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It is 36 years and. more since I made my first appearance in the jT^ South Riding of Ontario County as a politician, and 29 years and a few months since I ceased to be the member for the Biding. I don't see to-day many of the faces that I used to see at political meetings during that time. < I seem to have survived most of my old South On- tario friends, and of my opponents too; and, f.A. Act the Dominion assumed $62,5,00,000 of the debts of the old Province, every other of the Confederated Provinces being allowed an equivalent. The debts of the Province of Quebec exceeded the sum named, but by how much was not known. Of the excess, whatever it should be, Ontario and Quebec were to pay each its share. To pay Ontario's share the Government kept unexpended as much as they could of the Provincial receipts, in order to pay such share when the amount shonld be ascer- tained. The revenue which was accumulated for that purpose, and either temporarily invested or deposited m the banks, amounte'd to about three and a half millions of dollars (or more exactly $3,595,645). Mr. Sandfield Macdonald, ihe Premier for those four years, is frequent- ly represented as having kept the money with a view to using the inter- est only in the annual expenditure, That is alleged to have been the policy of his Government, and the Reform party is blamed because of the money having since been used, or partly used, for public purposes. But it is a mistake or a misrepresentation to say that Mr. Macdonald'b policy was te keep the accumulated money untouched, and to use the interest only. He had no such thought. The following was his own express and distinct statement on the subject in the House in 1871 as reported at the time : — " For the first time in the history of this country thft House had to deal with a surplus, which had accumulated in the treasurv of Ontario. . . . The Government had been blamed for not disposing of the surplus before, but they had felt that it would be very hazardous to anticipate in advance the ascertainment of the liability which this Province would be exposed to as respected the disputable sum of the public debt assumed by the Domirnion Government. The Government had now ascertained that its proportion of that debt was not so large as to justify the withholding of that portion of the surplus which has to be devoted to the development of the resources ot' the Pro- vince, commercial and agricultural. There being such a surplus on hand the House would be recreant to its duty if it did not provide means for opening up the country. It had been urged that a portion of the surplus ought to be appropriated to purposes other than those proposed viz railway aid. There were, no doubt, a number of things which were worthy of consideration. . . . A? to other questions which honor- able members in the interests of their constituencies had brought uuder the attention of the House, while he admired their zeal, they must not hope that the Government would be in a position this year to deal with these other matters. The feeling of alarm, which would be justifiable if it was proposed to devote the whole of the surplus to aiding railways had no real ground, since it was proposed only to deal with a portion of the BUI plus, and still leave ample means wherewith to treat these other i - 5- \ I claimants with full liberality and meet every contingency. I mean to divide all I can this year, but I do not know with suflScient accuracy what our public debt ip, to apply it all." Tn that session (1871) a beginning was made by Mr. Sandfield Macdonald's Government of using the accumulations for permanent ob- jects, by appropriating a million and a half thereof in aid of railways. No one has ever since pretended that it was unwise to appropriate that amount to aid railways, thouji>h great objection was justly made to the absolute power which that Government took of selecting the roads to be aided, and of determining the amount of aid to each, without my refer- ence to the Legislature as to these important matters. ONTARIO CAPITAL EXPENDITURE. The million and a half appropriated for railwaya had not become payable, and was not paid, until after the change of Government. It has been paid out since ; and further appropriations and payments were from time to time made afterwards for the same object, so that up to the 31st December, 1892. the Province had paid in cash for railway aid nearly six millions of dollars (or more exactly $5,813,667), two millions of dollars more than the aggregate amount of the accumulations during Mr. Macdonald's Premiership. Besides this expenditure in aiding railways, large sums of our capital and revenue have also been expended, in and since 1872, in finishing buildings previously begun by Mr. Sandfield Macdonald's Government, and not completed at the time of his defeat and resignation. Also, in needed additions to these buildings from time to time since; and in new buildings and public worka The total expenditure on public buddings and public works from 1872 to 1892, inclusive, was $6,465,957 ; or nearly double the amount of Mr. Sandfield Macdonald's investments and cash deposits. These two heads of expenditure alone amount tt $12,279,624, or more than three times Mr. Sandfield Macdonald's investments and de- posits ; and these capital expenditures, so far from being in opposition to the policy of his Government, were actually in accordance with that policy. Besides the expenditure on railways and for needed public buildings and public works, large suras have gone annually for various objects in relief of the municipalities, such as the Administration of Justice, Education, Agriculture and Arts, Industrial Farms, the Maintenance of such Public Institutions as Asylums, the Central Prison, the Penetan- guishene Reformatory, aid