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The following diagrams illustrate the method: Les cartes ou les planches *rop grandes pour Atre reproduites en un seul clichA sont filmAes A partir de i'angle supArieure gauche, de gauche A droite et de haut en bas, en prenant le nombre d'images nAcessaire. Le diagramme suivant iilustre ia mAthode : 1 2 3 1 2 3 4 5 6 u ^1 ♦ K i.'J ft ' J LONIAL RAILWAY WEDNESDAY, 21st FEBRUARY, 1883. THURSDAY, 22nd ?" -SATURDAY, 24th " . '«•, Present: GEORGE M. CLARK, Esq. ; FREDERICK BROUGHTON, Esq. D'ARCY EDWARD BOULTON, Esq. JOHN B. BERTRAND, et al., OJlaitaawta ; AND THE QUEEN. . il«BP0rwXeut. ARGUMENT OF D. GIROUARD, Q.C. COUNSEL FOR CLAIMANTS. ^^^"tj^- 1 'f i ^1 'J v i INTERCOLONIAL RAILWAY CLAIMS COMMISSION. WEDNESDAY, 21st FEBRUARY, 1883. THURSDAY, 22nd " SATURDAY, 24th . " «' PnraKNi' : (IKOKGE M. CLARK, Esq. FREDERICK BROUGHTON, Esq. D'ARcfv EDWA ARl) BOULTON, Eh«. JOHN B. BERTRAND, et al., C>Xaitnatits : AND THE QUEEN, ^Ics^jontleiit. ARGUMENT OF D. GIROUARD, Q.C, COUNSEL FOR CLAIMANTS. * Ottawa, Wednesday, Feb. 2l8t. Mr. GiROUARD — III proseuting this case, Mr. Chairman, I find my task a good deal easier than in the McGreevy case. In that instance I felt it was nei'essary to discuss some questions of international law ; and I laid down as a rulhig' principle that as the work had to be performed in the Province of Quebec, the case should be governed by the principles of the French law which, I con- tended, were more favorable to the contractor than the English law. There mwriliii H^ttii was a good deal ol discussion on this point. I do not intend to refer to thi^se legal questions in tht.' present instante. 1 intend to rest this case upon the law as laid down by the Grovernmont in dealing with several contractors on the Inteniolonial Railway, and on public works generally. But before going into the merits of the case, 1 presume it will be necessary to establish thai these claims of Bertrand & Co., concerning sections 9 and lA do not come within any ol the exceptions mentioned in the Commission. I believe the exception which might be applied (if it can apply at all) reads as follows : " 4 — Any claim arising out of or connected with a contract, the performance of the work under which was legally taken out of the hands of the contractor, 10 and in regard to which the work was completed at a loss to Her Majesty." I contend, in the first place, that the Government did not take possession of the works " legally " ; and in the next place, that the works were not completed by the Government at a loss to Her Majesty. I think it will be sufficient to establish the first point to show that this Commission has jurisdiction. The second point . i nvolves, in fact, the decision of the whole case. The Government took possession on the 9th of June, 1873. In order to take possession of the works legally, I believe that thi^ Commissioners and the Government, under whose advice they were acting, were and are bound to show that they had done everything which the contract required them to do, and if 20 they are in fault in any respect towards the contractors, that then they had no right to take possession of the works. In the case of Roberts vs. The Bury Com- missioners, decided by the Court of Common Pleas in England, and reported in the Law Reports, Common Pleas, vol. o, page 310, Kelly, C. B., for the said Court ; '• The contractor also, from the nature of the works, could not begin his w^ork until the commissioners and their architect had supplied plans and set out the land and given the necessary particulars; and therefore, in the absence of any express stipulation on the subject, there would be implied a contract on the i-Mt of the Commissioners to do their part within a reasonable' time ; and, if they .30 broke that implied contract, the contractor would have a cause of action against them for any damages he might sustain, and the Commissioners would be pre- M 8 eluded from taking advantage of any delay occasioned by their own breach of contract ; for, it is a principle very well established at common law that no person can take advantage of the non-fulfilment of a condition, the performance of which has been hindered by himself" Further on the learned Judge says : — " In this case we should have been content to have simply adopted the judgment of my brother Blackburn, in which we in substance concur ; and observing that inasmuch as it is admitted on the record that the alleged failure by the plaintiff to use such diligence, and to make such progress as to enable him to complete the works by the day specified was caused by the failure of the defendants and their architect to supply plans and set 10 out the land necessary to enable the plaintiff to commence the works, the rule of law applies which exonerates one of two contracting parties from the perform- ance of a contract, when the performance of it is prevented and rendered impos- sible by the wrongful act of the other contracting party." I find the same principle laid down some years previously in the case of "Westwood vs. The Secratary of State for India, reported in the Law Times Reports, N. S. Vol. 7. Page 736. Want of Plans, Etc. Now let us see whether the Government was in fault and whether by their doings they prevented the contractors from going on with their work as dili- 20 gently as they could have done if the Grovernment or the Commissioners had not been in fault. The notice which the Commissioners were obliged to give the contractors that they were annulling the contract, is to be found at page 334 of the Bertrand correspondence — the book of correspondence published for these two sections, 9 and 15. And here is the reason mentioned in that notice for so annulling the contract : — •' And whereas the force employed, the rate of progress being made, the general character of the work being performed, and the materials supplied and being furnished, are not such as to insure the completion ot the works within the time stipulated, and are not in accordance with your contract. " Now we, Aquila Walsh, Esq , the Hon. Edward Barron Chandler, Charles John Brydges, Esq., and the Hon. Archibald Woodbury McLelan, Commissioners, appointed under and by virtue of the act of the Parliament of Canada, passed in the Session held in the 31st year of Her Majesty's reign, entitled, "An Act respecting the con8tru(;tion of the Intercolonial Railway," do hereby give you, and each of you notice in writing, of our intention to take the whole of the works of the said section No. 9, out of your hands, and to employ such means as we may see fit to complete such works at your expense, and that you will be 10 held liable for all extra expenditure incurred thereby." This notice was given under clause 6 of the contract which says : — " Whenever it may become necessary to take any portion, or the whole work out of the hands of the contractors, or to annul this contract, the Commis- sioners shall give the contractors seven clear days notice, in writing, of their intention to do so, such notice being signed by the Chairman of the board of Commissioners, or by any other person authorized by the Commissioners, and the contractors shall thereupon give up quiet and peaceable possession of all the works and materials as they then exist ; and without any other or further notice or process or suit at law, or other legal proceedings of any kind whatever, or 20 without its being necessary to place the contractors Crt out of your hands." Their resolution, or their representations to the Council, dated the day l)i'fore, do not mention any such reason. The only reason which they mention is one of'SB'^if^^mmmmmimmmmm 6 upon w hich they are not able to inform the Government, viz. : that statements for extra work, amounting to over a half a million of dollars, were submitted to the Chief Engineer for examination and that they were not in a position to report. They admit on the very face of these proceedings that they were not able to in- form the Grovernment. Before they could take possession of the works they ought to have been in a position to show that the Government did not owe a cent to the contractors, or they ought to have been in a position to show that they had not gone on with the works, as represented in the notice. There is no statement to the Privy Council that the contractors had not done their duty — that they had not been carrying on their works satisfactorily. The contention is that they were iQ claiming extras, and the Commissioners were not in a position to report upon those extras, and therefore they want the w^orks taken out of the contractors' hands. They show on the face of this paper that they had no right to proceed as they did. The Chairman. — Have you taken into consideration this circumstance, that on the 26th of May, 1873, your clients notified the Commissioners, in express terms that unless they got money immediately on extras they would not be able to continue the progress of the work ? Mr. GiRouARD. — Yes, I have taken that into consideration. The Chairman — Assuming for a moment that money was due to them on 20 extras, that is on work done entirely beyond the agreement embraced in the contract, then your contention amounts to this, that if money was due to them on a new bargain, or on the new contract or new liability, that so long as the Govern- ment was in default in the payment of that liabili:>y, they were not bound to go on with the works under the contract. Mr. GiROUARD. — No. I agree with you in some parts of the statement made, but not in others. I dc not contend that those extras were outside of the contract, in one sense. I contend that they were bound to make any extras the engineers required, but that they were entitled to extra pay for such extra work under the contract. 80 The Chairman. — Only if these extras were caused by change of grade or locatio)!. Mr. GriROUARD. — That was for the Commissioners to report upon : They were not in a position to report whether it was caused by change of grade or location, and when my clients notified the Grovernment a day or two before, that unless they were paid for those extras which they considered they were entitled to, and on which the Commissioners were not in a position to report, I say they were asking what they were entitled to, and it was a good reason for them to say " If we are not paid we cannot go on with the work." That is sus- tained by the authorities I cited a moment or two ago. tUf I have referred to the notice and ri^solution of the Commissioners at the time they took possession of the work ; let us now inquire into the facts of the case and see really whether the reasons mentioned in that notice were true or not. Did the contractors actually use due diligence? I think I will be able to show that they did, and I will be able to do so from the reports of the Commis- sioners themselves, and their engineers. At page 69 of the Bertrand correspon- dence, a report of the Commissioners is to be found, in which the following statements are made. It is dated the 24th of October, 1870 : — " The amount of work actually executed upon these contracts during the present season is satis- factory, considering the date at which the contracts were let. 20 "The preparations for a vigorous prosecution of the work in the future are very satisfactory. " The same difficulty in reference to stone, occurs on section No. 9, as has been met with in sections Nos. 3 and 6. The contractors for these respective sections haA'^e consequently entered into a joint arrangement for the transporta- tion of stone, and have purchased barges, schooners and a steam tug, and by these arrangements expect to deliver during this and next season, and as fast as it can be used, all the stone required for these sections. " Excellent stone has been found near the bridge site over the Nipissiguit A very good granite quarry has been opened up, and about one-third of the 30 Ill 8 stone for the heavy bridge had been quarried at the time of the Commissioner's visit. Lower down, another granite quarry has been opened up, from which stone is being placed directly upon the barges, and transported to different points on sections Nos. 9 and 15. " Tbv grading and excavations (both earth and rock) are being proceeded with, and the Commissioners believe that, with the extensive and satisfactory preparations for work, the contractoi. vill show great progress during the next season." The Chairman. — Of course, you know that is their report nearly three years before they took possession of the works? 10 Mr GriROUARD. — I propose to show that they used due diligence from the beginning to the end. I will show that up to the very time of the notice the Commissioners did not cease to report in favor of the contractors. Mr. Broughton. — Mr. Schreiber reported against them. Mr. Girouard. — Yes, after his visit of the line, in March 1871. But Mr. Schreiber's condemnation refers especially to the expenditure in the quarries, a fact which can easily be understood, considering the difficulties the contractors had to contend with in this respect. But I believe that the representations of Mr. Schreiber were greatly exaggerated, for immediately after, the contractors received from the Government $40,000 for the four sections, beyond and above 20 the engineer's certificates. The report of the Commissioners of the 27th of September, 1871, will be found at page 105 of the correspondence, and page 13 of the Orders in Council. In this report, the Commissioners refer with ap- probation to a report of Mr. Fleming. This report goes on to say that he, Mr. Fleming, has much pleasure in stating that the works executed so far, on the whole line of Railway, have, with a very few exceptions indeed, been done in a satisfactory manner. As the best proof that the Government and Commis- sioners were satisfied with the work that was done so far, they recommended further aid to the contractors, and on the recommendation of Sir George Etienne 9 Oartier an Order in Council was passed extending that further aid in the shape of a sum of $100,000, then paid by the Government or the Commissioners to the contractors beyond the monthly estimates. I will now refer to page 244 of the Book of Correspondence. This is a report made by Mr. Sandford Fleming to the Commissioners. It wag the basis of a report of the Commissioners to the Privy Council. It is dated the 15th of January, 1872, and consequently after the close of the business season for the year 1871, and before the opening of the business season of 1872 : '• These contractors have pushed forward their work since last winter with a great deal of energy. They have^accoraplished a great deal more than was 10 expected and the character of the work generally is quite satisfactory. " I am perfectly satisfied, however, not only from their own statements but from the statements of the engineers in charge, that the work has been executed at a heavy loss. " From all that I can learn, the certificates fall far short of the actual ex- penditure, and unless they be increased the work must come to a stand. " The work could not come to a stand without resulting in serious diffi- culties, and in all probability, very large additional cost, and therefore it should be avoided if at all possible. " You are aware that the certificates are made out from the returns of work 20 executed, and measured up by the resideJit engineer, and the quantities so returned are computed at prices established by the Grovernment. " I believe it will require those prices increased at least 20 per cent to give the contractors the necessary relief, and as it is a matter of the very greatest moment to them that assistance should be rendered without delay, I shall be prepared to make out a supplementary certificate at once at the proposed in- creased rates on receiving the authority of the G-overnment to do so." 10 At the same page, 246, a report to the Privy Council, datt^d 20th January, 1872, will be found adopting this report of the Engineer in Chief, the condition being made, however, that the Commissioners shall take <;are that the bulk sum of the contract be not exceeded. I believe it was at that time that a sum of 165,000 was paid by the Government to these contractors beyond the progress estimates. In the report of the Commissioners to the Minister of Public Works, dated the 2nd April, 1872, we find the following statement made as to sections 9 and 1 '), at page oO of the Orders in Council. " These two sections are in the hands of the same contractors, and the same jq difficulties that have been experienced in regard to 3 and 6 were found to exist on these two sections. " A great deal of work has, however, now been done upon both, and there seems to be no reason to doubt that the greater bulk of the work will be com- pleted by the end of the present year. " These four sections have been constructed in parts of the country where no public works of any magnitude had ever previously been constructed ; the population is not large, and there has consequently been very considerable diffi- culty in obtaining skilled labor for such works." At the page 280 of the Books of Correspondence, I find another report 20 signed by Mr. Sand ford Fleming, dated the 16th of July, 1872, in which he says : " In the meantime it is due to the contractors that I should report favorably of the work they have done and are doing. Three out of the four sections are in a very advanced state, and they are undoubtedly doing everything they possibly can to have the whole work finished in a satisfactory manner, with as little delay as possible; their expenses are, however, very heavy. I am informed that their monthly outlay is greater than the certificate amounts." At page 284 a telegram will be found signed by Mr. L. Gr. Bell, the district engineer, dated the 2nd of August, 1872, addressed to Sandlord Fleming, Fort 11 Garry, he buiiig at the time in the North Wt^st, which is as follows : '* Section 15 mwch tth usual. Four hundred men. Big cutting at Nipissiguit going on." At page 305 another telegram will be found signed by Mr. Bell, to Mr. Fleming, dated 29 Octobor, 1872, as follows: "Section 9 road very nearly »K?:&RKrt*fb:7.=cx:fitcjrer^- 12 always fur largor than their monthly estimates. It is admitted that the sun^eys whiili led to the construction of this great work were imperfect and done in a very hiirried manner. I believe it is also proved that the contractors could not verify the representations made in the specilications, plans and other papers sub- mitted for their consideration before making their olfbr. 1 believe it has also been proved that in fact the cross sections were not laid before the contractors. The consequeme was that a good deal of extra work Was found to be necessary as the contractors w«>re proceeding with their work. In some places a great deal of ch.uige of location took place. It is true- thei'e was none on those sections, but there was change of grade, and especially change of structures and quan-10 tities. The foundations for some of the abutments and piers, it was found, required greater depth than was mentioned in the bill of works, plans or other papers. Rock was found extensively where earth was represented, and a great deal of borrowing from a long distance had to be made. The Government and the Commissioners were greatly in fault ux the sup, plying of the plans necessary to construct this work ; and more than that, too, they did not have on the spot a competent staff to set out the work for the con- tractors, and upon this point I will refer the Commission to some undoubted evidences to be found in the hook of printed correspondence of Bevtraud & Co. A large number of the pages of that book might be referred to, but in order to 20 save time I will content myself with quoting the most important ones. At page 23 there is a telegram from E. Lawson, the local engineer, to Mr. Marcus Smith, the district engineer, under the date of the 28 of April, 1870 : — " Hertrand's agent is pushing to get work laid out on contract No. 9." Mr. Smith, on the same day, telegraphs back to Mr. Lawson : — " Q-et l)ooks, cross sections, &e., contract No. 9, then take assistants and set out work to keep contractor going for a short time till the staff is organized." Here it is established beyond a doubt by the vlistrict engineer that the staff was notorgiuized on the 2Sth of April, 1870. The contract was signed on the 2nd ol Noviinbcr, 18(J9 ; so we have contractors who were required to fiiiish a 30 work of great difficulty within a very short period and under a very severe ■■■ i I 13 penalty, laboring under constant delays brought by the Grovemment's officials ; in the face of this obligation we have the positive fact laid down by an officer of the Q-overnment, that the staff was not organized on the 28th of April 1870, that is nearly six months after the contract was let. But it appears that it was not im- mediately after this telegram of Mr. Smith's to Mr. Lawson that the staff was organized; for at page 26 we find a formal complaint from Mr. Bertrand to Mr. Smith, in the shape of a telegram dated the 23rd of May 1870, in these terms: " We are in want of an engineer who has authority to give us measures and pro- portions " Let us look at the letter of Mr. Peterson, another local engineer, to Mr. 10 Smith, dated 16th of June 1870, and published at page 29 of the book : — " The following niembers of my staff have arrived here : Mr. Dickie, assistant engineer ; Messrs. Maingy and Mann, rodmen, and Mr. McDonald, chainman. •• I shall send them out to-morrow to lay out land widths for clearing, and will keep them at this till finished, or till I receive further instructions from you. "1 suppose Mr. McLaughlin has by this time finished the tracings of section and plan." The tracings of section and plan not then finished ! He " supposed " they were finished ! 20 "I think,' continues Mr. Peterson, "it would be as well to commence stak- ing out the work so that the contractor may be able to commence work as soon as he is ready and in as many places as he may wish. I should like to g*it the books of instructions, and my location level books, as well as the green books for cross sections." Most astonishing! The 16th of June aud none of these things are in his hands ! Mr. Broughton, — " As soon as he is ready !" i 14 Mr. G-IROUARD. — He was ready months before. I have read that a month before Mr. Bertrand's agent wanted to have work laid out. He had been asking all along. We find even at the same page, 29, another telegram or letter, from Bertrand & Co. :— "At Nos. 805, 934 and 825, there is very little work laid out ; will you please send some of your engineers." That is dated the 20th June, 1870. At page 31, we find there is the same trouble about section 15. Mr. Bertrand, in a letter dated the 29th of June, 1870, ^I read this one to show that his previous one must have referred to section 9 and not to 16): — "As the contract and bond for section 15 are now signed, we should feel very thankful if you would direct to have all the profiles of that sec- iq tion that were exhibited in different places sent to us ; they are of the greatest use to us. and we presume of no more value to the Commissioners." Again, at page 43, in a letter from Mr. Peterson to Mr. Smith, dated the 23rd of July, 1870, it is stated : " The contractor has asked me to stake out the west abutment and pier of the Nipissiguit Bridge, so that he can make his road from the quarry to the bridge in the right place, and I believe he wishes to excavate the foundations. "I have given him 600X60 as about the front of the abutment, but I have nothing here to show its exact position or its size." At page 44, in a letter from Mr. Smith to Mr. Peterson, he says in parenthesis : 20 " The general (lithographed) plans have not yet come down from Ottawa." The Chairman. — That refers to lithograph plans which, as I understand, was only necessary when they wanted to work at the details of the structures. Mr. GiROUARD.— They wanted to work at the details about the stone, and so on, all the time. It is very strange that after such a length of time those plans were not there. As I have shown, Mr Bertrand was asking for some special plans than ; he wanted to have the location of the abutments of the Nipissiguit bridge, and Mr. Peterson says, " I cannot do it : I have not the plans 16 with me." Referring to page 61, Bertrand complains of the delays about laying out the abutments of the Nipissiguit bridge. Mr. Peterson in a letter to Mr. Smith, dated September 2l8t, 1870, says:— "The contractor has just written me to lay out the first abutment at the Nipissiguit river. Have you received the plan yet ?" At page 63, Mr. Bertrand asks for some more details in a letter to Mr. Peter- son, dated the 6th of October :- " Would you please to lay out the foundation for the pier, and abutments of the bridge at T6te a Gauche, and to tell us what kind of foundation you will require. "Also to lay out the foundations of culverts at station 475, and fo decide 10 about that place. " Also, to mark out the ditches at each side of the dump at Nipissiguit, and to give us the qualities and sizes of the wood required for the cattle guards, and tell us if we construct the fencing according to same specifications of sections 3 6 and 7. " We would require the above soon, so as to give orders for the different timber necessary for next summer. Hoping you may be pleased to favor our reqiiest." And Mr. Peterson shows in a letter to Mr. Smith he has not the plans. In a letter dated the 7th of October, he says :— " Can you send me a specification 20 for fencing and cattle guards ?" Mr Brouohton.— They were not ready for them. The contractor was not ready for the fencing. There was no complaint about the fencino-. Mr. aiKOUARD.— But it is not only the fencing: he is complaining about everything. ! ii Hii : n\ 18 Mr BROUaHTON. — That is an ordinary letter applying for so and so. The Chairman. — I do not know whether your are contending that these different requests of Bertrand & Co. to the engineers asking them for foundations and otht'r work to be laid out, is any evidence that there was improper delay on the part of the engineers. Mr. G-IROUARD. — No, unless he complained again, or the engineers say they are not ready. The Chairman. — You understand they do not lay out the work until the intimation is given that it is wanted. Mr. G-irouard. — Yes, that is perfectly understood. It is never done, and jq it cannot be done except at the contractor's request. At page 68 about the western abutment of the Nipisiguit bridge, Mr. Peterson, in a letter dated the 22nd of October, says to Mr. Smith : '• He " (referring to the contractor) " informs me that he will be ready to commence building about the end of next week, and you are aware that I have no plan to give him to build by. You informed me that general plan No. 11, sheet No. 12, would do to cut the stone by, but said you were expecting a plan from the Chief Engineer's office." The Chairman. — Four days after that, Mr. Smith tells Mr. Peterson that the drawing for that abutment will be sent down in a day or two. go Mr. Girourad. — Was it sent down ? The Chairman. — But it was so late in the season that there was a doubt about the expediency of commencing. Mr. Girouard, — They had an excuse, but Mr. Peterson who was on the spot says, " I cannot give you the plans." im n The Chairman.— Mr. Smith notifies Mr. PeterBon : • Let the contractor got rock in loundations west abutment, Nipissiguit ; it will be according to general drawing sheet No. 14," (page 73). So that within four days after the request is made, and before a week expires, which he says will expire before he is ready, he gets the plan. Mr. Girotjard. — He gets the general plan but not the detailed plan. He had been asking all along. On the 22nd of October it was decidedly not too la(e to commence work. The Chairman. — The plan he was asking for then was the plan for the place to commence work, because the lithographed plans showed how to get 10 the stone ready. Mr. Girouard. — But he wanted the work set out by the engineer, and the •'ugineer said " I cannot; I have not the plan." The Chairman. — On the 26th of October, which is still within the week which is named, page 73, at the end of which the contractors were expected to be ready, Mr. Peterson gives to his assistant, Mr. Blackwell, the very cross sec- tions and all the minutiae of the locality for that foundation (No. 157) and on the day following, Marcus Smith again sends him a tracing with a section of the abutment and all the plans that were necessary and descriptions of the masonry, the sizes, etc., still within the week. an Mr. Q-irouard. — In laying out the work of an important structure like that, I do not see that the contractors are bound to wait a week. To commence the work within the week they wanted the plans before the end of the week. The Chairman — No, but the contractor says he will be ready to commence building about the end of next week — it is even more than a week ; it was the end of the week following. Ill fl i i -J 1 1 '''1 li'i 1 1 '^' 5 litj 1 ) If I 18 Mr. G-IROUARD— Whether he had beeu waiting long for the plan or not, it shows that the office must hav'e been badly organized when they were running ail the time for plans. At page 87 Mr. Smith, in a letter dated the 17th of November, 1870, complains to Mr. Fleming that his staff has been reduced. He says : — " I have just received the list of the staff as re-organized by the Commis- sioners. I am sorry to see that in every case one assistant has been taken off eac'i division. This will make it difficult in some cases to struggle through the winter." The Chairman — He adds, however, that his office staff" is strong. Mr. G-IROUAUD — Yes, he says that, but he complains that the staff" is reduced 10 too mui'h. The Chairman— Not " too much." Mr. Q-IROUARD — The moment the engineer expresses a regret that the staff has been reduced, it is an admission that the staff has been reduced too much He says, " I am sorry to see that in every case one assistant has been taken off each division." But we will find somewhere else that the contractors really were delayed lor want of plans. At page 97, in a letter to the District Engineer, dated the 28th of November, 1870, Mr. Peterson says : — " The contractor is constantly asking for plans of the Nipissiguit bridge so that he can commence to cut at once for cutwaters. &c. He has also asked for 20 plans of overhead bridges for public roads — could you send me a lithograph copy of these bridges to hand him ? I have not yet received the specification for the fencing or cattle guards." At page 102 Mr. Peterson says Bertrand is making the same complaint. In a letter dated the 6th of December, 1870, he says : — " I think you told me you were getting ready some general plans for farm crossing bridges, culverts, &c. If these are finished, would you be so kind as to send me down a copy of them ? " r 19 If the plans for the Nipissiguit bridge had been sent as represented pre- viously, that is within a week, I do not see why Mr. Peterson should be asking for those plans all the time. Mr. Peterson adds : — " I am making drawings of the ground plans, and fixing the position of the overhead bridges for public roads; shall I make them all to cross the line at right angles, or will you allow a slight skew so as to keep the road straight as at 284 and 337 ? Of course, at 465 and 583 the angle is so great that the road must be changed, and so we may as well cross at a right angle. " Mr. Bertrand is asking for plans of these bridges, so as to give Mr. Fergu- son his bill of timber." 