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(FaX^ f^'Ci^ ^^ lUd<:U<^ 
 
 MKMdlJANDlM. 
 
 Tli>' ruihvfiy ii..li.'\ ot rhi' Maiiit.iliii (iuvrriiin la, ii- it Ini" lii't-ti turc-liaili'wcil in tin* 
 pililii preKM. \* lit -11. Ii iii.iaiiiitiuli'. aiiil \t trmiiflit with ^-ndi ni'rioii!. cdh-" '(Uimk'i's to tlio 
 rr(iviii''f. timt t'vt'r_\ rt'itiilfiit ol' tin' rrovinci' r<h>iiii| li iiH^lt uinli r-tmi.l rlir .•iimli'liiim 
 under wliich it in |iro|HMiMl tn rurry out thi« |Mili<y. 
 
 It wtw ttu! (Ict'lurcil iiitciilioii (il till' hit.' (i.iv.TiiuK'nl — ttii iniiiitinii whi. h )iii>t linii 
 emphiif-i/.t'il l>y U* micii'-i.iii'*, ilu- pii'^i'iit < iiwcrviitivi' OiivcrMnn'iii — ti. Mliimuti'h ..Mur" 
 tor the jii'Djile ot the I'r'iviiioo II ratt' 111' 10 ciMit-i per 100 IIm. on Whiut tnun Munitolia to 
 Lake Siiiiorior, ami varioiM jiroieot:< have Id.n ili«'ii:»-eil with the ohjeci <it liriiiifiiij; that 
 abotit. 
 
 It i.^ now known flial ilie Oovoniment, in order to he in a |lo^ition to intlnenee the 
 (jiieHtioii irf rate's, liai> ha-, il. with llie cpiimi ol' |iunhuw,', llie \hu- it" the Nortlieni Paeirto 
 in Maiiit. oa. eoini)ri!<iiiir ilbont 3oO miles, and il U imder^itood that the rental to he paid hy 
 the Government is : 
 
 For tht! tir»t ten years |210.t)00 per nnniim. 
 
 " seeoiul ten years 226,000 " 
 
 " third •• 275,000 
 
 Theroat'ter 800,000 
 
 and that the option ot' purchase is at |7,000.000, 
 
 It may be here remarked tiiat it is diffieult to understand how. in the faee of the 8tro'-(f 
 position taken by tlie leaders ot" both political parties aifainst the over oupitalizalion of rai. 
 ways, tlie Government eaii justify an arrangement under whicli it will pay as renl.i! interest 
 at tlie rate of 4 per cent, on over ^20,000 per mile, or about ilouble the eost for whioli a new 
 road could be built; yet capitalizing the averaure ioiital at four per cent, this is what the 
 Government proposes to do. 
 
 These lines the Government (iroposed to hand over for operation to whichever of the 
 existinjf companies would make tlie best arraiiirciiieiit, the main object hcinu' the securing 
 of reductions in rates, and it asked for proportitions. 
 
 Without (Altering into the details of the prcliininary negotiations, it will suHice to say 
 that amongst others, tlie two Companies which were really in a position to m<et the require- 
 ments of the I'rovince, the Canadiiin I'acitic and the Ciniadinn Xorthern. each submitted 
 propositions. 
 
 That of the Canadian Pacific Company provided as follows : — 
 
 let. That the Company would take over and operate the lines of the Xorthern Pacific and 
 
 would pay the Government by way ot rental — for the 
 
 1st ten years !ji220,000 per annum 
 
 2nd" •' 245"^0 " 
 
 Thereafter 300, '0 " 
 
 or a profit over and above the rental paid by the Government of more than half a 
 
 million dollars. 
 
 It maj- be said that the fact that the Canadian Pacific Company was w'lling to pay a 
 profit on the rental is a justification to the Government tor the payment of the rental it has 
 agreed to pay. 
 
 It must be borne in mind, however, that the Canadian Pacific Railway Company is only 
 able to make such an offer because it can operate these lines in connection with its present 
 system for a vastly less sum than they can be operated for by the Government, or by any 
 independent corporation, and because whatever additional traific they will contribute to the 
 Company's lines East of Fort William makes them moie valuable to that (^'ompai.}' thu- to 
 any Company whose interests extend to Lake Superior only. 
 
2ti.|. Thrtf >]»■ ('..fiii«»tiv w..(it.l iimk>' ill.' I..1I..W! ,jf .|H.irt. r.'.l(i.ti..iu iii rn?. * 
 
 (»i firuiii uikI Kl.iiir l»t>vi. II |M.itit. in the i'Miviii. •• itii.l lj»kf Sii|crior tdWiuk' 'rti ■ ♦ 
 
 ^.■|•t, l.t. 11.01 1| t.. |.,r 100 11- 
 
 ■• •• I'.MCJ i 
 
 • i'M»:j 1 
 
 •' •• 11MI.» J 
 
 •• '• l»<)ft J '• " 
 
 •• i;»o«; 5 
 
 fh !• imtkiiiit tt r«><liKtitMi <luriiiK'liut pi H.hI ..t 4 n ntf |mt loO llw in ■! .■-iiililUliinL' » t- u 
 . (M \»\*U. Tlirnc rtliiitiiiin wuiilil hiiv.' m.iinf a 'i>** t.i the Ciiiiipiiiiv tiinl a -avintf to 
 til- |....|.li- "t th.' IVitviiici- iiikI T«rrir<'rir. (iln' 'r>Tritoi-iiM miixt !>.■ lukt-n iiii" a.'.i.uiif. 
 it-imv r'ilii>ti..ii itiii'U' ill Manilolm will iiii.limlit»'.llv ttthit iIm' Korlli-Wf-r T<riir..ri.'«), 
 ..t iifiirlv Four Mllli.MiP ..I I)'iil«r». w'l lili. iIk im At nix u-ur-. 
 
 Th.' rut.' ..II Siilr t.. !.,■ r..lM..-.l ..nliwitl. t, i;> .•.lit- i-.r I'VI ll,* fn.in K..rf 
 William t<> Wimiipcj; 
 
 Til.' int.' oil Colli iV'.m Fort Williiitii f.. !..• r.Mln.'f.l lorthwitli ax |..ll..w« — 
 
 To Wiiiiii|,.i; t.i #-J.;(0 pi-r fun. 
 