to Hospitals and Charities, and various other objects of municipal interest ; and colonization roads ; not to speak of the distribution in 1874 and subsequent years of more than three millions of dollars ($3,388,777) amongst the principal municipalities of the Province in connection with the settlement of the municipal loan fund indebtedness of other muncipalities. If the Province had not had the early investments and the subsequent timber sales (of which I shall speak) to assist, no such expenditure could have been made for the important public purposes mentioned without going into debt (as is done for like purposes elsewhere), or without meet- ing the expense by a large direct tax on the real and personal property of the whole people of the Province in the same manner as municipal funds are raised. Expenditure on buildings and works by the other Provinces, and by the Dominion as well as by other countries, is made by incurring debta There are few, if any. States of the Union which have not incur- red debts for some or all of thede purposes. The debt incurred by the Dominion for such objects is upwards of 200 millionsof dollars. 6 Our expenditure is spoken of by our opponents as an expenditurt ** for carrying on the Government" — an expression which, used in this way, is misleading, and, I am afraid, is used often in order to mislead. The only items for expenditure for carrying on the Government, in the proper sense of that expression, are the expenses for Civil Governmen*, Legislation and the Administration of Justice. These three items amounted, in 1892, to only 8760,048 ; not much more than half what the Province receives annually from the Dominion, not to ppeak of our other sources of revenue. It would be a very poor political party which would confine attention to the three essential objects mentioned, and leave undone everything else which the Province has been doing through the expendi- ture of its money since Confederation, and with such satisfactory results. The assets still remaining to the Province consist of the following particulars : — PRESENT PROVINCIAL ASSETS, (1) Standing timber on some 170,000 square miles of territory. (2) Unsold Crown lands, including fisheries and mines of gold, sil- ver, copper, nickel, etc. (3) Unpaid purchased moneys on Crown lands heretofore sold and not yet patented. (4) A perpetual annuity or subsidy of about $1,200,000 ($1,196,872), to which the Province is entitled from the Dominion under the B.N. A. Act, and which is payable every half-year. Also a further annual sum of $142,000 payable in like manner under Dominion acts passed in 1873 tod in 1884. (5) Trust fund?, Dominion and Municipal debentures, Bank deposits, etc. In order to make up a balance sheet of our assets and liabilities in the same way as a public corporation or a private individual makes up a balance sheet, all the particulars I have named are to be taken into ac- count ; the first four quite as much as the other items mentioned. That this is so there is no room for dispute. Let me go a little into details as to some of the particulars. OUR STANDING TIMBER. The first of the five items is our standing timber. The value to the Province of less than half of it was, in 1887, officially estimated by the officers of the Crown Lands Department. The substance of the valuation was stated to the House by the Commissioner of Crown Lands in the session of 1890, and was, perhaps, stated on other occasions also. It is set forth also in a Sessional paper brought down last year to the Legislative Assembly. On no occasion was any serious attempt made in the House to disprove or dispute the reasonableness or accuracy of the estimate. At the time of its being made about 20,000 square miles of the timber territory was under license. These licenses gave to the licensees (subject to certain conditions) the right to cut the timber on their limits, and for this right they pay an annual rent, and also pay specified dues on the timber which from time to firae they cut. This licensed territory of 20,C00 square miles was estimated to contain at the time of the valuation half a million feet to the square mile, the stipu- lated dues on which would alone be ten millions of dollars. (I may men- ttion here that of this licensed territory the greater part had been placed under license before Confederation.) The area of unlicensed territory included in the estimate was 63,410 square miles. On that part of it which forms the territory formerly in dispute between Ontario and Manitoba, say 39,000 square miles, Col. Dennis, as Deputy Minister of the Interior, officially estimated the tim- ber at 26,000 millions of feet (b.m.) Thia figure was accepted because i the Crown Lands Department had no estimate of its own as respects this part of our territory. The officers of the department estimated the remainder of the 63,410 square miles then unlicensed as containing on an average a million feet to the square mile. The dues payable to the Province in respect of this quantity of timber, as estimated by M r. Dennis and Grown Lands officers would be $50,410,000, and, assuming the quantity of timber to be substantially as estimated, the bonus ob- tainable for the 63,410 square miles will be $75,615,000, or about an average of $1,200 a square mile. The bonus is dependent upon the esti- mate which bidders make of the quantity of timber. This bonus for yet unlicensed territory, plus the dues in respect of the whole 83,410 square miles of territory .licensed and unlicensed, make.out a tota) value of $126,« 025,000.