10 Mr. Chairman. — The plans that were asked for, that is, all the detailed parti- culars at the end of November by Mr. Peterson in that letter to which you have alluded, are given on the 22nd of December by Mr. Smith, the tracing and all the details, (page 108). Mr. G-IROUARD. — He asks again at page 102. The Chairman. — Who asks again ? ' Mr. Girouard. — Mr Peterson. The Chairman. — Mr. Bertrand is asking for plans so as to give them to Mr. Ferguson for a bill of timber : that is timber to be cut during the winter. The plans he wanted were not stopping any work at that time. go Mr. G-IROUARD — The plans were furnished one month after. The Chairman.— You will notice Mr. Smith says :— " We are not bound to iurnish the contractor with such plans as this, nor do I insist that he shall carry out the work literally according to this plan, but to assist him and save time I submit this to him as a plan that would ensure good work, and I think economical." ^'fi f il > :l! '^ so Mr. (tIROUard. — If he does not insist that the «ontractor shall do it by that plan, what plan is he going to do his work by ? The Chairman. — He had already intimated to him that the lithographed plans would be sufficient. He had the lithographed plans which were held to be sufficient in the absence of specials plans. It does not appear that the lithographed plans had yet reached the sections, moreover, they w^ere too general as they applied to the whole line. Mr. GriRouAUD. — At page 97, Mr. Peterson represents that the contractor is constantly asking lor plans for the Nipissiguit bridge and plans of over-head bridges for public roads, etc., and he asks to be sent copies of the lithographed 10 plans of these bridges to hand to him. It is evident that these lithographed plans had not been handed to the contractor before 28th November, 1870. Here again, page 123, Mr. Odell, in a letter to Mr. Marcus Smith, daied the 27th January, 1871, says: — " The contractors have applied to me for specifications and plans of wooden bridges for farm-crossings and public roads. The former I have, but the plans I have not ; will you please have them forwarded at once." At page 128 Mr. Peterson, in a letter to Mr. Smith, dated the 4th of March, 1871, says:— "The contractor wants plans of bridges at Little and Middle Rivers, as he 20 wishes to commence dressing stone for Middle River. I have informed him that he can cut for four feet walls, as shown on sheet No. 20, but his foreman has sent me in word that he wants a plan. Shall I give him a plan or will you send me one ?" It was not made then. About these lithographed plans, Mr. Berlinguet tells me that they are not made for any special structure or section. They are all alike for the whole line of railway. 'A 21 The Chairman. — The understanding was that they should be adopted unless there was a special order. Mr. Brouohton. — The contractors were constantly asking for plans of par- ticular stones. The Engineer shows him that on sheet No. 20 there is so and so, but the Ibremau sends word he wants plans. They always want more particulars. The foreman wants a plan to work by. Mr. GiROUARD. — Those lithographed plans had to be regulated for the local structures. They are subject to special application for every structure. Mr. Schreiber, in his report of the 11th March, 1871, after his visit over the line, published at page 182, mentions grievances of the contractors, and among them 10 he says : — " The contractors at sections 3, 6, 9 and 15, set up a plea of having been seriously delayed with the masonry and works connected therewith, owing to having been unable to get the work set out when applied for, and in several instances, not having been furnished with plans of structures when called for and needed." v.- 1 really believe that a contractor will not make a complaint of that kind to an Engineer going to make a special investigation unless the grievance is a seri- ous one — one, in fact, of public notoriety. But there is something more than that, Mr. Schreiber reports upon this complaint of the contractors at page 134 : — "The delay which has arisen in supplying plans of structure and staking out 20 the work, though apparently having been done with a good intention, and with a view of assisting the contractors, must in some cases be embarrassing to them, and should, I think, be as far as possible avoided." It is a judgment, in fact, upon the complaint of the C!ontract«rs. He does not want to impugn the motives of the Engineers, but he says it mast have been embarrassing to the contractors, and should be avoided I think the com- mon sense view of a case of that kind seems to be that before a contr.tctor will lay down a structure he must have plans. At page 139 Mr. liertrand complains «ii 'A 22 again resper-ting the plans, in a letter written in the French language, dated the 17th March, 1871. This letter is addressed to Mr. Smith :— " Will you have the kindness to send me a copy of the general plans which you have given to Mr, Berlinguet, as those which I have are incomplete." The Chairman. — He may have lost some of them. Mr. G-IROUABD — That may be ; but he may also have got them incom- plete. p' The Chairman. — He asks it as a favor and not as a matter of right. Mr. GiRouARD. — It appears that nothing can be got there as a right ; it must be a matter of favor. Now at page 171, there is one intance which shows 10 these lithographed plans will not do for structures. There is a special plan made for every structure. On the 31st of May, 1871, Mr. Smith requests Mr. Odell to " Let the contractors see your plan until a copy can be made for him." They must have been in need of this plan. Mr. Brouohtoat. — If you will read the whole of it you will see that is ex- plained. Mr. Q-iROUARD. — It shows that the Engineer was late. Instead of giving him a copy he let see the original. Was the contractor to go and hunt for Mr. Odell every time he wanted information about that structure. I do not think it was a proper way to treat the contractor. At page 184, in a letter dated the 20 17th of August 1871, to Mr. Smith, Mr. Odell says:— "The contractors have applied to have the foundations of the Migadoo bridge set out. Will you please let us have a sketch or trace of it, and also the position as near as you can from the data already furnished." At page 230, Mr. Peterson to Mr. Smith, in a letter dated December the 2nd, 1871, says : — " The contractor has asked me to give him detailed plans of all the JJirj ; I 1 23 structures on the line, so that he ran give them to his foreman to get out and dress stone by this winter. I do not see how I am to get them ready lor him ; it will take all this month to j^et the summer's work put in proper order, so that Mr. Mcliaughlin can hand me over his books ; and now that the masonry has stopped I want to get all the stone on hand re-measured, so that I oan commence ttie year fairly and avoid all the trouble ol last season. There is not the least doubt that a larger start is now required on this section than at any previous time. Since i\w- stall was reduced last year, we have been constantly at work, and have always had work ahead to be done." I think that is plain e.iough. Mr. Smith replied to Mr. Peterson. On pagejQ 231, Mr. Peterson says that what he sent him is not sufficient. The letter is dated the 11th of December, 1871: "I received the plan for the bridges at Grant's brook and the Millstream this a.m., but it is only a general plan ; it will be of no use to me. What tht' contractor wants are special plans for each place, so that he ( an dress the stone in the quarries and draw it to the bridge all ready to build. In the plan sent me the abutments are only 18 by 7") feet long, eti." Finally Mr. Smith complains to Mr. Fleming at page 233, in a letter dated the 14th J)eoember, 1871 : " 1 shall be glad if you will give me your decision on this matter, as soon as possible, as the contractors have asked for plans, to 20 get out the quantity of stone required, and to cut it. Will you please alter the quantity on your copy of revised schedule of quantities, according to your decision ? " It is very provoking to have this question come up now. I have written ' to Peterson a very sharp letter for his neglect, which is inexcusable, as his in.«tructions were to make a thorough revision of the structures in getting out the new quantities, so that there should be as little alteration as possible in the j'uture." In a letter published at page 235, and dated the loth December, 1871, Mr. Smith makes the following representations to the Commissioners : 30 ■vma V _J ^ 24 • The contractors will have a larger fon-e on from thf present to the end ot next summer, than they evt?r have had before, and there will bi^ moie work lor the engineers than there has been in any season, except the Hrst after the eon- tracts were let. They will not be so much on the line during the winter ; but they have their progress profiles, and plans to work up and to prepare plans of culverts and other general drawings that have not to pass through the office, and which the contractors are demanding now to get out the stone by; and next summer I expect to have a considerable portion ready for the rails, so that the centre line will have to be re-run, and grades put in, etc."' Then he says in the postscript at page 236 : " A few of the best of the rod- 10 men have been raised to the rank and pay of second assistants ; there are some others who perhaps can never be engineers, but iirc intelligent and have made themselves very useful."' That is the kind ol assistant engineers who were placed on these sections, a lew rod-men who were raised to the rank and pay of second assistants. 1 see at page 237, in a letter dated the 18th ot December, 1870, Mr. Bertrand asks Mr. Peterson to let him have his profile. Does he mean by that that he never had the protile befoi ? It would be rather extraordinary, considering that it was n(>arly a year and a-half after the contracts had been signed. Mk. Brouohton. — Mr. Bertrand may have loaned it and may have wanted 20 to borrow the engineers. Mb. CtIrouaed. — That is true, but I do not s«e why the engineer should report that. Moreover, Bertrand does not say " send back my profile." Mn. Brouohton. — Mr. Bertrand may have loaned his i^rofile to some men going another direction, and may have wanted to borrow Mr. Peterson's. Mr. GriRorARD. — The letter does not convey that idea. Why should a letter of that kind have found its way into official corresponden<'e, if that was the meaning of it ? |i 1 w ) I 2ft Mk. Bkouohton. — It contains everything apparently. Mr. Gibouard.— Mr Smith in a lett«'r to Mr. Odell, dated the 22nd of December, 1h71, printed at page 289, states in a post-script: "I have written both tu the Chiei' Engineer and the Commissioners, protesting against the r«duc- tion of the engineering staff by discharging assistants." At page 240, Mr. Smith, evidently in a state almost of desperation, addresses himself to Mr. Burpee, as follows: "I wrote to Mr. Fleming on the 18th. and again ou the 30th of November, informing him that Mr. Matthews had left, and no one was appointed in his place, and as he look three weeks or a month's leave of absence before he finally left this office, there has been no one here to write out 10 weekly reports or continue the tracings of the land plans for the Commissioners, or all the other things constantly required in the office. The only clerk I have was all his time engaged drawing plans for the contractors. He has now left' so that this office is practically shut up except when I am there myself." I do not think it could be worse than that. Then he goes on to say : — '' There is a report that several of the assistants and rod-men on my district are to be discharged at the end of this month. I have had no notice of this, but if it is true there will be no more reports from the sections, and the contractor on section !• will have to stop work or reduce his force, and it is impossible that one man, the division engineer, can ever do the work necessary to keep the con- 20 tractors going over 21 miles. Please remind the Chief Engineer of this state of things." . Here is a lettei from Mr. Brydges in answer to Mr. Smith's, dated the 4th of January, 1872. at page 241 : — " Your letter to Mr. .Tones, of the 18th ult., about the engineering staff on your district, had been forwarded to me by the chairman, and I now^ write to reply to it. " I regret that I cannot at all concur in the views which you express. If the whole of the plans for the work required upon the four sections, 3, 6, 9 and 16, I i i ) •26 have Jiot been all supplied, I can only say that I think it anything bnt a credit to the staff that such should be the case. All the work is, of course, laid out, and no variation whatever in the location can by any possibility now arise, and certainly the whole ol" it must have been by this time properly slaked out." At page 243, Mr. Smith sums up the situation to Mr. Pet<5rson in these terms: — "I have written to the chief engineer respecting the reduction in the sttiti, which he has laid before the Commissioners. I shall proba- bly have .some instructions about the matter very shortly ; meanwhile, employ all the spare time you have in coloring up the progress profile and making plans ol striictures as executed. I supi>ose you have most of the latter ready, as my 10 instructions were to make the drawing as soon as each structure was ut upon your trial, and unless you can 8ul)mit quantities that you can prove to be substantially correct, before anv commission or engineer who may be sent down to examine the same or measure the work, there will be a reorganizntion of the staff. ' g0 V^<': ) 27 It will be noticed here that Mr. Smith asked both of them to prove that their quantities are substantially correct. Mr. Peterson did not understand his duty in that way. Mr. Broughton. — "With regard to Mr. Brydges complaining in that long letter, there is a discrepancy. Mr. (.tIROuaud. — And he said the contractors were right ; that was his impression. Mr. Smith says " you are on your trial and you must prove your quantities <'orrect." Mr. Peterson, however, believes it is a great deal easier to prove that the contractor is wrong than that he is right. At page 253 he says in a letter of the 5th of February 1872, to Mr. Smith :— "I think we should only 10 prove him wrong, and not attempt to show that we are right." m Evidently he had been deliberating over the point, because at page 258 he reiterates the statement in a telegram dated the 9th of February 1872: — "I suppose that now the contractors' quantities are shown to be wrong, that I need not make any check of mine ; proving him wrong is much easier than going over all my measurements." I have just read the letter from Mr. Brydges to show that it was not a credit to the staff, not to have all the plans of the structures ready at the time he wrote. However, we can see at page "282 that the contractors were still a!?king for plans on the 18th of July, 1872. Mr. Bertrand writes : — " Would you have the kind- 20 ness to let us have the plans and proportions of wooden bridges and beam cul- verts, with signs of public roads to complete No. 9 ? We would also like to know the exact places of farm crossings, and have the demarcation of the fence according to our demand of the 22nd ult. " We beg to inform you that we have taken all the necessary measures to have section 9 completed in October next. As the informations that we are now asking are indispensible to linish, we sincerely hope that you will as soon as convenient, comply with our demand, in order to aHord us time to get some iron works done either at Quebec or St. John." ;■ ■> ili* J i 1 :3 . • L L 28 Then Mr. Odell writes to Mr. Bell the same date, iutbrmini? him what the contractors are asking for, and he says : — •' If you have them in your office, will yon send me a copy at your earliest convenience, that I may lurnish them with one." Mr. Brou(JHTON. — What is that ? It is a form of sign V>oard to be used at the Mr. GiROUARD. — But he asks for more than that the same day ; he asks for plans and proportions of wooden bridges and culverts, with sign boards to com- plete No. !> ; because they expected to finish the section by October following. Mr. Brouohton. — As he does not write for them again, it is to be presumed 10 he got ihem at once, Mr. GliJoUARD. — There is nothing to show that he got them. '.I Monthly Payments. Another delay of which the government was guilty was in not paying for the work actually done. Clause 11 of the contract says: — "Audit is further mutually agreed ui)Ou by the parties hereto that cash payments, equal to 8') per cent of the value of the work done, approximately made up from returns of progress measurements, will be made monthly on the certificate of the engineer, that the work for or on account of which the sum shall be certified has been duly executed, and upon approval of such certificate by the Commissioatjrs. On 20 the completion of the whole work to the satisfaction of the engineer, a certificate to that effect will be given, &c." We contend that we never received jiayraent as provided for by this clause of the lontract. The Chairman. — Do you mean to say that you received less than S5 per cent ? 1 5*. If 1 ■.r i j" ' ■'.- i3 "*■ IM"" "^ 1" i< 1'^' 1 'f 1 if S9 Mr. G-IROUARD. — Yes. a good deal less. The Chairman. — On the certificates ? Mr. GlROUARD.— Yes, I am not talkingof anything in the shape of advances. I am talking of the progress estimates, and I will be able to prove that by olhcial papers returned by the (iovernment. I mean to say in the first place that is the reason why the contractors have notified the Commissioners that they were obliged to discontinue the work.s. This will be Ibund at page 327 of the Correspondence of Bertrand. In a letter addressed to the Commissioners, dated the 28th of May, 1873, they say:—" Understanding from you that we are not likely to have any sums of money paid to us immediately, in account of the large 10 claims submitted to you for extras on the sections 3, 6, 9 and 15, we beg to in form you in consequence, and without prejudice to those claims, that we are unable to continue the progress of the work as you have notified us that you require." I. That is signed by both Bertrand &; Co. and Berlinguet & Co. At page 328 we find that the Commissioners, upon the reception of that letter from the con- tractors, give instructions to the engineers to ascertain this claim of the contractors for extra work, and they requested him to take the earliest and be.it means at his disposal " for obtaining the information to enable you to report the facts seriatem in reference to each item in these statements, without 20 reference to the question as to whether any of the works so claimed to have been executed should be considered as extra." The details of the claim of the con- tractors for extras will be found at pages 328, 329, 330, 331, 332, and amount altogether to the sum of $543,554. At page 333, in a report of the Privy Council, dated the 30th of May, 1873, the fact is mentioned that the statement submitted by the contractor8,and the report of the Commissioners and Engineer were not the same, the report further stating in express terms that the Engineer in Chief had not the information in his ix>ssession to enable him to make an immediate or early report thereon. The Privy Council then ordered the Commissioners to take the four respective sections out of the contractors" hands, not for the reasons mentioned 80 in the notice ot the Commissioners, but just because the contractors had notified the Ooramissioners that if those payments were not made they wese unable to go m I 'iii^f It ' '?. 80 on with the work. I am perhaps touching slightly om' of the former branches of the caae ? I think this report of the Privy Council, of the Commissioners antl of the Engineer, shoves that the contractors were right to refuse to go on with the contract if they were not paid. Of course, it is for the Commission to say whether anything was due to them. The ChaiKiMAN. — I do not understand them to say they were not paid according to the contract. I understand their contention to be solely this, that they had a largo claim for extras, not that anything was due under the contract, but that something was due for extras. Mr. Q-IUOUARD. — Those extras were done in consequence of having a con- 10 tract with the Government. The Grovernment reserved the right to have extras made. We have it, for instance, beyond doubt in extras caused by change of grade or location. That was within thecontract beyond a doubt, and if we are to give a reasonable interpretation to clause 4 of the contract, we believe that changes of structures will also give a right to the contractor to be paid for extras : but I think it is very important to notice that at the time, the Commissioners, the Grovernment and the Engineer were not in a position to report upon any portion of those claims. The Chairman.— These extra claims ? Mr. CtIROuard. — These extra claims. 20 The Chairman. — Of course, you are keeping in mind that your contention is that the Grovernment were in fault because they had not fulfilled their contract, which Gontra 38 immaterial whothiT the work was muasnn'd correctly or not. They thought all they had to do was to keep the amount within the lump sura. Mr. Fleming again, in a letter to Mr. Hell on the subject, under date ol' the 17th of June, 1878, page 342, says : — "On all sertions the original printed quantities have, to a greater or lesser extent, Im^cu reduied. The ConiinisKionfrN want to know how far the reductions are due tayment on acirountof the claims we have made for ihe large sums expeiuled by us over and above what we have received for sections 3, 6, 9 and !;'» of the intercolonial Railway, or yet any communication Irom you, except verbally, to our application, we beg again to press lor action on your part, it being t>f the utmost imi)ortance to us to lose iis 20 little time longer as possible, in obtaining part payment at least, and in case you do no) decide to lake action y«)ur8elves, and grant us relief we have been so long waiting for, we respect fully re<{uest that the matter be referred without delay lo iirbitration." It has been in litigation ever since, and the claim has been growing by the amount of <;osts and interests. 1 shall now endeavor to prove that the progress es.iniates were a good on the face of the papers which are prinl)*d an«l now belore you, the contractors had reason to exp«'ct that their claim for extra work would receive better attention. I iind at 'he iK'ginning of (he works that the engineers were very carel'ul not to give tog ) the contractors all the information they possessed, with respect to their returns mi ) ». 1 84 of the quantities of work doin'. In a letter of the 23rd of March, 1871, page 143, Mr. Smith writes to Mr. Odell:— " In reply to yours of the 22nd inst., you may give the contractors a copy of the estimate in the form we send them up to the Chief Engineer ; also if thi'v want any details of quantities, let their clerk come to your office and take a copy from your schedule of details, but don't put your name to it or make yourself in any way responsible for the accuracy of the quantities which from former estimates would appear to have been done daring the last month ; we only give approximation of total done to date." Uii monthly estimate — that is to say, an estimate for the present month — is to be made, and it contains also the quantity of work done before this month, if 10 the former measurement was correct, what objection could there be to giving those quantities ? He says " Don't put your name to it : don't make yourself responsible lor the accuracy of the quantities of former returns as would appear to have been done during the former month ;" — I am not an engineer, but it seems to me that this conduct throws suspicion on the returns. Mr. Bbouohtox. — The contractors were not entitled to any information whatever. lift- I Mr. GiuoUAKD. — That may be. Mr. Brouohton.— Mr. Smith permitted them to get information; any infor- mation his assistants possessed, but they were not to put their names to it, 20 because, you see the returns made to the head office here are made in glubo up to the last measurement they made, and they would get into a state of «'onfusion il they began to give any particulars signed. Mr. GiuuuARD. — I think this letter says they were not sure oi the quan- tities. The Ohairman. — They were only approximate. They professed to give approximate estimates only until the work was completed, and only for the pur- pose of progress estimates, keeping in view always the bulk sum. ; ■ 1 Jk. 4 85 Mr. GiROUARD. — He might have been keeping in view the lump sum and returning smaller quantities, and I think that is exactly the reason why he did not want to be responsible for the accuracy ol the quantities The Chairman. — Keeping in view the bulk sum at head-quarters. These engineers certified each month the quantities whether they wore contract work or extra work, and irrespective of financial results. Mr. G^IROUARD. — It was moneyed out by the Engineer in Chief The Chairman. — I have not seen any communication or any letters from any local engineer attempting to falsify any returns, or give less quantities than he should return in his measurements. ||| Mr. GiROUARD. — I think I will be able to prov«' that before long. 1 think I can show that Mr. Fleming made representations that the contractors were not paid for the amount done. At page 251, returning to the progress estimate.s, Mr. Smith calls the attention of the loc .r thai Mr. I'eterson was not willing to make a rc-measurcmcnl of the works done and to be done. In a letter dated the 21st of August, 1872, he says : — " Yours of the 23rd asking for amount of work yet to be (JUtne was only received yesterday morning, and as to-day is as wet a.s wet can be, I have, of course made but little progress Your letter would seem to ask for 10 iHettsurements of all works to be done, but I don't im^ine you mean me to take \w\\ measurements of all the earth work. The original quantities are checked most carefully, and the quantities in the revised schedules were taken out care- fully from cross sections, and they agreed with the original quantities, save where changes of grade had been made. Then last winter I went over the work done, and again at the end of May, 1872, checked bank against cut and found all correct. 8o I suppose you will be satisfied with this for the earthwork. " The masonry and the paving, etc., I will have to go over, as some changes have been made, some foiindations are on rock where earth wa^^ expected, etc., which has reduced the quantity to a slight extent. t(^ '• I can have all this ready Ibr you by Friday night, and it we could meet on Saturday, might arrange it all. Please let me hear from you as soon as possible." Then, the following letter, on page 2f>l, from Mr. Bell to him says: •' I do not mean that you should measure on the ground all the works, but to be able to show me, by your papers, your figures and dimensions, so that I may be able to make some check of your calculations and statements of gross accounts. Could you come up by the " Kothesay Castle " ou Saturday ? " (■ ; T ? ■,i-. 87 That letter is dated the 28th of August, 1872. At pages 2i»l, 292 and 293, there is a comparison ol' measuments or returns made by the Commissioners' engineers and Mr. Thompson about contract () ; Mr. Bell says : "The contractors statement gives 30 86 acres of clearing em remaining to be done, against 50 acres reserved by the engineers. All the cutting is done and the amount reserved is for piling and burning ; but the value of the difference is not of much account. •' In fencing, the engineers for the contractors measured all the fences that had been erected, but some were only for temporary use, and a large quantity had been condemned by the Engineer in Chief. In this case I take the statement 10 of the engineer in charge as correct. In excavation I have gone closely into the quantities with Mr. Odell without being able to make any serious (hange in the quantities of work done as set forth in the certificate of the 30th June, except in one case, where about r),000 cubic yards may be added to the (luantity of earth. In many (-ases the contractor's statement shows more work lo be done than that of the engineers, and in these cases I a«'cept the less quantities. In several places the amount of total excavation in the contract has been lessened, partly by a recent change of grade, and partly by the amount reserved for shrinkage of embankments proving more than necessary. Still, in the cuttings on the line, the contractor's statement shows 10,888 cubic yards of rock and 20 11 3,5'.>0 cubic yards of clay, against the engineers' 11,257 of rock, and 120,071 of clay. But in the other earth works, in drainage and approaches to level crossings, the contractors statement gives very much too little as that required." .\t page 2!»3, Mr. Bell concludes by admitting that the sum of $8,;{27, is the amount to which the contractors are entitled in addition to the amount of the June certificate. I may say, however, it appears thai the Commissioners were satified more by the returns of Mr. Thompson than by those of Mr. Bell, because at the same date as that of the report, the end of August or the begin- ning of September, the tJovernment paid $80,000 to the contractors above the monthly estimates. This report of Mr. Bell was made on the 29th of August, 30 1872. On the 3rd September, page 2!M5, Mr. Bell recommends that the following amount should be paid for work done up to the 31st of August, namely. tiif" s?ti' ••'l . 'ft . M 88 $06,576, and the contractors received, as I have already stated, the sum of $HO,000. It would oeem that this payment would represent a large amount of works not previously returned in the certificates, and will show that the ongiiieers quantities were not correct. The bill of quantities as returned by Mr. Thompson, will be found at pages 2'.