 To I'ort.id.' i.i I'riiiri*' 300 
 
 To Urnnilon H.iS.'i 
 
 Sri That tlic I'onijii'.iy wo.iltl jrivf to fh'.. (.Jovi'riinu'iif .ontml of nil l.i.al rut.'H liotwoii 
 poitifd w'.'l,;., tliu I'roviiii'i' Mil. I Iwtw.'i'ii |i.iiiit-. in Maiiifolni nn.l I.iiki' Sii|..'ri.>r, Hiilijciit 
 ..iih to uii ainicul to the Court* ot tli. I'rovi- ••■ in tin- ..Vfiit of ili*|iiitf. 
 
 4tli. Tliiif tlic Coiii|niiij- woultl, without (iovrriini'Mit a>»*i*lmif.', Imil.l iltiriiiir ihr . iiiri'iit 
 Vfiir : 
 
 A hraiii'li iiiK- from it.iinc point lu-ar nraiuhiii, north-woM.rly thr.mjfU tin- nimii.i' 
 i alitiiH of Duly nnd Woodworth, u iliRtunci' of alioiit 34 mile!'. 
 
 A brniich lin« from Carman, canterly. lor ii iliKtniici' I'liliout It! iiiilon. 
 An exteiiMioti ot'thf Siiowlhike liruiK'h. 
 Whil-t all that tlic raiiMilian I'luifn' (;..mpaiiy ii-ketl in ri'tiirn wiix : — 
 IbI. That thi' GiiviTimu'iit would not. tor n period ot f.'n y.'urn. Hulwidi/.o any iifW railways 
 in that pait (it 111.. I'roviiK-o xoiith ol' a liii.' .'.'awn . a-t and wo*t tlirouirh Hinscarth, 
 uiik'-.x tiif Compuii' it.-eir hud provi..iirly rvUwA i.> huild ^u.'li lin.'^. nor any railway 
 line liotwiH'ii any point in th.' I'r.ivin... an.l I.ak.' Superior. (Thi- .uiiilition liax ^in.'U 
 li.'t';i withdrawn ha- injr the (iiivcnini..nt -Aitli ii pcrtctly Ir.c hand in this matter). 
 
 2li>l That the Oovei nieiit \M.uld put the Company in the winie position with re^r.nl to 
 taxation a> the <-';. ;adii«» Noi'liern n.-w oe.- ■; i-s. the Canadian I'aeilie being at pr.-sent 
 the nly Railwa- whi.b is t x.-d hy the rrnviiieo of Manitoba. (THIk condition lias 
 since been modili.-d. uo Otm^r -^uy agreeinu to a taxation of on.' per .'ent. of it'< ea.niiiifs 
 inst.ad ot two us .,f prcsrr leavini: the Company still the only Railway taxed in 
 Manitoba.) 
 TllI.S 1'ROI'OSITIO.V U REFUSKI> m.l in place of it the aovernment now 
 
 prop.ises to makea ...ntruet wl liai, .Sort hern C.impuny ei.ibodyin.v th.- t.illow- 
 
 iiig conditions; — 
 
 Ist. That the Canadian North, t. -«<.» will take over the lease of th" Xortheni I'u.'ific 
 
 lines, promising to pay to the i, eminent thfi name rental only ah the Government 
 itself is liable for. BUT Tli ^T ONLY IF THE NKT EARNINGS OF THE 
 COMPANY ARE SUFFICII- To MAKE THE PAYMENT. IF THEY 
 
 ARE NOT, THE GOVERNM T IT^'ELF MUST I'AY THE RENTAL TO 
 THE NORTHERN I'ACIFI' ( ^WN i OUT '>F ITS OWN TREASURY. 
 
 2nd. Thai the Company will pay inter. - i nd* u. be guarunte.Hl by the Govern- 
 ment for $5,800,000, hereinafter r.'t. ' '•' '<•! earnings, PROVIDED ALSO, 
 AS IN THE CASE OF THE RE^ "HE EARN[N(.> ARE SUF- 
 FICIENT TO ENABLE IT TO . " "HE EARNINGS ARE 
 NOT SUFFICIENT, THEN THE Gu .. ''SELF MU^T PAY THIS 
 INTEREST. 
 
8^l Th:«f III.- r..iiif'i!iv "ill iill,, di.' !,i-ii»i.|i»iii-i}..\.Ti.."- "1 V ,it.ii,a m t'lHiii.-il '•■ fl« 
 
 h" iri'ijtlit fiiii.i'i M.iiiit.iliii mill tn'twfi'i |i..itiiii ill M.itiitoliM itml l<iiki' f*ii|~ ri"!* : m 
 
 . H'( 'it ilixtiiiic 'If mail' • '" Iw .|.i. >iiiiii<"l In Ml' ('lii«;' Jifii'i- 'il 'U' Pr.iviiKt', 
 
 MhiiKC lilt inloir oli.iii '!»• tliiiii. 
 
 III. Ti.Bi ill.' ('<iiii|i.iii\ Mil fi-ltii'i ill. ;.»4«»<'iii'T riit.i 111 Muiiit'«i'» ill ;J I'lii" |..r iii!l«, 
 
 iTIu" pri'". iif ('aiimli.iii I'mili' nil"). 
 ■Jill Tlirti 'li'- ''"iii|iiitiy will I'lMiiplrti' it* litii' Ih'Iwwii U'iiiiii|M'ir uii I'lirl Artlmr li> tint 
 IkI »»,t.. . \t, iiml will :ilmi ImiM III «iieiiro • fniita-i tii»i> mi u |»>iiit mi ifi line itt 
 
 or iinir ;•; ._ t'' tii liiiiii'li. 
 