* In making the estimate as to that part of the C3,410 square miles not included in Mr. Dennis' estimate, the officers of the Crown , Lands Department availed themselves of all the available information of surveyors, forest rangers, timber explorers, mining explorers and others, and applied to the area what seemed a reasonable average. The estimate of $1,200 per square mile seems moderate. The last sale of timber limits, 1892, brought an average bonus of more than three times this amount, and the previous sale of 1887 brought an average of more than doubb $1,200. At the sale of 1892 the highest bonus was more than fourteen times, namely, $17,500 per square mile, and at the sale of 1887 the highest bonus was more than five times, namely, $6,300. The territory so estimated is exclusive of so much of the territory north of the 48th parellel of latitude as lies east of the territory formerly , in dispute with Manitoba. This unestimated territory contains 89,000 square miles, and there is some timber on it, but (as the return states) " no such exploration or examination has been made by anybody as would warrant the formation of any opinion as to what it would pro- duce." The officers' estimate, therefore, leaves it out of account alto- gether. With regard to the estimate of Mr. Dennis and our officers, some de- ductions have to be allowed. Sales have since taken place, there have been fires, and some timber has been cut. The sales since the estimate have been of about 1,500 miles (1,468), the bonuses obtained for which amounted to about $4,000,000 ($3,973,568). Our opponents may also {when brought to close quarters) repudiate the estimate of the Domin- ion officer in respect of that part of the territory which has not been verified by other evidence. To avoid all possible controversy, I am con- tent for my present purpose to set down our yet unlicensed territory, the 63,410 square miles, and the 89,000 together (if you like) at $50,000,- 000 — a sum less than half what the facts mentioned would indicate to be the correct sum. If the territory is put into the market from time to time in future years as occasion may require and not otherwise, and with the same prudence as to time and mode of sale as in the case of the sales already made, it is a most reasonable expectation that at least fifty mil- lions may be calculated upon from this source, with an addition more than equal to the interest until the time of sale. The prices have been steadily rising hitherto, and in the judgment of experts are more likely to rise beyond present prices than to fall below them. The Opposition say so also ; they argue that because prices are sure to rise we should not sell our timber territory at all, whatever their party does at Ottawa, and whatever the liame pressure would make them do at To- ronto if, unfortunately, they should obtain power at Toronto m well AS at Ottawa. *See note at foot of page 16. 8 Snch a system as the Dominion Government has pursued in regard to Dominion lands, without complaint from their supporters in or out of Parliament, would easily deprive the Province of the millions which our unsold limits are destined to realize under the policy pursued by the Reform Government of the Province. ONTARIO AND DOMINION METHODS CONTRASTED. The Province has realized so far from the bonuses obtained for timber limits nearly !B6,000,000, ($5,859,592), besides ground rents and timber dues. The amount realized, including rents and timber dues, according to last printed papers, is nearly $16,000,000 ($15,745,526). This large ^um, as I have already intimated, has helped to enable grants to be made in aid of important railways, and for the erection of buildings and other works needed for the public service. To get the Ln^i ^)riceB for the timber limits, times of prosperity have been chosen for the sales, the sales have been largely advertised, they have been m ie by auction; the limits have gone to the highest bidders, whether these bidders hap- pened to be political friends or political foes, and by all these means the highest prices going at the time of the sales or before the sales have in every instance been obtained. The way of our opponents in dealing with the timber limits of the Dominion, where unhappily they have had power, has been different. Their sales, as a rule, have brought a mere song, they have not been advertised beforehand ; have not been by auc- tion ; have been made privately, and the purchasers have, as a rule, been political friends of the Dominion Government, or the associates of poll- tical friends, often members of Parliament, and not persons engaged or intending to eng'^ge in the manufacture of lumber. These persons are allowed to buy at nominal prices in order that they may put either into their own pockets or into the political election fund the difference be- tween what they pay and what would be obtained if the sales were con- ducted like those of the Reform Government of the Province. To prevent such scandals, Mr. Blake, in 1882, moved in the Houso of Commons that " It is expedient to apply the just principle of public competition to the granting of timber limits," and the motion was nega- tived by a party vote. The party wished to retain the power of rewarding in this way political friends or of obtaining money for elections. Take a few well known casca illustrating the system pursued by our political opponents where they have power. WHITE FISH RESERVE. Take, for example, the case of what is called the White Fish Reserve. This reserve was one of the limits sold by the Province in 1872, and be- fore my Premiership. The land was then supposed to belong to the Province. The price obtained at the sale was $9,000, or about $100 per square mile. The locality was at that time wild ; there were no railways of which advantage could be taken, and the limit was, in conse- ?uence, difficult of accesa All these circumstances affected the value, 'he Dominion Government afterwards discovered that the limit was an Indian reserve, and, in 1885, they re-sold it, privately and secretly, with- out advertising, without communication with us, and without our know- ledge. The