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PROVINCE OF QUEBEC. 
 
 ITS FINANCIAL POSITION REVIEWED 
 
 AMD A 
 
 COMPARISON OF RESU 
 
 OP THE 
 
 PRESENT AND PASF ADMINISTRATIONS. 
 
 V 
 
 SPKKCH OK 
 
 L G. DESJARDINS, Esq., M. P. P., FOR MONTMORENCY, 
 
 IN REPLY TO THE SPEECH ON THE 
 
 BUDGET BY THE TREASURER. 
 
 M=o(waooaanr-w- 
 
 Delivered in the House of Assembly, the 20th and 2 hi June, 1888. 
 
 QUEBEC. 
 
4- 
 
S'!> 
 
 ■* J '■> 
 
 ! ■^ 
 
 4 ' ■,» 
 
 SPEECH OF 
 
 Mr. L G. DESJARDINS, M. P. P., FOR MONTMORENCY, 
 
 ON THE 
 
 KiNANCKS OK THK PrOVINCK, 
 
 Delivered al Vie sillings of June 20lh and 2 hi, 1888. 
 
 Mr. Speaker,— The constitutional Opposi- 
 tion is one of the most important wheels in 
 our parliamentary machinery, because it is 
 in the interest of the public that the general 
 policy and administrative acts of the minis- 
 ters responsible to this house and to those 
 who have elected us, should be submitted to 
 the free discussion of the representatives of 
 the people. The role of Her Majesty's loyal 
 opposition is that of criticsim, but to be 
 useful and attain its object that criticism 
 ought to be just in principle, should be based 
 on indisputable facts and should recommend 
 itself to the public approval by the sincerity 
 of those who assumed the responsibility of 
 it. I 'Till consider it my duty to conform 
 strict'^ to those essential conditions of all 
 deliberation that is profitable to the country 
 in the remarks that 1 have to make in reply 
 to the able speech on the budget of the hon. 
 treasurer, (Mr- Shehyn.) 
 
 We are all agreed that the proper man- 
 agement of our financial affairs is one of the 
 questions that interest our province and, I 
 will add, the country in general, in the 
 highest degree. .United on this point our 
 divergencies of opinion commence and be- 
 come more and more marked, as we 
 study the situation of our finances, 
 the policy which has produced it and more 
 particularly the responsibility of the public 
 men who have for several years directed or 
 criticized the march of affairs. The recol- 
 lection of our past discussions on the same 
 subject is still present to the memory of all 
 those who have given it any attention. It 
 is not necessary to insist too much on that 
 point, in order that my honorable colleagues 
 may have a clear knowledge of the starting 
 point of the debate in which I am now en- 
 gaged in the name of my honorable friends 
 
 of the Opposition. Besides, the hon. trea- 
 surer (Mr. Shehyn) gave a resume of our 
 former controversies in the opening words 
 of his speech of Friday last I have 
 a perfect right to make use of his own re- 
 maiks to show how, by carefully following 
 the direction indicated by the principles and 
 the facts, we can assuredly arrive at conclu- 
 sions very different from those which he has 
 drawn from them with such apparent satis- 
 faction. 
 
 The Hon. Treasurer said : 
 
 " We promised to work with energy for 
 the restoration of good order in the finances 
 of the province; before submitting the 
 budget it is our duty to show that 
 we have kept that promise. Of course, in 
 the brief period that has elapsed since our 
 accession to power — a period of only fifteen 
 months — it has not been possible for us to 
 accomplish all that we undertook ; but we 
 have labored courageously in the work of re- 
 habilitation, and the facts which I shall lay 
 before you will, I hope, prove that we have 
 accomplished the greater part of our task. 
 In fact we have already placed the financial 
 position of the province on a foundation 
 which allows us to look to the future with- 
 out tear, and if the policy that we are pur- 
 suing does not meet wi A too much opposi- 
 tion, we shall soon have accomplished the 
 task at which we are aiming." 
 
 Let us further consider the remarks of the 
 honorable Treasurer. He tells us that the 
 present Government have labored courag- 
 eously at the work of rehabilitation which 
 they set themselves ; that they had promised 
 to work with energy in restoring good order 
 in the finances and that they have kept their 
 
2 
 
 word ; that, In fact, they have 
 already placed the financial position of the 
 province on a foundation which permits 
 them to look to the future without fear. 
 
 Need I say tliat I differ in Mo from the 
 hon. Treasurer on the first of the points that 
 I have summed up ? I dispute altogether 
 the pretension that the present Government 
 en acceding to power was imder any obliga- 
 tion to undertake a work of financial 
 rehabilitation. To picture the situa- 
 tion as desperate in order to justify 
 the claim of having almost miraculously 
 rescued those who were about to be its cer- 
 tain victims, is perhaps a piece of able tac- 
 tics. But it does not show to advantage 
 from the standpoint of strict veracity, or of 
 justice towarc's opponents who are thus per- 
 sistently held responsible before the public 
 for a state of things which never existed save 
 in the over-excited imagination of those who 
 had a strong party interest in thus repre- 
 senting the facts. 
 
 In order to define the real financial situa- 
 tion bequeathed io the present Government 
 the chamber will allow me to recall the fol- 
 lowing words which I pronounced last year 
 on a similar occasion. On the 15th of April, 
 1887, I said: 
 
 " The Government of the Hon. Mr. Boss 
 and the Conservative party bequeathed to 
 the present ministry a most favorable finan- 
 cial situation which, in general terms, may 
 be thus outlined : 
 
 We left them a surplus of $257,646 in the 
 
 nineteen months from July 1, 1885, till 
 January 31, 1887. 
 
 Against a funded and floating debt in 
 January 31, 1887, cf $18,884,241, we trans- 
 mitted to them assets amounting to $13,- 
 122,494, thus leaving a debt of only $5,760,- 
 746. 
 
 Besides we transmitted to them assets im- 
 mediately realizable amo .nting, in round 
 figures, to $2,250,000, with which to meet 
 obligations falling due from during the two 
 coming years and more. 
 
 We also transmitted to them an 
 annual revenue of more than $3,- 
 000,000, thus assuring an annual 
 surplus over ordinary expenses, as 
 with good management the latter might 
 be kept down to less than $3,000,000. 
 
 The assets of the province give an annual 
 revenue of $700,000 in round figures. 
 
 We transmitted to the present ministry a 
 magnificent public credit. Our provincial 
 bonds at 5 per cent, are quoted as high as 
 
 113 on the British market. So much for the 
 financial situation. 
 
 Moreover, the province is progressing. 
 Railways are being built everywhere. Col- 
 onization is being rapidly developed. We 
 are laying the foundations of a powerful 
 national industry, and are creating every- 
 where a commerce which will soon assume 
 large proportions. 
 
 Such ara the conditions under which the 
 present Government were charged with the 
 administration of provincial afi'airs. If they 
 do not profit by ah the advantages of a situ- 
 ation so favorable for working in the well 
 understood interest of the province, they will 
 have to render a strict account to this house 
 and to the province, after the solemn 
 promises tliat our adversaries have lavished 
 on the electors to win their confidence and 
 their votes." 
 
 In this definition, made last year, of the 
 situation bequeathed to the present Cabinet 
 I have nothing to modify to-day. It was and 
 it is essentially true, being based on incon- 
 testable facts. The new Government did, as 
 the hon. Treasurer represented, find them- 
 selves confronted with the difficult task of re- 
 habilitating our financial affairs. That un- 
 tenable pretension led the hon. Treasurer to 
 forget his roie of a responsible minister and to 
 devote almost the half of his speech to a 
 criticism of the administration of his oppo- 
 nents, whan he should have remembered that 
 the public expected from him, not attacks on 
 those who have no longer the direction of 
 aff^airs. but a complete exposition of the Cab- 
 inets' policy and serious defence of its ad- 
 ministration. The hon. Treasurer divided 
 his speech into five principal points. I will 
 follow the same order in order to fa( ilitate 
 for my honorable colleagues the comparison 
 of my arguments and my figures with those 
 of the financial statement that we beard on 
 Friday last. 
 
 FINANCIAL YEAR 1886-87. 
 