>0, 207 and 208, and Appendix " P." It is enclosed in a letter from Mr. Fry to Mr. Brydges, dated the 4th of September, 1872. Talking ol the mca.surements made by Mr. Thompson, Hertrund and Hcrlinguet, at page 804, say : " In requesting payment of this sum of $81,087, we will merely draw your attention to the fact that this amount is the result of careful personal measurements by Messrs. Thompson 10 and Fitzgerald, both of these gentlemen having thoroughly examined the sec- tions they were sent to report on." The Chair.man. — You are reading from a letter of Mr. Bertrand's ? Mr. GiuouAUD. — Yes, it is a letter from Mr. Bertrand and Mr. Berlinguet, but at the same time it includes the statement of Mr. Bell which gives about the same figures. Anyhow, the Government acted upon the representations made by the contractors, supported by the measurements of Mr. Thompson and Mr. Fitz- gerald, and out of the sum of $81,000, they got 180,000. At pages 810 and 311 Mr. Bell speaks again of the ditference between the quantities returned by the contractors' engineers and he says: — "Although the difference between our 20 quantities thus revised and those of Mr. Thompson and Mr. Fitzgerald, as far as their statements went, did not amount to very mu<'h, except on the earthwork and crib wharUng on No. G, whert^ the difference is of easy adjustment, my report on those two contract.-:, and that of a slightly later date, on contracts 3 and 15, were not satisfactory ; and on the 28th September last the Commissioners, then on their tour of inspection, gave me orders to prepare a new measurement of the work remaining to be done on the four contracts." He concludes that statement on pages 812, 813 and 314. At page 342 Mr. Fleming again asks lor diminutions or increases in con- sequence of changes of grade and location, and also due to other causes. It is 80 perfectly evident it was not done at that time, viz., 17th June, 1878. At page 30 of th»' KesKional papers of tlu» IIoum' ol" ConimoiiH lor the year 1870, Vol. H, No. 5, I Knd u rejjort — a supplementary report — of the Commis- hionerB, in whifh the following statement of Mr. Fleming is embodied : — " The percentage retained in the hands of the Commissioners In, I feel assured, a great deal too mui-h, and in view of the present rin-umstances, I think it would be advisable to reduce it to u more nominal amount if the whole .cannot be relin- quished." And in conclusion he says : — " In consideration of the above, and in view of all the circumstances, I would very strongly recommend as liberal an advance as iiossible to the several 10 contrat'tors, feeling satisfied that ample security is atibrded in the artnal value of the work exerutedy The Chairman. — Are they referring to those particular sections Y Mr GiROUAHU. — All the sections then under eonlra lo 20 jwr cent, less than the value of the work really done during the month." The eontrnef allows only 15 per tent, altogether The reiM)rt continues : — " From the amount thu> cerlilied by the engineer, the Commissioners deduct, as provided by the rontracis. so that before the money rear cent allowed to be retained on the contract. First the actual «iuiuitity executed will affect the return of the engineer from 5 to 10 i»er cent, and then 10 per cent is also retained by the engineer for contin-20 gencies, omissions and errors ; and then the Commissioners deduct 10 per cent, so that makes about 30 per cent ; and then the Q-overnment gets about i,wo or three weeks work which has been done by the contractors between the time the estimate is made and the time the money reaches hi*^* Tutting aside this last rea.Hon, it shows that the system followed until the 20th of September, 1870, was wrong, and not jusliti«>d by the contract, which allowed only 15 pe; cent alto- gether. I may b«' alhiwed here to refer on this point to the remarks of Mr. Justice Taschereau, in the case of Berlingnet vs. the Qut>en, to lie found in the book of documents containing the contnu-t, petition of right, Judgment, etc. I quote from pages «)8 and 61» : — |^ 41 " There is one point in the case," ; says the learned Judge, " on which the petitioners should succeed : it is that concerning the manner in which the engi- neers made their monthly estimates during the iirst four months following the beginning of the works, in 1870, as established by documents 07 and 98 pro- duced with the ofRi-ial correspondence concerning the eonstrui-tion of the Inter- colonial. According to this correspondence and the order-in-council of the 20th September, 1H70, which settled the queslion. it would appear that the engineers committed errors n-sulling in a loss to the contractors, for interest, of :^5,S.59.90. or thereabouts. In order to appreciate correctly the intention of the Commis- sioners in their communication to the Privy Council (do»ument 97) and the 10 meaning and signilication of the report of the Privy Council, I cite them ver- batim, and I belii'v^e, although the chiel engineer was not of the opinion of the Privy Council, and of the Commissioners on this iwinl, that the engineers made grave eiTors on this occasion, and that this sum of |5,8r)0.<.)0 should be credited to the petitioners in the final result of the case." Mr. Bi;or(iiiToN. — Is that by reason of .short payments — deductions? Mr. GliMUAltl). — Yes, that the estimates were under-estimated. The learned Judge says that the order-in-Council of the •20lh September, settles that point, because it lecciiiiizes Jthe fact. The Commission adjourned until to-morrow. 20 O'lTAWA. Thursday, Feb'y 22nd. 1883. Mr. UiiiouAUD resumed his argument: I have shown, I believe, that the Commissioners illegally took possfhsion of the works on the itth of June, 1878; and that although^they had very strong powers given to them under the con- tract for that puriKMe, yet they must be in a iK)sition to show that there was no fault on their pan towards the contractors : 1 thijik I have proved that the con- trai!tors used due diligence, and that the (ioverument was in fault in not sup- ft !) r-' i-' 1 4- ■ 42 plying pluns in lime, in not having on th<>spot at-oinpeicnt stati', in the payment ol the monthly cfstimuics — espt'iially in under-estimating the work executed, and iu the refusal to adjudicate upon the claim lor extra work. Before, however, going into the merits ol the < ase, 1 may allude here to a point which will show that the eontraetors were working under very great disadvantages. I refer to the ill-feeling of the engineers towards them, and when touching on this subject, it will not be out of place to point out that Mr. Fleming, the engineer- in-chief, anticipated such a result before the contracts were given up, under the system ilial was adopted by the Commissioners and th*; G-overnment against his advice, under the authority given by the 4th clause of the Act of Parliament, 10 intituled •' An Act respecting the Intercolonial Railway." The G-overnment, iu lUiis, appointed Mr. landlord Fleming, C. E., chiel engineer v->f that work, with the joint re* ominendation m his favor of the three Provincial U-overnments, and ihal ol the Duke of Newcastle, the then Secretary of State for the Colonies. The oliicial document to be found in Vol. ;'>, Sessional Papers, 1870, No IH further sayh I hat Mr. Fleming l^-ars a well-earned reputation for accuracy and caution. Notiiwithslanding this very Uattering •ertilicate of his ability, it would appear thai liie opinions of Mr. Brydges prevailed instead ot tho^se of Mr. Fleming iu I he adoption ol the system to be followed by the Commissioners in the construc- tion of this great work. In a letter addressed to Sir Sohn A. Macdonald, dated 20 ilalilax, Jan'y 'ilTth, IhO!*, Mr. Fleming cautioned the (J-overnment of the day against the adoption of the system of building the Intercolonial Itailway by lump sum contracts. " This provision," he says, " in the circumstances under which the work is undertaken, would place it in the power of the engineer to ruin *»r enrich the contractor at his pleasure, and this cannot fail to subject every act of the engineer, however honest his intention may be, to suspicion and unfair interpretation" Xnd again further on, Mr. Fleming continues: " Hut il the oltjection — that is to say, the system he advocates — is tounded upon the possibil- ity of fraud or corruplia8tle to dress stone for Brown. He will soon have only Frenchmen and apprentices left." I am at a loss to know why it is that he refers to F'rench stone-cutters in this way. Why should it be supposed that Frenchmen could not cat stone as 1^ well as any other class of workmen ? I'--' ■: t Mr. Brouohton. — He says that he referred to them in that way as men not accu.'^tomed to cutting i^ranite as the Knirlish stone-cutters were. The French stone-cutters were only accustomed to cutting the common limestone of the country. Mr. GuioUARD. — But in April. 1871, limestone was the stone that was being |)i'incipally used ; granite was not being used on section '.' or on any oth[' the K'ailway. V ■ I ■ As early as the .second (»f .Vugitsi, ls70 — see page 28 of Borlingnet's Book of Cornwipondence,— Mr. Smith writes to Mr. Lawson at the end of n certain state- ment of quantities : " Yon must, however, do all that is necessary, regardless of <|uaniities, as there is a large amount for contingencies ; and. anyhow, the con- tract will have to be relet." Here is the district Engineer in 1870, during the contra<'tors first season's operations, when it is proved that they had more men on the work than they had on it at any other time, aninmning his expectations gn that the contract would have to be relet. .•^fj 44 The Chaikman. — You aro not speaking of section 9 or section fifteen, are you Mr. GmoUARi), — These expressions of Mr. Smith refer to the four sections of Berlinf^uet and IJertrand ; these four contracts were run conjointly. Th»' Chairman. — Mr. tjinith is writing ofii cojitrait which is not mentioned in these chums of Mr. Bertrund at all. Mr. GmouARD. — He is speaking of Herlinguet's contract which was being run Jointly with the contrai't of Bertrund te Co.. and whether referring specially to sections 9 and !•>, he shows his animus. The Chairman. — This letter refers to some section other than 9 or 15. 10 Mr. GllsouARl). — Yes. it refers to 3 and 6, but about the same time he was making the same remark of Berlrand. At page 39 of Bertrand's Correspondence, in a letter dated IHth Jxaly, 1870 — about the same time that he was writing down his expectations of Berlinguefs failure, he says : " It is evident that Ber- tram! is a man of far too small calibre to carry on a work of this importan n'l'ors to the reproachos made by the petitioners against Mr. Smith, and as lie was in tho same district, and the four contracts were being run conjointly — at lea«( so far as the quarries are concerned — under his supervision, the remarks of the learned judge will not be out of place here. Ai page 42 of the Judgment, he says : — '• I now come to the .serious reproaches made by the Petitioners ai^aiust Mr. Smith, of haviuLr. in a conversation with Captain Armstrong, and in another with Mr John Home, behaved himseil'in a most singular manner, in u way calculated to throw much discredit on his own honor and honesty. According to Captain Armstrong, Mr. Smith told him, in a conversation regarding the small amount ^'^ ot the monthly payments received by the contractors : " They got all they de.serve or were entitled to." Upon Mr Armstrong remarking to him (Smith) that it was very hard for the contractors to n»ceive barely enough to pay their men, Smith replied : " I sent in a contract for this .same section for my friends in liUgland, and it they had got it, they would have had plenty of funds to carry on the busi- ness without drawing ou the (lovernment until it was Hnished" And Mr. Smith is said to have added : " These I) d little Canadians an^ tho cause of my not getting It,"' (the contract) Mr. Armstrong says that Mr. Smith did not mention to him the names of his friends. li-'K ' " Mr. Armstrong asked him besides : "How could you have acted as engineer ?" 20 Mr. Smith replied : " I should have resigned my situation and gone on with the works." " According to Mr. John Home, Mr. Smith addressed the following words to him. with regard to the advice he (^Smith) gave to the Petitioners of employing one Davey as Superintendent : " If Davey is here, it is just as easy for him to save you a half a million oi dollars as anything at all, and without any disparage- ment to the Government. The Government will not have anything to find fault with the road, and you will get quit of the Frenchmen that don't know anything at all about building the road. " He said "If they (Herliuguet & Co.) want to get the credit of the work, let 30 them go to the salt water and they would have the credit of the work ; but let IMAGE EVALUATION TEST TARGET (MT-3) // h I/.. fA 1.0 I.I 11.25 jw U^ !■■■ •tlUt. IIIM 1.4 11 1.6 4^ f ■ 1^1'' ■I i 'M 46 them keep their tongue quiet." And he said : " I will not sell myself to the Frenchmen." Of course it is only fair to Mr. Marcus Smith to state that when he was examined in that case he denied this conservation altogether. Mr. Brouohton. — Did not Mr. Justice Taschereau acquit Mr. Smith alto- gether ? Mr. GriROUARD. — Judge Taschereau preferred to believe the evidence ot Mr. Smith than that of the two men who testified that such conversation did occur; and as far as I am concerned I prefer to take the testimony of two disinterested men like Mr. Home and Mr Armstrong, than to take the evidence of Mr. Smith 10 who had an interest in the case ; at least as far as establishing his reputation in the country was concerned, it being his only chance to do so, as he says himself in one of his letters. Biit there is something in the correspondence of Bertrand which perhaps did not exist in the Beriinguet case, and which to my mind corroborates to a great extent the testimony of Mr. Home and Mr. Armstrong in relation to this conservation. I refer to the correspondence I have already read, where the expression was used that it would not be surprising if the contractors would have to break down, and the contracts would have to be re-let. To my mind the statement of Mr. Home and Mr. Armstrong are corroborated by the correspondence of Mr. Marcus Smith and of Mr. Peterson 20 , ";.• J. :.i The Chairman. — You have probably noticed that Judge Taschereau, in giving his reasons for his conclusions, did not merely base them on the fact that Mr. Smith had stated it not to be true, but that all the surrounding circum- stances were against the probability of its being true, so that it is not a question merv'lyof the credibility of two witnesses on one side against that of one witness on the other. Mr. Brouohton. — I understood him to say that circumstances were against Mr. Smith having made any such statement. v. ft I I :rj'^ 41 Mr. GriROUARD. — Mr. Justice Taschereau was willing to put aside the testimony oi' Messrs, Home and Armstrong, and accept that of Mr. Smith, and mentions especially as one of the reasons that it was because it was not corroborated by any writing of any kind. (See page 46 of the Judgment.) But I have got something more : in the case of Bertrand I have got that corrobora- tion in writing, and I have a confirmation by the Government of the complaints of the contractors in this respect, in the fact that finally Mr. Smith was removed from his position. In concluding this branch of the case, I wish to call the attention of the Commission to the fact that the unwarrantable aspersions of the engineers on the capacity of Bertrand & Co. to carry out this contract, were 10 unjustified by the facts. In his evidence before Mr Shanly, at page 358, speak- ing of section 15, Mr. Marcus Smith says: "The masonry on that section is Egyptian work like the Pyramids." And Mr. Fleming in Bertraud's Corres- pondence at page 199, says : " The masonry on this section is most excellent, and will be a standing credit to the contractor and all > oncerned." Even Mr. Peterson, at page 109 of the Correspondence, says : " The first class raasouTy has cost $24.43 per yard ; but as the second class is as good as first, I cannot account for this difierence." Here is a man making second class masonry as good as first class, according to the report of the engineer, and still it is the same engineer who writes that 20 Bertrand is not a man having sufficient calibre to carry on work of this magni- tude, and he will have to break down It shows that those statements made by the engineer concerning (he capacity of the contractors to carry on the work were perfectly unjustifiable. Their competency is also to be found in the fact that I he Government asked Mr. Bertrand to remain on the line and finish the work after they took possession of the contract. :-•/■(*■, W-M ^.'i^. $■-' The Chairman. — I do not think there is any suggestion anywhere in the Correspondence that Hertrand & Co. were not perfectly competent to spend a great deal of money, but there is that that they were not competent to complete the contract within the contract price. 80 Mr. UiROUARD. — I wovild like to know the man who could do the work 48 executed work within the contract and extra work, for the contract sum. Bertrand & Co. might not only spend a good deal of money, but also do good work. Even Mr. Smith says the masonry cost a large sum of money, but it was because they could not get stone suitable for the work. That was not their fault, but iheir misfortune, and I cannot see how the charge of extravagance can come in there. This closes my argumeiil with reference to the point whether this case comes within one of the exreptions mentioned in the Commission, viz : — Whether the Government annulled the contract and resumed possession of the work legally or not. The second point raised by the preliminary excep- tion, viz : — Whether the works were completed at a loss to Her Majesty depends 10 on the decision on the merits of the case. -A m ■'m. m The Chairman — Of course you understand that in deciding whether or not the work has been finished at a loss to Her Majesty, it is necessary for us to ascertain the value of the extra so as to take that value out of the bulk sum received, and then if the balance is less than the bulk sum of the contract work, there is something due to the contractor, otherwise there is not. That is the principle on which we start. Mr. GiROUARD — That is the reason why I say there is no use in talking of this second point of the preliminary exception until that is decided. Ottawa, Friday, February 23rd, 1883. 20 Mr. G-IROUARD — Resumes the argument. He said : The claimants take as evidence in the case the testimony of Messrs. Ross, Dunn, Home, and Huot, in the case of Berlinguet vs. The Queen, before the Exchequer Court of Canada, to be found in the printed volume before the Commission ; and also the evidence of the Hon. Hector Langevin, (now Sir Hector Langeviii), and also the evidence of Kamuel Keeler, produced in the case of McQ-reevy vs. The Queen, before this Commission. ■fri 1 understand that no decision by the Commissioners as to Bill of Diminu- tions or Increases was ever rendered. I had occasion to consider these two clauses on a former occasion in the case of R. H. McQ-rcevy, but T find my posi- tion to-day much less difficult. I was obliged to esttiblish in that case that the principles of the French law were to rule. The counsel representing the Crown contended that the principles of the English law were to rule, and that those principles were against the contractor ; that a contract like this has to receive 20 its full interpretation according to the plain meaning of the words to be found in the contract. I contended, on the contrary, that a certain latitude was to be allowed in interpreting the meaning of those words. In fact, I laid down, as a proposition, that clause 1 of the contract, which provides for the construction of the road according to plans and specifications, and clause 4 which authorised the Engineers to make any changes or alterations in the dimensions or character of structures or in any other thing connected with the work, must be construed reasonably and equitably both as to quantity and character of the structure, so as to protect both the contractor and the Crown according to the true intention of the parties. I also contended in that case that in case of doubt the benefit of 3Q the doubt must be given to the contractor, because the information given for the construction of the work being altogether and exclusively in the possession of the Q-overnment, they were the best judges of the nature or .class of work they wanted. ^: .U 61 Any work which could not reasonably be expected from the contractor at the time he signed the contract is an extra or addition to the contract. m: Clause 4 of contract, which authorises " changes or alterations " in the "dimensions or character " of any structure, without indemnity, does not com- prise the case of demolition of nor addition to, the original plan, or of a new plan. I consider it is altogether unnecessary to examine whether there is a diver- sity of opinion among English or French jurists as to the interpretation of this contract, but perhaps it would not be out of place to refer to three Ontario cases that I quoted in the McG-reevy case. 10 Ritchie vs. Bank of Montreal, 4 U.C.Q.B., 459. ' i Watson vs. O'Brien, 7 U.C.Q.B., 345. Logan vs. Stranahan, 12 U.C.Q.B., 15. I believe all those decisions were rendered by the late Chief Justice Robin- son, and they seem to establish the principle that a clause like clause 4 of this Contract must be interpreted reasonably. At page 464 the Chief Justice said in the case of Ritchie vs. the Bank of Montreal, " The just and natural application of these provisions, it seems to me, must sufficiently protect both those parties, but they may be so applied (though contrary to their letter and spirit) as might be most unjust to one party ". 20 •* In the case of Logan vs. Stranahan, Chief Justice Robinson again said, " It is very true that the Company were at liberty to make any changes in regard to the work, but yet not without limit, and the very conditions in the original contract that they should be allowed to substitute embankment for tressel work or piling, and vice versa, implies that there was not to be an unlimited power to change the description of work, and yet hold the Defendants to their original contract. The reasonable construction to give to the original contract in that respect is, that in carrying out the kind of work contracted for, the directions of the Engineers were to be obeyed. The Plaintiff had for all that appears, full ih- h ' .«! ifi .'ft m • il 52 opportunity of hiumjij? culverts ; whni kind ofculvorts wtMc htMUi'- much* upon work ; and, if ho, he would naturally 8upi)o80 that he would bo required to couiploto (hut part oC the Contract upon the Hame scale ol' work In his eontraet with tho Deroiidiiiit.s there is no surh stipulalion as liieri^ is in the first contract with the Company, about doing work not included in the contract L"t us Nupi)oso that Karwell and Co. had nmide a contract with the Company to supply all the wooden ties that they should recjuire, and that they were directed hy the N|)ecilications to 1)»* of hemlock and !o he eij^ht feet lon<>\ and that after (he work had been bej>uu, the Company Inul made a chanu'e in their y'au^-e and re(|uired thi' ties to bo twelve feet long, and had also determined (hat th*7 must be of 10 oak. Could it be said thai this I'laiutiil, if he had agreed with Karwell and Co. to lind all (he ties required in this section at so much a hundred, must under that contract provide them of oak, ami twelve fi'( long at the j)rice named in this agnniment ^ We must, as Couris have said, rcjeive evideni c ol Iht^ sur- rounding circiuns(an(M-s in order to assist us in putting a just construction on a contract, and iuile.*.8 we wer-- to do so we should IVeq\ienlly Und that we w«'ie d altogether upon a convenan( before u Court of Law where (he e(juitable ccnisideration, or eijuilable view of the case c((uld not be considert'd, it seems to me (ha( (hey are not aulhoritit>s to 30 govern this tribunal. I may say, moreover, that against these decisions, which are so strong against the contractors, I may refer also to Uedlield on Railways, vol. 1, page 4I'J. I have not the book before me, l)ut it says in »5xpres8 terms that although the contractor having a contract similar to the one in this case has no action on the covenant, still he has an a<;(ion for the value of IV t:3 ' i !|i i i^i i i i; >i , 68 the work done if it benefitted the proprietor. Against the decisions in Thome vs. the City ot London, and Jones vs. Queen, we may also quote the decision of Mr. Justice Fournior in Murray vs. the Queen. I do not think it is necessary to go at any length into the legal decisions to find the exact meaning of a contract like this. The Grovernment themselves in a series of oases have defined the meaning of a contracts like this. They have adopted the views which I advocated in the case of McGrreevy, that a reasonable construction must be given to the contract ; the intention of the parties must be consulted — the intention of the Crown and the intention of the contractors must he consulted ; the circumstances of the case and all those contingencies as 10 to changes in the character and dimensions of structures must also be considered. ,r^ There has been a good deal said about the bulk sum system of letting con- tracts. It is stated that in England that is the system that generally prevails, still Mr. Marcus Smith, who is evidently a man of ability and has had a long experience in the old country and on the European continent, says that he never saw a contract so stringent as the present one, yet there is no reason to be more siiiiigent in Canada than in England. In England, the geographical position on every portion of the counti y is throughly known, not only the geographical position, but also the geological position is well defined. Another reason also 20 why the system of letting bulk sum contracts should prevail in England is that a bill of quantities is generally, I may say invariably, correct. The country b(>ing small, the engineers are in a position to make thorough surveys, not crude surveys as were made in this case, but perfect surveys which upon examination of the profile and cross sections would be sufii I'^iliiV Ii •fllT ■' O^;' ^i- \i'h f'i -.. '-f m § 57 be made with a gauge of 5 feet six inches, and at such a time, in such places, and in such manner, with such materials, and on such specitiiatious as the Governor in Council shall determine and appoint as best adapted to the general interest of the Dominion." Here we have it laid down in the Statute that the specilications must be approved by the G-overnor in Council. Those spe- cifications cannot be changed, a.s I understand it, without an order of the Privy Council; therefore, those specilicutions should be the only guide, the only rule for the contractor, and anything done contrary to this provision is beyond the power given to the Commissioners. The Commissioners and the Grovernment and the contractors could not change these terms of the Intercolonial Railway 10 Act. Mr Broughton. — None of them or all of them ^ .\nswer. — No. All of them could not. But then it will be said that if a certain amount of work has been done contrary to the provisions of the Inter- colonial Railway Act, that we have no claim whatever. We cannot sue the Commissioners, and no doubt we cannot sue the Grovernment, but we rely on this, that the work which we have done for the Government, and at the instance of the Government, and which has inured to the benetil and advantage of the country must be paid for. We may not have a suit in the lace of the provisions of the Intercolonial Railway Act; but I think we have a just claim for work 20 done for the Government and for the benefit and advantage of the country. Section 16 of the same act says : ' The Commissioners shall build such rail- way by tender and contract after the plans and specifications therefor shall have been duly advertised, and they shall accept the tenders of such contractors as shall appear to them to be possessed of sufficient skill, experience and resources, to t-arry on the work, or such portions thereof as they may contract for ; provided always that the Commissioners shall not be obliged to acccept the lowest tender, in case they should deem it for the public interest not to do so ; provided also that no contract under this section involving an expense of ten thousand dollars, and upwards, shall be concluded by the Commissioners until sanctioned by the 80 Governor in Council." ifl !?«' i-i- u^o w 4 58 It is evid»»nt, as I said bi-fore, that it is only after the plans and specifirations approved by the Governor in t'ouncil shall have been duly adv<^rtised that the contract can be g/ven, and then the Commissioners shall accept only the tenders ol' th»* contractors best qualiiicd to carry on the work. What is the moanini? of this clause if it is not that the contract is to be made accordinj^ to the phvns and specifications approved by the Governor in Council cannot be altered subse- quently without the sanction of the same authority. And there was a reason for so providing'. Parliament was careful how this work was to be done ; it was to be done by Commissioners in a certain manner, and according to t;ertain plans and sp iifications to be approved by the Government. Parliament did not want 10 to leave those plans and specificatiuii -i at the me 'cy of local engineers who might be more or less ignorant of their duties. 1 m Section 17 of the same Act provides : — "The contracts to be entered into, shall be guarded by such securities, and contain such provisions for retaining a proportion of the contract monies, to be held as a reserve fund, for such periods of timtv and en such conditions, as may appear to be necessary for the protection of the public, and for securing the due performance of the contract." Can it be argued that the Commissioners could put in any other conditions, without special power for that pi;rpose,when we see that to so unimportaiit a thing 20 as to retain a certain percentage for securing the due performance of the contract, the Legislature found it net-essary to give them that power in express terms. I say, then, that the Commisioners had no power under the Intercolonial Railway Act to stipulate that clause 4, and other similar clauses should be in the contract, because those clauses are contrary to the express provisions ot the statute. After the Intercolonial Railway Act 'was passed, the gauge of the road was changed, but, of course, it required the interference of Parliament : that was done in 1872, 1 believe. :.i The Chairman. — It was after these contracts were let? Mr. GiROUARD. — Yes, I mention that to show that any change in the original 30 k w '■'■ .