 In r. turn till iliii I Hiir-Hii..' IMK < i( >V Kl{ N MKVT I'VDK. JvKS 
 1 : . Til •.'imr.iiiti' ■ till' l.iiii I- 'il tin' ' >iil.iri 1 aiiil i;;iiii\ I. ■ <■ li'iiihv iv . priiiri] >' hhI iiiii'iiMf 
 1 1 I. till I (i^tiiiii ■■ .>l '2 mill-, iitukiiiix 
 
 A t'i|.iiit iiiii.;;ii.v I.I |.,.»tio,iMiii 
 
 \Vi' ^111 iiiiiiM!iI iiiii'''i>«t I'li.'iiifi' ii( $ -;!-.' ■' 
 
 2li'l. 'I'liilt ill till' I'Vfiit ■ . 1' .rriii;ri lit till' Hiiihviiy lii'iii',' in-iiiltli iiiit In |my iti .i|ii'nitiiii; 
 i'%|M'ii..'i. mill ti. III."' ill.' iiiii'i'.'-t I'll till- li. ii.l-i. t'li- <« 'VKUN'MKVT ITS''"I.K. 
 WITIIOt'T ANY UKt i»rU-iK AUAINST TIIK CoMI' \> V. W'lU, M\I\K 
 (UH)\< .SI (11 DKI-ICir. 
 
 3ril. Tn alliiw fill' l'iiiii|i;iii\ to i«Hii<> itililitiiiinil IkhhI-. (iiii(fiiar;inti'..il) t.i tin- t'Xti'iif nf 
 |:ii 00 |«'r mill' ovit flic p .rfiniM of the C'liiiiiiliiiM XortlnTii lim- uimii »vliii'li the 
 (loviTiiiiii'iil liii'< iilri'inly ;.'! iiiti.i'il Mil ii<"iii' 111 fMOllO |i(>r inili'. 
 Tlii'Hc iirr iili ot'tlir iin|ioi-t;irit rnitiiri.* ol'iln' |iro|ii>titiiiiii ot'lli' two ('oiiiimiiic''. 
 
 iihrr us ((»Mi-ARi; thk uk-si-kctivk okkkus: 
 
 T.ikihKtir«t tl.iii ..ITIIK CANADIAN I'ACIKIC COMI'ANY- 
 
 It iiu'iiiif that till' (''>in|i;iiiy wmilil luivo ; 
 
 Built Hiii-li liniiH'h lin. n* iiiiglit li<. coiiKiiliTi'il in I'onmiry I'v ilu' (lovi'miiu'iit ; 
 
 Miiilo r.'ilii.'lioiirt ill rill. I'liiiiini'M.'iiitf ..ii tin- \*^ S.']ifi'iiili. v 'u-xl, ilmt w.nilil liavo 
 diivfil F'oiii- Milliini- '.| I>olliir~ ii ilii'i |il' 111 ilii' N.iitli-W.'nf , 
 
 (livi'ii ioiii]i't'ii' I'oiifi'ol .it'if» ..tli.'r mil'-' ill MinifoliH mni lii'twci.n Maiiit.il.a ainl F.akc 
 Sllfii'rlof to till' (io\ .•rniiieiil iiiiil t'ourln ot tin' I'mviiu'i', 
 
 AVliilst it iiwki'il : 
 
 For no lioii.l", l.ir m jtiiaraiili'c nor liir tin' a^isimnili t any lialiility whuU'V.T In tlu' 
 
 Gov.'iiiiiii'iit, a-, even in tlif fUi*t! of tin- r.'iital of flic Irai-fi! lini's tlini lovcrmin'iit w.iu'd 
 havL- till' .'ovi-nant of tin' i<lroni{i"<t I'oriHiratioii in C'aiiinlii, i ol only aifaiiwt any lo^-. Imt 
 providiiii; for u liniul-oni " jnofii. 
 
 Tlie only <'oiiceKMoii the Company iihWh for all tin- ailvaiitau'en it otlfru, in a modonite 
 rediK'tioii ill taxation, ntill leaving it tin' only Uailwiiy Ci)m|ittiiy laxtnl liy tlio rroviiii'f. 
 
 Tlio CANADIAN NoRTlIKIiN COMPANY'S [.io|io^iti..ii on ilie other hand: 
 Provides for the ('oii-.tMi('tioii of no Itniii.h liiiL-- : 
 
 (lives no rijictifie ndiution in rates ; 
 
 Troviiles for i; eoiiliol of rates similar to that otfered hy the Caniidiaii rueifuComiiaiiy ; 
 
 rr.ivides for u reduction in imnseniter rates, whi.ii means nothing, as the rates on the 
 Other lilies in the Province are already down to A cents per mile, and the rates on the 
 Canadian Northern would undoubtedly have been forced (h)wn by public presr.ure to the 
 same ba^is bei'oro long ; 
 
 Provides for a promise by the Company that it will complete its line to Tort Arthur 
 by 1st October, presumably to carry out a share of next sea.soir.^ crop, whilst it is kiiowu 
 that the Company's lines cannot bo completed by the date named, and that it will be 
 utterly impossible for it to provide by that time proper facilities for hamiling any portion of 
 next season's crop ; 
 
 It provides also tor the construction or acquisition at some future time, no dale being 
 specified and no penalty provided for failure, of a connectun with Duluth. 
 
 8 
 
WhiUt in payment fur ttn'ce ri'iiiarkal'le " comvfiion'* ' : — 
 
 Till' Oovcrnnit'iit uiidiTtaki'r' to a-tHumo a !iu))ilit_\ lor n n'iii o; an ir.fnia''' 
 amount por iinniiin ot' t:i!^><,000. 
 