 The house has doubtless remarked the 
 efforts of the hon. Treasurer to cast upon the 
 preceding Government all the responsibility 
 of the operations of the year that ended on 
 the 30th of June, 1887. I must confess that 
 I was a little surprised, as I be- 
 lieved it just to admit that the present 
 ministry share with their predecessors the 
 responsibility for the financial administra- 
 tion of the "preceding year. The Govern- 
 ment in which the hon. member for Quebec 
 East occupies the important position of Treas- 
 
 i i > 
 
 •, !1 -• 
 
 1 
 

 i > 
 
 
 < I 
 
 1 
 
 B 
 
 »^^*"M^ai3LA 
 
 urer arrived at power towards the close of 
 January, 1887. He is therefore responsible 
 for the five last months of the year. On the 
 16th of April, 1887, 1 thus stated the result 
 of operations from the Ist of July, 1886, to 
 the 30th of January, 1887, and I added my 
 forecast for the close of the year : — 
 
 " The favorable result obtained in 1885-86 
 has been surpassed hy that which was re- 
 alized during the seven first months of the 
 current year, which will terminate on the 
 30th of June, 1887. 
 
 From the first of July. 1886, to 
 the 3lHt January, 1887, the re- 
 ceipts were $2,093,213 
 
 Deducting the receipts following : — 
 
 Repaid to the Longue Polnte 
 
 asylum $ 7,125 
 
 Assurance on the old Parliament 
 
 buildings 32,765 
 
 Contributions to the Teachers 
 
 Pension fund 33,000 
 
 72.890 00 
 Ordinary revenue from July 1, 
 1886, to January 31, 1887 $2,020,323 00 
 
 Let us now pass to the head of expenses 
 
 during the same period of seven months. 
 
 Total amount paid from July 1, 
 1886, to the 31st of January, 
 1887 $2,705,400 00 
 
 Deducting for extraordinary expenses : — 
 
 Railway subsidies. $ 628,964 
 
 Quebec Court house 70,876 
 
 Parliament building 54,306 
 
 Special grant for colonization 
 
 paid to same capital as that of 
 
 1 885-86 80,000 
 
 834,146 00 
 
 We ascertain the surplus obtained by the 
 
 Eoss Government during the first seven 
 
 months of the current year by the following 
 
 subtraction : — 
 
 Ordinary revenue from July 1, 1886 
 
 to Jan. 31, 1887 $2,020,323 
 
 Ordinary expenses 1 ,871 ,254 
 
 Surplus In seven months $149,069 
 
 I entirely differ from the opinion of the 
 Hon. Treasurer as to the result possible from 
 the operations of the current year. I say that 
 this year ought to terminate with a surplus 
 of ordinary receipts over ordinary expenses. 
 
 The Government, if it employes the neces- 
 sary energy in the task, can and ought to re- 
 ceive in 1886-87 a total revenue of $3,100,- 
 000 in round figures. 
 
 Here is my forecast on that point. 
 
 Ordinary revenue received Jan. 
 31, 1887 $2,020,32:0 
 
 Possible receipts to June 30 — : 
 
 Balance, federal subsidy $50,580 
 
 Crown lands 326,000 
 
 Justice 115,000 
 
 Public officers 2,000 
 
 Licenses 200,000 
 
 Legislation 1 ,000 
 
 Lunatic ABylums,Munlclpal contri- 
 butions 50,000 
 
 Interest, North Shore Railway 186,000 
 
 Province of Ontario 60,000 
 
 Sundries UifiOO 
 
 $1,083,860 
 Forecasting ordinary revenue,1886- 
 
 87 $3,104,173 
 
 Ordinary expenses, 1886-87 not to 
 
 exceed 3,000,000 
 
 Possible surplus, 1886-87 $ 104,173 
 
 If the Government change a possible sur- 
 plus of a hundred thousand dollars into a 
 deficit of $370,000, as the Hon. Treasurer for- 
 sees, the House ought to hold him to a strict 
 account for it." 
 
 In his budget speech the Hon. Treasurer 
 has set down as follows the result of the or- 
 dinary operations of the year 1886-87 : — 
 
 Expenses $3,280,679 78 
 
 Receipts 2,965,446 62 
 
 Deficit $ 324,251 16 
 
 The Hon. Treasurer explains and justifies 
 this deficit by saying that on his accession 
 to office the financial situation was greatly 
 embarrassed. In the first place I think it 
 an exaggeration to estimate the deficit of 
 1886-87 at $324,251. It must not be forgot- 
 ten that in the amount of expenses just cited 
 from the speech of the hon. Treasurer is 
 comprised the special credit of $80,000 for 
 colonization, the payment of which, out of 
 capital — the house had ordered. That sum 
 deducted, the deficit is brought down to 
 $244,251. Account must also be taken of 
 the general elections of October, 1886, which 
 entailed an expenditure of $50,461. 
 
 Who is responsible for the deficit of 1886- 
 87, reduced, as I have just shown by calcu- 
 lation, to a couple of hundred thousand 
 dollars? That is what imports this house 
 and the public to know. 
 
 As I have just said, reading over my words 
 of last year, on the Slst of January, 1887, 
 when the change of ministry took place, 
 there was a surplus of $149,069 in the opera- 
 tions of the seven preceding months. In the 
 five last months of the financial year the 
 present Government brought the ordinary 
 expenses up to the amount of $3,289,697. It 
 is an increase of about $250,000 on the fore- 
 going year, 1885-86, counting the spe- 
 cial credits for colonization among 
 
m 
 
 the ordinary oxpeiiHCH of both years. 
 I wiwli to 1)0 juKt, niul HO I acknowlecl(j;e tlint 
 till! fnrnier Government nre rewponHibh; for 
 the inireaHC, iiuionntinjf to $38,000, in the 
 service of the intereHt of the provincial 
 debt. No [)articular rcHponKibiJity attaeheH 
 to one party or the other In the mutter of the 
 cxjjenHes for the general election of 188G, 
 which took place at the regular expiry of 
 the term of ottice of the houHe elected in 
 1881. It iH the name with some other ex- 
 penscH of no great moment. But the present 
 Government cannot free themselves of the 
 responsibility of an increase of from a 
 hundred to a hundred and twenty-five 
 thousand dollars in the expenses of 1880-87 
 compared with those of 1885-86. It would 
 have been wiser to accept it courageously 
 and endeavor to justify it on the ground of 
 the public interest than to try vainly to 
 cast the responsibility of it on their prede- 
 cessors. 
 
 The present Government are responsi- 
 ble for the deficit of last year, not only by 
 the fresh expenses that they incurred during 
 their five months of power in that year, but 
 also for not having been more diligent in 
 looking after the collection of the revenues. 
 From the 1st of July, 1886, to the 31 st of 
 January, 1887, the ordinary revenue reached 
 the figure of $2,020,323. With an energetic 
 collection it was easy to raise it to $3,100,- 
 000 at the close of the year. A hundred 
 thousand dollars and more of expenses 
 saved, and the receipt of from 
 $125,000 to $140,000 would have left 
 the operations of the year on equi- 
 librium or even with a surplus. 
 
 But from the story of the ofiScial docu- 
 ments submitted to us and from the speech 
 of the new treasurer, it is evident that the 
 ministry were more desirous of making out 
 a considerable deficit for the year 1886-1887, 
 and that they brought the tenderest solici- 
 tude to bear on that of 1887-1888, for which 
 they had the full responsibility. They were 
 also most careful in enlarging the expenses 
 of last year and especially to postpo je to 
 the first days of the current year the collec- 
 tion of sums really belonging to the preceding. 
 Let it suffice to cite the amounts received 
 from the Province of Ontario and the muni- 
 cipalities as their contribution to the main- 
 ten<tnce of the insane in the asylums. The 
 calculation of the ministry is easily under- 
 stood ; to bring out a seeming deficit from 
 the operations of the foregoing year by rest- 
 ing the responsibility on their predecessors 
 and to establish an apparent surplus for the 
 
 operations of the current year, furnished au 
 easy plan for i)ufling their administrative 
 capacity at the expense of their predecessors. 
 But that ruse has not escaped detection and 
 we shall show up its trickery and emptiness. 
 The public will easily understand what it 
 means and will with us rebuke the Govern- 
 ment that had recourse to it. 
 