-' i . ■ ■ m plan of building that railway could be made only through the same authority which authorized its construction at the beginning. The gauge of the railway was mentioned in the statute, consequently that gauge could not be changed without a new expression of the same authority — Parliament. The Intercolonial Railway Act says that the railway shall be built according to such plans and specifications as shall be approved by the G-overnor in Council, and I contend that no change from that could be made except upon the same authority. Mr. BuoiTOHTON — Any change in the course of construction ? Mr. G-IROUARD. — Anything that will amount to a change ; for instance where a tunnel is substituted to a culvert, it could not be done merely on the order of jo the local engineer ; it required an order in council. It may look very extraordi- nary, but it shows what the intention of the authorities was at the time. They thought that the surveys for that railway had been thoroughly made, that they were coming before the country with correct data, and no change need be made, and for that reason the lump-sum system of contracts appeared to be the proper one to adopt in building this railway. I say, too, that under the terras of the Intercolonial Railway Act, the quantities in the bill of works must be con- sidered as aiibstantially correct and a portion of this contract, when the statute says it shall be built in such a manner, at such a time, according to such plans and specifications as the (xovernor in Council shall determine, 1 say, then, if the 20 bill of works is a portion of the specifications that bill of works must be correct, and 1 find in this case of Mr. Bertrand's, some good evidence that it was the intention of the parries at the time the contract was signed — not only on the part of the contractors, but also on the pari of the Crown. OiiunNAii Quantities. I refer the Commission to page 26 of the Report of the I. C. Ry. Commis- .sioners, for 1871, containing the statement of two of the Commissioners to the Hon. the I'rivy Council, of date of 13th of May, 1870, in which they inform the Governor in Council that they have received a letter from the Chief Engineer on the subject of the quantities of work on section 16, of which the following 30 iis a copy : — Ivit 60 " I regret to say that mistakes have beeu discovered in the printed quantities of work on section 15. It would, therefore, be undesirable to place this section under contract at the present time. I shall, as soon as Mr. Smith has an oppor- tunity of inquiring into the matter on his return to Dalhousie, report on the subject, and furnish revised quantities. SANDFORD FLEMING." On this the Commissioners reported as follows : — " Under the circumstances, the undersigned are of the opinion that it would be inexpedient either to enter into a contract now with Messrs. Bertrand & Co., to whom the section has been awarded in terms of their tender, or to advertise It^ it again lor letting when the quantities have been correctly ascertained. As the correct quantities are beyond doubt greater than those given in the bill of works on which tenders were based ; and as a sceduleof prices for each separate kind of work is given on the tender, the undersigned suggest that the Commis- sioners be authorized to write to Messrs. Bertrand & Co., informing them that contract for section No. 15 has been awarded to them ; but as it is believed the quantities are in excess of those stated in the printed Bill of Works, the Commi.s- sioners propose to add to the amount of the contra<'t, a sum which will represent the equivalent of such excess. " Also, that the Commissioners be directed to report to Council the difference 20 in amount of the contract sum, when the Chief Engineer has reported the correct quantities, in order that the approval ot Council may be got before the contract is signed." ED. B. CHANDLER. A. W. McLELAN. • S:. I- is- Ix I M Then follows a statement showins the difference in quantities of work on section 15 as reported by the Chief Engineer. The lump sum in their tender was 1360,020, and to this the Engineer says that he must add 23,000 cubic yards Mm ,m.< llr ■'Utif of earth excavation at 20 cents, $4,600— making a total of $364,620. Then he say"' that 1,100 cubic yards of rock excavation at $1, $1,100 must be be deducted, making a total of $863,520, for which sum the contract was entered into. The following is the report of the Privy Council on this recommendation of the Engineer in Chief and the Commissioners : " The Committee of Council have had under consideration the memorandum dated May 13th, 1870, from the Commissioners for the construction of the Inter- colonial Railway, and on the recommendation of the Honorable Minister of Public Works, they respectfully advise that the recommendation of the Commis- sioners in reference to section 15 of that line be approved, and that the contract 10 be awarded to Messrs. Bertrand & Co., paying them for the quantities found to be in excess of those given in the printed bill of works, at the schedule prices submitted in connection with their tender." Then we find at page 24 of the Book of Correspondence in the Bertrand case that Messrs. Bertrand & Co. were notified of this mistake and correction, and at page 25 a statement and memorandum of alterations in consequence of that mistake will also be found. The notice to the contractors which is dated May 14th, 1870, is in these terms : ^- ■ " I have to inform you that under authority of the Privy Council, it is pro- bable the Commissioners will be in a position to offer to you a contract for 20 section No. 15. There are circumstances which would require the Commissioners to alter the amount and make it somewhat different from the sum in your tender. All will be explained when enquiries now being carried on are completed, and you will be duly advised." I contend that these papers show beyond doubt that the intention of the parties themselves as well as the law-makers was that the quantities in the Bill of Works were correct, notwithstanding the clause which is to be found in the contract that the Government were only giving the best information in their posset^sion, and that they were not guaranteed the correctness of the quantities. But nowhere the Bill of Works states that the quantities therein given are 80 ,}K 62 false. This general clause is one of those clauses very often to be found in con- tracts of that nature ; but at the same time, in order to judge of its value we must consult the surrounding circumstances. We see here, from the connection made by the Q-ovcrnment in consequence of having found that the quantities in the Bill of Works which was submitted to the tenderers were a little in excess, or erroneous, that the G-overnmont found it was their duty to change the amount of the tender by making an avance for the excesses, and a reduction for the diminution of the work. Committee of 1873. Now let us consult the Engineer in Chief and try and get from him his 10 view of clause No. 4 of the contract, at the very time that the contract was signed. It will be found, in his answers before the Committee of the House of Commons in 1873, at page 11 of the report of the Committee on the Intercolo- nial Railway. Clause 4 of the contract having been read by Mr. Fleming, Mr. Mackenzie said : — " I read that entirely different from you. I read it to say that the contractors shall be charged with reductions and allowed for an increase, and yet you say it was entirely in accordance with the contract not to charge any reductions. I think the Commissioners and the Chief Engineer are bound to make these deductions. " Mr. Fleming. — As far as the Engineer is concerned, I do not think he has 20 anything at all to do with it. It is taken entirely out of his hands and left to the Commissioners. " Question— Well, say the Commissioners ; but we have to deal with your opinion at present ? " Answer — I am giving my opinion." Then Mr. Ryan asks the question : •' Question — I understand Mr. Fleming to say, that, in the event of these changes not taking place, the contractor for section No. 5 would not be enabled to perform his work. Is that correct ? ^ii 'S f; 63 " Answer — Yes. " Question — Then if that were the case — if these changes had not taken place and the contractor could not perforn his work — what would the effect be to the country ? If the work were re-let again, would it not cost more or less than at present to the country ? " Answer — The result would be that the contractor would be ruined in the first place, and in the next the cost to the country would be a great deal more." At page 13 of the same report, he is asked by Mr. Blain : " You have stated that the Contractor was to get the benefit of the reductions. It is shown by the letter of instruction to you of Nov. 1869, that this principle was applied to Mr. 10 Haycock. When did you become aware that the same understanding was to be made as to the new contract ? " Answer — I was constantly aware of it. " Question — Were you made aware of it by written instructions or verbal ? " Answer — Chiefly verbal in conversation with the Commissioners. " Question — And you made out your estimates accordingly ? M " Answer — Yes." (By Hon. Mr. Tilley.) " Question — You have no instructions from the Commissioners or the Gevern- ment as to the final settlement ? 20 " Answer — No, and I cannot make out my final certificate till I have." Mr Here is the statement of Fleming that he could not make out his final certifi- w :vl 64 cate until he had the valuation of the increases or diminutions from the Commis- sioners, which they never gave. Mr Tilley continuing his examination of Mr. Fleming says : — " Question — On page 10 of the Commissioners report, it appears that there are $7000 still due on the lump sum contract, are there not still sums due the con- tractor for other work ? " Answer — Yes. " Question — Are there not claims for extras over and above the contract ? ' Answer — Yes. Question — (By Mr. Mackenzie) : What amount of extra work ? 10 • Answer— About $30,000. " Question — What work is that ? " Answer — Rock work and earth work outside the contract. " Question— (By Mr. Mitchell) : Which the contractor may claim as extra? " Answer — Certainly. " Question — (By Mr. Tilley) : I understand the contractor has also a claim for extras in reference to the foundation of the Bridge ? " Answer — Possibly he may make a claim for that. " Question — (By Mr. Tupper) : I think you never feel yourself bound to take the contractor's schedule prices in certifying for work ? 20 r'- ii i li : 1} ■ :' I' i" 'Hi-' >' ^l -, * V 1 f ! 65 " Answer — Not in one instance have I done to. " Question— You put some other valuation upon it and certified accordingly ? " Answer — Always. " Question— (By Mr. Mitchell) : That has been the uniform nractice? " Answer — Yes." Then on page 28 Mr. Mackenzie in a question says: "I supposed that the Commissioners would have entrusted you with the execution of the work ? " Answer — I simply see to the carrying out of contracts that have been made. " Question— How doy ou propose to value that work (the work Mr. Fleming had previously stated that he considered entirely extra) ? 1^ " Answer — That rests with the Commissioners. " Question — Have they not consulted you about it ? " Answer — No. " Question— Was the work ordered to be done through you ? " Answer — Yes. " Question— Without consultation with the Commissioners, only their orders ? " Answer— By their orders. {-■ ■ •i \ k -i': • -A. Question— Do you know the quantity ? 1^-1 ('^t^' 'ff ?l 66 ' Answor- Y<'s, I know the d of kW^ " 406. Question. — 1 want a distinct answer. You stated that any changes, other than changes of location or grade should not either increase or diminish the amount to be paid to the contractor. Now, the Commissioners have relieved th»> contractor of these bridges, and this has not been caused by ihange of line or grade ; and I ask if this saving is to be allowed to the contractor V " Answer. — The original lontracts included the cost of wooden bridges. Subsequently, alter information had been n'ceived as to the cost of iron bridges, 20 it was decided to build the bridges of iron. Of lourse the contractors could not be called upon, under their contract, to jnit up iron bridges in place of wooden ones." Still Mr. Hrydges does not say why the contractors lould not be called upon to build iron bridg«'H if that clause 4 was to cover everything. "Of course" he adds, " the contractors could not be called upon under their contract to put up iron bridges in place of woodet' ones." t If; II' " L^tf lil a ' ' * « i 'n\ i'ilF 74 Mr. Brouohton : — The case of the Montreal Bank tells you why — there must be a limit somewhere. Mr. GiROUARD. — So I believe, but where is the limit to be drawn, I think that limit must be based upon reason. " Therefore," Mr. Brydges says, " we decided with the concurrence of the Government to relieve the contractors of the bridges altogether. The question as to how the matter has to be finally settled was left till the contracts would be finished." That was one of those reductions or diminutions which they would value in the end. If the con- tractor had made a good deal of money, very likely he would be charged with the amount of the diminutions he agreed to be charged with, but these state- 10 ments made by Mr. Brydges before the committee in 1873, corroborates the impression which the contractors expressed before this Commission in former cases, and will very likely repeat in subsequent cases, that notwith- standing the fact they had signed an agreement that there should be reduc- tions for the substitution of the iron for wooden bridges, they were still under the impression it would not be charged to them. I am not surprised to find that they were under that impression when I come to read what Mr. Bridges has said before the Committee, that it was to be left open for decision at the end of the contract. m Mr. Brydges being further pressed by Mr. Mackenzie upon this question of 20 diminutions in consequence of the substitution of iron for wooden structures is asked : " But you can give your opinion as to how these changes should be dealt with ? " Mr. Brydges. — " I have no he itation in sayinp; that this amount of $21,000 for bridge superstructure is an amou '' that will have to be considered at the end of the time, as well as every other question arising out of changes. " Question — That is no answer. You stated that the entire deductions were $52,450, and that nothing would be considered, in your opinion, but the Bic em- bankment. Now, I want to know if it is your opinion that this bridging should also be credited to the contract ? 30 I};' i'.iii ill I- i » w m ' 75 " Answer — I have explained the circumstances, and in what I hare said I wish not to give any opinion upon the subject at all. I think it is very undesira- ble that I should be called upon to commit myself to any opinion in advance upon a subject upon which I may be called upon to adjudicate. " Question — (By Hon. Mr. Tupper) : Was there not a distinct understanding when the G^overnment approved of this change, from wooden to iron bridges, that the price of the wooden bridges was to be deducted from the contractor ; and did not the contractor agree that it should be deducted ? " Answer — There was, no doubt, a good deal of discussion about it, but I am not aware that there was any final decision about it. I considered, and I consi- 10 der now, that the whole question was to be left open for decision at the end of the contract. " Question — (By Mr. Mitchell) : Were there not distinct and positive commu- nications with the different contractors ; were they not asked to agree, and did they not agree, that the difference between the cost of the wooden and iron bridges should be deducted from their contract ? " Answer — There was no distinct agreement, as I understand it, as to how it should be finally decided. They were asked to agree to it, but I have an opinion on it, which I do not think it advisable to give." Of course, the opinion he had, was what he said before : That it was to be 20 considered in the end. I think what I have read shows that the quantities in the original bill of works must be considered. Original Plans. But I say also not only the quantities, but the plans lor structures must be considered. For instance, we find that the Grovernment took the consent of the contractors in order to make a change of bridges. If they were authorised to make any change they please, no such consent would have been necessary, and as remarked fi- II':- 1: It k (.4 • :h. Ill" 76 by one member of the Commissson in the case of the Bank of Montreal, although there was to be no extras, in consequence of an expensive coat of arms being placed in front of the building, that was allowed as an extra, and it shows that a limit must be had to the power gi\ en in clause No. 1 of the contract. If an iron bridge cannot be substituted for a wooden one without the consent of the contractor, I cannot see why other works that involve a larger amount of money can be author- ized under section 4, without the consent of the contractor, or without, at anyrate, giving him an extra indemnity. We find, also, in the specifications, that the Government, or the Commissioners, reserved to themselves the right to put i!i iron pipes. Why should that power be expressly given it under clause 4 they already 10 had the power ? We find, also, that tunnels could be substituted for culverts ; but there is a special power given in the specifications for that also. 4.1 The Chairman. — I do not think there is anything about tunnels. Mr. GiROUARD. — I am under the impression there is. However, if there is not, the iron pipes is a case in point. Even if the tunnels are not mentioned, I do not see how such a change could be ordered without the authority of Parlia- ment. It shows that the intention was that the plans, as originally made and let were an important portion of the contract. I think there are some papers in the correspondence which show that also. At page 155 of the correspondence, Mr. Smith says to Mr. Bertrand, referring to the west abutment of the Nippisiguit 20 bridge : " Of course you will not suggest anything, but let them work by the plan ; but if they have got out stone of large dimt'usions, as here shown, you may allow them to deviate from plan thus far, if they ask it in writing." Strange to say, the words " ask it in writing," are italicised. Why should the district engineer say, if there is any change from the plan, it must be asked for in writing ? Clearly this precaution was recommended by the district engineer in order to prevent the contractor from claiming extra for any deviation from the plan ; so, it seems to me, that in the minds of the engineers at the time, they felt that any deviation from the plan that would be ordered might give the contrac- tor a claim for extras, and it was with the view of avoiding that, that the writing go from the contractor was asked for. ■;i \m '■'] ■ .1 '4 '.'• ''' \i Mr. Brouohton. — Tho engineer was proterting himself in doing so. Mr. Girouard. — It was very clear that he did not think of altering the contract without getting a writing from the contractor for fear of giving founda- tion for a claim — at least he must have been fearing that. At pages 156 and 157 of the correspondence, we find a statement to the same eiFect : " On receipt of yours of the 12th instant, this morning I went out to the bridges taking with me the new plan received on the 12th, left it with the foreman, who returned the old plans. Mr. Bertrand is now some place up the line, and assoon as he returns I will get a letter from him asking for this change I suppose I should get the letter before I allow the deviation." , Iv That is the change from the old plan to the new plan. The Chairman. — That is at station 285 I suppose ? There was a good deal of correspondence about that change and they hesitated a long time about mak- ing it. There was a discussion, you will remember the correspondence, as to whether it was going to increase the cost to the contractor. The contractor did not wish to do it, but Mr. Smith said from precaution finally, "this change ought to be made, but in order to avoid all difficulties as to whether it is to be an extra or not we shall have it in writing." Mr. G-irouard.— This change I was just referring to is the change at the west abutment of Nipissiguit bridge. I cannot recollect the number of the 20 station, but it is there. We find the answer to Mr. Peterson's letter which I have I already quoted on the same page, 157: " No letter from Bertrand is required for the changes in the plan of the west abutment of the Nipissiguit bridge made by the chief engineer. It is only when deviations from the plans or schedule of works are proposed by the con- tractor for his benefit, that a written application is necessary." That is his view. Mr. Brouohton. — Who said that Y 'n fi' - ■ ■'■ 1^' 1m L ^, *1 .. < ' IVi 'tl 78 Mr. Girouaud. — Mr. Marcus Smith. It proves plainly that iu the mind of Mr. Smith, it was not to protect the Governmjnt against a claim of the con- tractor for changes in the pitins of the bridge that the writing was asked for ; it was quite the reverse ; it was only when the change was proposed by the contractor for his own benefit that Mr. Smith considered the writing was neces- sary. It must be remembered that seldom did the engineers require the writ- ing of Bertrand & Co., and it must be presumed, according to Mr. Smith, that the changes made were not for his beneht. The Chairman. — I remember it was proposed to be used to protect Mr. ^^ Smith from blame by his superior officer, because in the writing I think he wished three things to be shown : First that the cost would not be increased ; next that the efficiency of the road would not be diminished, and third that the time for completion would not be changed. I: Mr GliloUARD. — From the interpretation given by Mr. Smith at page 157 il would seem that he did not understand the position in that way. At page 232, we find again a request from Mr. Smith to the contractor to ask in writing for a change in the abutments of a certain structure. . '' > At page 270 of the same book of correspondence, we find the instruction of the Engineer in Chief to Mr. L. G. Bell, district engineer at Restigouche as to 20 changes: "You will particularly bear in mind that no changes in the original grades or structures, or plans of the same, are to be made without the knowledge and concurrence of the Chief Engineer, and that he looks to the district engineer for the carrying out of instructions and plans, and the execution of the works mcoriling to spenjications, and as intended when the work was originally placed under contract." I think all these letters and the testimony I have quoted, show that the quantities mentioned in the bill of works, as well as the plans, were a material portion of the contract, within the intention and meaning of the contracting parties— not only the contractors, but also the Crown. W" In pursuance of the rule that I have laid down that no great changes were m 'j». I* 1^ jtf*. ♦•■7" It 79 to be made except when paid for by tho < "ommissioners or the G-overnment, it is not surprising to find that the contructors expected to be paid Ibr the work done. \Ve will take first the testimony of Mr. Fry in the case of Mr. Berlinguet, at page 4G2, and I believe he has repeated the statement in the evidence which he has sent here. Kecbss. New Kate,"*. — New Depautt're. Mr. GlROUARD resumed his argumen' : He said : Before the adjournment, 1 had just read, I believe, a letter from Mr. Fleming, recommending the engineers under him not to make any change except after getting his approbation in 10 writing, and from that letter it might be inferred that he entertained a fear that changes might be made which would not be necessary and might over-burden the contractors and take them too far away from the original plan of building the road. I M as showing, too, that these papers conveyed the intention of keeping as much as possible within the original quantities and plans, and I now pro.:eed to say that the contractors expected all along that they wovild be paid for the work they should do. I find that expectation on the part of the contractors and their sureties fully expressed by Mr. Fry in his evidence in the Berlinguet case at pages 262, 374, 375 and 462 12. I shall not now quote the very words used by Mr. Fry, as I will have occasion further on to refer to them move specially. The "^ conduct of the Commissioners and of the Government confirmed that expec- tation of the contractors. From the commencement of the work to the 20th of (September, 1870, complaints were made by the contractors and their sureties, that the work was greatly under-estimated, and that they were not paid as was intended under clause 11 of the contract, which provides that only 15 per cent, should be retained by the Commissioners, as surety for the due performance of the con- tract. At page 39 of the sessional papers. No. 13, of the year 1870, 1 find this state- ment made by the Engineer in Chief The precise date is not given, but the month was September, 1 869. This statement is embodied in a supplementary report of the Commissioners on the Intercolonial Railway, under the head of " Advances qq on plant, and percentage." Certain contractors having made application in fK» I 1% Pi* , 1 • It' 80 :September last for an advance on plant, and to get payment ol' the peroentage retained in terms of the contracts, the Commissionern called upon the Chief Engineer, to report upon both subjects, which he did in the lollowing terms: — " The percentage retained in the hands of the Commissioners is, I feel assured, a great deal too much, and in view of the present circumstances, I think it would be advisable to reduce it to a mere nominal amount, if the whole of it cannot be relinquished " Hut even with a system ol rertilioatos, which will give to the cojitractors the iimouut due to them, nearly a fortnight earlier in the month, and even yield- ing to them the whole of the percentage retained, I am satisfied from all I have 10 learned thai this alone will be insutticicient to enable them to proceed with the work properly; and it will be necessary, in order to a4Compli8h this object, to assist them still further. '• They have all made an expenditure in procuring plant, and in making preparations of various kinds, which cannot be represented by work actually done and certified. 1 would go as far as to recommend an advance on this account rather than to lose the present favorable season, by even a partial sus- pension of active operations. " The following shows th<' percentage retained in each case, and as far as I have been able to gain information, it also shows the probable amount of expen-20 diture by the contractors in makinif preparations, opening quarries, building shanties, and furnishing {dant." Then 8(nne sections are mentioned, from 1 to 7, including 3 and t>. " In consideration of the above, and in view of all the »'ircumsta]icea, I would very strongly recommend as liberal an advance as possible to the several contractors, feeling satisfied that ample security is afibrded in the attunl value of Ihe work exenifed." The words " actual value of the work executed " are underlined : I say 14. 1 1 1 1 St that this shows that at the very beginning in the opinion of the Commissioners and Chief Engineer, the actual value of the work executed was intended to be paid. In consequence of this report of the Chief Engineer, the Commissioners advised or recommended that an advance should be made to the contractors of those sections. ' Under these regulations, and in all cases, with consent of the sureties in writing, the percentage, to 30th of September, 1869, was paid to the several contractors upon application. This report of the Commissioners was made, although the date is not men- tioned, in the spring of 1870, because they say they do not want to lose the '' present 10 season," and as it mentions that with the consent of the parties, the percentage to the 30th of September, 1869, was paid, it must be inferred that this report covers the time to the 30th of September, 1869. The CHAIBMA.N. — That is before the time that either of these contracts were entered into ? Mr. GriROUABD. — Yes, but the report of Mr. Fleming was adopted by the Commissioners only in the spring of 1870. There was no use then to make special advances to the contractors for sections 9 and 16. Section 15 was only given in the spring or summer of 1870, and the work upon section 9 was only beginning. The Chief Engineer and the Commissioners recommend that the con- 20 tractors should be paid according to the actual value of the work executed, and with a view of meeting that rule, they recommend an advance on plant and that the percentage retained by the Uovernment should be decreased. We iind the same principle t'.dopted throughout, as far as this section and other sections are concerned. Look at the Orders in Council, pages 4 and 5. I had occasion yester- day to read the report of the Commissioners of the 20th of September, 1870. It is useless to read it again, but we Iind there that it is the same statement which is made by Mr. Fleming with regard to the other sections, 1 to 7, in September, 186J*. There was a j^ood d«*al Uw mu<-h retained, no allovvanre being made for the gross amount, and th»^ result Wi^^s that the amount ct'rtiKed by the Engineer 80 was from 15 to 20 per i-ent less than the value of tht; work which had been M 82 done during the month. Then he complains also that the Oommissioners de- ducted the 10 per cent, under the contract, making the whole amount 25 to 80 per rent., besides the value of two or three week's work retained by the engineers. Here is a copy of the Order in Council which was passed in consequence of that recommendation of the Commissioners that the percentage should be a good deal less ! It is to be found at page 5 of the Orders in Council in the case of Ber- trand. '* The Committee of Council have had under consideration the communica- tion dated the 20th of September, 1870, from the Intercolonial Commissioners representing the hardships to the contractors of the present system upon which 10 the monthly estimates of work done on the several sections are made up, and the heavy percentage unnecessarily retained from them, and recommending that the engineer be instructed to make the returns of quantities actually executed fully equal to the work done each month, and that no deduction of 10 per cent, from the schedule prices be made for errors, omissions and contingencies. " The Committee on the recommendation of the Hon. the Minister of Public Works, advise that the foregoing recommendations be approved and acted upon ; and that in the certificate required to be given by the Chief Engineer, that officer be at liberty to state that the percentage is relinquished in compliance with the instructions from the Commissioners." . 