 Wliiili cupitalizi'd at 4 f>er tent, int-ans $7,45-, 4J0, lint lor ihi- purpo-c ot' 
 capital liahility may l>f taken under tht> option at i 7,0()0,0Oi) 
 
 Ami by way ol guarantee on l)on<li* a liability of 0,800,000 
 
 Or a ..ital liability under thin contract ot #P2,800,00O 
 
 And in addition to thin the Govornmont has jiruviously assinned liabilities 
 in the form of a tfuarantee of bond* on the Company's lino already constructed, 
 oiiy 475 miles at $8,000 per mile 3,N00,000 
 
 Making a total tor this one railway of ■fcl*5.t^*^f>,000 
 
 Tlipre would be rhorffore an nvcrairc annual rental and interest charge of ... tJ82,0 
 
 As'sutning that there are 11 In miles of road upon which to earn thir* net revenue, tin- 
 linr-i being as follows : — 
 
 Line north of Gladstone 325 miles 
 
 " east of Winnipeg 150 ■' 
 
 " west of Port Arthur 2!>0 •' 
 
 Xoithcrn I'acitic lines leased ;550 " 
 
 111.) 
 It woulil mean a ti.xed charge for interest and rental ot SiJlO.OO per mile per annum. 
 
 Assuming that the road could be operated for 65 per cent, of its gross earniug>, an 
 exceedingly low proportion and possible only in the ease of a line with a heavy tratiic, (it is 
 true the Canadian Northern Company shows a less proportion, but it would he interesting 
 to learn what share of its earnings were derived from the freight charges ou its own con- 
 struction material, and what rates the Company allowed itself on this busine.ss), it would 
 require gross earnings of nearly $1,750.00 per mile per annum to enable sucli a charge to 
 be paid. 
 
 As this is a much larger sum per mile than the average earnings of the Canadian 
 Paeitic Company's lines in .Manitoba, a child can ( aNulate the result to the Province ot rlio 
 acceptance of the Canadian Northern Ciunpanv's proposition. 
 
 But to pursue this subject a little further, tile Canadian Northern Comjiany undertakes 
 to pay the rent-Is and interest on guaranteed bonds out ot earnings If it nin. but if it can- 
 not the Government steps in and pays these charges itself. 
 
 What are the chances of the Canadian Northern Company lieing able to pay theses 
 charges ? 
 
 It is not unreasonable to cite the experience of the Northern Pucitic and Manitoba 
 Company, the leased lines, the lines which are being leased to the Government of Manitoba 
 BECAUSE THEY ARE UNPROFITABLE TO THE COMPANY, and unprotituble not- 
 withstaiuling the fact that this Company had the same or better facilities (with eipial, if not 
 better rates) for getting the traffic from its Manitoba lines to the Lake, as the Camidian 
 Northern Company will have when its line is com|ileted. 
 
 Tlie Northern Pacific and .\Linitoba Railway, although established in Manitoba for 
 many years, and running through a well settled country, HAS NEVER YET PAID 
 EVEiV ITS OPERATING EXPENSES. 
 
 ITS LOSS in the actual operation of the line apart from the interest charges, for the 
 year emled 30th June, 1900, according to the sworn statement filed by the Company with 
 the Dominion Government was |185,578.21. 
 
 This being the case what prcspect is there for the Canadian Northern line between 
 Winnipeg and Port Arthur paying its operating expenses, let alone interest on its cost, for at 
 least many years to come? Is it reasonable to suppose that a line built tor over 400 miles 
 through an unsettled and practically unproductive country can do as well or nearly as well as 
 a line built through such a well settled district as southern Manitoba. But allowing that it 
 does as well as the Northern Pacific Company has done, and that the Canadian Northern 
 lines west of Winnipeg will take care of themselves it means what ? 
 
 4 
 
 _^:'--^-^m.''-^- 
 
 .vieyg^^ 
 
It n]«'iiii- tail. 11 .I'l'li' r.' I" till' iiitiTi-t HI, ttiuiraiili fil iinni- 
 ami the rciitut to Ik- \niA l^r the I.-uk.mI lint's* whi.-h the tinvirii- 
 aifiit will 1 iivi- r.. [.ay, ami wl.i.)i i t tiiemstflvct* aiii'iiinf to * ••"•i.OOO [ht uiimim. 
 
 There will he tlie deficit in tlio ojieration ot flie loiisetl line- 
 mixl of tlie line between Winnijiejr and Port Artliur whieh, .'veti 
 under the liivoriible conditionH stated alH)vc, will umount to no leos 
 
 than -te^'TSO 
 
 innkinjf a total defieit of *1, 145,780 per unnuui, 
 
 an amount oonsideriibl y larger tlinn the total revenue of the Province at the present time. 
 
 It mwM be remembered that the figures i,'iveii are based upon the rates now existing. 
 What then will bo the result if the ratei are reiluced to thi' figures ottered by the Canadian 
 Pacific Company ? 
 
 The comlitionn of the Government guarantee are su.h also, that whilst it makes good 
 all losses, it participates in no [irolit, in other words : 
 
 It takes the responsibility of pledging its eretlit for over $10,000,000 in aid of a line 
 whose p- ifits will go to its private owners, but whose losses will be borne by the Govern- 
 ment. 
 
 It is necessary for a moment to draw attention again to the provision of the contract 
 under which the Government undertakes to make good any deficit should the ditterence 
 between earnings and operating expenses be insufficient to pay interest. 
 
 The definition ot operating expenses can be Ibund in the Railway Act, and any one at 
 all familiar witli railway operation will understand what an opportunity such a provision as 
 this offers for the expenditure ot the Company's entire revenue in the improvement of its 
 line, regardless altogether of any obligation to pay interest. 
 
 And what is the Government getting for the enormous liability it is assuming? IT 
 IS GETTING NOTHING MORE; IT IS GETTING LESS than it could have got 
 WITHOUT ASSUMING LIABILITY FOR A SINGLE DOLLAR. 
 
 "fiiif*'* f 
 
WlNNU'Eu, .Ittiiiirir\ , liljh I. !;•')! 
 Hon. K. !• liuBi.ix, M.I'.P.. 
 
 Premier of Maiiitobii. 
 
 Wiiinii>»'/<. Nfnn. 
 Sir. 
 