 The manner in which the hon. Treasurer 
 has mixed u» the operations, ordinary and 
 extraordinary, of the year 1886-87 will per- 
 mit some of his friends who are not over 
 scrupulous, and care little for the serious 
 discussion of public uft'airs, to base on those 
 figures the conclusion that there was a de- 
 ficit of $1,445,533 last year. Several times 
 already I have pointed out the fundamental 
 error of such a method of calculation, be- 
 cause it is as clear as possible th-,t it gives 
 a false idea of the position of affairs. It is, 
 consequently, injurious to the public. Why, 
 then, this obstinate refusal to admit that 
 principle in public finance, the truth of 
 which cannot be disputed. But the deficit 
 of any financial year is the difference be- 
 tween receipts that are ordinary, regular 
 and permanent in their source, if not in 
 their amount, and the expenditures of the 
 same class. I cannot understand what the 
 hon. Treasurer means when he speaks of 
 deficiency in the service of the extraordin- 
 ary budget. Not a single one of all the most 
 renowned financiers who administer the 
 aftairs of the greatest and richest countries 
 has ever made such calculations. I cannot 
 concei\3 a government who have under- 
 taken works, by common agreement set 
 down to capital account, saying at the end of 
 the year : •' I have paid for those works, say, 
 two million dollars, vet at the beginning of 
 the year I had in the treasury only a million 
 for that purpose. Therefore, I have 
 a deficit of a million." On the contrary, 
 it was understood from the first 
 that those extraordinary disbursements 
 should be paid out of extraordinary resources. 
 There can be no question of a deficit in such 
 operations, and again I ask why the hon. 
 Treasurer persists in grouping his figures 
 in so strange a fashion — a fashion that I 
 have never found before in the speeches of 
 statesmen dealing with public finances. He 
 will, perhaps, have reason to regret it ere 
 long, for we shall soon be in a position to 
 turn it to account against himself. I don't 
 renounce the right of using the arms of of- 
 fence that he has himself furnished us with, 
 seeing that they will prove, perhaps, the 
 most efficacious means of rendering him a 
 
 i f > 
 
service— that is, of convincing bim of an 
 error of which he has availed liiniHelf, with- 
 out regard to justice or reawon, to criticize 
 the policy of liiw i)redece8Hors. 
 
 A8SET8 AND MAIlILITlISa, JUNE 3J, '.887. 
 
 The statement of the assets and liahilitles 
 of the province at the close of the last finan- 
 cial year differs little as to the amounts from 
 that which the hon. Treasurer presented 
 over a year ago. The provincial debt is 
 brought to the figure of $22,188,700, but 
 contrarily to what is practised everywhere 
 else, the railway subsidies voted, but not 
 due, are not counted. TJie assets are 
 calculated at $10,859,059, having a net debt 
 of $11,329,640. The hon. Treasurer after- 
 wards went into long details on tlie floating 
 debt so as to convince the house, if possible, 
 that the famous loan of $.3,500,000 was abso- 
 lutely necessary, still with the design of 
 - casting the responsibility for it on his pre- 
 
 W ^ \1 decessors. He has told us that, on the 30th 
 
 June, 1887, he had to meet a floating debt of 
 $3,861,466. But why does he not acknowl- 
 edge, what we all know, that a million and a 
 half of that sum was composed of bonds 
 which were not to fall due for a long time, 
 r A I and some of which will never fall due at all. 
 
 He calculates the realizable assets on the 
 30th of June, 1887, at the modest sum of 
 $300,000. And still the statement of re- 
 ceipts for the nine months ending on the 
 2l8t of March last proves that, at that date, 
 the hon. Treasurer had easily collected the 
 sum of $782,000, on account of our assets of 
 June 30 preceding. Evidently the realizable 
 assets hequeathed by the former Government 
 rose to more than the $300,000 of the hon. 
 Treasurer's estimate. 
 
 THE LOAN. 
 
 Let us now pass on to the examination of 
 the question of the famous loan. After the 
 strange events that marked the negotiation 
 for the loan of $3,500,000 it was only to be 
 expected that the hon. Treasurer would do 
 all in his power to put a favorable color on 
 the affair. He accordingly devoted a 
 third of his speech to it. It is my duty 
 to say that, notwithstanding that long and 
 elaborate production, he has not succeeded 
 in proving the absolute necessity for the 
 loan, nor in justifying his Cabinet for the 
 manner in which the negotiations were con- 
 ducted— the result of which was the creation 
 i 1 ^ of a consolidated debt of $3,500,000. 
 
 It is important to recall the exact position 
 taken by the two parties in this house last 
 
 i > 
 
 year on the subject of the ministerial project 
 of contracting u new permanent loan. 
 
 The Government, on their part, in order 
 to conviuie the house that it was right to 
 authorize a loan of $3,500,000, said that 
 almost immediately obligations to the ex- 
 tent of nearly $4,000,000 had to be met and 
 that there wore no financial resources to sus- 
 tain the provincial credit. 
 
 On our side, wo combated that loan 
 policy, replying that the ministry greatly 
 exaggerated the amount of its pressing ob- 
 ligations; that before contracting a new 
 loan, the Cabinet ought to collect with 
 energy what was due to the province, and 
 that by so doing they could avoid, if not 
 wholly, at least in great part, the permanent 
 addition of $3,500,000 to our consolidated 
 debt. 
 
 Whoever will judge impartially the events 
 that have taken place since last year, must 
 admit that they fully justify the position 
 that we then took. The Legislature wos 
 hardly prorogued last year when the 
 Privy Council rendered judgment in 
 lavor of the province in the ques- 
 tion of the commercial corporations tax. 
 On the 30th cf March last, the Government 
 had already collected from those arrearages 
 the sum of $557,665. With the $100,000 re- 
 ceived from Ontario and the $125,000 in the 
 settlement of the account with the city of 
 Montreal, we find a total of $782,665. It is 
 certain, therefore, that the Government could 
 make the assets meet much more than they 
 have made them yield to meet the extra- 
 ordinary obligations that fell due. 
 
 In the second place, events have proved 
 that the previsions of the hon. Treasurer as 
 to the amounts he would have to pay, and 
 for which he asked authorization to borrow 
 $3,500,000 were greatly exaggerated. I will, 
 I hope, be allowed to remark that my own 
 have been realized. On the 12th of May, 
 1887, I said : 
 
 " The hon. Treasurer has told us that from 
 now till the 30th of June, it was imperatively 
 required to meet obligations amounting to 
 $1,900,000. This forecast was very exagger- 
 ated. I calculate as follows what the Gov- 
 ernment will have to pay from now to the 
 end of tLe current financial year : 
 
 Railway subsidies 350,000 
 
 Court House and Parliament Build- 
 ing, Quebec 250,000 
 
 Northern Railway and Exchange 
 Bank 37,000 
 
 Deficit of 1886-87 at the most 200,000 
 
 Total $837,000 
 
6 
 
 That if) all the tioTernnnDt can bv obliged 
 to pay of expctiHuH imputable to capital from 
 now till June 30 next. The pro- 
 bability iH that it need not diHburne the 
 •whole amount. The temporary loans can 
 be eaHiiy renewed and the payuienl will not 
 be InHiHted on." 
 
 In his Budget speech the hon. Treasurer 
 declared to us that " of obligations comprised 
 in the floating debt and falling due froiu 
 January 31 to June 30, 1877," he has only 
 paid up a sum of $758,407. That is $78,593 
 less than I calculated on the 12th of May, 
 1887. 
 
 The hon. Treasurer had calculated that 
 he would be called upon to pay $1,200,000 
 for the expenses of capital during the current 
 financial year, 1887-88. From July I, 1887, 
 to March 31, 1888, he had only to disburse 
 for those objects the following amounts : — 
 