20 We find here two statements which are rather important, to wit, in the first place, that it was then the policy of the Commissioners and of the Government, that the engineers should return the quantities actually executed, and they should be fully equal to the quantity done each month ; and you will find in the second place that it was their policy at that time to abandon the percentage of 10 to 15 per cent, which they were justified in retaining under the terms of the contract. At page 66 of the Bertrand Book of Correspondence, we find that the contractors were not satisfied with those advantages. They represented to the Government on the 17th October 1870 : — " As the amounts of the last warrants for sections 9 and 15 do not reach our expectations, we beg to enquire whether 3Q the changes in making up the estimates have all been made, or if we are to look for still further release of the amounts withheld." I i h l^ff! ^ . 181 Br'- ^: mi ( J We find that a short time after this complaint of the contractors, the Com- missioners took the matter into considi'ration as will be shown by a reference to pajcres 6 and 7 of the orders in council of the Bertrand case. The report of the Commissioners is dated 24th of October, 1870, and is as follows : '• The Commissioners for the construction of the Intercolonial Railway beg to report to the Governor in council that they have carefully gone with the Chief Engineer into the q lestion of the basis upon which the estimates for the different contracts should in future be made out, and they now submit a report from the Chief Engineer giving th«' l)asi8 as agreed ujwn, except for contract No. 20." 10 On the 26th of the same month, the Privy Council on the recommendation of the Hon. the Minister of Public Works, advise that, "as suggested by the Commissioners, the basis submitted by the Chief Engineer be adopted for the present." The Commission will no doubt remark that in both the orders in council of the 20th of September, 1870, and the 26th of October, 1870, no allusion is made to the lump sum ; no condition is put in that the engineer shall always take care not to exceed the lump sum, and always keep it in view. There is not a word said about that. This action on the part of the G-overnment con- stituted a new departure, a new price for the contract. These orders in council 20 assured to the contractors new rights of which they could not be deprived by any subsequent doing, unless notihed to the contractors ; they were droits acquis in their favor. In a letter signed by Mr. Fleming, dated 10th November, 1870, page 48, sessional papers, 1874, he addresses the Commission as follows : " I have always instructed those under me to have their work measured up for progress certihiates, not at the middle of the month, but at the very end of the month ; and in the event of any measurements being made a day or two earlier, an allowance must be added sufficient to cover the work done up to the last day of the month. 80 A i, ' t^ jil '1 i •-..If 84 ' This is the general rule, and it has been invariably carried out as far as I know. " I adopted all other means which I considered necessary to make the certi- ficates fairly and fully represent the correct value of the work actually done up to the end of each month under the terms and conditions of the contracts, and in this, I believe, I generally succeeded." Then at the very end of the letter he concludes this statement by saying : " My only object is to set myself right in this matter, and I need scarcely add, that 1 whall be very happy to make up my certificates for work as it is done, at the schedule of rates now established, or which may herealter be esta- 10 blished, the responsibility of deciding the terms and rates of payments to con- tractors not now resting with me." This was written evidently in consequence oi some complaints coming from the Commission that the estimates were too low — a gpreat deal less than the actual value of the work done. These new rates which are recommended by the Chief Engineer, and which are not based at all upon the schedule prices were continued, and in fact increased from time to time up to the very day that the Government annulled the contracts for sections !> and 15, and all that time the contractors and their sureties were led to believe that they would be paid for work actually 20 done. At page 7 of the orders in council will be found another report of the Trivy Council, dated the 24th of May, 1871 (it is marked 1870 by mistake). It is as follows : •': "The committee have had before them a memorandum dated 12th of May, 1871, from the Intercolonial Railway Commissioners, submitting for Your Excel- lency's approval — schedules of prices to be allowed in reckoning monthly pro- gress estimates for contractors as recently revised by the Chief Engineer, and on the recommendation of the Hon. the Minister of Public "Works, they advise that schedules submitted be approved and adopted." i; i i ■■■ •:<>.■■ P; as Not a word about the Inmp sum ! At page 9 of the same book of orders in council, we will find that the same rates were continued again under an order of the 18th of June, 1871, as follows: " On a memorandum dated 7th June, 1871, from the Commissioners appointed to construct the Intercolonial Railway, and submitting the schedules of prices to be paid to the several contractors on the Intarcolonial Railway, and recom- mending the adoption of these schedules for the present in substitution for those adopted by order in council ol date 24th May, 1871. " The rates in these schedules, they state, are arrived at by applying the contract lump sum to the total quantities (as now ascertained) of the work to 10 be executed on the several contracts. •' That the item " bridge superstructure " will not at any time be returned as work done, and the amount thereof be deducted in the end from the lump sum to be paid to the respective contractors. " The committee on the recommendation of the Hon. the Minister of Public Works, advise that the schedule be adopted and substituted for those approved by the order in council referred to." I made a mistake a moment ago in stating that the same rates were con- tinned on the order of 13th June 1871. At page 11 of the orders in council we 20 find another report of the Privy Council dated 27th July 1871. That report recommends as lollows : " On a memorandum dated 27ih July, 1871, from the Hon. the Minister of Public Works, recommending that in accordance with the report of Sandford Fleming, Esq., Chief Engineer, the Intercolonial Railway Commissioners be au- thorized, if they think it in the interest of the public, to increase the schedule prices paid to the contractors on the railway sections in the Restigouche District to a uniform rate of 20 cts. per cubic yard for earth works, and $1 per cubic yard for masonry, and that they be further authorized to take out of the hands of the contractors such portion or portions of section No. 12 in the Province of 30 m Nova Srotia, as they may think necessary for the immediate and more vigorouB prosecution of the work upon the said section. " The Commissioners will take care that such additions to the rates upon which the progress estimates are made up, do not expose the Government to the risk of the gross contract price being exhausted before the work is completed. " The committee submit the abovt* recommendations for Your Excellency's approval." I believe this is really the first Order in Council (although the one imme- diately preceding it refers to it) which recommends the Commissioners to keep always in view the gross amount of the contract. -lliugs, and opening and finding quarri*,>s, and procuring the plant necessary to start and carry on the work. All these outlays 10 have now been made, quarries have been opened in all the contracts, and all needful prep.irations made at a large cost to vigorously prosecute the works. The monthly certificates of the engineers, of course, only include the actual number of yards of masonry, earth work, etc., actually executed, and thus cannot meet the outlay incurred in preparations, and which will apply to the whole work to be performed. " The Commihisioners have discussed this matter fully with the Chief Engineer, and annux^a letter which he has addrt>ssud to them upon the subject. It is clear that the works, if re-let now, wuuld cost far more than the present oq contracts, besides involve great delay. " Mr. Flemin;^ reports, " that ho has inU'-h pleasure in stating that the works executed so far have, with a very tew exceptions indeed, been done in a satisfactory manner," and proceeds to say that he would recommend still further aid to these contractors who have special difficulties to contend with. This is the time when the 8 iason allows work to be most energetically pushed, and the Commissioners are strongly of opinion that the puplic interests would L. best served by lending a reiisonable and moderate aid now to those contractors who need it, and are doing their utmost to push on their work. Considerable changes have been made by careful study of the work in go ' it 'I } -J. . f' :/ ^ h the total quantities to be exerut«d in several rases, and the CommiHsioners believe that when the Hnal completion \h arrived ut, the result will be the same as exporieneed in this work so far. viz , that the latter estimates will be cAtn- siderably in excess of the work actually |>erformed in the closing months of the execution of the contract. "The Commissioners, after fully eonsidering the whole matter, recommend that for the < on tracts between Metis and Bathurst, and No. 12, a careful estimate Imj made of the work yet to be m' found at page 14 of the book of Orders in Council. It is as follows : " The committee of council have had under consideration the memorandum date 27th of JSepteniber, 1H71, from the Intercolonial Railway Commissioners, having reference to the expediency of extending to the contractors on the line every reasonable facility in the prosecution of their work, and on the recom- mendation of Sir Oi'orge K. (,'artier, actinir in tht-absenceof the lion, the Minister 20 of I'ublic Works, they advised that the rectmtmendation submitted in the said memorandum be approved, and that the authority re«juired by the Commissioners be granted." The Couiniission will, no doubt, remark that the Intercolonial Railway Commissioners always state that they will have a com]>let.e estimate of the work yet to be done, and in the meantine they ask to be authorized to make su<'h advances to the contractors re(|uiring aid, as in each case tliey may consider exi>edieiit. And thai report was adopted wiiliout any condition ; there is nothing said about the lum^) sum, or that the new advance made will ultimately exceed the lump sum or not. There is nothing said of it in the Order in Council. 30 ■il-^ 89 After this Order in Council, we find a letter signed by Mr. Sandford Fleming, dated 14th of Nov., 1871, to be found on page 213 of the Book of Correspondence. This letter addressed to the Commissioners is as follows : — " Herewith, p.^ase receive certificates in duplicate, (red and black) for the month of October. " The amounts for contracts 13 and 14 are calculated at new rates, based on recent returns of quantities, giving the contractor the benefit of all reductions in work to date ; which rates are to be established by Order in Council. "The amounts for contracts 3, 6, 9 and 15 were furnished you before the receipts of returns from resident engineers. The work done for October was -.q assumed to be the same as September, the object being to accommodate the con- tractors who were particularly anxious to transmit money, to pay men, &c., by the last Gulf steamers from Quebec." At page 246 of the Book of Correspondence, we find another letter from Mr. Fleming, addressed to Mr. Smith, in which, among other things, he says — " Mr. Brydges has stated his belief that the contractors must be right, and the en- gineers must be wrong." Referring to the measurements and estimates, he says : — '' The contractors being in a great strait for money and the Oovernment seeing that they could not go on with the contract without a large advance, and it being highly advisable in the opinion of all here thai they should not at the present. 2q time break down, an Order in Council has been passed authorizing me to in- crease the rates at which quantities will be moneyed out in future certificates, 20 per cent, over tho.se established by Council on 27th of July last. This will help them to pull through, but the Commissioners and the Government between them must take all the responsibility of the contract sums being exceeded. You will see from this that the crisis is for the present over. You will make the returns as usual, and I will money them out at the increased rates, but I want you to understand all that is going on here, and give you an opportunity of comparing the statements made by the contractors with those you sent me." At pages 244 and 24') of the Book of Correspondence will be found a letter of Mr. Fl»>mings, in which he recommends the Commissioners to increase the 5 i: - ), te „ 1 lb. 90 rates at least 20 per cent. At page 245a will be found the rei)ort of the Commis- sioners approving the report of their Engineer, and at page 245 the Order in Council approving the whole. In this report of the Privy Council will be found a reservation not to be discovered in the reports of the Commissioners or the Engineer, viz., " the Commissioners taking care that the bulk sum of the con- tract be not exceeded." That same report will be found at pages 15 and 16 of the Orders in Council. At page 44 of the Sessional Papers for 1874, in the report of the Committee of the Hou8e of Com mons, the following letter from Mr. Saudford Fleming, addressed to the Commissioners, on the 26th January 1872. will be found. IQ " I moneyed out the quantities so returned at the prices fixed by Order in Council, dated July 27th, at least as far as such prices were applicable. " The estimates so made out for the four sections were as underneath, and I submitted the result so obtained in my letter to you, dated Nov. 29th : Value of work executed, contract 'J. Nov. 1st 1871, 1143,000 ; value of work to be done Nov. Ist. 1871, $173,352, total, 1316,352; bulk contract sum, #354,897. Contract 15. value of work executed Nov 1st. 1871, #143,000 ; value of work to be done Nov. 1st, 1871—1289,879; total— #432,879 ; bulk contract sum #363,620. " It appears from the best information in my possession, furnished by the 20 resident engineers, appointed by the Commissioners, the work still to be done, added to the work executed, both being- moneyed out at prices fixed by the Government, amounts to #1,750,86175 on the tour sections, while the contract sums amount to #1,637.807. " From this, it is cle ar that the contractors are now paid at rates which will exceed the bulk sum of the four contracts, and if 20 per 100 be addetl tu these rates, it is equally clear that the contract sums will be still more exceed^ni." 80 :?t' in ^^- ^. -,;tj 1 1'-' ti h-\ tl At page 253 of the Book of Correspondence, the new rates will be found laid down hy the Commissioners, with the resolution "that the Chief Engineer be instructed to make his certificates for work done up to Slst of Jan., 1872, at the following rates, on each contract— contracts 3. 6, 9, and 15 ; " these new rates were established on the 5th Feb , 1872. * v * 'I At page 17 of the Book of Orders in Coun«il. will be found " Copy of a Report of a Committee of the Privy Council, approved by His Excellency the G-overnor Ueneral in Council on the 10th ot February, 1872, in which it is decided : " that for all work done alter the 1st of February. 1872, the rates established in July, 1871, be adopted in the certihcate made by the Chief Engineer, and that 10 after the opening of the spring, and when the work still to be done on each con- tract shall have been accurately ascertained, the prices be again revised so as to keep the payments within the gros« amount of the contract. i " On the recommendation of the Hon J. C Aikins, acting in the absence of the Hon. the Minister of Public Works, the Committee advise that the report above submitted be approved and acted upon." There is a recommendation in this report that later on, the prices be again revised so as to keep the payment within the gross amount of the contract, but, however, the old rates were here maintained irrespective of the gross amount of the contract. I my say, en passant, that none of these reports of the Privy Council 20 were communicated to the contractors. Thev;.u?y have had a knowledge, perhaps, of the first ones, where there was no reservation made whatever, and they had reason, I presume, to suppose, and in fact they say themselves Jin their evidence, that the continuation of these rates led them to believe that they were going to be paid for the work done at those rates so as to meet actual expenditure. :i At page 18 of the Orders in Council we find another report of the Privy Council, dated 6th of April, 1872, as follows : — "On the report, dated 29th of March. 1872, from the Commissioners for the construction of the Intercolonial Railway, transmitting for approval copy of a letter from the Chief Engineer, dated 27th March, 1872, and on the recommenda- 30 I • ^ i" 92 tion of the Honorable, the Minister of Fablic Worki, the Committee advise that the suggestion sttbmitted in the Chief Engineer's letter be adopted, that is to say : — " That certificates, to be prepared in a few days, for all works done up to the end of March, be made up at the rates established by Order in Council in Febru- ary last, amended in the following particulars : — " Section 7. Rock excavation $1.10 raised to $1.20 12, Earth " 26 • 87 12. Firntclasj* masonry 1400 " 16.00 16, Clearing 16.00 " 20.00 10 16, Rock 90 " 1.00 " 16. Earth 28 " 80 " 18, Rock 1.10 " 1.80." ¥^. }••■*/ There is nothing said about the lump stim there. Another report of the Privy Council, dated llth of June, 1872, will be found on page 19 of the same book of Orders in Council, as follows : — " The Committee have had before them a memorandum, dated 27th May, 1872, from the Commissioners ap|>ointed to construct the Intercolonial Railway submitting the following copy of letter from the Chief Engineer, in reference to 20 the rates at which progress estimates should be prepared up to, and including the months of May and June. J " The authority under which I have made up certificates in favor of the Intercolonial Railway contractors, under Orders in Council, dated 10th February and 5th April, ha.s expi ed. and it becomes necessary to renew it. " I doubt if it will be possible to diminish the rates established in the above Orders in Council at this time without greatly hampering the contractors, and retarding the proirress of the work. The winter has proved very severe, and operations have been carried on at many places under great difficulties. 80 IMAGE EVALUATION TEST TARGET (MT-3) h ♦ *< V4 :/. ,> %^ A 1.0 Lim |25 W ^ 12.2 111.1 l.'"!^ 11-25 Bll^ |j^ / ■"V 4^ -^ -*- '■^ V*^ % 'W V "■^^ X i ' ■ \ 1 W >, V %i' i, •;' ■i ^) K ii n • A 98 " To enable the contractors to renew their work with energy this spring, and prosecute it with vigor during the open season, I would suggest that the rates authorized by the said Orders in Council be continued for the months of May and June, and until such further time as the Commissioners may be able to report to the Council, a reduction expedient and advisable. " For the reasons^stated by the Chief Engineer, the Commissioners recommend that the rates established by Orders in Council of 10th February and 5th April be continued and applied to all works executed to the end of June. I! " On the recommendation ot the Honorable the Minister of Public Worksi the committee advise that rates be continued to end of June, as recommended." 10 There is no mention here of the lump sum question. This Order in Council is to cover work to be done in the months of May and June, and it seems clear that it was passed with the view of coming to the relief of the contractors who had to pay a good deal more than they anticipated on account of the exceptional difficulties they had met with during the previous winter. At page 45 of the report of the committee of the House of Commons for 1874. another statement of Mr. Fleming to the Commissioners will be found having reference to several sec- tions, and among others to 9 and 16. He says : — " Referring to your letter of the 12th inst., I now submit the following statements made up from the best information in my possession. 20 " Statement No. 1 gives the value of work still to be done on several of the contracts, moneyed out at the Order in Council rates now employed for making up my certificates. " Statement No. 2 gives the balance of the contract sums unpaid to the con- tractors ; those amounts are made up, by adding the advances given in the Com- missioners printed report dated March 8th, to the total amounts last certified. From these two statements placed in parallel columns, the Commissioners will 30 % 94 see that the amounts paid in several cases are very nearly up to the contract sums, while a considerable portion of work still remains to be done " In the statement referred to, which is also published at page 324 of Bertrand's Correspondence, we find at that date, 16th April, 1873, the value of work still to bedone at "present O. C. rates, Sec. f», $53,644; Sec. 15, $136,416 ; a total of $190,060," and the balance of contract sums unpaid for the same sections is set forth as being $10,897 for section 9, and $1,520 for section 15. The amounts for sections 3 and 6 are also given. This was not the first representation, as I have shown, by the Engineer in Chief to the Commissioners and the Government that if those new rates that had been applied for months — I might almost say for years 10 — would ultimately exceed the lump sum. It was only upon the representa- tion in this last letter that the Grovernment seeing that the contracts were nearly all finished, made up their minds to reduce the rates. Until then, the contrac- tors had been under the impression, and had reason to be be under that im- pression, that up to the last they would be paid a^pording to the value of the work done ; but now that some of the sections were nearly finished, the Com- missioners wanted the contractors to get no more. I hardly believe that that was the intention of the Government at the beginning ; in fVict. throughout from the very inception of the work, the intention was that the contractors should be paid for the actual value of the work they would do, but unfortunately, during 20 the month of April, or during the winter of 1873, political complications arose in Ottawa. There was a general election in August or September 1872, and the result of those elections showed beyond doubt that the party in power could not long retain office. During the session of 1873, or the spring of 1873, what is known as the Pacific Railway scandal also came belbre the public, and it was more than ever evident that new elections would have to be resorted to, and very likely the party then in opposition would immediately come into power, as sub- sequently happened. I cannot believe that the party in power ever gave the contractors reason to believe that they would have been paid according vo their work if they had not intended to do so. I do not think they would have inten- 30 tionally deceived them. I think they were acting in good faith, and it was due to those extraordinary and uiiforseen circumstances that they were not paid. The Government thought they would be obliged to reduce the rates to come to the schedule prices and keep in view as much as possible the contract sum. ^: ^ % £*■■'■■>', w •:i E-' ".-.'■- ff £*;■',.'■- '■ * E-»iV' i^ R .^' ' Ek**fl''t '. m^y': il g/T'T-l'-'' t Hi-, • V t f • if. r 95 You will easily understand the ettect that those large rates should have upon the election. The Government of the day were laboring under great disadvan- tages before the public in consequence of the Pacific Railway scandal concerning money coming from a contractor or intended contractor, the late Sir Hugh Allan, who had subscribed largo sums of money for an election fund ; and if besides that scandal, it had been known to the public that the contractors on the Intercolonial Railway were being allowed more than their original contracts warranted, they would have said at once " Here is another scandal ! Here is more money for election purposes ! " I believe that only for this unfortunate circumstance, the Intercolonial Railway claims would have been settled long ago without re- 10 fcrring them to Mr. Shanly or anyone else. The Grovernment would have done as they did on the Lachino or Welland Canal, refer them to their Engineer in Chief, who would have settled them immediately. Unfortunately for those con- tractors this political difficulty arose ; and they had to suffer the consequences ; but I hope they are not going to suffer for ever. The reduced rates were again ordered by the Privy Council on the 31st of May, 1873. The Order in ( -ouncil will be found at page 24 of the book of Orders in Council. I may say that, at page 21 of the same book will be found the re- vocation or annulling of the contracts for sections 3, 6, 9 and 15. Up to that date, those men had been paid upon the new rates ; they had been paid almost 20 from the beginning, as I have shown, and I belieA'e, they would have been paid at the same rate to the end, if the political difficulty to which I have alluded had not occuraed. All parties understood that those new rates were a departure from the contract and would in any event — as no special instructions were given to the contrary — cover the expenditure made by the contractor. These new rates, advances, payments of money, were also made in ths interest of the country. They were understood as a new departure by all parties. Let us see first as to the cc.uractors themselves. Berlinguet so understood it. (See his evidence in the case of Berlinguet vs. the Queen, page 247.) On page 464 E, of the same book, we find the testimony of Mr. Fry. He mentions his 30 interview with Mr. Langevin and is questioned as follows : '•Question. — Were there any payments made ? . ■ s •" 90 " Answer. — Repeatedly. I went there and was told not to be so nervous and anxious as I was ; that I need not be alarmed ; that if we could go on ad- vancing that we should not lose the expenditure. " Question. — Then, as I understand, you were led on to carry on this work, and to spend the money you did spend, by the promises made by the Minister of Public Works, that you would not be allowed to lose the money you spent ? " Answer. — That was so. Yes." Referring to the correspondence between Mr. Fry and Mr. Fleming, to be found at pages 374 and 375 of the book of correspondence, dated 12 and 13th of October respectively, 1875, we find the following statement of Mr. Fry : 10 " In relation to the claims against the Dominion G-overnment, arising from the works done on sections 3, 6,9 and 15 of the Intercolonial Railway, a settle- ment of which I am pressing, as one of the sureties in the interests of all, I have stated to the Honorable Mr. Mackenzie that on several occasions when the works were in progress, your conversations with me on the subject were to the effect that I need not feel so anxious as I was evidently doing; the Govern- ment could not expect or allow the road to be built at the expense of private individuals, but that means would be found to meet the difficulties we were encountering by disbursing such large sums over the monthly payments we received; and doubtless you had good grounds fordoing so, from what had 20 passed between you and the Honorable Mr. Langevin, the then Minister of I'ublic Works, and other members of the Cabinet. " I would recall, also, a particular conversation on the steamer ' Lady Head,' on her p assage from Newcastle to Bathurst, when you told me you were glad to say that estimates at increased rates of from 20 to 25 per cent, had been sanctioned. I replied how thankfull I felt to hear it, but remarked naturally that by the payments of these increased rates the bulk sum of the contracts would be exhausted before the works were completed. You answered me that you considered the fresh rates established to be a new ai. ^gemeut, and altogether apart from the original contracts. This you have already verbally 30 (,( 97 confirmed in the Honorable Mr. Mackenzie's presence, he having Bent for you during my interview with him, when I made that statement. " I beg also to refer you to your letter to the Commissioners dated 26th January, 1872, which had reference only to sections 3, 6, 9 and 15, pages 33 and 34, Report of the Standing Committee of Public Accounts, in reference to section 16, Intercolonial Railway, 1874. " You clearly point out in it that by the rates of payment being made under Order in Council, dated July 27th, the bulk sum of the contracts would be exceeded $113,054.75, and that naturally a further increase of 20 percent, would add that much more to the increase over the contract sums. You 1^ asked for further instructions, and the result was the sanctioning and payment of additional sums. " The whole of the letter above referred to corroborates the position I take, viz., that the oris^inal contracts, (impossible ones as they were from the first) had been clearly departed from, and that a refusal to recognize our claims and hold us to the bulk sum of the original contracts would be a breach of good faith contrary to common sense, or to any fair and equitable view of the matter, whilst to the sureties it would be a peculiar and crushing hardship." Mr. Fleming answers : IB: " With regard to the conversation which you say took place on the steamer ^^ ' Lady Head,' I can readily understand that such a conversation did take place, as I was frequently urged by the Commissioners, contractors and others, to certify larger amounts than I consdered due ; that, I as frequently resisted all the pressure that was brought to bear on me on such and every occasion. The ground which I took was that no one had any right to interfere or influence me in any way with respect to my own certificates. The Commissioners went so far as to pass resolutions directing me to increase my certificates, but I would not act on these resolutions ; I demanded Orders in Council as well. I invariably acted on these Orders in Council, considering them in the li^ht of new 80 fj ■1111 08 contracts, as far as making out my certificates was concerned. My official cor- respondence will show all this, and I have no doubt at all that I said to you, and to other contractors, that I considered the increased rates established from time to time by Orders in Council, as stronp evidence that the Government was anxious to assist contractors to finish their work with as little loss as possible." That is exactly the contention I make. Mr. Broughton. — He does not go quite as far as Mr. Fry wished him. Mr. GiROUARD. — Not quite as far, but it comes pretty near the same thing ; but we will have something more yet. The Chairman. — I suppose you notice that the former portion of that letter ^a says he could not have gone as far as Mr. Fry thought he had in this conversa- tion ? Mr. GiROUARD. — No, but he says : " I feel satisfied that I have frequently expressed great regret that you should ha\e been led into a matter which has been the source of so much anxiety to you, and I may have said that the system by which public works were built, to any extent, with private means, must be a bad one ; and at the same time, expressed a strong hope that in your case the losses might not prove 60 serious as you supposed. I could not, however, have done or said much more than this, as I had no authority whatever to commit the Government to the pay- 20 ment of anything ; certainly not by any informal expressions such as I allude to." I need not say that Mr. Fleming when examined before the Exchequer Court in the Berlinguet case, persists in this letter. I would now refer the Commission to a few passages of the evidence of Mr. Fleming in the same case, pages 18d, 20d, to 23d inclusive. On page 18d he is questioned as follows : — 80 <','':: .'