 Rercrrilig to the ilUoiiMion at our ititorvicw tlii* ufternoon, 1 iloniru to repeat wha' wa « 
 •ta^'' in {fenornl term* to you mkI the other Menibor^ ot your Qovemment 
 
 Tho Ciiiiaiiiaii Piu-ifi<', ok described iti the irmitrai't between the Govcrnnicnf ainl tlie 
 Syndicate, received HubittAMtiul aid in tiie way of constructed line«, landn, and rii*h. Imt the 
 road, ■ then eontemiiiated, would not at thi«* date bo earning money eiioui^li to give 
 any reti.rn on the private capital invested in tlie onterpriMe, much leu* to have enabled 
 the proprietors to raise the large addilii d amount of money that has been expendi-d on 
 the line since its nominal c<Mnpietioii, to improve its ciiaracter, so that it inighr be 
 operated more economically and ettectively. 
 
 That the Company has been tinancialy successful is due to the broad policy of building 
 and ac([uir'i'>g fe«'il rs, adopted almost in the bej^inning and pursneil ever since. To-day 
 tliere are .pwards of two hundred and twenty-tive millions of dollars of private capital 
 invt 'cd 'n tho enterprise. 
 
 Common honesty demands that the people wIk) invested that vast 3um of money in our 
 country should receive fair treatment at the country's han<ls The Government could, o. 
 course, by utilizing the resources o< the Dominion or any of the Provinces for the constr.io 
 tion of i-ompeting lines, seriously injure, or, indeed, totally destroy, the property of tlic^e 
 investors. 
 
 Ti;e Government cannot operate a railway any more economically than a private 
 company ; indeed, experience tea'lu -i that Government operation i-- the more ex|n'nsive. but 
 with tho public chest from which to make up deficits, the rates fu;; the carriage of traffic 
 over a Govorment Railway System could be establislied on a basis that would be impossible 
 in the case of a private corporation. It woulil take t]»e public some time to fiml out that 
 the apparent reduction in rates was more than lounter-baianced by the increase in taxation. 
 Speculators can be found who, with a sulFicient Government bonua, will undertake to 
 build linos, and will accept almost any coudition as to rr.tes, their interest boinir only in the 
 profit to be realized from the construction of the lines, without any regard to tlioirsMcoossfiil 
 operation in the future. 
 
 Even where there is a 8i>ecific contract by which the Coverninent waives the control of 
 rates until certain things have coino to pass, as in the case ot the Canadian I'a.itic. the 
 Qovor.iment is justified in resorting to all reasonable nieasures to sei'tire fair rato- of 
 transportation for the people of the country. b\it in determining what arc lair and na-onable 
 rates some recognized course should be adopted. It would be manite-^tly wronij to 
 arbitrarily name the rates that are to be put in cti'crt. without reterence to their ciiicion* y or 
 fa mess. The Canadian Pacific has not attempted, and it has no desire, to use its contract 
 with the Federal Government tor the purjiose of securing rates for the carriage of treight 
 that are unreasonably high. It has been tho policy ot the Company to reduce rates trosn 
 time to time, in one locality or other, when it couM be done without unduly sacriticinir the 
 interests of its security holders. 
 
 The Company has a line of railway from Lake Superior to the Pacifi.- Coa,-t. with 
 bran-h linos in the Provinces and Territories. South of the International boundary there 
 arc two railways similarly .-lituated. The circum-'tances under which the lines are operated 
 are identical in many jiarticulars. but the advantage is with the lines south of tho 
 International boundary. Their rolling stock, fuel, and supplies cost them loss 
 money than ours cost us. There is little, if any, difiercnce between us in the 
 matter of wages. Each of the railways south oi the boundary lias a population to serve 
 several times as large as the population along the Canadian railway ; consequently these 
 railways have more local business. Their tolls iind fares are controlled by the Federal 
 Government, with reference to certain clashes of traffic, and by each of the States through 
 which their lines pass with reference to tho traffic within the State. It may bo assumed 
 that under all these circumstances their tolls are as low as can be reasonably expected. In 
 any event, we do not hear that either the Federal or State Government will provide money 
 for the acquisition or construction of lines to compete with them. Is there any reason why 
 the rates in Canadii Pacific territory between Port "William ar 1 the Pacific Coast should 
 
 6 
 
 wm^^m- 
 
Ih' liiwtT than t'ldfc «liu h j ■ vbiI in the torrit'iry lii'twi-ri Iiiiliith iitiil thi' I'uoiftr r.>u»t in 
 the I iiiteil Stilt i>h ' On the .•Dntniry, fakinif cVfTytliiiiir int. i'oti*i4ii'ration. thuuld iiDt thi* 
 Cantiilan Pacitic Im <'ntitioil tn HOint-whiit hiifkuT ratcit. in v'ww of the ('I'lulitioiis |ir('vailiii){ 
 north of the It tcrnntionai l>ouiiilury :■ I iniiko thi! Mtafcnii-nt most jM«itivfly that our rate* 
 ari' uii low ai< '"■i* of -ii.y of tlie railways in corri'!«iM>n(|inj{ ttjfritory in the ('nited State*. 
 I think that iln- Minister ofRmUvayn, Hon, Mr. Uluir, who t-aiiited an exhauiittve com- 
 parison to be made iijiwurdx of u year ajfo, will !»««r mo out in thin ttatement. It the*o be 
 the factH, and they I'lui lie easily verified, ix there any reasonable ground for complaint 
 agninnt the CanatUun rai'itie, and in .here any jiistitii-ation tor legiitlative action, that is cal- 
 culated to force down to an iinreaitonable and indefeiiHible baMJ^t the oompenHiition that the 
 Company Hhall receive for its (tervice«, thereby using the ntrong arm of tl • Government to 
 attack investor*, and to injure, if not destroy, their projierty ' 
 
 The popular tlemanil for what in known ax u ten cent rato on wheat in Matiitobu liui* at 
 the present time no more Justification in I'act than would a demand that gold doilarri ithould 
 paiii« current at seventy cents in that Province. No such rate pre\ails elsewhere under like 
 conditi'>ns. It is thirty to forty jier cent, lower than the rates from corres()Oiiding points in 
 the United States to Duluth. 
 