 Public bulldlnijN and Iron bridges 
 
 In the municipalities $ 180,412 
 
 Railways 061,076 
 
 Total $ 831,487 
 
 He will not have to pay more than $250,000 
 from the 1st of April to the 30th of June 
 current; or, during the ytar a total ol 
 $1,081,000 or $119,000 less than the forecast 
 of the hon. Treasurer, In presence of these 
 indisputable official figures, published under 
 the signature of the hon. Treasurer himself, 
 who can seriously pretend that, in the 
 month of May, 1887, the Provincial Trea- 
 surer was BO laden with obligations — such 
 as those of the pretended floating debt — de- 
 manding payment at once or with very little 
 delay, that it was necessary to borrow 
 $3,600,000 — not a dollar less. If the minis- 
 try insists on it, I reply that the regrettable 
 events which marked the negotiations of 
 the unhappy loan give a formal contradic- 
 tion to the hon. treasurer and his Govern- 
 ment. Last May they must, they said, have 
 the loan at once — otherwise the province 
 would be unable to honor its engagements. 
 But what happened. The public will recall 
 the official pilgrimages to New York and 
 the search for those millions that failed to 
 turn up. Weeks and months passed away. 
 The contract with the Credit Lyonnais was 
 only positively concluded at London on the 
 30th of January; 1888, and the treasurer did 
 not begin to r'jceive those borrowed mil- 
 lions till after the 9th of February, 1888— 
 that is nine months after the declaration, 
 officially made in the house, that the prov- 
 ince must have the loan w thout delay. And 
 during those nine months of interval, under 
 
 circumstances of which I shall speak pres- 
 ently, had not the flovemment the resources 
 necessjiry to meet the provincial obligations. 
 Is a new and still stronger proof requir- 
 ed that the $3,600,000 loan was not of abac- 
 lute . necessity at the time when it was pro- 
 posed ? I find it also in the documents on 
 the finances deposited by the treasurer on 
 the office of the house at the begin- 
 ning of the session on the 3lBt 
 of March liist all temporary loans were paid 
 up, as well as capital expenses paid as above 
 stated, and there was in the treasury a bal- 
 ance of $1,199,166. At that date, only 
 $2,41.%437 had been received on account of 
 the net i)roceeds of the loan. There still 
 remained $966,000 to receive. That balance 
 was paid into the treasury in the early days 
 of April. Let us add to the balance in the 
 treasury on the 31st of March and wo have 
 an amount of $2,264,166 to be disposed of. 
 The hon. treasurer has told us that he reck- 
 oned that the ordinary receipts from the 
 Ist of April to the 30th of June would bo 
 almost sufficient to i)ay the ordinary ex- 
 I)enses ot the last quarter of the year. So 
 that, calculating the disbursements on cap- 
 ital account during the same period at 
 $264,000— and they will certainly not ex- 
 ceed that amount — the balance in the 
 treasury on the 30th of June, 1888, will bo 
 in round numbers $2,060,000. Tiie fact that 
 notwithstanding an increase in expenses of 
 more than $300,000 from the Ist of Febru- 
 ary to the 30th of June, as I shall prove in 
 an instant there will be cash on hand to the 
 amount of tv,- - million dollars, at the close 
 of the current year, clearly proved that the 
 loan of $3,500,000 was not necessary in May, 
 1887, and has not been necessary since. 
 The Government pretended that it was ab- 
 solutely necessary to borrow $3,500,000 to 
 pay the obligations which their pre- 
 decessors had left them. We 
 have disputed the pretension with the irre- 
 futable argument of figures. I have the 
 right to say and the satisfaction to know that 
 my previsions have been justified by 
 events You will have on the 30th of June 
 next a balance on hand of at least $2,000,- 
 000. What is, on the other hand, the bal- 
 ance of obligations of the floating debt con- 
 tracted by former Governments which you 
 will have to meet ? Let us make the calcu- 
 lation from your own official documents and 
 the hon. Treasurer's speech. In your state- 
 ment of the liabilities of the province on the 
 30th of June, 1887, you enunciate the obli- 
 gations following : — 
 
 < I / 
 
 i 
 
 }V 
 
the amount 
 
 Hu> NliitueH for ti7t) 
 
 Entlmato of 
 
 Contr"'l^>-' 5'"'''"J"^"'^'*'i'^'''"^^^ * 76,123 
 
 IiiHilmafcof niiioiuit ro«]ulr<Hl to lln- 
 iHh UucIm'c Court HouHo 100.487 
 
 llHlunce on limdH and other dchtH of 
 the(„j,. M. (). AO. Hallway 60,070 
 
 LoHHoii Lxoh.^ngo Bank dopoHlt... 27,000 
 
 'J^otaX $287,U79 
 
 Such is your calculation. 
 From the iHt of July, 1877, to the aUt of 
 March, 18H8, you paid for tho public build- 
 ingH above mentioned $lf.'J,Gll ; and $14,- 
 000 for the North Shore railway, making a 
 total of $183,011. According to your own 
 y statement of these old obligations, transmit- 
 ted to you by preceding ministry, there only 
 remained to be paid the difference shown by 
 the following subtraction :— 
 KHtlmate of obligation Juno 30, 
 
 , ^*'"" $287,(179 
 
 Less amount pnkl March 31,1888.. 183,011 
 
 |i», Balance March 31, 1888 $104,008 
 
 According to your own statement of the 
 liabilities, on the 30th of June, 1887, you had 
 still to meet tho obligations of your prede- 
 cessors for former railway subsidies and 
 conversion of land into money subsidies. 
 $530,107 on the one hand and $1,019,521 oii 
 the other hand, making a total of $1,549,628. 
 From iho Ist of July, 1887, to the Slst of 
 March, 1888, you paid on account ot those 
 obligations $637,075, leavin? a balance due 
 of $912,553. According to your own docu- 
 ments the balance of obligations transmitted 
 to you by the preceding ministry was lim- 
 ited on the 31st of March last to the sum of 
 $912,553, plus that of $104,068 for the pub- 
 lie buildings above mentioned, or a total of 
 $1,016,621. As I said before, you will pay 
 about $264,000 on account of that balance 
 from the Ist of April last to June 30, which 
 will reduce it to a sum of $752,621. To 
 meet these obligations, now reduced to 
 $752,621, you will have, as I have shown, a 
 balance from the loan of $2,000,000, plus 
 assets, easily realizable, of at least $750,000, 
 by the sale of Government property at 
 Montreal, which is valued in your statement 
 at $138,348, but which is worth much more, 
 by the collection, of what is due 
 to the province by the Government 
 of Ontario, for diffeient advances, for 
 arrearages of commercial corporations 
 taxes, and the Municipal loan tund. In 
 fine, if you choose to give serious attention 
 to the collection of those assets, you can pay 
 all the obligations handed down to you by 
 your predecessors, comprising the tempor- 
 
 ary loans already paid, and you will have a 
 balance remaining of ;it least $2,000,000 from 
 your permanent loan of $;t,500,000. You 
 were not obliged, therefore, to borrow that 
 sum of $3,500,000 to pay obligations con- 
 tracted by preceding Governments. 
 
 Why have you persisted in borrowing the 
 total amount of $3,5(to,0()0 after tho receipt 
 of $100,000 from tho Province of Ontario, 
 and $125,000 from the city of Montreal, and 
 after the judgment of the Privy council in tho 
 case of the comnierciol corporations which 
 assurc<l you another receipt of more than 
 $760,000, making, with the foregoing, a total 
 of nearly a million dollars ($u75,000). 
 
 I therefore come to tli! certain conclusion 
 that the loan of so large a sum as $3,500,000 
 was not necessitated by the engagements 
 contracted previous to your accession to 
 power, and that you were in no wise obliged 
 to undertake such a financial operation, 
 which so greatly augments the consolidated 
 debt of the province. 
 
 It is easy to see to-day wii^ you 
 were so persistent in authorizing tho $3,500, 
 000 loan. You revealed the reason when 
 you declared in the speet h from tho throne 
 that you liad to propose a measure for new 
 railway subsidies, and that you wished to 
 develop your policy of iron bridges in the 
 municipaliti'js. You make the matter still 
 clearer when you ask in your supplementary 
 budget of the current year, and in your gen- 
 eral budg(!t of 1888-89, to vote you for the 
 Parliament building and the Quebec Court 
 house $42C,000 moie than the amount that 
 you deemed necessary for those buildings on 
 the 30th of June, 1887. You must have 
 been courageous to assume full responsibil- 
 ity for the policy that you proposed to 
 adopt. If you thought it in the public in- 
 terest to further subsidize those important 
 railway enterprises, and you had to borrow 
 in order to do so, why did you not frankly 
 say so to the house and to the province ? We 
 should then have judged your policy on its 
 own merits, without prejudice, from tho 
 single standpoint of the greatest good to the 
 province, which, be assured, we love as well 
 as you do, and whose prosperity we desire, 
 deeming it an honor to labor with all our 
 strength on its behalf, as we have always 
 done, in spite of the obstacles that 
 you have constantly placed in our path. 
 We are justified in reproaching you with 
 having obtained from this house authority 
 to raise a considerable loan under the pre- 
 text that you required it to pay obligations 
 which you had inherited and for which you 
 
 i 
 
8.' 
 
 were not responsible, wlien tlio tiuo reason 
 for that floinand was that you desired while 
 unjustly shiL I ding yourselves with the re- 
 sponsihility of your predecessers to obtain 
 the resources necessary for giving effect to a 
 policv that you were preparing, but thought 
 wellnt that time to keep secret from tlie 
 public. In spite of ail the reasons against 
 it, vou contiTcted the loan. Nor can 1 
 leave that subject without speaking ot the ] 
 manner in which you conducted these 
 important negotiations, as appears trom 
 documents deposited in the oftice of the 
 house in replv to an address which 1 haa 
 the honor of proposing at tl.e beginning ot 
 the session. 
 