■[,..• vis ■^r ' ' , ' mv- !''; ^ SI' hi- m v. 1 ill 99 " Question — Was it possible to carry out the Order in Council in face of this last increase ? (That is the increase of the order in council of July 27th.) " Answer — It rendered it imperative. It seemed to me I could not add the money, and at the same time preserve the bulk sum." Then on page 20d : — " Question — Refer to the documents of June 11th, 1872, and you will find a report of the Privy Council approved by the Q-overnor Q-eneral on that day, set- ting forth that the committee had had before them a communication from the Commissioners of the Intercolonial Railway in which your letter is cited. Now I should infer from your letter of the 11th of May 1872, and from this Order in 10 Council that no reduction in the rates had taken place in the interval ? " Answer — I could have spoken positively had I known what the question was to be. I think the rates were continued irom the date of one Order in Council to that of the other without any reduction ! I believe so. " Question — The rates that were last established in consequence of this order in council were continued until those contractors gave up the work ? " Answer — There is an order in council dated the 31st May, 1873. " Question — That is the time the work was taken away ? I think from this it is clear the rates were never again changed during the time the suppliants continued in possession of the works ? 20 " Answer — So far as I can see, the last certificate is dated 12th May, 1873." Further on ho is questioned as follows : — ■:^:i^ Question — We have gone over the Orders in Council and the different m 100 chanj^es madt^ in the sc^hodule of pricoK ; yon have pointed out the difficulties that were likely to arise I'rom these changes ; do you consider the schedule of prices you mivd*^ originally and the first account was the only correcl one to carry out the fontract with the lump price agreed to? Answer — I undoubtedly thought so." Then on psigo 22d : — "Question — As ;i niatt«'r of fact, would it. not necessarily have followed from the increased rates carried out as they were, that the hulk sum would have been exceeded. If the rates lixf;d by the Order in Council had been continued, would not th(^ money (ulher have been paid before the work was done or, in other 10 words the bulk sura been exceeded ? " Answer — With the new rates, certainly. " Question — Did you not yourself recommend to the Government that the contract prices should be increased to induiie the contractors to go on with the work ? " Answer — I did. I was asked what course should be taken to carry on the work at the least expense to the Government at that particular season, and recommended that the prices should de increased. *' Mr. Bell — The amount of the progress estimates? " Answer — Yes. 80 " Question — Did you not recommend to the Government that the contract prices themselves should be increased, with a view of inducing the contractors to go <»n. so that the contracts would not have to be re-let? *' Answer — I don't remember. I advised that the contracts should not be let to the parties that tendered lowest, but rather to good experienced men at a reasonably fair price. M "Question — Before the Committee of the House of Commons you were asked about various Orders in Council increasing the rates that does not apply to these sections. But you stated you repeatedly did recommend increased prices, because if they had not been given the work would have to be stopped, and that their stoppage in the middle of the working season and reletting at higher prices would not have been in the interest of economy, etc. Does not that refer to increasing the contract prices as an inducement to the contractors to go on with the work ? 10 " Answer. — I fancy so ; that is a general answer that refers to all the con- tracts, the present one included." The Chairman. — He advises them generally that the prices were too low. Mr. G-irouard. — He refers to all contracts. Further on, he is asked . Did you not yourself inform those contractors that you considered this new payment as a new basis, or new departure, as intended to increase the bulk sum of the contracts ? " Answer. — The moment the Order in Council was passed, without knowing its legal effect, I felt that in the common sense point of view it entirely altered the contract. 20 .■; I "Question. — It practically altered the contract then? " Answer. — Yes, and so far as I was concerned in making out the certificates, it was an entirely new contract to me. " Question. — Do you know yourself, or have you any means of knowing whether these additional payments made the contractors, was an inducement to them to go on with the work at the period when they were on the point of giving it up ? 80 '<■ '*~f \ \ •.Ui 102 '* Answer. — The increase was undoubtedly to induce them to go on. " Question. — Aftei- it was ascertained it was a losing operation ? " Answer. — After it was ascertained they were sinking money; these increased rates were undoubtedly intended to encourage them to proceed with the work." At page 39d, the Order in Council of the 20th of January 1872, having been read, Mr. Fleming is asked : " Question. — You understood that the order still left in view the fact that although an increase was made, it was not to cause the Commissioners to pay more than the contract prices named ? " Answer. — I was at a loss to know what to do, when I got my instructions " and wrote a letter on the 5th of June pointing out that it would be impossible to act upon them with the result apparently expected." Still they kept those rates until next spring. At page 38, of the report of the committee of the House of Commons, Sessional papers of 1874, Mr. Sandford Fleming is under examination. He is asked : " Question. — Were you asked to increase the schedule of prices ? "Answer. — I was. " Question. — By whom V " Answer. — By the Commissioners. " Question. — Upon what ground did they put their demand ? " Answer. — On the ground that I was their officer to do what I was told. " Question. — Did they state that the contractors were being underpaid ? 20 ;Vp<>d ; and because it was my duty and dosirc to carry out the wiHhes of tht! Ooverntnenl, und I know their wish was that the contractors should finish their sfction. I aJNo felt that a stoppage of the work in the middle of thi) working soHHon, and nvletting it at a greater price would not be in the interest of economy. "Question— (By Mr. Mitchell): Did you feel that the reletting of the ' work would result in having to pay a great deal more than what would be paid by increaning the priceH Y ,' .\ Anwwer, — I did. 10 " QucNtion.— (By Mr. Mills) : Were you in favor of the lump sum of lotting the road out V " Answer. — By no moans. ' Question. — You expressed disai)proval of it V "Answer. — I did, very forcibly and rcfpeutedly before the system was adopti'd. :> "Question. — Had you any Hpecial retiKou affecting yourself personally why you should be anxious that this work should not fail V "Answer. — Not any personal reason, except a natural desire that the con- tractors should not break '<.! 112 Mr. GiROUARD : — To have been done, and it was on that ground that the money was asked for, and we are to suppose that it was upon that ground the money was paid, no other reason being apparent. Interviews with Ministers. Not only was this conduct of the Government and the Commissioners of a nature to lead the contractors to suppose that they would be paid for their actual expenditure, but I believe that the utterances of the Commissioners and of some members of the Government of the day conveyed the same impression. At page 260, " E" of Mr. Berlinguet's evidence, being asked whether he had several inter- views with the then Minister of Public Works, the Hon. Mr. Langevin, his reply is ; — 10 "Yes, in several instances we have been induced by the Minister of lublic Works to continue our work, and to do all possible to finish our contract, and he added, it will be more easy for you to have a claim, if you terminate your con- tract, than if you do not finish the work." At page 265 " E " Mr. Berlinguet continues as follows : — " Question. — I believe that you have already stated that the substance of the conversations which you had with the Minister of Public Works, or Sir George E. Cartier, or Sir John A. Macdonald, with regard to certain promises of indemnity, was not in writing, and you can not produce any letter from those Ministers? 20 Answer. — No, I have no writing and no letter from any of the Ministers. " Question. — I suppose it was the same thing from the Commissioners every time they told you they would support your claims before the Ministers and they would see that you would be indemnified ; you have no writing from the Commissioners to that effect ? - i' " Answer. — We have no writing of those promises from the Commissioners either." iiiS vlk« 118 I will now read the views of the Hon. Mr. Justice Taschereau, upon this par- ticular point in the Berlinguet case. It is to be found at page 66 of the judg- ment, and is as follows : — " The question here presents itself as to whether the petitioners might have a right against the Government of Her Majesty in consequence of the numerous promises which, they say, were made to them by the Hon. Mr. Langevin, Minis, ter of Public Works for the Dominion of Canada, in 1871 and 1872. The con- tractors and their bondsmen, their endorsers and some of their friends swore before me that in several interviews with Mr. Langevin, with regard to their financial embarrasment and their intention of giving up the contracts, Mr. ^0 Langpvin " had told them not to give up their contracts, that Government did not intend to build the Intercolonial Railway at the expense of private parties and that if they carried on the contract to completion, they would be eventually indemnified for their losses." Mr. Ross, the advancer to the contractors, swore that Mr. Langevin told him that he could in all security continue his advances and that he would be refunded. Messrs. Dunn and Home, bondsmen for the contractors, swore the same thing. Mr. L. H. Huot swore that Mr. Langevin told him the same thing, viz., " to tell the contractors not to give up their con. tracts, that sooner or later, their claims would be settled one way or the other by the Government." Mr. Langevin, examined as a witness, swore the contrary and 20 merely admitted to have told them that it was their interest to complete their contracts, which would have resulted in causing no delay in the completion of the road and would better the chances of the contractors to have their claims favorably considered and settled by Government. He denies having used the words cited by the above witness. He was right ; he would have gravely com- promised himself as a member of the Government and a public man, and he says that he could not bind the Government. We therefore see the immense differ- ence existing between the meaning of Mr. Langevin's expressions and (hat of the expressions of the above named witnesses. In this case, as in all the cases where the witness is interested, his mind may be influenced by interest and induce him 30 to attach to conversations a meaning i'ar different from that which they were intended to bear by him who uttered them " y-r I do not believe, for my part, there is much difference between the different yersions of those gentlemen. I do not pretend that the promises, the individual 114 promises, of Mr. Langeviu, would be binding on the Government. No one can contend that, but I believe it gives a strong equitable claim to the contractors to come to the Gk)vernment and say, " now you in your official position " — because it is very difficult to seperate the individual position of Mr. Langevin from his official position — " you have made certain verbal statements to ourselves, and in equity you should fulfil, or execute the representations which you made at the time." As I have said, I do not see much difference between the different ver- sions of those conversations. Take the A'ersion of Sir Hector Langevin himself, " It was their interest to complete their contract which would have resulted in causing no delay in the completion of the road and would better the chances of the contractors to have their claims favorably considered and settled by the Q-ov- ernment." 10 '.•ii.| Was not this an inducement for them to go on ? Was not this a promise, or if not a promise, did it not hold out a hope that the Grovernment would favorably consider the claims of those contractors if they would go on with their contracts? I believe the learned judge took that view of the case finally, for at page 68 he says ; — " But this question is quite useless at present. Mr. Langevin could not thus pledge the Government, he formally declared it, and I confess that one would vainly seek in the Intercolonial Railway Act for legal means to indemnify the petitioners, although their claims might be equitable." •#; And that is the ground that I take in consequence of all those representa- tions. 20 The Chairman. — I do not know that I have quite understood up to this time what your contention is upon this branch of the subject. For instance, I do not know whether you mean that Mr. Koss, who was the advancer, ought to be repaid all the sums that he has advanced without respect to the question whether the contractors have done work to the value of his advances. Mr. GiROUARD. — No, I do not think that. I would not go so far as that. if; )N in< 116 The Chairman.— Then I would be glad if you would fix a limit so that I can understand it and what is your contention. Mr. GiROUARD. — 1 may say that the reasonable inference of all those conver- ' sations on the part of the G-overnment would be that the actual outlay would be paid, and perhaps the actual value of the work ought to be considered. In con- sidering the value of the work, you must consider the cost also. The Chairman. — For instance, such a thing is possible, as the contractors mismanaging their affairs, and squandering Mr. Ross' money, and the money so expended would give no indication of the real value of the work obtained by the Government. Therefore, it has occurred to me at all events, that even in the lo most extreme view you can take of it, there must be a limit somewhere, which would be the value of the work done by the contractors. Do you contend that the liability of the Government ought to extend beyond that ? Mr. GiROUARD. — I think the fair cost of the work, provided it was managed by competent men, ought to be the limit. Of course, if those contractors were extravagant and squandered money right and left without reason, I do not sup- pose their extravagant expenditure should be taken into account. The Chairman. — As to the value of the work, assuming for the purpose of this discussion, that it was an open question, that there was no contract at all between the parties, and that the Government was bound to pay these men what 20 is called " quantum meruit" the point to be considered in that contention would be, what was the value of the works to the Government, and not what was the cost to the contractors, because the cost may have been unnecessarily high to them from mismanagement, bul even from your point of view, it appears to me that the value to the Government of those works would be the limit that you could possibly claim on the moral or equitable ground that or could urge before any tribunal of unlimited jurisdiction. Mr. Girouard.— I think I would go a little further ; take for instance masonry on 15. We will take it for granted for argument's sake, that that class -m 1. !*v y'^-y ..-vV./if.. ■..^; :w' : I ,. ^n-: ■ : ■ I 'i! Ill 11« of stone is put in there because no other could be found on the section. It is the contractor's misfortune that it is so, but at the same time you cannot attribute the increased expenditure on that work to extravagance or mismanagement on the part of the contractors. I think that ought to be taken into consideration, especially in this case, because it is admitted that granite masonry will last a good deal longer than masonary built of any other kind of stone, and for that reason the country will benefit by it. The Chairman. — You have urged throughout your argument, that each time the revised schedule of prices was adopted by the Government upon which moneys would be advanced from month to month to the contractors, then that 10 amounted in effect to a new bargain, and that those contractors were entitled after that time, to demand as a matter of right for each piece of work they did, the value mentioned in this revised schedule of prices. Do you go beyond that and say that even that was not sufficient ? Mr. GriROUARD. — Certainly, I say that if the work done shows they were entitled to more money than was granted to them by the engineers or G-overn- ment, they should get it. I think the actual expenditure must be taken into consideration. The Chairman. — Do you go any further than this ? That the quantities of work they actually did — not what the engineers returns, but what the contrac- 20 tors can show by evidence they actually did — shall be paid for, and that they should be paid for it at the highest price mentioned in any of those schedules. Mr. Girodard. — I say more than that, that even if those schedules do not mention a price sufficient to meet the cost — I am not talking of the profit, but the cost— of any especinl work, that they should get it. The Chairman. — Whether the cost was increased by their own mismanage- ment or not ? i .-yj I'V Mr. Girouard. — No. If the Crown can show that the cost of any special work was increased by mismanagement, that should be deducted. i ■ f %■ If* ' ta- li 8A - IP % ir If ¥ 117 The Chairman. — Then do you think it should be the part of the Crown to go into that enquiry ? if Mr. Girouard. — Certainly. The Chairman. — In that case, would it not be much better for the Crown to undertake the work themselves, putting their own officers in charge, than to undertake to pay whatever the cost would be to men over whom they had no control. Does it not seem to be an unreasonable proposition ? Mr. Girouard. — No, I do not think it is, when we come here to examine the cost and value of the work done by the contractor. It is not to be presumed that he is guilty of mismanagement unless it is proved against him. That is a 10 general principle of law, and the more especially in this case, where we have the best testimonials coming from every quarter, that they have done their work in a substantial manner. The Chairman. — I think you have overlooked the fact that Mr. Schrieber reported that they were not managing the work with sufficient care and economy. Mr. Girouard. — That was in 1871. The Chairman. — And that they were spending upon it such an amount as made the cost of the different works startling to him. Mr. Girouard. — That was in 1871, and at the same time there was an explanation given by Mr. Schrieber himself in that report where he says he 20 found a great many quarries which he approved ; while it is proved in this case that about six months belore that, some of those quarries were condemned, and the whole machinery and organization had to be changed, causing great expense. ■'••>■■ The Chairman. — Then in effect, I understand you now to urge this view; ...» I 1 fl II 118 that the Government ought to pay these contractors whatever they can show the cost of the whole works to have been, and that the burden of proof is on the G-overnment, to show whether or not it was well managed or mismanaged. Mr. G-irouard. — Yes. The Chairman. — That the documents containing the bargain between them in reality have no effect upon the fair and equitable rights or liabilities of the Government. > Mr. Girouard. — I am not talking from a strictly legal point of view. The Chairman. — Assuming for the present that it was merely a moral or equitable right you urge. 10 Mr. Brouohton. — You mention the enormous cost of the work. It has never been proved that the difference you claim between granite and other work, |15 a cubic yard, was at all a reasonable sum. ^ • Mr. Girouard. — I think that is proved beyond doubt by the evidence of Mr. Schrieber and Mr. Perterson. Mr. Brouohton. — You speak also of the extra value to the country. As the Chairman remarked a few days ago, it will be some hundreds of years hence before the difference between the granite and other stone begins to tell for the country. Mb. Girouard. — This remark of Mr. Chairman was based upon some of 20 the answers of Mr. Smith, but that is not the final answer of Mr. Smith. He says finally he had known some ordinary limestone used in first-class masonary that had lasted a hundred years, but he says also that he has very often seen it not last more than 25 or 30 years ; but he says, " I am sure the granite will last as long as the world will last." There is no risk to run as far as that masonry i,!A* 11; •r* iL-. 119 is concerned, but from Mr. Smith's statement we cannot say that in 25 or 80 years, we may not be called up>on to rebuild some of those limestone structures. He says there is no risk in the granite. Is not that a benefit to the country ? Diminutions. I come now to another branch of this case. I refer to the reductions, and I maintain that the Commissioners in order, no doubt, to induce the contractors to go on with their contract, and considering that they had been entered into at very low rates, agreed that all reductions from whatever causes, were to be for the benefit of the contractors during the progress of the work. Their final adjudication was to have been made at the time of the final settlement. Now, 10 the first question which we will have to consider is, suppose the Commissioners having made a bargain of that kind, or having represented to the contractors that during the projrress of the work those reductions would not be charged to them, no matter from what cause they were made, the first question is had the Commissioners the power to grant such a favor. I say they hnd. If the Com- missioners had power to exact clause No. 4 without special or general authority from Parliament, most positively they must have had the power to modify that clause. Clause 4 of the contract says that no allowance shall be made for any diminution or increase except that may be caused by change of grade or location ; but if they have the power to stipulate a clause of that kind, they must have the 20 power to modify it, and I say they have modified that clause. They have led the Contractors to understand that all reductions will not be charged to them ; that those reductions would be considered in the end, when their claim will be finally adjudicated upon. "When they saw that the contractors were going so much behind with the work, that it was so expensive, and their price so low, they determined that in the final settlement they would see whether they would charge anything, and if anything, a trifle, for those reductions, and give the contractors the benefit of the increases. Mr. Smith before the Commission, page 413 : " The result of those rates would be to make no deductions on account of diminutions. 30 3 ■ ■ t U^ w III I* k •il 120 '* Question. — Diminutions caused by change of giade and location ? " Answer. — In any way. " Question. — That the contractor was to get the benefit of the whole ? " Answer. — I was not told that the contractor would get the bonefit of it, but the Schedule pointed out to that. " Question. — You could not infer anything else ? " Answer. — No. " Question.— And you know that Mr. Fleming inferred the same thing? " Answer.—Yes." • Mr. Buck, when being examined before the Commons Committee in 1874,10 (page 107, question 1331) is asked : — • " Question. — You never knew a case where such large reductions were made where they were paid for ? ' } " Answer. — In lump sum contracts they are generally paid for. " Question. — But in such large reductions ? " Answer. — Any reductions that were made, whether large or not, were always paid for." V-- -^ Mr. Fleming, in his examination before the committee of 1873, is thus km reported : — M I I i-i I • . I {I- :ii-_ li 121 " 14 Question. — In that case the Government vronld save money, both as to quantity and as to price, would they not, because the price of embankments, of course, is less in proportion to the size ? " Answer. — The contracts, as every body is aware, were taken very low, and it was understood generally that the contractors should get the benefit of these reductions to help them to finish their contract." " 15 Question. — "What do you mean by ' the benefit of the reductions ' ? " Answer. — That the value of the reductions should not be deducted from in the end. "16 Question. — And do you think the contract justified that? 10 " Answer. — Well, that is a matter of opinion. " 17 Question — -But I wish for your opinion, Mr. Fleming. I am asking for it now ? Answer. — '* I am not prepared to give it now." At page 10, question 81, Mr. Fleming is asked : " 81 Question.— If Mr. Tupper's question was legitimate, he asked whether unless these reductions were allowed, the contractors would be able to finish the work. Tou said no I asked why should the question of allowing or disallowing come up at all, if reductions were provided for in the contract? 'j!«' i ' " Answer. — I have stated that it was understood the contractors should have 20 the benefit of all reductions that could be made, and they do. Question. — Does the contract provide that they should do so ? •i ! ■n'i Hi It I Jim III I J; 122 Answer. — It docs not. " Question. — Then, it is a departure from the contract is it not ? •' Answer. — I do not say it is. " Question. — It is not provided for in the contract, and yet you say it is not a departure from the contract to allow it ? " Answer. — It is left to the discretion of the Commissioners. *' Question. — Will you show the point in the contract which says that? " Answer. — The fourth clause of the contract says : — " The engineer shall be at liberty at any time before the commencement or during the construction of any portion of the work, to make any changes or 10 alteration which he may deem expedient in the grades, the line of location of the railway, the width of cuttings or fillings, the dimensions or character of structures, or any other thing connected with the works whether or not such changes increase or diminish the work to be done or the expense of doing the same, and the contractors shall not be entitled to any allowance by reason of any such changes, unless such changes consist in alterations in the grades or the line of location, in which case the contractors shall be subject to such deduc- tion by any diminution of work, or entitled to such allowance for increased work (as the case may be) as the Commissioners may deem reasonable, their decision being final in the matter. 20 ■ 4 ■ ■it " Question — I read that entirely different from you. I read it to say that the contractor shall be charged with reductions and allowed for an increase, and yet you say it was entirely in accordance with the contract not to charge any reduc- tions. I think the Commissioner.s and the Chief Engineer are bound to make these deductions ? «! I. h!i Hi 1;1 !*' It" 128 " Answer — As far as the Engineer is concerned, I do not think he has any- thing at all to do with it. It is taken entirely out ol his hands and left to the Commissioners. " Question — Well, say the Commissioners ; but we have to deal with your opinion at present ? " Answer — I am giving my opinion. " Question — (By Mr. Young, Waterloo.) I understood from Mr. Fleming that there had been a very large reduction in the earth-work by the change made in this section, but the contractor added to it an additional amount of rock-work excavated. I would like to know the amount of saving to the contractor in 10 dollars and cents by the change in the road ? At the request of the Hon. Mr. Mitchell, Mr. Young allowed his question to 8tand for the time. " Question — (By Mr. Ryan.) I understand Mr. Fleming to say that in the event of these changes not taking place, the contractor for Section No. 5 would not be enabled to perform his work. Is that correct ? m " Answer — Yes. " Question — Then, if that was the case — if these changes had not taken place and the contractor could not perform his work — what would the effect be to the country ? If the work were re-let again, would it not cost more or less than at 20 present to the country ? Answer — The result would be that the contractor would be ruined in the first place, and in the next the cost to the country would be a great deal more. Question — (By the Hon Mr. Macdonald, Pictou.) " How long would it delay the construction of the road 'i III 4 : 'I I'.- i' i*f- ' 1- .-':.- = h^X- 124 "Answer — Probably another year." Then on page 13 of the aame report he is asked : — "Question — You have uo instructions from the GommissionerB or the Gov- ernment as to the final settlement ? " Answer — No, and I cannot make out my final certificate till 1 have." This may account for the want of the final certificate. Here is another ques- tion which will show the views of Mr. Fleming in dealing with claims for extras. At question 1 10 he is asked : — " Question — Are there not olaims for extras over and above the contract ? Answer — Tes. 10 "Question — (By Mr. Mackenzie.) What amount of extra work? " Answer— About |30,000. " Question — What work is that ? " Answer -Rock work and earth work outside the contract. "Question — (By Hon. Mr. Mitchell.) Which the contractor may claim as extra? " Answer — Certainly. ■ . f "Question — (By the Hon. Mr. Tilley.) I understand the contractor has also a claim for extras in refereme to the foundation of the bridge ? •' Answer — Possibly he may make a claim tor that." 20 (P ll. :l ■I ,. . ' ;il :. 