limit had increased in value since 1872, the G.P.R having in the interval been constructed through the limit and the country opened up, good facilities created for getting in supplies and getting out logs and timber, and there had been no depreciation in i\ny other respect. Tet, with all these reasons for an increased price in 1885, what did the Dom- 9 inion Government accept from their friend who purchased 1 It is almost incredible, but the undoubted fact is, that not only did they not demand an increased price, but they did not demand or obtain one-tenth of the sum which our sale of thirteen years before had produced ; in fuct not much more than one-thirtieth. In a word, the trifling sum of $316 was accepted instead of the $9,000 which we had got thirteen years before, or $3.50 a mile instead of our $100 a mile. There is no pretence that this sale can be defended as correct or proper. The purchaser shortly afte vds sold for $15,000 the interest which he had bought for $316, and iu short time afterwards there was a re sale at a still larger sum. hunter's island. Then agf i.., take the case of Hunter's Island. This island wns in the dispute jcrritory, and contained a large quantity of valuable timber., Lovf, a tier the award had been made deciding the island to be within cur boundaries, and while the Douiinior Government was, notwithstand- ing, dibpiiting with us as to the title, that Government andertoo!:, without any corauiciiication wi*h us, and witliout advertising, ^osell this limit also to a number of j arsons, and witlout exacting any bonus whatever. The purchasers immediately after the?r purchase put the limit into the market at $600,000, and would have got that sum from Chicago pi^rchasers, but the intending purchasers discovered in time that the Ontario Government claimed the island, and they therefore declined to pay. What the Dominion Government had attempted was to give away without any bonus a property estimated at $600,000. The Province could not stand that way of dealing with the property of the Province. ANOTHEft CASE Take, again, the scandalous purchase hy Mr. Rykert. That gentleman was at the time a member of the House of Commons, and he got at private sale, without any bonus, a limit for which he and his partner in the transaction almost immediately afterwards received $200,000. This was not in Ontario territory. The sworn evidence in the McGrecvy case shows that the parties who get wrongful profits in transactions with the Government are expected to turn over a large share of these wrongful profits to the election pur- poses of the party, and that they do so accordingly. Looking at the timber and land policy of our opponents where they hftve power, and on the fruits of that policy, as compared with the policy of the Ontario Reform party, .and the fruits which the Reform policy has yielded, the Opposition carpings at our financial management are absolutely grotesque. Thus, they occupied a great deal of time in the Committee of Public Accounts to show that the officer whose duty it is to look after the supplies of groceries to the Toronto Asylum had allowed the sellers to get for some of the articles somewhat more than was necessary ; that a cent a pound might have been saved on some currants and some tapioca ; that a few c^nts a bottle might hav.: >eeu saved on some Anchovy and Worcester sauce ; that three cents a gallon might have been saved on some vinegar ; and so on ; that an uncon- scionable number of eggs appeared in the supplies for one of the medical officers, who lived in the asylum ; and that some objectionable luxuries appeared amongst the supplies obtained by others. I suppose every housekeeper sometimes finds that he might have got this or the other item of his supplies at a little lower rate than he paid if he had been more wide awake and better informed ; and an officer will sometimes be too lenient in regard to supplies desired by brother of- 10 ficers. But I do not suppose that any Government 4n the world has managed to avoL^ overcharges or waste of supplies to the same axtent as the Ontario Government has. If any have occurred they ate of trifling character, and nobody supposes or pretends that they occurred with the knowledge of any member of the Government. They are the merest bagatelle as compared with the proved losses to the country in Dominion matters from private arrangements with contractors and with grantees of timber limits ; in regard to which it cannot be said that no member of the Dominion Government for the time being had anything to do with them, and yet the Provincial Opposition do not condemn them. We have taken steps, however, to prevent the possible occur- rence of even these small overcharges and excesses in future. The effort to make capital out of them is all the more absurd in view of the fact that the aggregate expenaiture in the maintenance of our institutions, including ail supplies, is undeniably very small as compared with most other institutions of the same kind in the United States and elsewhere. And yet no institutions of the same kind anywhere are conducted more efEciently or successfully than our own. flxports from other countries who have visited us from time to time so reported on returning to their own country. Let me give you some samples of the comparative cost, as taken from official reports. Thus, the average annual cost per patient in the Ontario asylums, after taking into account all the alleged over- charges for groceries, is less than half the average in the li^e asylums in Buffalo and Utica. The averages, in the asylums at Trenton, New Jersey ; Columbus, Ohio; Pittsburg, Penn.; and Eulton, Missouri, are 50 per cent, more than the average in Ontario. The Belleville Institute for the Deaf and Dumb has a like record ; the like institutions in New York State costing 50 per cent: more per patient