 YOUR OPERATIONS IN NEW YORK 
 
 will remain legendary. In the first place, 
 the idea of contracting o loan at New York 
 was no' a happy one A little reflection 
 would have warned vou that you were ex- 
 posing vourselves to misunderstanding 
 from which the interests ot the province 
 would not fail to suffer. Everyone knows 
 that New York is not a favor- 
 able market for the placing of state 
 loans. And the reason is not difficult to 
 perceive. Doubtless the metropolis^ of tlie 
 American Republic is aa extremely wealthy 
 city. Its progress has been wonderful, arid 
 it bids fair to be one day the greatest city in 
 the world. But the United States is not a 
 country where much money is lent to 
 foreigners. And why? Because tho im- 
 mense improvements which are made every 
 year throughout the territory of the Repub- 
 lic absorb the national savings and even 
 necessitate foreign capital. When it is con- 
 sidered that as much as $400,000,000 is ex- 
 panded annually in the United States in 
 railway building alone, and in the single 
 city of New York fiom $60,000,000 to $70,- 
 000,000 for new houses, we cannot be sur- 
 prised that our neighbors have constant need 
 of all the capital which their powerful man- 
 ufacturing an-.l agricultural industries, am 
 the ceaseless activitv of their commerce ma/ 
 accumulate. 
 
 The two great money markets are Lonaon 
 and Paris. A recent statistical document e.s- 
 timatcs at $500,000,000 the annual accumu- 
 lation of capital in England, to be disposed 
 of by investments in the United Kingdom 
 and'elsewhere England has more than ten 
 milliards of dollars ($10,000,000,000) invest- 
 ed abroad and in the colonies. At 
 an average interest of four per cent., 
 those ten millions would yield an annual 
 
 income ef $400,000,000, coming to England 
 from all parts of the world. New enter- 
 prises in a territory already so encumbered 
 and so limited in area as that of Great Brit- 
 ain could not absorb all that capital, a great 
 part of which goes abroad again in search of 
 investments as profitable as those which 
 yielded it. The first mistake of the Govern- 
 ment in the negotiation of the loan was to 
 fancy that they could obtain in New York 
 conditions as favorable as they would find 
 in London or Paris. Having once taken the 
 wrong path, they were sure to come to mis- 
 chief I am not disposed to be very se^rere 
 in my criticism, knowing the cruel ordeal 
 tluough which they h.id to pass in the in- 
 terval between the end of August, 1887, and 
 the beginning of the present year. Those 
 were long months, I am convinced, and the 
 memory of them will not soon perish in the 
 minds of the Government. 
 
 The repesentative of a New York syn- 
 dicate made a proposal with respcc to the 
 loan, which the ministry considered excep- 
 tionally advantageous. He offered 94 per 
 cent, for the debentures at 3^ per cent in- 
 terest. What astonishes one is that they 
 could for a moment have imagined it 
 possible to place a provincial loan on such 
 conditions on the New York market. The 
 very nature of the offer ought, to my mind, 
 to have put the Government on their guard, 
 and to have prompted the enquiry whether 
 they had really to deal with serious men ot 
 business. But the least suspicion docs not 
 seem to have entered their mmds on that 
 
 head. , ,, , 
 
 Before signing the loan contract, the hon. 
 treasurer and his colleagues ought to have 
 fully assured themselves taat the person 
 with whom they were negotiating was in a 
 position to meet his obligations. Mr Nel- 
 son, who represented the syndicate, offered, 
 in guarantee, to deposit bonds or debentures 
 of the United States or the city o New York, 
 at the "Chemical National bank ' to the 
 ■ amount of $3,500,000. It was all very fine 
 on paper, but the agreement had the grave 
 inconvenience of being signed at Quebec on 
 the 16th of August, 1887, by the hon. 
 treasurer and the attorney of Mr. Nelson 
 while Mr. Nelson did not bind himself to 
 make tiie deposit of United States and New 
 York city bonds until on or before the 23rd 
 of August, i8b7, seven days later. The con- 
 tract was signed, but in reality the Govern- 
 ment had not a single dollar of guarantee 
 that the New York syndicate would, fulnl^ 
 its obligations. On the 23rd o. 
 
 t 
 
 i 
 
Ang'ist, the Hon. Treasurer began to be 
 anxioud, and by a defipatch, 1 suppose 
 (though It does not appear in the documents 
 on the Pubject of the loan), he addressed the 
 Uiemical bank with respect to the famous 
 deposit. On the same day he received the 
 loJlowing reply : 
 
 ^ 
 
 New York, August 23, 1887. 
 
 Joseph Shehyn, Treasurer Province of Quebec, 
 Quebec : 
 
 No; nothing known at Chemical bank 
 regarding the transaction. 
 
 [Signed] ^Y. J. QfiM,A.v. 
 
 The deposit bad not been made. After 
 the primary mistake of going to New York 
 for the loan, and the remissness shown in 
 having signed a contract with Mr. Nelson 
 without asking for a guarantee, I blame the 
 Oovernment for not immediate! v breaking 
 oflfpll relations with the pietended syndi- 
 cate and its representatives, and for having, 
 for nearly five months, allowed the public 
 credit of the province to be dragged through 
 the markets of the American metropolis, at 
 the mercy of men who could not execute 
 their contract, and who were not even able 
 to make the deposit of $100,000 subsequent- 
 ly oflered and accepted as a guarantee, in 
 place of the three millions and a half of 
 United States and New York city bonds. 
 
 All hope of a success, which kept 
 constantly receding, being lost, the 
 trovernment at last took -'^unsel, in 
 December, 1887, with an emir^nt 
 New York lawyer what recor-se for 
 damages they could obtain against Mr. Nel- 
 son who, having dazzled our ministers bv 
 flashiug his millions before their eyes, 
 turned out to be completely Impecunious'. 
 In his reply (which my honorable colleagues 
 may read among the loan documents), 
 •Mr. Catdoxt says that the Government's 
 right IS unquestioned, but he adds the two 
 following phrases which have a lively in- 
 terest : — 
 
 "Still itisaquestion of fitness rather than 
 of right whether it is judicious to take action 
 against him unaer the cir umstances. Ac- 
 cording to the information that has been 
 furnished to us, and after the behaviour of 
 those people, it is not likely that Mr. Nelson 
 IS a man of any financial responsibility and 
 ajudgment obtained against him would re- 
 sult, I fear, in a profitless victory." 
 
 The ministry may make all the excuses 
 they please, but they cannot a^ -;uit them- 
 elves of the charge that, being entrusted with 
 
 an important financial operation, they 
 assumed the responsibility of negotiating 
 with a man who was incapable of fulfilling 
 his engagements and neglected even to take 
 the trouble of informing themselves as to the 
 real position of that person. An attempt is 
 made to explain the failure of the operation 
 by the death of two of tlie chief members 
 of the syndicate. The documents inform 
 r-s, indeed, that a Mr. Ross and another per- 
 son died shortly after the signature of the 
 contract at Quebec. But I find nothing 
 which proves that those two persons were 
 capable of placing the loan or even that they 
 formed part of the two famous syndicates. 
 Did fatality pursue the negotiators of the 
 loan, since two of those who, we are told, 
 were engaged in the business, were stricken 
 by death within a few days of each other ? 
 In such circumstances, the ministry ought 
 to have become a little superstitious and 
 have concluded that it was about time to 
 have done with an operation that claimed so 
 many victims. Mr. Nelson explained his 
 failure to make the deposit agreed upon in the 
 National Chen ical bank to "the considerable 
 rise which had taken place in the interval in 
 the securities on the market. I regret that 
 the hon. Treasurer should have pleaded this 
 excuse in his budget speech without assur- 
 ing himself of its truth. I have ascertained 
 that it was not well founded. I have made 
 out a statement of the rates on the New York 
 market from the 12th of August to the 14th 
 of September, as published in the New York 
 Herald, and I find that no such 
 rise took place in United States 
 securities. Two classes of securities 
 were quoted, one at 107, the other 
 at 127, and there was only a slight variation 
 during the period in question. 
 