 It is the jiolicy of the Canadian Pacific Railway Company to reduce the rates Just as 
 rapiiUy as circumstances will permit. The increase ot tonnage will be a most im[M>riant 
 factor iti bringing this about, because on the western sections of the sy.-.tem several times as 
 many freight trains could be run without any increase iti the fixed expenses, the additional 
 cost being practically represeiited by the wages of the truinmeti, fuel, and repairs. Every- 
 tliiiig that has been done, and may be done, to iliveit tonnage to other routes is ati obstacle 
 in the way of the reduition, which I beg to assure you in all sincerity the shipper is no 
 more anxious to secure than the Company is to make, Just as rapiilly as the cotiditions 
 warrant. 
 
 Xotwithstandihg the Company's desire and determinatioti to pursue this jiolicy, it 
 Seems imjiossible to satiety the public and a large section of the press of its sincerity, 'Mid, 
 therefore, the Company has decided to do what it can in ordinary prudetice towi.rd ullayitig 
 agitation by submitting for the acceptance of your Qovcrniuent the following propositioti 
 for the control of rates : 
 
 The Company will agrcjto build a line from :i (loint near Brainloii on the (jiciit N'ortli- 
 West Central Railway, northwesterly, f'lrough the Municipalities ot Daly and Woodworth, 
 for a distance of about 31 miles, during tli current year; also a line tiom Carma:i i-astward. 
 It) miles, towards (>sb(.rnc. 
 
 The Company will lea?e tor 00i< years trom the Goveniiiient the Xortherti Pacific lines 
 in Manitoba, including ei|uipiiieiit and terminals, jiaying iherct'ir an animal rental of Two 
 hundred and twenty thousand dollars for the lirst ten years, Two hundred and torty-tive 
 thousand dollars for the >i'ci>nd ten years, and Three hiindriil thou-and dollars tlici. a r 
 
 In consideration of the Province piaring the Comiiany in the same positiini that .' •• 
 Canadian Northern now oi'cupies with reference to taxation, and an undertaking nu thi' 
 part of the Provincial Goverimient that lor a period of teti years the Goveriiment will not 
 grant aid toward the construction of any railways within the Province, south of a line 
 drawn easterly lietween the western boundary of the Province as it now e.xists, or may 
 hereafter exist, through IVniscarth. to the eastern boundary of the Province, nor any railway 
 line between any [loiut in the Province and a port on Lake Superior, the Comiiauy will 
 make the following specific reductions in its rates : 
 
 Sept. 1st, I'.iol, Grain and Flour. 1 J cent- [ler hundred lbs. 
 I(t02, " " I cent 
 
 1003, '• '■ J " " 
 
 1904, •• " J '■ 
 
 1905, " •• J '• 
 1900, •• '• J ■' 
 
 thus making a reduction within that period of tour cents per hundred poo nds from all 
 points within the Province. 
 
 The rate on salt will be reduced forthwith to fifteen cents per hutidred iiouiuls from 
 Fort William to Winnipeg, and to all other i)oiuts in proportion, according to existing 
 
 tariffs. 
 
 The rate on coal, Fiu't ■VViHiaui to Winnipeg, will be reduced to 1^2,50 ; to Port.igo la 
 Prairie. $3.00; and to Brandon, $3.35 per ton of 2000 pounds. 
 
Ill <iril<'r tci ili'llii.' iIh' riiiitnil nt iiti>l to iloul willi (liii|mt«'« tliat inav ufi« with refer- 
 encu to nit»'7«. tin- <'iiiii|»uny will uiiil«rtiiku to ptiy to lln> (li>vernnu'iit tin Kmouitt nut i'xc«<«'<l- 
 iiig Kivi> TliDiMuti'l DiilliirH per ai<niiii, ui4 tlio *iklurv of u fiini|H'fr<it iimii to lie iip|iiiiiiti>>l by 
 tho flovcrniih'iii lur thf piirp<>«' of" ri'i'iMvimj, iiivi'>*titfutiiijf, iiiul n-portinji upon I'vcrv fotu- 
 plaint alKiiit the truiinportuti')!! >-hiir)(t'i< oT tin* Cotnpuiiy. It'ut Hiiy time itiU'li otHciiil xliull 
 Im« of till- o|.iiiii>n tluit iiiiy nl'tlu' (Jmnimiiy'-* lii.'iil riittM hofwonn point* within tln' I'roviiii'i' 
 of Maiiitoltu 111' lM-t\vi'fii iiiiy point in Mttiiitoliu iiiiil Fiiiki' iSnporior, in fitlicr ilirci tion, in 
 not fair ttiiil r«;i*onulil«, till' Ilniiway C' tinti«»ion»'r fop Miinitobi iimy notify tin' Coinpsny 
 to tluit I'tfi'ft, iiiiil lit tin' I'liiiiijji' wliicli. in liin opinion, \» ii"ii«Kiiry to rniiki' it im. 
 
 Ff till- l'<i!npiiiiy lit' not xittiKfuiil willi tin- propoMcij . iuingis it itlmll, witliin oiif niniith 
 from the rccoipt <t tin- notion, ^iitirttV tlir>Conimi<»ioncr tliiit tho nit<' propo«i'il liy him i* not 
 » fair uml rcuwuiuMi' oiii' ; tWilin^ thi«, thn unostii.n «hull in' rftiTro"! to the mtjuiru'iition ot 
 thi- t'ourt of KitiifK lJ< Mill of N;iinitiilm, to ilctiTiniiii' wiiut uii<it'r tin- liri'uniKtuiK'c* in ii lair 
 and rettKonalilo rate in roit^x-'-t of tlu- mutti-r in coiinoction with which tlu' jtropniti'ii ihun)fi' in 
 required. Sm-h Court i.iay, for tin- puriH.-i.' of ili>tcrniiniiij|( tho nmtti-r, nuikr full 
 in<|uiry »:i<l rtHcive such cviilcniii hk may he aihluccil hy cillnT party. It -hull he thi« 
 privilegf of either ot the par'it'n to app''ul from till- jailjfnifiif nl .*ni-h Cmirt to the Cmirt 
 ill hfitic, whoHc ilt'i-',i»ion in tli. matter nhail I'-- liinil. 
 
 It would 111- iKn'M^ary, i rourne, in any format asfri'i'iiieiit In aiuplity tin' detail- nf the 
 procedure and to provide nn-a is of .■oinneliiiijK the Coinpany to put in etfeii the rati'* liiially 
 Uecideil upon. 
 