annually. In like manner, the cost at the Brantford Institute for the Blind is greatly less than in similar institutions in New York State and city, and in Maryland, Illinois, Pennsylvania, Kentucky, and Massachusetts. UNSOLD CROWN LANDS. (2) The second item of Provincial assets which I have mentioned is our unsold Crown lands. Of some of these lands free grants are being made under statutory authority ; and of the value or probable proceeds of such lands as may be sold, there has been no official or other estim- ate, and I, therefore, in reckoning the Provincial assets, put dorru no sum for these lands. Valuations, however, have been obtained of the site of the old Parliament buildings and other Government property in Toronto, which the Legislature has appropriated for sale, towards covering the expenditure on the new Parliament buildings, and I put down for these lands $500,000. DEBTS ON PAST SALES. « (3) The third item of our assets which I mentioned, is the unpaid purchase money on Crown lands already sold. An approximate state- ment recently prepared in the department shows the amount, with in- terest, to be about $800,000 (or, more exactly, $827,696). ' As all may not be realized, let me, to avoid all controversy, name one-half of this sum as the value of the item, say $400,000. THE SUBSIDY. (4) The fourth item named of our assets, is the value of the an- nuity or subsidy to which the Province is entitled from the Dominion under the B. N. A. Act The amount of this annuity under the B. N. A. Act is $1,196,872, or nearly $1,200,000. A perpetual antiuity of '' 11 that amount ia of the present value of about $24,000,000, reckoning money as worth 5 per cent. If the money, in case it were in hand and invested, would not bring 5 per cent, (as it would not), the present value of the annuity to the Province is more than would be represented by a capital of $24,000,000. No business man and no company, in mak- ing up a balance ^heet, would put such an annuity down at less than that sum. Occasionally it is suggested that the subsidies to the Prov- ince should be abandoned, and the Provinces left to raise by direct taxes what they now receive from the Dominion Government. This, how- ever, can "bnly be done on the common consent of all the Provinces ; and there is no chance whatever of the other Provinces agreeing to such a proposal, whatever Ontario might be willing to do. I doubt very much if a majority of even the people of Ontario would be willing I to give up the subsidy at the expense of adding the amount to their I municipal taxes, notwithstanding all that could be said in favor of that I course. THE FOUR ITEMS. The four items which I have mentioned at the low estimates at which I propose for my present parpose to take them, amount to $74,900,000, though that amount is greatly below what the facts and evidence point to as the proper and reasonable amount. This amount is arrived at, as you will have observed, after making liberal deductions, setting down nothing for unsold Crown lands, except the lands in Toronto which are held for sale, and setting down nothing for the 89,000 square miles of territory of which no estimate has been made. Nor have I set down as aosets our Parliament buildings, our Agricultural College buildings, our Model and Experimental Farm, our Mimico land, our School of Practical Science, our Central Prison, our Reformatory, for Females, our Penetanguishene Reformatory, our Asy- lums for the Insane at Toronto, Hamilton, London, Kingston and Mimico, and for Idiots at Orillia, our buildings for the blind at Brantford and for deaf mutes at Belleville, and our lockups and other public buildings and public works throughout the Province. These cost many millions, «nd are worth, for the purposes for which they are used, ell that they have cost. But no other use of any of these being contemplated, except the public uses to which they are now put, I omit them from the state- ment of saleable or revenue-producing assets. SURPLUS ASSBTS. Then come the items which successive Treasurers, from the time of the Treasurer the Hon. E. B. Wood, have been in the habit of bringiag together in their financial statements to the House on going into supply each session. They consist of cash in hand, and ecme items which are regarded as quasi-cash items. The following are the particulars : — (1) Trust funds in the hands of the Dominion Government, as to which there is no dispute, and on which the Dominion pays the Province interest at 5 per cent. These funds on the 31st December, 1892, were stated in the Treasurer's financial stfitement, in the session of 1893, to be as follows : — The Upper Canada Grammar Schoool fund $ 312,769 The Uppdr Canada b\iilding fund : 1,472,391 The Land Improvement fund ' 124,686 $1,90CS5 (2) The Common School fund in the hands of ihe Dominion, and of which Ontario's share was set down at $1,441,882. (3) Dominion debentures on hand, in December, 1893, and dnce ■■M 12 paid by the Dominion, and now represented by cash on^eposit, bearing interest $200,000. (4) Municipal drainage debentures on hand, $328,959. (5) Other obligation? of municipalities for other drainage works, $167,321. (6) Bank balances, December 3lst, 1892, since increased to a much larger sum, $613,787. (7) Another item of assets which the financial statements contain, is the balance of the open account between the Dominion and the ProT- iace. This account is now under investigation by arbitrators. The amount was stated by the Ontario Treasurer last year as $1,590,519. From this sum is to be deducted the amount of Dominion bonds issued to the Province by the Dominion in 1891, and mentioned m the same statement of the Treasurer, $500,000 ; making the balance of these two items, $1,090,519. ' The seven last named particulars amount to $5,752,405. Add to this the $74,900,000, and we have as