 The New York loan having utterly failed, 
 it was necessary to make application else- 
 where. And so an arrangement was con- 
 cluded with the Credit Lyonnais. This time, 
 at least, the ministers had to do with serious 
 business men who were capable of fulfilling 
 the obligations which they contracted. 
 But the directors had wind of the fiasco at 
 New Yoik. They knew that the Govern- 
 ment had got into a predicament and that 
 they would regard as saviours those who 
 came to their rescue. They accordingly 
 availed themselves of their knowledge to 
 obtain from the Government more advant- 
 ageous conditions for the stock holders of 
 the Credit Lyonnais. I do not blame those 
 who have charge of the aftairs of that im- 
 portant institution. They made the best 
 
10 
 
 bargain they could in the circumstances 
 and in doing so, only discharged their duty. 
 Whatever the hon. Treasurer may have 
 said against the system of adjudging securi- 
 ties to the highest bidder, I claim that the 
 ministry ought not to have sold the bonds 
 of the province at a fixed price to the Credit 
 Lyonnais ; that they ought, on the contrary, 
 to have placed those securities on 
 the market at a definite minimum 
 which might easily have been fixed at 99, 
 reserving to themselves the right to 
 let the province have the advantage 
 of the competition of those who were 
 in search of a first-class invefitment, at the 
 rate of interest, relatively high, of four per 
 cent. It is a singular coincidence that on 
 Friday, the very day on which the Hon. 
 Treasurer pronounced in the house against 
 the system of adjudication in public loans, 
 the Federal Government employed that sys- 
 tem, with the greatest success, for the Cana- 
 dian loan of $20,000,000. 
 
 Launched on the London market at 3 per 
 cent., and at the minimum of 92J, that loan 
 was subscribed three times and by the com- 
 petition of the purchasers the offers accepted 
 surpassed 95. In that way the profit of 2J 
 per cent, and more realized by the rise pro- 
 duced by the run on values so secure as 
 those which Canada oifered to lenders goes 
 to the Federal Treasury, instead of, as in the 
 case of the Quebec loan, the profit going to 
 the Credit Lyonnais, the fortunate negotia- 
 tor, and not to the Provincial Treasury. The 
 2i per cent, premium above the minimum 
 fixed tor the recent loan is a profit of $500,- 
 000 for the twenty millions of securities re- 
 alized by the Ottawa ministry by means of 
 adjudication which the hon. Treasurer here 
 finds so unfavorable. Sold to the Credit 
 Lyonnais at the fixed price of 99 and net 
 96 J, our securities at 4 per cent were launch- 
 ed'on the London and Paris markets by that 
 institution on the 1 4th of January, 1888. The 
 Credit Lyonnais thus fixed at 100 per cent, 
 the minimum at which our securities should 
 have been placed by siucion on the market. 
 They thus had a gain of 1 per cent., having 
 purchased at 99. 
 
 I was astonished at the candor with which 
 the hon. Treasurer, in order to justify his 
 having made the loan at a fixed price, gave 
 us certain information concerning the man- 
 ner in which the Credit Lyonnais managed 
 to its own profit the placing of the securities 
 on the market. He told us that a syndicate 
 largely interested in the institution had 
 raised the first subscription of securities to 
 
 launch them at a rise and give them a good 
 position on the market. He added, 
 moreover, that the Credit Lyonnais 
 had the greater part of those bonds in securi- 
 ties. But how is it that the Hon. Provincial 
 Treasurer failed to see that he was thus 
 giving the best reasons possible for his own 
 condemnation in having sold the securities 
 of the provincial loan at a fixed price. If I 
 had any doubts before, I should assuredly 
 have been convinced that he had acted 
 wrongly. But what signifies the act of that 
 syndicate which would have subscribed at % 
 considerable premium for the institution 
 itself which placed those securities on the 
 market and the I'act that, although they are 
 now quoted at 104, the Credit Lyonnais still 
 keeps those securities in the same form, if 
 not that the present possessors of our bonds 
 are well aware that they have values which, 
 from day to day, will be more appreciated on 
 the market. The Credit Lyonnais, whose 
 resources of credit are very great, made no 
 haste to dispose of our securities, because it 
 knew that, enhanced by the development of 
 public credit which was the immediate con- 
 sequence 01 converting the English debt, by 
 the success of the important operations 
 that the Canadian Government and Pacific 
 Railway company were soon to transact 
 at London, it could, by still waiting, realize 
 a profit greater than what %?as possible at 
 the time. To-day the Credit Lyonnais can 
 sell those securities at 104— a profit of 5 per 
 cent on the price paid. Five per cent, for 
 three millions and a half is a net gain of 
 $175,000, of which the Credit Lyonnais is 
 assured, and which the province has un- 
 doubtedly lost by the transaction. Nor is 
 the Credit Lyonnais satisfied with even that, 
 because it is aware that before long it will 
 be able to make still more, and therefore it 
 is content to wait. I confess my surprise 
 that the hon. Treasurer had the complacency 
 to tell us a fact of which, assuredly, he has 
 no reason to boast. 
 
 The hon. Treasurer has made calculations 
 to prove that, compared with the rate of our 
 5 per cents on the market, the price 
 
 of 96i net realized for the securities of 
 our loan represents the real value of that 
 new class of our provincial bonds. But he 
 has forgotten an essential point, and there- 
 fore, his comparison, having no solid foun- 
 dation, falls to the ground. There is, in- 
 deed, a certain parallel in the rates, if we 
 take noaccount of the differences in the rate 
 of interest. But the hon. Treasurer ought 
 to know that the duration of a first-class se- 
 
 ^ J > 
 
 ^ |U 
 
 r U 1 
 
 I 
 
 T 
 
 i 
 
11 
 
 n a good 
 added, 
 Liyonnais 
 n securi- 
 rovincial 
 ras thus 
 
 his own 
 jecurities 
 3e. If I 
 issuredly 
 ad acted 
 t of that 
 ibed at "i 
 istitution 
 3 on the 
 they are 
 inais still 
 3 form, if 
 n\v bonds 
 es which, 
 sciated on 
 is, whose 
 made no 
 because it 
 )pment of 
 [late con- 
 1 debt, by 
 )peration8 
 Qd Pacific 
 
 transact 
 g, realize 
 jssible at 
 nnais can 
 t of 5 per 
 r cent, for 
 it gain of 
 onnais is 
 ) has un- 
 1. Nor is 
 even that, 
 ag it will 
 lierefore it 
 ly surprise 
 nplacency 
 lly, he has 
 
 ilculations 
 rate of our 
 the price 
 curitieG of 
 ufc of that 
 i. But he 
 and there- 
 solid foun- 
 lere is, in- 
 ates, if we 
 in the rate 
 urcr ought 
 st-class se- 
 
 ^ i > 
 
 4 iw 
 
 r H / 
 
 
 \ 
 
 T 
 
 curity, such as ours, on the market, goes for 
 much in the valuation that the purchasing 
 public put on it. The new provincial 4 per 
 cents are for fifty years, whilst our 5 per 
 cents will fall due, some in sixteen, some in 
 twenty and some in twenty-four years. The 
 4 per cent, security, payable in fifty years, 
 is worth proportionally more than the 5 per 
 cent, payable in twenty. It is so true that 
 the duration is of importance in the appre- 
 ciation of values on the market that our 5 
 per cent, securities whose time is more dis- 
 tant are always quoted higher than those 
 whose date is nearer the present. 
 There is often a difference of from 
 1 J to 2 per cent, between the rates of those 
 payable in 1904 and those payable in 191:3. 
 The hon. treasurer has made long calcul- 
 ations to show that his loan was made on 
 better terms ^han those which preceded it. 
 This comparison is wholly unfounded. You 
 cannot with reason compare the results of 
 those operations without also comparing 
 the situations at the different periods when 
 they were concluded. There is a great differ- 
 ence between the general conditions of the 
 public credit to-day, and those of 1874, the.year 
 of our first provincial loan. At that time 
 the Canadian Government hardlv obtained 
 90 per cent, for its 4 per cent, securities. On 
 Friday it was able to negotiate at 95 1-20 a 
 3 per cent, loan — an average rise of 30 per 
 cent, in our Federal credit since 1874. The 
 fruitful progressive policy of the Canadian 
 Governments since Confederation, at Quebec 
 as well as at Ottawa, has greatly developed 
 our provincial credit by the confidence in 
 our future that it has inspired among capital- 
 ists in search ot advantageous and 
 secure investments. It was owing 
 to that patriotic and intelligent policy that 
 the present Government was enabled to ne- 
 gotiate with the Credit Lyonnais on the 
 conditions of which we are aware, which, 
 nevertheless, as I have shown, are not the 
 best obtainable under the circumstances, 
 and considering the actual situation of the 
 public credit and of the money market. 
 The hon. Treasurer might, therefore, have 
 saved himself the trouble of in tituting com- 
 parisons. The real point at issue 
 was whether he had really made 
 the most advantageous arrangement 
 that it was possible to make. Because, for 
 reasons that I have explained, the offers 
 made to him wete more favorable than those 
 obtained in 1874, 1876, 1878, etc., it_ by no 
 means follows that he was justified in con- 
 cluding a contract on a principle which has 
 
 occasioned considerable loss to the pro- 
 vince to the advantage of those with whom 
 he negotiated. 
 