 If it lie il M-nie'l ili->iiratile tliat the portion ol the litu' lietweon Winnipi'^: ioel I'or.»ir<' la 
 P-Hiiii' jliniild li.- icHerved lor Hie piirp'xe ot nivinir the Canadian VnrlhiTM Kaihvuv a 
 conii'-otion with the Wiiinipijf and it Snutli Ku-terii Rai'.wiiy .nel tlie Oiitario iS: Kainy 
 River Railway, tliiit line nniy he re.Horved hy tlie (lovniiuiiiit. ihe icnlal to lie paid liy the 
 Cnnailian Pacitie llaiiwa\ Company to lie reiliiei'd /iri ratfi aeeirdnit; to tie- tnileai;.'. 
 
 It is understood, of uour-e, that t'.ie iirop'witioii is siiliinified ii- a who!.- and suliiiM'i to 
 aecfptanee within a reasonahle time. If tlnre he ftiiytliinir in the propo-ition r.ipiirinjf 
 further explunalion or amplitiiatioii please advise me. 
 
 I liiivi' the honour to he, Sir, 
 
 Your oliedient vervain. 
 
 (Signed) T. t; SHAlJtillN'KSSY, 
 
 
!i> ai-i-.'iri thi' |ir(i|HMiti<>ii ot the Cuiift- 
 IiiIimI i'iud JuiMinry lui>t. 
 ■i; th*l yiMir (}iiv)'niiiii<tir wmjlil not 
 "<itioii, without 111)- hiiv'ing u furthur 
 
 her «tHtuiik«ttit« tiiuii') l»_v youMflf' 
 
 'h«t tilt' |iri>[>oiiitioti w I,.. «ijl»- 
 
 .«.!(( ftttlinlttirtorv til viiiii- (>('» i>rii- 
 
 of jrot «»oviTiiiiunit thi- liirtl ortur iii 
 
 M>d th.: t wiirt ttjfiiiii.t .h'' iiiiuiiiiiioiM 
 
 -I I'rii.i • 1h' t, »! b»'»t iiitiTf'utt of tlit> 
 
 •ir the 
 -mil Bti 
 
 k'.l u 
 
 •iil>i't 
 
 i Vl»»i 
 
 ;t. 
 (|,*ftP! u ,t;U«»d. f htig, oil 'iH'holf of till) 
 
 li. «iii|j mifli! s{ii 'IK to fht> |>ro|Hi!*ition 
 
 MoHTMAL. 8lh Ft'hrimrv, IftOt. 
 Ron. K. I'. RoBLiM, 
 
 Pr«'mi«r ot Manitobl^ 
 
 Wiiiiii|n'j(. Miinitohii. 
 
 Tlie Kxoc'Utiv* Aifaiit of the C<>iM|Hiiiy lia« r«'| 'rtml to mo your xlvU-a to him (h»t nt » 
 wmiMM ot'tho MemlM'r* of your purty riKxiitly htti' it wmt iIocIiIimI \,y ,\ tiuijority of thn 
 Mt):>ilH>rK, uKainat tUv wi»h ol your <Jov«riim«'iif, ii 
 iliiiii I'ucitii' Kikilway ('om|iuny a<lilrtti«H»l to ymi ai 
 
 III vii'W of your »«4urttn<'c to in.- whtm in Wiin, 
 rt'ji'ct fht« Caiiikiliikii I'ttcilif llttilwity l'oiu|Miiiy - |>r>i 
 
 oiijKirtuiiity of t>i>miuiinifHtiii(( with you, to mmbli* u, to amtuiil the |iro|Hhtitioii to, •<> fur m 
 |x<Mit>lu, coiiii.' into ucconl wilh tlic wmhf* of your followerji, I hiivc ilixiil..! on iHtmlfof 
 the (.'itiiailiiin I'ui'ifli lUilwHv C<im|iuiiy, i>> -ulituii thr llowiug tiioiliti< utioiM <>t thi- origiiiul 
 |)ro|Hi<iitioii, uihI uIko thf ulivrnutivi- oHur hcri'in tuiitii oil 
 
 I am c'oiiKlruiiiL'il !o (•niioiivor to iiu'ut tlu' vii'w« ol' your followorK, not only l>y my 
 iK'niro to mulce im arriiiigi'iiu-ut with your (}n"oriiii!''it wiucli will bo in thi- best intoront* 4>f 
 thu iVoviiiiu, liuil will «>fur« for ihu co»i}>«iiy tli.- Iiuurty support mil tM-iipiTiitioii o| all ro- 
 ■{ileiitx ot Miiiiitobii, but ivl«o by ycuir trw < ■■' i»"uk'i.i lo m-'that tlm |>ri>|>o.itiori ww u tniii'h 
 bt'ttur oiii' tlinu you hail ■■xjiuoUmI to 'il -it \>y thu : 
 
 to Mr rtakMi, an. I l.y tin. II„ii. Mi. i Vir J'hit 
 
 ji'L't to till- nil (titl(.'utioii4 wblt'h ai'i' in 
 lu^nt, utid wuK, in thd o|iinioii of all '> 
 the interiMtit ot the I'mviin'c tiiut •.■ 
 wishes of your Uovcrnmtnit, ami ajjn 
 I'ruvincf, titac uaucui hs'l ilucideil i:ui 
 
 For tJu'M' rcu«>ii!(, iiiul thn na- 
 Caiuiiliiin I'uiMtii' HuiUvuy Comjiuiiy. ■ 
 of th« :'2iiil January, whicli, exi:t'|it ms 
 
 !•(. Tl.c ''ompaiiy will witliUni'H ihfti \" 
 your (jovwniMii'iit from iinniHting otli. ri>«il» i 
 of ton yearn, tbiui leaving tlie Go*, 'itucu' ■! 
 in aueh tiiattura. 
 
 2uii. Tl'i' Company will iiihIi: ii-, rf., 
 taxation us thu (JiiiuliHii Xort \»iT»i>»ii. 
 
 im[)0!*oil up to DUO p«r cent. ( ml ot « 
 
 ourning.i in Muiiituiiu. 
 