125 Then at page 17, question 164, he is asked : — " Question — Is there no mode under the contract by which the Engineer can make deductions ? Answer — '• There is no mode under that contract by which the Engineer can make deductions. The Commissioners are the only parties that can make the deductions." Then at page 24, question 256, he is asked : — Question—" In recommendingjor deciding on this change were you influenced with the intention or purpose of relieving the contractor ; was the object to make the change for the benefit of the contractors ? 10 Answer — " I felt, apart from the wishes of the Commissioners, without de- grading or lowering the standard of the line in any way, it would be worse than a shame to insist on the original location being carried out ; and that was the principle that instigated me throughout in regard to all contracts." Then on page 28, question 827 : — Question — " Now supposing under the terms of this section, that there were no additions at all, how could you count the deductions ? Answer — " I should not feel authorized to count them at all under the con- tract, and I should refer the matter to the Commissioners." The same views that he has expressed throughout. Then, again, on page 81, 20 question 280, by Mr. Mackenzie : — ..: j Question — " You said it was decided once before the contracts were let, the contractors should have thejbenefit of all deductions ? h 8't. I ii ii; Answer — " It was probably understood." Then, at page 82, question 88n, he is asked :— .1 •■?] Question — " After communication with the Commissioners, you understood it was desirable to give the contractors the benefit of the deductions in the pro- gress estimates. Now, was it not absolutely essential in the great majority of cases, that this should be done, in order to keep them alive to go on with the work at all ? Answer — " Yes, they certainly would have broken down." Then at page 10 of the report of the Committee of 1874, question 480 : — Question — " Of the reduced plan there is a certain amount of work to be 10 done. What would it amount to if moneyed out at the schedule prices paid to the contractors before the termination of the contract ? Answer — " At the reduced order-in-Council prices it will amount to from #60,000 to $63,000. These prices were intended to recoup the advances, giving the contractor the benefit of all red' "^.tious that have been made." The Chairman — Was he speaking of the Intercolonial Railway ? Mr. GiROUARD — Yes, this investigation was altogether on the Intercolonial Railway. Mr. Chandler, one of the Engineers, said before the Committee of 1878, pages 14 and 15, question 137 : — 20 "Question. — Did you iniorm the commissioners of the amount that in your estimation should be deducted on account of these changes ?" '!>■ "Answer. — I had some conversarion on the subject of the amounts, but I »if 127 have forgotten what the amounts were. Mr. Walsh and Mr. Chandler in talk- ing over this matter pointed out that they would be fully able to save the amount of this reduction by the percentage which they retained, but I showed them that in my mind the reductions would exceed this percentage. Mr. Chand- ler said it was a prerogative the Commissioners held in their own hands and 'when the work was done they would exercise that in the manner best suited to the public interest." i Mr. Brydoes laid before the committee of 1873 a statement in which he says, at page 36 : — " The principle which I have referred to, and which is contained in the 10 extract from the report which I have read, was applied to every contract upon the line, and if it had not been so, the majority would, as I have said, have failed and the work would have to be re-let at very great increased prices. I say this advisedly, as a thing within my own knowledge, and about which, I have no doubt whatever. "That being the case, of course the principle governing the whole of these contracts was necessarily applied to this contract as well as to the others, and it was well understood that wherever it was possible to make reductions in the quantity of work to be executed without " degrading " as it was called, the char- acter of the line, that it should be done and the contractors assisted, so as, if pos- 20 sible, to enable them to complete this work for the amount of their contracts. ' i " And care was taken, as far as possible (and has been so far successful) that whatever 8um.s of money were paid to the contrattors in each case should be treated as payments on account, without reference to a settlem»»nt with them at the end of their work. "This has been the case in this particular one as in every other, and I want here to say that the words of the contract, which have been referred to once or twice with reference to changes and deductions for alterations in grades and alignment of the road, was intended and put in expressly to protect the contrm;- tors from the fact that the work might be so altered as to throw ujwn them a 80 •^ ■ III 128 very large amount of work which they did not contemplate, and for which they wonld not have been able to get any additional pay. And I desire also to say that I have been entering as fully into all these questions as I dared, as I want to avoid saying anything which shall atfect the ultimate settlement of these questions." m Then at page 124 of the report of the committee of 1874, question 1684, Mr. Brydges is asked : — "Question. — Did you, in all cases upon this road, when you diminished the quantities, give the contractor the benefit of the reductions ?" m' '■■■'. Answer. — Yes." " Question. — The principle was adopted throughout in all cases ? m Answer. — Yes." Then, question 1589: 1/ " Had the Commissioners any communication from the contractors, asking them to reduce the quantities, to lower the grades, and to strike out structures, &c., and did the Commissioners direct Engineers to supervise work ? " Answer. — They gave general instructions to Chief Engineer to revise all the sections and make such deductions as might be considered right and proper without degrading the character of the work." At page 280 of Berirand Book of Correspondence, Mr. Fleming reports to the 20 Commissioners on the 15th July 1872: "Having procured such a bill, verified as above, it will form a new and true basis for future certificates, and the con- . tractors will get the benefit of all reductions which we have been enabled to make" p^ 8 t f! •tV » 129 In all the Engineers' statements of work remaining to be done and to be found in Appendix Q. N., and also pages 812 and 342, no charge is made for diminutions. As to this question of diminutions, I think that it can be fairly stated that under the contract, the substitution of iron bridges for wooden bridges would be a diminution which the Commissioners would have no right to charge the contractors, because under the terms of the contract only such diminutions as are caused by changes of grade or location can be considered by the Commis- sioners in the final settlement The Chairman. ^ — But you know that against this argument there is this 10 new written bargain, consenting to be charged with the saving on schedule rates. Mr. Girouard, — It is true there has been a new agreement changing the terms of the contract, but at the same time the CommisHion will no doubt recol- lect what Mr Brydges said before the committee of 1874, and which I read yes- terday, that notwithstanding that agreement, the Commissioners intended to consider whether those contractors should be charged with those reductions, and he said the whole matter would be considered in the end. He said, as far as he was concerned he did not know what would take place. I presume that Mr. Brydges was expressing the views of other commissioners to the efieot that all 20 the circumstances of each case would be considered ; that the great losses sus- ta; - by the contractor would be enquired into, and it seem to me that the lan- guage that he utjed conveys the idea that the substitution of iron for wooden bridges would not bv* charged, but, as I have said, it is only an inference. I pre- sume you are sitting here having all the functions of the Commissioners, not- withstanding what Mr. Lash said to the contrary in the case of McOreevy v. The Queen; that consequently you are going to consider this question of diminutions and it seems to me that in view of the great hardship oi these cases you are not going to charge these diminutions. If you do charge them no doubt yon have the right to put in jusu the rate you think proper under the circumstances of 80 each case. ;«> Pi 130 The Chairman. — You have urged at different times throughout the argu* ment that our finding ought to be in pursuance of the policy that has been declared by the Commissioners from time to time, sometimes in the evidence whioh you have referred to, and sometimes in Mr. Fleming's statement of what he considered to have been the effect of the new agreement. Now, on the whole, does it not appear to have been the intention of the Commissioners in all those changes, and in all those favors to the contractors, at all events to con- fine them within the bulk sum of the contract, or with such addition to it as they may have at the time paid out ; in other words, that the Government should not have at any future time to pay any more than the bulk sum together 10 with those further advances which they had actually made Mr. GiROUABD : — No, I do not mean that. I think the whole subject was to have been considered at the final settlement. It would depend altogether on whether they would charge the diminutions to the contractors. The Chairman : — You think then that this policy that you have alluded to that the conttactor should get the benefit of all diminutions without being charged for them, and of all advances that were made beyond the bulk sum, and in addition to that they might charge by way of extras, whatever sum, theiv work done, would appear to call for ? I I- I: i* 1^ Mr. GiRouARD: — Yes. 20 The Chairman : — And irrespective of the terms of the contract ? Mr. GiROUARD: — It is within the terms of the contract. I think that this power which wa.s reserved to the Commissioners to consider all diminutions, in the end was a door, which was leiTt open, to permit the contractors to be actual- ly recouped their expenditure. I am now going to close this argument, which has been a rather long one. The facts are so numerous, and they are spread over so many, I will not say pages, but volumes, that really it was almost impossible to make it any shorter. T 11' i ,. '* i i if 181 My client, althoagh not appearing in his own name, but in the name of Bertrand & Co. having a transfer of their rights, is interested very deeply in this case. In fact the whole of his fortune is involved in it, and he will be almost a ruined man if he is not, at least, partly recouped. The heavy interest of my client is my excuse for being i>erhaps a little longer than I would have been. I would conciude by showing that the Government have actually settled with many of those contractors upon the principles I have advocated and established, 1 believe, that is, paying for the actual value, or I might say the cost of the work ; and I say that the word " lOst," in this case means " value," unless the G-overnment shows that there has been mismanagement. 10 List of Contractors Settled Accobdi.vo ro the Actual Cost and Value of the Work. I believe that what we experience just now, is a full realization of what Mr. Fleming predicted in 1809, in his letter to Sir John Macdonald. He then said, (page 13, Sessional Papers. 1870): — "It would be difficult to shut the contractor out by the most stringent forms of expression in the contract. Indeed, the terms of the specification and contract proposed by the Commissioners, taken in connection with the imperfect data furnished the contractor, and on which his tender must be based, are so extremely iinreasonable as to convince him that the conditions cannot possibly be enforced; and this will be the ground 20 on which he will establish the very best equitable claims for extras. " Under this conviction many will tender, and they will have as little hesi- tation in signing any contract, however stringent the Commissioners may be pleased to make it " The first case that we find on record, for payment of actual work done, is the case of .Tobin & Co.. the predecessor of Berlingnet & Co. ; their contract was annulled, and was re-let to Berlinguet & Co. But their actual expenses were recouped. The Government even paid them for the plant and some stoue they had on the spot, and some in the quarry, too. Mr. Fleming being re-examined in the Berlinguei case {pAge 28, " D ") referring to Jobin & Co., was asked : — 80 p I' (1 I,? b! > pi 1 r u 4 i 1% 132 " Question. — Was the work taken away from them, or did they give it ap from inability ? " Answer. — I am not quite clear; I think it was taken from them, becacue the were not progressing with sufficient rapidity. " Question — Were these first contractors paid in proportion to the work done, on the bulk sum. or merely the cost of the work ?" " Answer. — I cannot say positively, but think they were paid the relative value of the work done." Mr. Brouohton : — Was it not the custom when the Government took the woik out of the hands of any one to pay him up and arrange with the next con- 10 tractor ? Mr. G-IROUARD : — This was not a case of substitution of a new contractor with the consent of the former one ; if that were so, I could understand that to apply. But in this case there was no understanding between Berlinguet and Jobin, 80 much so that Berlinguet bought a part of the plant and stone, and the Government actually paid Jobin. although he was in default, and under the terms of the contract everything was forfeited. t The Chairman : — Perhaps they were willing to pay something to get rid of such a contractor without trouble. ii'. .* Mr. GiROUARD : — I think they were paid over $30,000. SO Then let us take the case of Haycock & Co. You will find some of them got very large sums of money. Mr. Brou<»hton : — What vear was that ? li Mr. GiROUARD : — Haycock & Co. were contractors on Section 5, and they ili Ill U-mi Ill I 188 alHo received payment for the work done even after the section had been re-let, See sessional papers of 1870, No. 18, letter " A," page 8. This was a cancelled contract on the 81st December, 1869. The gross value per chief engineer's cer- tificate of work was $48,762. Net estimates paid or applied, $42,889. It is en- tered as being nerly all paid. The Chairman. — Does that show that Haycock & Co. got anything more than the schedule price of their tender for the work they actually did ? Mr. GiRODARD. — They got that anyhow, and at that period, they could not expect anything more. The Chairman. — But you are not content with that. W Mr. Girouard. — But I show that the Government does not insist on the strict terms of the contract. The Chairman. — You mean by making them give up the money that was in their hands ' Mr. Girouard. — No, by paying them money after the contract was annuled. The Chairman. — The contract was ended by mutual arrangement — the Haycock contract. Mr. GiROUVRD. — Not at all. The Government cancelled the contra t and took possession of it. SO The Chairman. — Don't you think that was the result of negotiation ? Mr. Girouard. — No, there was nothing of the kind. It is mentioned here as a contract that was cancelled. It i» between quotation marks. It is cancelled under the terms of clause 6 or 7 of the contract. w III n l-n 184 The Chairman. — However, you do not nrge that it is an instance of the Government paying anything more than the value of the work actually done. Mr. GlROUARD. — No, and I am not asking for more. The Chairman. — And according to the rates mentioned in the tender? Mr. GlROUARD. — I merely quote this instance to show that the Government did not settle within the strict terms of the contract. Sumner & Somers, section 12, had to give up their contract after receiving ^164,000, in excess of the original contract sum- It is to be found at pages 10 and 11 of the sessional papers for the year ending 1881, returns 36 1 36 m and 36 n. " Contract No. 12. — This contract is for grading, bridging, masonry, &c., 1^ on section No. 12, between Folly Lake and Truro. The lump sum of the con- tract (subject to diminutions and increases caused by change of grade and loca- tion and other deductions agreed to) is 1597.600. The amount of the final estimate is 1648,844. The amount of payments #702,866.55. Over-paid (fcy cost of work) 1154022.65." Contract No. 17. — To be found at page 10 of the same paper, was settled as follows : — " Contract No. 17. — This contract is for the grading, bridging, mason- ry, &c., on section 17, between Amqui and a point a few miles below Causap- sical. The contract sum (subject to diminutions and increases caused by change of grade and location and bridge superstructures, deductions agreed to) 20 is $440,000; the final certificate amounts to $432,728.24 ; payments, 1459,364 25, less sale of plant, J1989.49 ; overpaid (by cost of work) 124,636 55." Then here is the case of Alexander McDonald, for contract No. 5. " From Mr. Fleming's evidence before the Public Accounts Committee in 1873, the following is gathered : '•Lumpsum of contract, 1533.000. m II I m 136 " Deduct wooden saperstrnctures of bridges as per written agreement, •21,200. " Deduct under-drains, as agreed with Mr. Fleming, 14,642. " Deduct the value of the excess of the diminution of work on the increase caused by changed grade and location, 179,485. *' Amount payable under (.-ontract, 1427,078. " In addition to the abovo I find that the chief engineers' returns for the work done in preparing station yard at Bic, rock excavation, lH,7ti2 cubic yards ; earth excavation, oO,8lG cubic yards ; and that the Commissioners applied the following prices to those works respectively; rock 90 cents; earth 82 cents ; 10 which applied to the quantities, produce a sum of $88,102, making a total ol |4t)0,775. Payments on contract $510,000. Payments on extras in Bic station yard, $10,000— $526,000 Over-paid, $66,225." The return for contract 28, Sutherland & Grant's contract, shows that they were paid in excess of the contract sum, $103,632.57. We find at page 3 of sessional paper 18, of the year 1870, that the gross value per chief engineer's certificate of contract No. 3, Jobin's contrect, was $28,675 ; net estimates paid or applied, $24,878 ; percentage paid or applied — $2,526 paid $1,170 applied, total payments $28,574 " 8o that Jobin got paid in full. . Contra«^-t No. 4, also cancelled, to be found in the same statement, shows 20 gross value per Chief Engineer certificate $46,200; he got paid $46,200. Contract No. 6, also found in the list of cancelled contracts, shows the value of work done, $26,325, total payment $25,571. Contract 7, gross value of work done, $53,780, total payment $60,599. I! T . BE, » . «. 136 In the list of contracts, published by order of Parliament in 1878, page 14, I find the following statement concerning Sumner & Somers, contractors for No. 12 :— " On July Ist, 1872, the Government undertook the completion of this con- tract, although a sum of $551,000 had been paid to the contractors, and the sum of 1105,000 had been expended in excess of the original contract sum." i. Mr. Fleming, being asked before the Commons Committee of 1878, how it came that he certified in excess of the contract sum, section 16, King & Q-ough, is questioned by Mr. Mackenzie as follows : — " Question : — But you say that the bridge superstructure was agreed to be lo deducted from the contract sum, and yet it is evident you went on making certi- ficates as if it were not to be deducted. I mention this to show that Mr. Fleming's two ways of putting it won't do ; he only gets out of this difficulty by rushing into another ? ■ Answer : — It simply shows that the contractor has been overpaid 14,200. Question : — Upon whose cirtificate was he overpaid ? Answer : — Upon min<^. Question : — How did you come to certify above the contract sum ? " Answer : — I acted according to my instructions. Question : — Show us those instructions ? Answer : — They are not here. Mr. Mackenzie :— Then I move that Mr. Fleming be instructed to bring Ill' IP I* . 187 with him the instrnctionB from the Commissionera, to cign certificates beyond the amount of the contract sum. " Question : — If this was the proper contract sum, will yon state how mnch the Government have in their hands now, counting the amount of extra work and deducting this balance overpaid ? *' Answer : — There appears to be $14,800 in the hands of the Govern- ment." Hon. Mr. Mitchell: — You have been asked a series of questions for the purposo of showing that you have certified to an amount greater than the amount of the contract ; but I understand from the nature of the questions put and the ^^ answers given, that if such a thing has arisen, it has arisen in consequence of the dediActiou which you say is made upon the saving between iron and wooden bridges ? ♦ "Answer: — Yes. " Question : — Did the Government decide that there was to be any deduction on that saving any more than on any other saving, or were the instructions you receivetl, and the attion you took for the purposes of preventing a difficulty arising thereafter, as between the Government and contractors, in case the Government decided to make the reductions ? *' Answer : — The contractors signed a paper agreeing to have the value ot 20 the wooden bridges, and aUo the saving iu the masonry, deducted from the con- tract sum. 4 " Question : — But there was no actual decision on the part of the Govern- ment that such deductiona should be made '( Answer : — These papers were sent in. Quetitiun : — If it should be decided, as the policy of the Government, that r: I* r 138 thei« dednctiotiB, in every ca«e, should be made from the contract, then you have over-paid over #4,000 according to Mr. Mackenzie's way of putting it ? Mr. Mackenzie : — It is not my way of putting it ; it is Mr. Fleming's. " Answer: — According to this calculation— I don't know whose it is — there would be over |4,000 overpaid." In the very report of the majority ot the Commons' Committee, over the sig- nature of " Thomas Scatcherd, Chairman." we find it stated : — " The value of the work done, according to the original schedulo of prices, is estimated by the Chief Engineer at 1102,000, and giving the contractors the benefit of the reductions in earth work and masonry, the value of the work done is estimated at about 10 $124,000, the contractors have received $164,000, being $40,000 in excess to the amount they were entitled to on the most favorrble mode of calculation." If I: \m " The reductions made in the work were in the contractor's favor." In the minority report of the same Committee, which is signed by the Hon. Peter Mitchell, we find (he following statement given for the reason of this excessive payment : — " The great and unprecedented rise in labor and material, shortly after most of the contracts were let, is given as one reason for this course, as opposed to reletting the works, and must under all the circumstances commend itself to the judgment of this Committee." 20 We take now the list of contracts publich^^d in 1878, page 10, and we find that the firm of G. & J. Worthington, contra(;t No. 1, *' received in addition to the amount of the contract, a sum of #00,000, partly ou account of the difficulty met in the <'lay at Trois Pistoles, and partly on account of extras." I have asked Mr. Jones, the Secretary of the Commission, to try and produce the details of these extras. Of course, it would be better to have them, to see what kind of extras were allowed by the Commissioners and the Government. m mM 1 ir^ Hir m ! 148 the public interest, I think it would be advisable to fight ofi' all such claims as long as possible, and when it becomes necessary to deal with them, on other than strictly legal grounds, it would probably be best to adopt some well considered equitable principles applicable to every contractor on the line ; and, in order to make the whole binding and final, have the sanction of Parliament to this pro- posed mode of settlement before anything is done. 'I: " It appears to me that this would be a much more satisfactory course in every way than applying arbitrary and indefensible rules in each case, such as Mr. Brydges recommends, and which would, I am certain, make matters worse instead of effecting a final settlement." XO ];• There is something very remarkable about these proceedings. We see that Mr. Brydges, who seemed throughout to have entertained the idea that no extras should be allowed except whenc aused by change of grade or location, allowing extras for work which was not caused by change of grade or location ; and I have no doubt that the Commissioner will have noticed the four different items which were allowed by him. It will also be noticed that Mr. Fleming, in pursuance of the same idea that he advocated during the progress of the works, said it would be better to wait until all the claims were submitted to the same authority, and the same principles applied to the whole of them ; and he said : — " I have no doubt at all, owing to the mistaken policy adopted at the commencement of 20 the Intercolonial Railway, that large sums will have to be in the end paid for extra claims." ;; k ■■■•' «'»¥ fl ^ •* Ir. Sandford Fleming, formerly chief engineer on said Railway, be relieved from the duties and responsibilities connected with the office of engineer in chief of the Pacific Railway, and be re-appointed chief engineer of the Intercolonial Railway, to investigate the uusetttled claims which have arisen in connection with the undertaking upon which no judicial decision 20 has been given, and report on each case to the Department of Railways and Canals." (I Mr. Fleming having refused to act, Mr. Frank Shanly was appointed, by Order-in-Council of the 23rd of June, 1880. This Order-in-Council reads as follows : — 'r 1 .« " On a report, dated 21st of June, 1880, from the Hon. the Minister of Rail- wavs and Canals, stating that a letter has been received from Mr. Sandford Fleming, wherein he states that for reasons given, he is under the necessity of declining the position of Chief Engineer of the Intercolonial Railway and Con- sulting Engineer of the Canadian Pacific Railway, to which, by Order-in-Coun- 30 cil oi the 22nd of May last, he had been appointed. III 11 p m ISlii ' :■. (.'' ' w • ^•> ki JH 160 " The Minister accordingly recommends that authority be given for the appointment ui Mr. Frank Shanly, C. E., as Chief Engineer of the lutercclonial Railway, that his salary, while so engaged, be fixed at 1541.66 a month, the engagement being nnderstood to be of a temporary character." The Commission will no doubt notice that there is a change in the terms of the appointment of Mr. Fleming and Mr. Shanly. Mr. Fleming was to report only on cases which had received no judicial decision, but this limitation is not to be found in the appointment of Mr. Shan'y. Now let us see what Mr. Shanly has done, so far as we know. The Commission appointing you to investigate these claims, states that several of them have been re-examined 10 and reported upon by Mr. Shanly. For reasons that I do not under- stand, these reports have not been laid before us. It is to be regretted, the more so as Mr. Shanly not only heard the parties and their witnesses, but also made a personal examination of the works, and his report would be of great value, not only to the contractors but to the public. But some of Mr. Shanly's reports have been published by order of Parlia- ment, and let us see the principle which Mr. Shanly has adopted. I refer to the same sessional paper of 1880, which I have been obliged to consult so often. At page 5 will be found a list of the claims referred to Mr. Shanly. In a great many of them petitions of right have been fyled. At page 6, we find a statement 20 showing sundry claims for work done not under contract, and submitted for investigation and report to Mr. Shanly. I find, as item one, '' extra work on iron bridges," by one Mr. Higginson, $20,128.26. We find also a claim for 8,000 ties lost in the Baie des Chaleurs, made by Mr. Girouard, the present member for Kent. He claims a balance of |2,640, and I note that he has been paid by vote of Parliament. Those ties were not delivered to the Government, or their representatives ; they were lost in transitu during a storm in Baie des Chaleurs. His claim had been rejected by the Dominion Arbitrators ; a receipt had been given in full The claim was finally referred to Mr. Shanly who reported it favorably, and it was paid by the Govern- 39 ment in 1881. Hon Mr. Pope, when moving for this estimate in Parliament, said : " The arbitrator, after examining into this matter, decided the claim H'l '4 161 should be paid." Debates 1881, p. 1377. Hon. Mr. Costigan, in favor of the claimant, stated the case of one Johnson, who had been paid by the McKenzie administration for ties which he never delivered, under circumstarces less favorable to the contractor. The officer of the G-overnraent, Stevenson, had sta- ted to Sir Charles Tupper that " if Mr. Girouard proves the loss as above stated, I think in equity he is entitled to it." Mr. Girouard proved further that Mr. Stevenson took the risk of the case. There was also a doubt whether the ties had been delivered to the officer of the Government, although the contract said that the ties were to be delivered at any place named by the officer, and the officer had ordered the contractor to transport the lost ties to a place which they 10 never reached. Sir John A. Macdonald said : " I have no hesitation in saying that a more just claim could not possibly be presented to the Government." 