the chief freight that will be carried for some yean will be coal, and according to the regulations with respect to moving coal on the Intercolonial in Nova Scotia, the shippers and consigness of the coal have to load and unload at their own expense, making a very considerable saving to the Government ; and applying the same regulation to the Esquimalt- Nanaimo Section. I reduce the expense to a maximum of $10u,000 per annum. Now, Sir will give a statement of my estimate receipts and expenditure of this sect)' 1 of the Railway after it shall have been fairly put in operation. It is as follows : 304046 ■TATIMINT OF KtCKIPTS AST) KXl'BNDITLhE. 40,000 tons coal delivered nt Victoria for local consuinption, at $1.00 per ton $40,000 60,000 tons coal, delivered at Victoria, or Esquimalt, to l>e shipped foreign, at the special rate ob the Intercolonial bo- tween New Glnsgow and Lon- dondcrrj iron mines, at G5 cents per ton 30,000 50,000 tonB coal, delivered to ship- ping at Nanaimo fok- exportation at 50 cents per ton r^25,(X)0 5,000 tons produce and murchaii- dise at 92 per ton 10 000 10,000 passengers at $2 20,000 Rojaltj on 100,000 tons coal rt^od within the Railway coal fields, at 20 cents per ton 20,000 Saving on carrying mails between Victoria and Nanaimo, per an- num 4,000 Sales of land, timber, &o 10,000 Total gross estimated receipts. . . .Ijl(53 003 Total annual expenditure for K. and N. Railw»y !>100,000 Interest on Oold Reserve. 1 5,000 ? 1 1 5, 000 ToUl Estimated Net Receipts. . . ■•? J3,00 J I .believe, Sir, that, in the near future, after this road shall have been put fairly in operation, my estimate of receipts ami net profits will belrerified ; and that when the continental portion of the Railway shall have been extended to-Engli.sh Bay, Burrard Talet, with rt ferrv to contu'ct I with Nanaiii.o, that llie passenger and Sfreight business that will be done by the Island Hectiou of tlie Pacific Railway, I will e.\cord any ciher short section on the whole tran.sconcineiital line. I have only now to direct attention to the Rail- way Land lielt on v' anrouvcr Island that will pass to the Dominion Government as soon as it is prepared to commence the construction of tiu.s ..oction. There will be a vei-y considcralle area of land, chiefly timber lai. \ in the bilt, that will prove valuable. l>ut it ia the coal fields along the line of Railway that will be most valuable. I estimated that between Eaquimalt and Nanaimo, within the Railway Belt, that there are 200 square miles of good coal fields. Now, the very least it will be worth to the Government, on the avenage, is $50,000 per mile. At that rate the 200 square miles would be worth ultimately $10,000,000— a sum equal to four times the estimated cost of the line between Esquimalt and Nanaimo. This show.v, iu connection with my estimates cfth'i net receipts that the building and operating ol this sectioTi would prove a proli tabic undertaking. I trust the Government, during Reces.s, will give this 8ubjeot tl'ir b' st attention, and at the next Session ff Parliament will submit a mrasuro iir its construction. '■; i