 Thu result of therie mo<liticatioiix i-* 
 return, ':„ great advaiitageH contuineil i 
 only benefit the Company in to receive Iwiiii- a . 
 imjxised, but Ktill leaving the Canad'ui 1 a-ilk 
 by your Province. 
 
 I have pernoimlly given you the reiwoim « 
 to the Trovince should the contract, the term, of which ^ou have disclosed to me, he 
 entered into with the Cttiuidiau Xorthern or any i.ihcr Rui' ,iy Company. I liavt pointed 
 out to you. that it. making the proposed confniot, the l'r...aice assumes a fresh liability of 
 112,800,000, and an annual payiueiu of .iii82,000 ; that according to the sworn 
 returns to the Dominion Government, the lines of the Xorthcni Pucitic liailway 
 Company in .Manitoba were last year tMeriited at a loss of sl85,573.2l apart 
 entirely from interest on bonds, notwithstanding the fact that these lines are con- 
 structed through some of the most fertile parts of your Province ; that taking this as 
 a basis, and allowing every margin in favour of the Canadian Nr "rn Company, that 
 Company cannot hope to more than pay its operating expenses for mt ears to come, and 
 that in the meantime the Province of Manitoba must pay out annually i»,i rental and interest 
 the sum of $682,000, a sum approaching the present total gross revenue of the Province 
 without any ilaim against, or hope of recovery from the Company. 
 
 I have shown you that the statement that the Canadian Northern Railway Company 
 has been able to pay its operating expenses and interest on iu bonds from the commence- 
 ment may be due to abnormally high freight rates charged by that Company to its 
 contractors (its owners) for hauling construction raateriu., and that this \ 3w is clearly 
 
 9 
 
 • 1 st»iicl »« originally made : 
 
 ■« ■>rigiiH proposition restricting 
 
 » -• ti««» ot thf I'rovin.'.' for a [KTiod 
 
 - ri-^ tnei! to u. t an it may deem liest 
 
 in- ( j»,t>d ill the sam.' position us to 
 ■v'Hig to pay such taxes u* may be 
 ut SIS at present) ot the Cnmpuiiv 
 
 • v'tlcr your Governnieiit, without 
 k'iiiiy g otlerot thf 2i'iid .luiiuiiry, tli»- 
 rtdu.tioii in thi- amount of taxes to be 
 *»\ Coiupany the only Railway taxed 
 
 ill my "I 'lion, it will b.- most disastrous 
 
 t.r 
 
.MUi«i,ti„....|. „,.» .M.l.v •-> III.- \mu,n ..t ..rl,«r r..„i|.Hui..- -ir'il»r|y Miimt.-.l. Im.i I.v tl„> 
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 niu.l biiv i« t]|.H«iroii« ortiHl iiiMMt It (;..tiiiHi.iy lik.' lli.< Cut. i.liiin N'..rll..TM 
 
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 tti..| ..il..-r i.iutt..r^ i........,ary 1,. ,.|,..l.l.. y...i t.. nrriv.. at an iht..||i;r..nt . ,.n.l,j,i..i,, 
 
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 Railway C.tnpuny nliall |.r..vi.i.. r,.|lin^' .f...k, an.l .......r.! m„.t <-..a,,.t,„|,|.. rat... »,.r I Uh,.j 
 
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 pr„,.»....l t,. 1... |..„...,1 ,■,..,„, the N..rtl,..n, l'a..itu.. wh-n „,,..,.a„.,| ,.,„l..r „.„.; .a..„r.M.. 
 ciriMimstuii.v. a,. |..,rti.,n ..f,, .y.t..n, .•xf..ti.lin^ t., I^ik.' ^ui-.r!.., 
 
 Thi.C.„n,.anywilla'..a,.r....tl.at...ttl,..e.,.i .,( ,l„. „.,„.. it, ,,ro,,.,.ition .,(' .1 .arv 
 
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 The C.nipany ..iu,-titi.-ati„„ „„. ...akin^ thi. -H.-r. un.l.r al! •I,- ,r.M...,rat,.-. . ..„.li„..,| 
 
 abov... .H that thes.. hn..- .a,, I p.-rat-.l n,...t ,...,.n.„„i..ally a- a ,„.rti ,t ,t, lar-.. tai'.vav 
 
 Ky^teIn. .i.al l«...an.,. the rvvn.,,. tV,„n th.. tn.tfi-. that tho li,.,.. .,v„„l,l .ontnhi.t.- t., it's 
 extenstve miloa,^. oa«r ..f F„rt Willia.n, w.,„l,| make them more vahnihl,- t„ thi. Cn.pu, '• 
 tha.. they cMtl.l pos.„.|y 1... „. the X„rtl.,.r,. I'aeiti,. Railway C,.mpa,.v. tl... Cana.t.an 
 jyorti.ern Uailwny tV.t.ipai.y <,r t., the .Manit..l>a tJovernment. 
 
 The tna^nitn.le of the propo.c.l traH^aetion hetw....,, tl„. Government tl„. y.„,|„.n. 
 Pact,.- KatKvay Company an.l the C.„,a.lian Northern Railway (;„mpuny atnl the ern.hinK 
 financial hnr.leu that it wo.tl.l pr..hably itnposo „n the I'rovit.cc. from whi.-h there .-an he 
 1.0 c«eapo. once the contract h«» roceive.l lejfi.lative Mat.ction, prompt, mo to nrge .„,on 
 yon that no .lehn.te arrangements in connection with it be tna.le I.etweon the aover.ment 
 Ht.d the other parties until, at least, there ha. hoot, turther opportunity t„ .ii.eu.. the 
 whole suhieet with the Memhorn of the Loginlauire. 
 
 I liave the honour t^J be, 
 
 Sir, 
 
 Your oh'-Jient servant, 
 
 (Signed) T. G. SIIAUGIINESSY, 
 
 
 I'rt'sidt'iit. 
 
 f^ 
 
 10 
 
 Mi^'' 
 
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