 The imhappy eagerness of the ministry to 
 contract a loan of which they had no im- 
 mediate need has also caused the pro- 
 vince to forfeit advantages which 
 it might gain from an operation on the 
 money market — if it became necessary in 
 the public interest — advantages which would 
 be still more important in a near future, 
 owing to the new conditions created in the 
 market by the conversion of the British debt 
 and the brilliant transactions of the Federal 
 Government and the Pacific Railway com- 
 pany. For those two loans thirty-five mil- 
 lions were asked, and two hundred and ten 
 millions were, so to speak, spontaneously 
 offered at rates the most favorable. 
 
 I also disapprove of the manner 
 in which the loan was effected for 
 another reason. I would have pre- 
 ferred the issue of annuities, redeemable 
 capital and interest, in thirty, forty or fifty 
 years, instead of the issue of securities for a 
 term of fifty years, as has been done. For 
 the Federal Government, for the Australian 
 colonies, and, in general, for all countries 
 that have still many works to complete on 
 account of capital, I conceive that it 
 is important not to undertake a 
 rapid redemption yjl the public debt, 
 but rather to obtain on the best 
 possible conditions the capital necessary for 
 the carrying out of great improvements of 
 general utility. But I believe that at the 
 stage which we have reached in our prov- 
 ince the best financial policy to adopt is to 
 begin to provide for the gradual redemption 
 of our provincial securities. It is for that 
 reason that I would have favored the plan 
 of terminable annuities for the new loan, 
 granting the necessity of contracting it, 
 which I think I have successfully disputed. 
 
 THE PRESENT FINANCIAL TEAR 1887-88. 
 
 After drawing a gloomy picture of the 
 situation on his accession to power and of 
 the operations of the year terminated on the 
 30th of June, 1887, the hon. Treasurer be- 
 came altogether radiant when he took up 
 the subject of the present financial year. 
 What is the secret of this change of tone ? 
 It is, of course, because in the present year 
 the Ministry now in office are responsible 
 for the financial administration of the prov- 
 ince. The hon. Treasurer understands that 
 the role of the pessimist is ended and 
 that it is time, for the sake of the Govern- 
 
 i 
 
12 
 
 merit's popularity, to begin to paint things 
 in a more brilliant, or even exaggerated 
 color. Indeed, I am almost tempted to 
 felicitate him on the suppleness with 
 which he has made the transition. 
 He passed suddenly from the most complete 
 apparent discouragement to the most in- 
 toxicating illusions as to the present, which 
 he represents as all that could be desired, 
 and to the prospects of future prosperity, 
 which he claims the merit of having assured 
 to the province. Personally I have much 
 esteem for the hon. Treasurer, and would 
 not cause him the least displeasure. But I 
 have a public duty to accomplish, and I 
 trust he will not take it ill if I make a large 
 hole in his cherished illusions. In fact I 
 am obliged to do so by the efforts that he 
 has made to impose his views upon my 
 honorable colleagues and the general public. 
 Speaking of the present financial year the 
 hon. Treasurer said : — 
 
 " It is impossible to indicate precisely the 
 result of the year, but the statement of re- 
 ceipts and payments down to the 1st of April, j 
 1888, shows that for the nine months the or- 
 dinary receipts were $3,024,981.65 and the 
 ordinary expenses $2,259,960.14, which leaves 
 a surplus of $705,021.51. It is probalilii that 
 this surplus will not be sensibly diminished 
 at the end of the year, if we collect all that 
 we hope to do." 
 
 The hon. Treasurer goes on to claim for 
 the Government and himself the merit of 
 having administered the finances so well 
 since the commencement of the year that it 
 will end with a surplus of about three 
 quarters of a million. But the figures that 
 preced it without the comments that they 
 provoke are calculated to lead the public 
 into error. The honorable treasurer ought 
 to have said that the revenue which permits 
 him to count upon the surplus indicated at 
 the close of the year is composed of arrear- 
 ages extending over several previous years. 
 He has received $100,000 from Ontario, but 
 $70,000 of that amount was duesfor the two 
 foregoing years. The Ontario Government 
 had, without reason, refused to pay it. 
 
 On the 31st March, 1888, the sum of 
 $557,165 had already been collected for ar- 
 rearages of commercial corporation taxes by 
 virtue of the Privy Council judg- 
 ment of last year. The regular contribution 
 to the revenue from that source is about 
 $125,000 for the present year, the remainder 
 being for previous years. To consider all 
 
 those sums as part of the ordinary revenue 
 of 1887-88 is to invent a surplus for which 
 there is no basis in fact, as tar as those con- 
 stituents of it are concerned. I need not in- 
 sist more on that point as the house and the 
 public will easily understand that the re- 
 venue of the current financial year has been 
 largely increased by extraordinary receipts 
 which will not be renewed hereafter. 
 
 THE EXPENSES OF THE PRESENT GOVERNMENT. 
 
 Have the present Government endeavored 
 to put in force the regime of economy which 
 they so often and so eagerly claimed, and 
 and promised in Opposition ? That is a 
 feature of the financial question which ought 
 to be studied with care. Evidently, in order 
 to make a fair comparison between the ex- 
 penses of the present Cabinet and those of 
 their predecessors, we must take into account 
 only those expenses for which they are re- 
 spectively and entirely responsible. Apart 
 from that, moreover, we may judge of the 
 financial policy of the present Government 
 by comparing the budgets that they ask us 
 to note with the expenses of the preceding 
 ministry during their last complete year of 
 administration — 1885-86. 
 
 The current year will not end until June 
 30, and we shall not have the public accounts 
 of it till next session. But we can even now 
 make an interesting comparison on the basis 
 of the statement for 1886-87, covering the 
 same period as that for which we have 
 the expenses of 1887-88. Let us compare 
 the expenses for the same services for the 
 nine first months in those two financial 
 years : 
 
 From the let of July, 1887, to the 
 31st of March, 1888, under the 
 present Government, the ordin- 
 ary expenses were $2,250,653 
 
 Under the former Government they 
 were, for the same services 2,137,390 
 
 Increase in nine months under the 
 present Government $113,263 
 
 I may surely calculate this increase at 
 more than $150,000, because the statement 
 for 1886-87 contains the $50,000 disbursed 
 for the general elections. 
 
 Let us now compare the expenses of the 
 
 several services during the same period of 
 
 nine months for the two years : 
 
 Civil Government in 1887-88.. $158,780 
 
 Do. 1886-87 145,766 
 
 Increase 13,014 
 
 Administration of justice, 1887-88.. 328,870 
 Do. 1886-87 304,921 
 
 Increase , 23,949 
 
 t 
 
 * ; > 
 
13 
 
 Public Instruction, 18S7-88 337 010 
 
 Do 1880-87 ; :;:;;;: 322.235 
 
 / 
 
 t 
 
 Increase 14 775 
 
 Public works and buildings, 1887- 
 
 i,"°o 94 411 
 
 Do. 1880-87 ;;;; 571844 
 
 Increase 30.567 
 
 Sundries, 1887-88 27 4no 
 
 1886-87 :::;;:;; V^'fd 
 
 Do. 
 
 10,620 
 
 Increase 
 
 Crown lands, 1887-88 124 050 
 
 i>o.i886-8f :::::::;: {{Vml 
 
 Increase. 
 