the total amount of our assets, at very lowest estimates, not less than $80,652,313. The debentures, which are amongst these particulars, may be sold at any time ; and as for the funds on which the Dominion is paying us five per cent, interest, the Dominion would be only too glad to have us take, at par, the whole principal as soon as the exact amount is ascertained, as the Dominion borrows money at less thatt the five per cent, paid to us. Accordingly, in 1891, the Dominion willingly gave us debentures for half a million of dollars, which at the time happened to be needed by the Province, and which was all we needed ; and no doubt debentures, if we wanted them, would willingly be given to us for as much more of the Dominion debt as we should desire at the market value of such de- bentures. OPEN ACCOUNT WITH THE DOMINION. Speaking of the last item of the seven — the open account — I may mention that the Dominion account, as prepared by the Dominion Min- isters and officers before July, 1893, and the Dominion accounts rendered to the Province and presented to Parliament before that date, did not vary greatly in their result and efiect from the statement of the Ontario Treasurer. The accounts on both sides had proceeded on an arrange- ment duly made between representatives bf the two Governments. But in July last, before the Arbitrators, counsel for the Dominion repudi- ated that arrangement, claiming that the Dominion had no legal power to make it; that it was ultra vires, and not in accordance with the sta- tutes, passed in 1873 and 1884, for the assumption, by the Dominion, of the balance of the debts of the Province of Canada beyond the amount provided for by the B. N. A. Act (the other Provinces receiving an equi- valent). That the arrangement was in accordance with the actual in- tention of these statutes is evidenced by its being the construction put on them for several years in the accounts of tha Dominion Government, whose members were the authors of the statutes. As regards the legal construction of the language of the statutes, the Arbitrators decided in favor of the argument that the construction which had been {^reed on, and for years acted on,' was not the legal constructiolft. The effect of this decision has been thus stated by the Hon. A. M. Ross, who was the Ontario Treasurer at the time of the accounts being rendered : " The Dominion Government now asks the Arbitrators to declare that the agreement made by Sir John Thompson and Mr. Foster was ultra vires, being beyond their powers. In this the Arbitrators concurred. The effect of this was to restore to the Province of Ontario the sum of $,2- \ ? 13 • 848,000 as an interest-bearing asset. Now, deduct from the sum $1,- 544,000 due to the Dominion by the revised accounts, and there would be left a sum of $1,304,000 to the credit of Ontario, or $214,000 more than Mr. Harcourt claimed. The account which is now being argued — that of interest — is not equivalent to $1,800,000" (as had been falsely al- leged in Conservative journals), '* but only involves an amount of about $300,000 in all." The practical result of the decision is, that Ontario has now another un- disputed asset of $2,848,000, which was not in the Treasurer's statement ; and the statute, under which the Province is entitled to it, expressly de- clares that this amount, and the equivalents given by the statute to the other Provinces, " shall be deemed capital owing to the said Provinces respectively, bearing interest at five per cent, per annum." On the other hand, the Province has a liability arising from the separation of the item from the open account. The exact amount of this liability depends principally on the decision which the Arbitrators may give on an inter- est question now under deliberation by them. In the meantime^ and for my present purpose, instead of swelling the amount of assets by the whole sum of $2,848,000, and inserting ou the other side the un- determined liability of the Province, created by the taking of that \ item from the open account, I set down the diflference between that asset of $2,848,000 and the counter liability, as an asset of $1,090,- 619. LIABILITIES. Then, as to the liabilities of the Province. What are these ? The only liabilities on the 31st December, 1892, were (1) some small sums mentioned by the Treasurer in his statement presently payable, and amounting in all to $19,099, and (2) some outstanding railway certifi- cates and some annuity bonds, issued under statutory authority to meet railway obligations, and payable in future years without interest. It has not been the custom of either the Dominion or the Province to reckon such annuities as debts to be taken into account in reckoning up the debts of the country. The reasons for this I shall state later on. If we 'hould reckon them as ordinary debts, the amount to be set down for them on business principles is their present value, not their face amounts, as they are not " presently payable," and do not bear interest before becoming due. It is obvious that specific sums payable without interest in future years are not of the same value as the same sums would be if payable immediately, or if payable without interest being added from the present time. When we take into account, however, as I have been doing, the whole of the Provincial assets, the amount of these assets is so large that it is of little moment for any practical pur- pose whether we set down the railway obligations according to their face amount and as if presently payable, or make a deduction in order to take into the account what is their present value only. The gross amount of the railway annuities and certificates is $3,976,998, and the present value, according to recognized rules of calculation, is $2,336,108. Adding the $19,099 presently payable, the liabilities in one case would be called $2,355,207, and in the other case $3,996,097. THE SURPLUS OF ASSETS. The surplus of assets would amount in the former case to $78,297,- 106, and in the latter case to $76,656,216. These balances are arrived ,at, you will have seen, by making up the account of our surplus, not in any fafaciful way, but as it would be made up by a correct, cautious, and certainly not over-sanguine proprietor, for his own inform&*:idn or that of others. N / rMioMiii 1 ^j^^ 14 THE RAILWAY SUBSIDIES. Though the surplus in respect of the Ontario's Treasurer's special items, is upwards of five millions of dollars after deducting all liabilities presently payable, and th^^ugh our surplus is more than seventy millions when all our revenue-producing assets are taken into account, and all liabilities deducted, including those not presently payable, yet Opposi- tion speakers and writers choose to say, and they sometimes get the un- thinking to believe, that any supposed surplus is a myth, and that the true state of the assets of the Province is to be ascertained by setting off against the special items mentioned in the Treasurer's annual statement (omitting all other assets) the total gross amount of our liabilities for railway annuities and certificates, though not presently payable, and without even making any deduction in consequence of these liabilities not bearing interest before becoming payable. Other opponents are still more wild in the same direction, for they would also exclude from the account of assets all the funds of the Province in the hands of the Do- minion, except any represented by debentures. As to the railway cer- tificates and annuities, they say that, though not yet payable, they are debts of the Province. I agree that, in an account setting forth (as I, have been doing) all our assets on one side, all our liabilities of every kind should be set down on the other side, and at whatever sum may be proper. But if in the account or balance sheet you only set down some of our assets, and, in fact, but a small part of them, what then 1 Why set future liabilities against these special assets 1 Why set future liabilities, which bear no interest, against items which bear interest, when the ac- count leaves out all other assets 1 Why not set future accruing liabili- ties against future accruing items ot our assets ? The accruing in- terest on the items of interest-bearing assets will be far more than enough every year to pay accruing annuities and certificates coming due in that year. The interest received on the items specified in the Treas- urer's last financial statement, amounted on the 31st December, 1892, to $336,739, while the railway certificates and annuities due in 1893 were $219,616 only. The amount for the Province to pay in 1897 will be considerably less than it was in 1893, and there will be a further drop in subsequent years. So, again, even if we had not that interest coming in, we shall have an annuity accruing to us every year from the Dominion Government of more than five times the railway annuities and certificates which we shall have to pay in that year ; and this annuity is not amongst the assets from which is shown the surplus of five millions or more. What common sense, then, ia there in saying that the annuities which in future years we have to ^hj are not to g'* against either the ar auity to be received, or the interest aecruing in those years, but ^against our cash capital only ? • THE DOMINION VIEW OF RAILWAY SUBSIDIES. The Opposition pretence, that, in stating the amount of our debts presently payable, these other liabilities should be added as ordinary debts, is specially curious in that the argument is in the direct teeth of the practice of their own party at Ottawa, as I have already intimated, and though the Dominion practice has not the support of any accruing^ revenue worth speaking of from timber or Crown lands, or from other sources, corresponding with the items of Provincial assets which the ' Treasurer names in his statement The Dominion treats all annuities, whethOT terminable or permanent, as on the same footing with the pay-^ V 'mm^mtimiMmtHii^^ A.i«4*lLuMtAMMM M 15 ments which have to be made every year for Legislation and Govern- ment, and other matters of yearly occurrence, and I am not aware that any one has made any objection to that method in tu? case of the Dominion. Again, the Dominion has issued railway certificates, payable at future annual dates, like the railway certificates and annuities of this Province. But they are never set down in the public accounts, or otherwise, aorong the debts of the Doininion. So, in the Year Book for 1892, published by the Dominion Govern- ment, the Ontario railway annuities are expressly treated in like man- ner. This book has a table (p. 176) of "Provincial debts," and debts of all the other Provinces are given by the Dominion in this table, but none of Ontario. Our annuities are thus spoken of in this Dominion book: — " The Province of Ontario has sold annuities to the extent of $1,432^519 to provide for railway expenditures, but these amounts are paid off by a fixed term every year, and, while a liability, do not stand on exactly the same footing as ordinary public debts." But railway annuities are not the only annuities payable by the Do- minion and uever included in its public accounts or otherwise as debts. Large annuities are payable by the Dominion to the several Provinces under the B. N. A. Act, or under rjubsequent Dominion legislation, and these, like the railway annuities are not added up or capitalized and in- cluded in the amount set down as debt, yet they are liabilities just as much as the railway obligations of this Province are liabilities and are in fact more like debts, because they are permanent annuities, inscead V of being terminable like the railway annuities of the Province. But