 14,050 
 
 It will thus be seen that there is an aug- 
 mentation in all the services which are 
 most easily controled. Where, then, are 
 the evidences that the promises of econo- 
 my were fulfilled. 
 
 Thehon. treasurer has giv*;n us but scanty 
 information as to the current year and the 
 probable results at its close. It is a re- 
 serve on his part which certainly savors of 
 prudence, as it was his interest not to pro- 
 voke discussion on that point. I must how- 
 ever gratify the impulse to enlarge on it a 
 little further. At the present moment and 
 with the ofHcial documents in our posses- 
 sion, we may make an approximate calcula- 
 tion of the amount of the ordinary expenses 
 of the current year. We have just seen 
 that for the nine months end- 
 ing with the 31 St of March 
 they amounted to $2,250,653. It seems cer- 
 tain, then, that on the 30th of June they 
 will reach the figure of $3,350,060. The 
 Government had voted the following sums 
 last year : 
 
 Ordinary general budget fori 887-88 $3,015,329 
 
 First supplementary budget 67 900 
 
 Special orders to May 16 180 003 
 
 Second suppl. budget now asked for 123 282 
 Codification of laws 45,000 
 
 Total $3,431,573 
 
 If the House vote the supplementary bud- 
 get that has been submitted, expenses 
 amounting to $3,431,573 will have been auth- 
 orized during the current year. I do not 
 exaggerate, then, when I say that the real 
 expenses of the present year will reach $3,- 
 350,000, supposing that the credits voted be 
 not exhausted. 
 
 Let us compare the ordinary expenses of the 
 current year with those of the lart 'omplete 
 year of the former Government : 
 
 Expenses of 1 887-88 $3,350,000 
 
 1885-86 2;961,503 
 
 Increase $ 388,437 
 
 This comparison shows an increase of 
 nearly $400,000. It is thus, forsooth, that 
 the present Government practice economy 
 by augmenting tho expenses by four hund- 
 red thousand dollars in a single year. 
 
 Keplying last Friday to certai/ remarks of 
 the hon. leader of the Opposition, tht hon 
 Prime Minister admitted that the financial 
 operations of the current year were far from 
 satisfactory. I give him credit for the 
 frankness of the acknowledgment, but he 
 does wrong when he tries to throw the re- 
 sponsibility, partially at least, on 
 his predecessors. We may ask, how- 
 ever, whether the Ministry purposes 
 to conduct the operations of the coming 
 year more satisfactorily. Evidently they do 
 not, if we may judge by the general budget 
 which they ask the House to vote. They 
 ask us for ordinary expenses of 1888-89 
 credits amounting to $3,277,359, to which 
 amount it is only fair to add the special 
 credit of $63,000 for the codification of the 
 laws, and the credits, amounting to $17 OOO 
 for various rublic works imputable to 
 revenue, as in the past, because those 
 penses have always been reckoned 
 the ordinary expenses of the 
 The addition of those credits 
 the entire figure up to 
 
 f?!''!./^ *''^* ''"• ^^ °iav expect 
 that the Government will ask for a fiict sup- 
 plementary budget before the end of the 
 year and a second at the next session of the 
 Leg)slature,_both being included within the 
 financial year, 1888-89. Nor shall I exagger- 
 ate if I set down those supplementary 
 budgets at $150,000 which will bring the 
 ordinary expenses of 1888-89 to the relatively 
 enormous amount of $3,500,000 in round 
 numbers, or an increase of $540,000 on those 
 of 1885-86, for which the former Govern- 
 ment 18 entirely responsible. Clearly then 
 we have not entered upon a reign of 
 rigorous economy, but rather on an era of 
 rapidily increasing expenditure. 
 
 The hon. Treasurer counts upon an 
 ordinary revenue of $3,345,67 2 for next 
 year. I consider his forecast of receipts 
 jiist on the whole. But even granting that 
 they are completely realized— and we must 
 always beware of miscalculations—it seems 
 !u ?f' inevitable, judging by appearances, 
 that tne Ministry may close the operations 
 of 1888-89 with a deficit of from $100,000 to 
 $150,000. We shall, in that ' case^ 
 "?^ ^*?° ^^I'ely return to the era 
 of deficits to which the preceding Gov- 
 ernment had happily put an end. 
 
 ex- 
 
 among 
 
 year. 
 
 brings 
 
 $3,358,259. 
 
14 
 
 Is it possible to prove more clearly than I 
 have done that the present Government has 
 not fulfilled the nromises so often and sol- 
 emnly made by those who form part of it 
 when they were in Opposition? 
 
 Let the hon. Treat urer permit me to say 
 that he has been unjust towards his oppo- 
 nents when he claimed for his colleagues 
 and himself all the merit of the augmenta- 
 tion in the resources of the province. The 
 development of the revenue in the cur- 
 rent year and in those to come is al- 
 most entirely the work of the Conser- 
 vative Governments which have administer- 
 ed public affairs since 1879. It is very 
 strange to hear you cite, for example, the 
 commercial corporations tax as a proof of 
 what you have done to increase the revenue, 
 when every one knew with what energy 
 you combated that measure. And is not 
 your pretended surplus in the present year 
 composed almost entirely of the arrear- 
 ages collected on account of those 
 taxes which had accumulated while 
 ) our predecessors were courageously striving 
 to obtain from the tribunals recognition of 
 the constitutional right of the Legislature to 
 levy those taxes. 
 
 If you wish to be * .d.ted with justice (and, 
 be assured, we shall not withhold it from 
 you) you ought to begin by showing justice 
 to your adversaries, whom you have too long 
 been combating with the weapons of a party 
 spirit the most deplorable and most hurtful 
 to the public interests. 
 
 You boast of having placed the 
 finances of the province on a solid founda- 
 tion. But that task was fully accomplished 
 before your accession to power. You got into 
 office just in time to profit by the patriotic 
 labors of those whom you have so unjustly 
 accused. 
 
 Your predecessors had an ordinary budget 
 of three million dollars in round numbers. 
 You pretend that it was an alarming situa- 
 tion. You arrive at power and in two years your 
 ordinary expenses have risen to three mil- 
 lions and a half,while your revenue, by your 
 estimate, is only $3,345,672. Yet you cry 
 out that you have saved the province from 
 the ruin that threatened it. Is there any 
 possible way of accounting for so strange a 
 pretension ? 
 
 C0N0LD8IOM. 
 
 If I have deemed it my duty to show up 
 the numerous contradictions between the 
 conduct of the hon. ministers in power, and 
 the principles which they professed in op- 
 position, it was not, be assured, for the vain 
 pleasure of drawing a party advantage 
 from it. Since they have had the 
 responsibility of office, our oppo- 
 nents have evidently begun to judge the af- 
 fairs of Government very diflerently. I will 
 not reproach them with their contradictions, 
 provided they acknowledge they were de- 
 ceived. Under certain circumstances, it is 
 even honorable to contradict oneself, when 
 the act is inspired by a broad sense of duty 
 to the country. But, that it may have its 
 full merit, it must be accompanied by a ready 
 acknowledgment of the error of opinions 
 formerly held. On our side, also, 
 the roles are changed. We are 
 now Her Majesty's loyal Opposition. 
 To fulfil with good results to the province 
 the duties of our position, we must under- 
 stand that, far from being an obstacle to the 
 vigorous administration of public affairs, a 
 parliamentary opposition ought rather to be 
 a source of energy by which the ruling pow- 
 ers are impelled to fresh ardor and higher ef- 
 forts in the public service. Its criticism, if 
 enlightened, loyal, just and marked by ele- 
 vation of thought and patriotic feeling, 
 should convey to the Government 
 the impulse of its own sincerity 
 and earnestness. On their side, let our 
 adversaries cease to cast upon their prede- 
 cessors the responsibility for their own acts. 
 Neither the party in power nor the Opposi- 
 tion can live by recrimination. It is well to 
 review the past when we can draw from it 
 useful information or timely suggestions. 
 But W( should not forget that our duty as 
 the people's representatives is to labor in 
 such a way as to make the future as prosper- 
 ous, brilliant, and as happy as it can be 
 made. To that patriotic task let the Oppo- 
 sition apply themselves with unceasing en- 
 ergy and praiseworthy ambition aud then it 
 will have done its share of the work which 
 it is the mission of this Legislature to ac- 
 complish.