in the judgment of the Dominion Government, though liabilitiea, these annuities and future annual payments do not stand on the same footing as the public debt, but are like any other necessary payments of yearly occurrence. So, also, the Dominion is under liability for annuities to retired ' officers of the Government, amounting annually to about a quarter of a million dollars, considerably more than Ontario's annual liability for railway certificates and annuities, and these Dominion obligations are not taken into account as Dominion debts. , Thus, in this matter, as in so many others, our opponents pretend to find fault with the Ontario Government for things which as support- ers of the Dominion Government they have to defend, and on far in- ferior grounds. RESULT. * In view of the facts which I have mentioned to you this evening, the people of Ontario, and especially the Liberals of Ontario, may well con- gratulate themselves on what the careful administration of Provincial affairs has accomplished for the Province ^inca Confederation, and on the noble provision also which still remains for the future, if the govern- ments of that future shall be as prudent and correct in their dealings with the assets of the Prpvince as the Governments of Ontario have have been in the past. How others than Reformers may be expected to act if they should obtain power it is reasonable to judge from what they have done and are doing in Dominion affairs, where they have so long had power. Don't trust them, mfen of South Ontario, with Provincial power like- wise. Trust rather those whose fidelity has been proved by twenty \ three years of (T venture to say) good government and prudent ad- ministration. Trust rather the Government and the party of which vour own representative is an honored member. ia.li I'rirh'iiifrilM . ■MMiM -■■T" 18 BESOLUTION OF CONGRATULATION. As soon a8 the cheers which followed the speech ceased, Mr. J. L. Fowke, seconded by Mr. P. B. Hoover, moved the following resolution : " This meeting desires to express its pleasure in welcoming the Pre- mier on this visit to his old constituency, which will never cease/ to be proud of the fact that it was the first to return to the Canadian Parlia- ment that statesman who has done so much to place and maintain our fair Province in the enviable position which it now occupies. " We have watched with the most friendly interest ;|nd admiration the Premier's able conduct of our Provincial affairs, his masterly de- fence of our Provincial territorial rights and liberties against all aggres- sors, and his careful and economical husbanding of our financial resources. We have been delighted with the exhibition on this occasion of that strong and pomprehensive grasp of public questions which he has always shown, and we rejoice at this opportunity of expressing our renewed confidence in him and bis Government, and our wish that he may long continue to control the helm of state as Premier of this Province." NoTB. —The Premier, in the above speech, set down the value of the timber of the Province at ♦50,000,000, pointing out that the valuation of Mr. Dennis, the Deputy Minister of the Interior, and other facts mentioned, showed a value in 1887 of $126 026,01^0 ; but that, to avoid all controversy as to value, he placed the value at the reduced fit(ure of $50,000,000. Oddly enongh, after the speebh was delivered and reported In the public Journals, the Lieutenant Governor received a despatch from the Dominion Government, dated 23rd February, 1891, to the effect that Mr. Dennis' estimate was really but 2,000 million feet, b.m., and not as Mr. D. himself had stated, 26,000 million feet. Mr. Dennis gave the larger figure in a letter so long ago as 1879, when applied to for information by a gentleman, Mr. Dymond, who had asked for the facts for the purposes of a pamphlet which he was preparing for the Ontario Government respecting the extent and resources of our North- West Ter- ritory. The naming of 26,000 millitns instead of 2,000 millions is attribiited to an error in tran- scribing the letter from shorthand notes. It appears that on receiving a copy of the pamptilet, Mr. Dennis and his secretary wrote to the author of the pamphlet, stating the error, and suggesting that it should be corrected in some way. As the pamphlet had been published, and as Mr. Dymoud doubted whether the new figure was mote accurate than the one first given, he did nothing in oon- Bequence of the letters. It is curious that those 'who were r< sponsible for the original statement idlowed it to remain for 15 years without public correction, so far as known Still, accepting the correction, the reduced amount of 60 million dollars, named in the speech as the value of our timber, is 50 per cent, under the real value according even to the corrected estimate, as the follow- ing figures shew :— Tlie area of unlicensed territory in 1887 according to the Crown Lands officers, estimated by them and not by Mr. Dennis, was 24,410 square miles, and was esti- mated by thejii to contaijn an average of one million feet per square mile, the es- timated bonus per thousand being $1.50, and $1 for dues, together $2.50, which would make the value of the 24,410 miles : , . . $01,025,000 Add for the remainder at the reduced estimate of 2,000 millions of feet (instead of 26,000 millions), and the value would be : 6,000,000 Add for^e dues on the licensed territory according to the estimate 10,000,009 Making in all for the standing tlmlber in 1887 no less a sum than $76,025,000 instead of the Premier's more moderate estimate of $50,000,000. The diCference will cover several tim)M over the deductions for sales timbor cut, and fires since 1887. So much for the value of one item of those Provincial assets which either produce revenue now or are available for that purpose in the future. , ■■MHi