1 ■ Then in the debates of the House of Commons for the same year, page 1379, we hnd another equitable claim paid by the Government. One I. B. Smith had erected a fence in 1872, on the Intercolonial, as sub-contractor for Sumner and Somers. He had not been paid by them and he preferred a claim agaiiist the Government upon equitable grounds. Hon. Mr. Pope, moving for supply said : '• This is an award of Mr. Shanly's. Mr. Smith was a sub-contractor under Sumner & Somers. Mr. Smith performed his work, but was never paid for it by the contractors, and the Government is now paying him. It has been 20 referred to the official arbitrators." Sir John A. Macdonald : " At present it appears that the work was done by Mr. Smith and was not paid for, and I am quite sure that if he is paid, Sumner & Somers will not be paid." Page 1379,- 1380. We find at page six of the return for 1880, also that G. I 1 mi f |h3| ■I 155 those parties who were paid. I have no hesitation in saying that if the Com- missioners will only ask for the reports of Mr. Shanly, upon the claims of Ber- trand & Co., they will find that they were allowed for changes of structures, borrowing, extra cost of masonry, etc. I have not, and could not see the Report, although I asked for it, but Mr. Shanly's views are so clearly expressed in vhe reports that are known, that it is not difficult to imagine what they are in the reports that are not known. UK At page 15, of the same return, we find other reports of Mr. Shanly. It is true that the formal report is not there, but a synopsis of it is given ; we find that on January 2l6t, 1881, Mr. Shanly reports that one Mr. MofFatt, is entitled 10 to payment for his work, and that Mr. J. J. Macdonald, who received the money should refund it. On June 8th, there is a report to Council recommending the payment of this claim, $4,777.25, and on the 13th of the same month, there is an order in Council authorizing the payment of the money. We find also the claim of Andrew Johnson & Co., the one I have already referred to at some length. On February 11th, 1881, Mr. Shanly reports that claimants are entitled to be paid $2,675.48, less $506.60 already paid. I might mention that at page 8, of the same return, it is stated that Johnson & Co. had been paid. The Government did not wait even for the sanction of Parliament. They were paid beforehand, on April 28th. 20 Mr. Shanly reports on J. C. Nolan's claim, that he considers the claim a Just one, and there is another report dated November 1st, recommending payment of the full amount of his claim, $132. There are other reports of Mr. Shanly's, mentioned on the same page of the return, and favorable to the claimants. Jurisdiction of this Commission. Now, pursuing the policy of the Government and the jurisprudence esta- blished by them, let us look at the jurisdiction of this Commission. The preamble of the Commission appointing the tribunal, contains the following language : " That some of the claims had been before the Courts, and some had been reported by Frank Shanly, Esquire, C. E., and others, or no action would 30 166 have been taken with regard to the remainder of them, and that it was advisable that three Commissioners should be appointed to make enquiry into the matter of those claims, and upon consideration ot the evidence already taken, and upon such further investigation as to them should seem necessary, should report thereon to His Excellency the Governor G-eneral in Council, for the information of the Council, in order that they might be well advised as to the liability of Her Majesty in regard to those claims, etc." I I say then, in the first place, that the jurisdiction of this Commission is to be understood in the same light as the jurisdiction of Mr. Shanly, and as a contin- uance of the same. You are not sitting here, in the first place, as an ordinary 10 court of justice. In fact you have yourselves admitted that you cannot force the attendance of any witness, no matter how importan the may be, such a witness as Mr. Fleming, the Engineer-in-Chief of the Railway when under construction, and probably the person having the best information on the subject. Moreover, there can be no ground which would justify the Government in establishing a new legal tribunal, especially a legal tribunal principally composed of mem- bers who do not practically belong to the legal profession. If that was the intention of the Government, they could have resorted to the ordinary tribunal for the settlement of such disputes — the Exchequer Court. The intention, then, must have been to create a tribunal with a special jurisdiction, and what is that juris- 20 diction ? It must be the special jurisdiction given to Mr. Shanly, because it is mentioned in the very Commission that those claims have been referred to, and partly reported upon, by Mr Shanly. The fact that it is mentionec* in the Commis- sion that those claims have been investigated by Mr. Shanly, shows that you are invested with the same jurisdiction, and, as I have said, unless we give that inter- pretation to the Commission, it cannot be justified upon any public ground, and has no raison d'etre. What was M.r. Shanly's jurisdiction ? Was it a legal juris- diction ? I say no ; it was an equitable one. Was it recognized by the Govern- ment ? Undoub^^sdly ! Not only was it recognized by the Government, but it was sanctioned by Parliament, who voted the necessary amount of money to pay the 30 claims reported upon favorably by Messrs. Shanly and Keefer. I think, however, there is something more to show the nature of your juris- diction. You have the correspondence which has been laid before you by the ■hm I i 4 sua L_ 157 Government. In a letter which I addressed to the Minister of Justice, I repre- sented — I may have done so under a false impression — that you were going to give a strict legal interpretation to these contracts, and that nothing would be allowed except for increases caused by change of grade or location. What was the reply of the Government ? We do not wish to interfere with the deliberations of the Commission nor do anything that will " enable them tu disregard (I am using the very terms of the answer of the Minister of Justice) the legal as well as the equitable grounds which should govern them." ' f' 4 m M A til M m i: 'i It is perfectly plain that the word " equity" is not used here as meaning " law." These two words will not be used to convey the same idea. You should, of course, 10 be governed by law, but if law is adverse to th«> claimant, then you must consult equity, that is, those principles which Engineers, Ministers, Q-overment and Parliament have laid down and applied for years in similar cases. In conclusion, I believe it is only fair to mention here the minimum and the maximum of the cost of sections !) and 15, as estimated by the Engineer in Chief of the Railway, Mr. Sandford Fleming : — No. 9, minimum , $421,985. " maximum 577,661. No. 15, minimum 424,000. maximum 550,000. 20 Mr. Brouohton. — These are his estimates. Mr. Q-IROUARD. — These are his estimates in the beginning. The Commis- sion has, no doubt, taken a note also of the cost of the work to the contractors or their friends, and especially my client, Mr. Ross, some $850,000 exclusive of interest and of the $300,000 spent by the sureties, I am speaking of the four sections, 3, 6, 9 and 15. This is the legal history of the Intercolonial Railway, as far as the claims of '4 ■ra 158 these contractors for extras arc concerned, and I believe that the principles which this history has established should govern this Commission. In a previons case, that of R. H. McGreevy v. The Queen, there was a good deal of discussion as to "whether the contract should be governed by the French or by the English law, the law of Ontario or the law of Quebec, the section of Mr. McQ-reevy being in the Province of Quebec. I believe that cases of this national character should not be governed by the laws of any particular Province ; they should be governed by Canadian law, as laid down by Canadian Government and Parliament. Would it be reasonable that the contractor who had the contract next to section 9 and 15 which we will suppose would be in the Province of Quebec — if the 10 principle of international law which I quoted the other day is correct — be ruled by the laws of Quebec, and Bertrand & Co. by the laws of New Brunswick, which may be, and are in fact very different — Would it be reasonable or fair to say that the rights of those contractors on the same public work should be governed by different rules and different principles? 1 say no; you must dei'idt; those oases according to the same rules and principles, and where will you" find those principles Y You will find them in the rules laid down by the Canadian Parliament and the Canadian Government, and that is the reason why I stated in the beginning of the argument that I was not going to rely any longer on English or French principles, but on Canadian principles. The Inter- 20 colonial Railway act says that the road shall be built at such a time, in such a place, and in such a manner, at such a price as the Governor in Council may determine. What has been done in this case ? True, at the beginning, a very stringent contract was entered into between the Commissioners on one side and the contractors on the other. It is true there is in that contract a provision which says that this work shall be built for a specific sum of money, but could not that price be changed afterwards by the same authority — the Privy Council? Was it necessary that this contract should be changed just as formerly as it was made in the beginning ? Could it not be changed in an indirect manner like any other contract ? I say yes ; and when you find all those new rates which 30 have been ordered, not by the Engineer in Chief, not by the Commissioners, because they had not the power to do it, but by the Privy Council, who had the right from the beginning to fix the price of those contracts, and who un- doubtedly had the right to change it afterwards so as to meet the emergencies of the situation, I ask any reasonable man whether this conduct on the part li:: I I *i il I'' • 6 , of the Government, is not implicitly an alteration or a modification of the con- tract ? I say it is, and we can come to no other conclusion, so much so, that the Engineer-in-Chief, Mr. Fleming, considered the moment he was ordered to apply the new rates, as far as his estimates wore concerned, at least, that it was a new contract. Is it to be presumed that the contractors, supposed to be experienced men like the Engineer in Chief, would come to a different con- clusion, especially when the reservation occasionally made by the Privy Council as to the lump sum was not made known to them ? What is a new contract in a case of that kind, if it is not the payment of the cost of the work done ? That is exactly where the new contract comes in for he contractor. He has 10 no objection to change the structures or make any change the Engineers may require, provided he gets paid for it. That is where the new contract is, and I say that the same authority which, at the beginning of the Inter- colonial Railway had the right to fix the prices for these sections, had the right to change those prices, and I say in this case it was changed most decidedly. My conviction is so strong on that point that I would leave it to any lawyer to say if that contract was not implicitly changed, and that the work was intended by the Governor in Council to be paid according to its actual cost or value. i-H'*! With these remarks. I submit the case. There would be a good deal to be said about the items of claim, but it would be more or less a repetition of the 20 general argument. After having laid down the general principles, I think it will be a very easy task to dispose of the details. The commission adjourned. A] i i BILL OF PARTICULARS OF CLAIM. AS AMENDED AND PROVED BEFORE THE OOMMrS'ilON. is .STATI(iN8. CONTRACT No. 9. I ll+aO ^t Armstroiii''M Brook, ii tuniiol HiibHtitiito'l for I'-'H an Arch -"■ft" •'•■'■'■», orCulvoi't.. $7,fi70 00 YdofA; imtend of earth. 2 Y' their recourse in 1$ i. damages. 20 Bei'ork Exchequer : Berlinguet. Poirier and Nesbitt 139e, 148e, 149e-lt)8e Berlinguet correNpondence 17, 29, 30, 33, 88 Belinguet'K Journal, vol. 1, p. 46, 47, 48 Correspondence of Bertrand.— 16, 17, 27, 29, 30, 35, 36, 37, 38, 40, 41, 42, 43, 45, 53, 68, 119, 134, 136, 136, 154, 170, 178, 180 Before Shanly : Bertrand 26, 27, 89 Odell 127, 128. 1J9, 180, 181 Home 182 Berlinguet 212 Peterson 294. 299 80 f. r 9 Hkfore Commission .- Berlinguet 164-171, 189-196, 200-201 Bertrand 246-247 Smith 898 Gelley 419-422 Item 26 — Expeiiwn, damage and .ro«t of oi>eniug ol" road, building material nt'CHKKary for the opuuing of Haw* lliver (joarry, improperly condemned by the Engineers and Inspectors, and snbst^aeutly foand good by Mr. Schrieber on his inspection during winter 1H71 On th.^ 23rd July, 1H70, Mr. IVu-rsou reports in favour of quarry to Smith. 10 Cor. 43. Strange to say on th»* Ist Augost, 1870, Peterson asserts that the iontrat tors had abandoned the quarry This statement is not corroborated by evidenc*', and it is .'viilent that Mr P«*t«'n*on had been misinformed. However, upon this information, the district Enjrineer condemned the quarry. The matter was referrtul to Mr. Schrieb«'r, who made a »i>e.ial inspection ol the quarry in February, 1H71, and reported in favor of it. ('orres|>ondence 135. But of course between August when it was «;ond.'mn.-d. and February lollowiiig 1871 when it was re-approved, th«' coniractors hnd entirely disorganized their force at Bass River, and had moved somewhere else, e8|ieeially at Nepissiguit and other quarries mentioned by Mr. Schrieber in his report Cor. 136 |3,000 20 CoBKKSPoNDKNCK— 37. 39. 40, 43, 44, 46, 113, 128, 129, 136. 174, IHO, 353. Bkkouk Siiani.v: Bertnuid 84,97 Odell 136 Peterson '. 277, 293 Smith 326,333 Bkkoue Commission: Herliniruet ' '2 Smith 396, 3!K{ 30 \i 10 E O u OQ i K a; S US s: Monthly Estimate. 30th Nov, 1873. CO 351424 50,203 Ap. Q., p. 5 ( ). Ist Sept., 1872. 65,974 377,794 53,972 e. li If 66,960 ) 57,615 \ o CO to" Revised Bill. An. C, No. 1 ( ). 31st Oct., 1871. 66,960 o (M It — p. o 422,000 60,000 ^ i» o *= « « c o E 6 Cm o CO ^^\ ' — ^ rl CO 6 .5 2 v ^^ c ■ es .g -3 >> 1 d Ph -91 CO 03 o ^ ■* " , t- ^ co t; CO « •5 § = o .2 o 6-, CI CO be 19 a c CO tn O o c« c o c o ® >> c ^' -^ l« .5 CO" c 9 o - u _ « o g &£ .IS cj o e o s p.1 - o s o ^ a: fejo 3 i 02 93 N S > 9 ' U CG K S ■^ 9 S 5 !<« 4= c •5' c = >=* ^ t >i c . c O o 00 « 00 5 1— I 03 t:= S ., c 4) jT- — Ift p I- X 1-- QC ■;= a; .2 i -r rt _x « £ W x" >> sr CO o &.ift 3 5^ d CO I— .5 CO X o s s 1.3 (S 9 C X o o •^ .2 ^ ^ -i ■ X T3 -^ > c <= 3 I § !3 O o c 93 JO .a cc j£ o p _>> "5 a? 2 S X S ^- i! — o § ® o o o B o s c«. _ c -r _» 93 ? " e ■!-> ® > J- P t^ J. ® I 2 a PC > o o •5b « ^ t- ■S -e 00 _ 3 jS ■§ ** PQ ^ c a) •— ■3 .a .^ o _ a oi o a5 ■> -^ P< o — "^ - 03 g J3 o •^ 13 " o -■ £ g a 2 03 P 00 - CTi-t J3 — a O -3 CO c « M 2 .£ » I « B o ^ ® "■?"*' -^ ^ X B X — » = J= -i ** ■- -r ^ ^ -5 £ M CO co" 5-1 S so r/5 C ^ ._ .• -3 _ =^ I ? 2 5 r; 3-co v r^: T 1 rt Is' iiMMMMWWKa s Stations. H From To 1 11 + 50 11 II. Extra Work Out or in Excess of Contract. Chani>e at Arinstrong's Brook. 2,740 C. y^y. IM Cliiss MiiM)niy $8 $21,920 00 120 " I'aviiiK 4 480 00 2,000 " Excavations, Kmiiiilulions 0.25 500 00 200 " Coiicroto 4 800 00 Work done to replace. 20,000 C v:i(li end of Tunnel, some 45 led high Irom lop lo huUom, oti account of contour on liic water level .^,000 00 123,700 00 10 Pitt'erence 831,370 00 $7,670 00 20 ' At Armstrong's Brook, Station, 1 1x50, a Tunnel 186 ft. long by 10 ft square was substituted for a 20 It. Arch Culvert provided for in the Bill of Works, and which might as well have been 10 ft. like this tunnel This tunnel was specially ordered by the Engineers ; the stream at that place was diverted through the tunnel, and the embankment heavily rip rapped for protection. This substitution also increased the filling up of the river. The consequence was that 20,000 cubic yards more of earth had to be borrowed. Odell estimates 16,000 lubic yards; and further state.s that the tunnel cost 20 per cent more than the culvert. Berlinguet also, who made a careiul examination of this item, linds it reasonable at $7,670. 30 Mr. Smith finds a difterent result, but he does not allow anything for the slopes being changed 2 to 1, instead of IJ to 1 as mentioned in the Bill of Works. The (quantities 'jiven by Mr. Smith were taken from the Bill of Works and from the local Engineers' returns, a source so well known to be inaccurate and uu- it ' 12 reliable. The Bill of Works proves to be incorrect in almost every particular, and especially in quantities. Mr. Odell examined before the Commission, pp. 38, 42, 98, has candidly admitted that the work was never measured after its comple- tion, and consequently the Government is not in possession of the real and true quantities, nor of the dimunitions or increases, caused by any change of grade or location, or other causes. It is from these data that Mr. Smith built an account of diminutions against the contractors, starting from a supposition and ending in a similar manner, that is supposing the Bill of Works and Engineers' Returns to be correct. Appendix Q and N. are sufficient to show that the Bill of diminutions is altogether erroneous. The Claimants have confined to prove 10 the first item of Mr. Smith's statement to be wrong and without any proper basis. They consider that they are not called upon to examine the others. See above, page 10. i Correspondence.— 3, 78, 88, 84, 86, 87, 113. 115, 194, 215, 220, 221,246, 261, 292, 300, 301, 366. Before Shanly : Bertrand 8,51,72,78 Odell 109, 110 Berlinguet 205, 206 Smith 307 Before Commission : Odell 30,41 Berlinguet 114,126 Bertrand 208,222 Smith 343,356 20 Items 2, 3, 4, 5, 6, 7, 10 — Rock cuttings instead of earth, and also extra quan- tities of earth, at Stations Nos. 128, 160, 230, 430, 520, 636 to 569, 810, 819. See statement prepared by Gelley. Exhibit 8. Total quantity, 23.729 C.Y. Differ- ence between earth and rock at $1.76. Total |41,426. :m This statement of Gelley is the only reliable one. Mr. Smith's quantities 30 18 are taken from the returns of Engineers ; these returns are inaccurate, a fact which Gelley has proved beyond doubt, speaking from personal knowledge. Correspondence.— 88, 98, 214, 221, 368. Before Shanlt: Berlrand 8, 9, 10, 11, 12. 77, 79, 81, 82, 88 Odell Ill, 112, 156 Berlinguet 206,209 Before Commission: Odell 42,44 Berlinguet 127, 129 10 Bertrand 220, 222,226 Smith 366-360 Gelley 434,438,441,442 Items 8 and 9 — The Bill of Works provides for 69,648 cubic yards of bor- rowing between Stations 580 and 590 from a distance exceeding 800 ft. Besides this quantity, the contractors had to borrow from a distance exceeding 800 ft. 105,627 cubic yards, as per Grelley's Statement and Appendix Q, page 6, valued at 46 c«nt8. Total $47,847.16. Before Shanly: Bertrand 13,14, 81, 82 20 Odell 111,112,165 Berlinguet 206 Before Commission: Gelley 422-424, 440-442 Smith 86fr-360 Item 11. — At Stations 1,050-1,100 a special work not provided for in contract, specifi cations or Bill of Works, was done at the request of Odell and Smith. 14 It consisted hi 1,800 cubic yards of earth work on an open drain outside the railway line. Odell says it was a portion of his contract, and so stated to Bertrand, at 90 cents per cubic yard. Total 11,170. Before Shanly: Bertrand 1^. 88 Odell 118,165,166 Berlinguet 207 Before Commission : Odell *^S0 Berlinguet 222-225 Siuith 860.861 10 Item 12— At Station 222, a box culvert 2Jx4 feet was made at Belle Dune River nnder an embankment of some fifty feet, although, as a matter of fact, this culvert was not necessary. The Bill of Works provided for an ordinary stone covering, but as the embankment was so heavy, the engineer in charge, Odell, ordered for a granite covering, which alone could stand the weight. The fact is that notwith- standing this extra precaution, the top of the culvert had so sunk (but not broken) that the light can now hardly be seen from one end to the other. Odell said he would do his best to get extra pay for this work. This granite had to be brought from Bathurst, some twenty-five or thirty miles, and ( ost fully the amount claimed and the contractors so far gave the plus value. Correspond- 20 ence 353 *887 Before Shanly: Bertrand 1^' 1^' ''^' 8* Odell 11-*' "5 Home 208 Berlinguet 207 HiiiaaiilliiiiilbiHMMiitiiiH u Before Commission: Odell .,... 61-52 Berlinguet 130 Bertrand 226-228 Smith 361 Gelley 420, 421 Item 1«.— At Belle Dune River. Station 226, a bridge had to be erected. The Bill ol' Works provided only for one span of eighty feet. It could safely have been built on this plan ; but the Engineer-in-Chief Fleming wanted a two span bridge, and consequently the district engineer, in presence of Sir Charles Tupper, 10 the di\ ision engineer, and Bertrand, ordered a skew pier in the center of about fifty feet high to support the same. The foundation of the pier was under water and caused a good deal of trouble, and in consequence of this trouble a sum of $1,000 i.s claimed as being beyond and abore the work required in the abutments. The quantity of masonry in the abutments was reduced, but its quality was raised. Smith's quantities are only based upon Bill of Works, which haK so often been proved to have been incorrect. His charge of 1 12 for abutment masonry is too high, and the pier masonry too low. Cost of pier, $1,000. I'i. CoBRErtPONDENCE. — 186, 187, 188. Before Shanly : Bertrand 17, 18, 84 Odell 116, 116. 167 Berlinguet 207 Smith 318 20 Before Commission : Odell 62-69 Berlinguet • 181 Bertrand -'2S-J.S2 Smith 861-364 Gellev 420 ■BS 1< Item U— At Station 590x50 the Bill of Works asked for an arch culvert of 10 f»^et, which would have required 491 cubic yards of masonry. At first the option was given the contractors to build a 12 feet culvert or a beam bridge. Finally the bridge struiture was decided upon by both Smith and (!)dell which required diflFerent stones, and a bridge was substituted requiring 700 cubic yards of masonry according to the return of the engineer. Apix?ndix C. p. 2 of Printed Book.) Bertrand erroneously states 600 cubic yards in his claim. Total, |6,469. This item of the claim as amended is hilly explained below. The charge for first class masonry and paving is based upon its value and actual cost. (See Appendix A page 1, and Api^eudix C page 2.) There was a change of grade up 1^ to the bridge. Orioinal Stbucti*!. Nkw Stbucturi. KiistClas.s Masonry. 4!>1 cubic yils. at $!» ♦4.419 00 TOO cubic yds. at $15 $10,500 |>avin.r 31 •• •• 5 155 00 114 " " 5 570 00 i:.vcuvalion 314 ' - 50cU. 157 «0 j^ 260 " "50ct«. 130 00 Total $4,731 00 \. Total $ll.'-'00 00 Difl'ereuce extra, $6,469. Before Sh.\nly: Bertrand 1^- '^•'* Odell 117. 157 20 Home 202 Berliuguet - 207 Smith 313,;514 BEKOHK CoMMlSiJlON : Odcll 69-70 Bertrand 232-234 Smith 866-874 !i r •'iTriiiiimirmTin m Mr 17 Item 15 — At Station 780 a beam culvert was required by the Bill of Works, and another one at Station 807, to be used for bridges for the Post road. At Station 806x50 an arch culvert was also provided for at Elm Tree River. The Post road was directed from Station 780 and carried to Station 807, as well as the river which was diverted from Station 806x60, and instead of those structures, and after a portion of the original plan had been partly executed, the two abutments of the beam culvert at Station 807 being nearly finished, two of the commissioners and the engineers, including the engineer-in-chief, to suit the residents of the locality and in the interest of the road, substituted a new struc- ture which caused the demolition ot the eastern abutment and the doing aw ay 10 of culverts at Stations 780 and 806x50. The western abutment was left, and a pier was put in the place of the eastern abutment, and a new eastern abutment was erected at a distance of twenty feet from the pier, so as to form a uniform and finer structure of two spans of twenty feet each, one span for the passage of the stream and the other for the public road. By this new plan, both stream and public road were diverted. There was a very heavy change oi' grade at this locality, which increased the masonry. Bertraud says the Bill of Works provided for 650 cubic yards of Ist class masonry. He was mistaken ; it was all 2nd class masonry. Appendix A, p. 1, 2. Smith's quantities only based on Bill of Works, and his prices are not 20 based upon facts. Total, $5,600. Correspondence.— 20, 64, 74, 75, 1)5, 96, 116, 119. 157, 170, 171. 171', 172 180, 199, 232. Before Shanly : Bertnind 18. 1!». 85, 87 Odell 118, 120, 121, 122, 157 Home 197,201,202 Berlinguet 208 Smith M14. 816 18 Before Commission : Odell 70-72 Berliuguet 186-188 Bertrand .....284-289 Smith 874 Item 1(). This is the sequence of the change explained under Item 15, Rirer diversion; 3,200 cubic yards excavation at 60 cts., $1,600; 98 cubic yards extra paving required for the new structure at |5 per cubic yard, |490. Appendix C, p. 2. Building and demolishing the eastern abutment, cost at $18 per cubic yard. Value ol stone after being taken down, |3 per cubic yard. Balance, $1,800. 10 Bekoim: Shanly : Odell 120, 121, 122 Home 202 Smith 817, 318 Before Commission: Odell 72-76 Bertrand , , 284-239 Smith 395 •II Items 19. 20' 21. Abandoned. Items 24, 28. The Bill of Works called for 6.300 cubic yards 1st class masonry. 20 Out of this quantity 700 cubic yards consisted of special pieces for bridges, being granite. This work is outside of specifications and contract, and cost and is valued at more than three times 2nd class masonry ; it is claimed as worth extra $15 ; total, $10,500. Odell says it is worth $8 to $10 extra. Peterson says it cost quarried at the Nepissiguit Bridge $24.43. Appendix K, p. 2. Granite masonry is generally estimated in text books at $27. See Trant- wine, p. 812. ,• ♦ i ,. 19 After deducting the above 700 fiibie yardrj of sjraiiite and 2,740 cubif yards lor Armstrong Brook, we find that there is a balance of 2,860 cubic yards of Ist class masonry, which, according to Mr. Smith, is worth $6 per yard extra value. Total, $17,160. As to the 2nd class masonry made equal to Ist class. 6,700 cubic yards at |7.60. Total, 150,250. It is true Bertrand says it did not exceed the specifications. And he claims nothing under this item which, he adds, was put in without his consent. The claimants who are two (and not only this J. B. Bertrand) represented by Mr. John Ross, who holds an absolute transfer of their claim, demand this plus value. Mr. Bertrand is simply mistaken in his valuation of the masonry on Section 0. It is 1st «-la88 as on all other sections, being 10 inferior to none except »Section 15, and equal to any Ist class masonry on any road. So says Smith, Odell, Berlinguet and Gelley ; and Hannaford says that he saw nothing but 1st class on the Intercolonial. Bertrand is perhaps right when he states that the masonry does not exceed the specifications, but he has no right to say that HE claims nothing under that head. The claimants claim the extra or plus value; they claim that, as admitted by Mr. Smith before Shanly, p. 816, the classification of masonry in the specifica- tion were of a nature to deceive them, and for all these reasons they demand the extra cost, which Mr. Shanly, alter havinjr personally examined the work, laid at !«'> to $7.50. 20 Correspondence: 41, 109, 135, VM\ 200, 207, 232, 352, 353. See Evidence under Items Nos. 23 and 25. Also, Section 15 ; Items 7, 9, 10, 11, 12. Before Shanly: Bertrand 36, 97 Odell 131, 136 Berlinguet 213, 215, 225 Smith 310,337. 356,361 Peterson 280, 286 Before Kxchequek, 231, 234. 30 II i! ■i 20 Before Commission : Odell 91,94 Berlinguet 171, 172 Gelley 418, 419, 488-461) Haunat'ord 459 Items 2(5, 27. 8pt'<'ilic'ation. Clause No. 6, annexed to contract, provides for a certain tlass ol" I'encing. After 12,000 l.f. had been made, the road was widened and new speciBcatious were prepared, (Appendix R. p. 6) increasing the cost of fencing 50 per 100. Item 26 (laims for the 12,000 l.f., which had to be rebuilt, #180 ; and Item ^^ 27 covers the increase in the cost of the new fence, which was a good deal more heavy and had to be made with timber carried from the distance, viz : 227,500 l.f. mentioned in the Bill of Works, at |2.70 extra, |6,000. Correspondence.— 16, 17, 20, 33, 84, 46, 60, 68, 78, 106, 107, 110. 112. Before Exchequer: Berlinguet 19 Forbes 85 Before Shanly: Bertrand 36, 37. 101 Odell 136-137 20 lierlinguet 214 Smith 384 Before Commission: Odell 96 Berlinguet , .172-178 Smith 896 Gelley 439,440 tl ESTIMATE OF WORK TO BE DONE ON No. 9. TO COMPLETE CONTRACT AS PKR "SPECIAL" MEASUREMENT. See Paoe 812, Book of Oobre.«ponden(!E. ENOiNRERti' Quantities Remaining to be Done on the 8l8T Deo. 1872. Moiiiod out at Rateu cltumcd by Claimants. Cl.ariiig 60 ArreB io) |U) 00 | 800 00 Fencing 200,000 i. 1". " *7 ». 14,420 00 KtHik 6,011 c.y. " 2 00 10,922 00 Earth 27,608c. y. " VI 7,442 00 10 Underdrainh 8,400 1. f. " 19 1,008 00 Rip Kap 81c. y. " 6 00 165 00 let Class Mnsoury ..11 c. y. •• 16 00 105 00 2iul " ...80 c. y. •' 11 60 48 00 Paving 7 f. y. •' 6 00 85 00 Foundations 60 00 B. Culverts 248 1. f. " 2 00 480 00 Catth'Ouards, etc...20 " 16 00 800 00 Armstrong's Brook.. 646 " say 60 823 00 $85,264 00 20 LESS. Work done from Slst Dei-., 1872, to Slst May, 1878, estimated in pro- gress estimates at 6,668 00 128,596 CO Commissioners' Statement of Gross Expenditure to Complete No: 9... 35,988 89 DiflFereuce $7,892 89 , )b , Stations. a H From To CONTRACT No. 16. 1 176—186 1800 C. yds rock instead of earth fXtra... 11 60 2,080 00 2 197—208 15000 C. yds extra of earth excavation... 40 6,000 00 8 277—296 Change of Grade. 10,000 C. yds extra excavation 20 2,000 00 4 286 — Bridge overhead extra. 22,000 ft B. M. timbfr, workmanship inchxded...® |60 00 pr M..I1100 00 860 lbs iron nails, &c.,® 16c.. 127 60 30 C. yds masonry, @ 118... 648 00 10 1,876 60 h 826.20— Abandoned. 6 572 — 900 C. yds extra rock excavation instead of earth, @ 1.26 $1,126 00 22,002 C. yds extra »»arth exca- vation (tt 56. 12,100 00 13,226 00 % 8,872 C. yds 2nd chiKs masonry made Ist class 2 60 9,680 00 i 6 acres extra grubbing @ 9104. ..$520 00 20 4 •• close cuttingext." 26... 100 00 81 " extra clearing " 20... 620 00 1,240 00 9 1,000 C. ydb at Nipissiguit bridge and 900 C. yds at Teto a Oauche of back- ing made as I'tuing masonry Ist class extra .ost 1.900 C. yds 6 00 11,400 00 10 720 snp. ft. of .utting in granite for steps to be used a» foundation to abutmi>nt ofNipiesi.uit bridge extra work . .. 80 216 00 30 Amount carried forward 47,716 60 11 12 18 Amount brought forward 147,716 60 820 ft. granite stone cut and prepared to suit in 8tep« extra work 76 616 00 To amount of expenses and damages cantM^ by the above rhnnges and ex- tra work at Nippissiguit bridge which prev«Mited the completion of the same in the fall of 1871 8.000 00 Extra value of Masonry executed in gra- nite as ordered by engineer instead Iv of sand stone and lime stone receiv- able under contract and specification 16,IOOC.yd» 16 00 241,500 00 106 C. yds extra enavation in loundatiou of two Piers at Tete a Oau<-he bridge. 50 62 50 87 V. ydK l»t class masonry addt>d to foundation of the two piers 20 00 740 00 Pumping and working coffer-dams occa- sioned by above change 475 00 To loss Rustained in not n^eiving pay- 20 ments in warrants promptly in years 1H70-71-72 and 73. (-ausing frequent visits to Ottawa and for< ing contrac- tors to procure money at a h<'avy rate , of intfrest. This matter was on several oi-t-asiomi brought U> the noti>-t> of C'ommis>^ioners ; loss kus- tain<-d at least for Se<-tion8 1* and 15, and also by delay <-auiMHl in execution of work, by plans not b<>ing made and furnish«l in time 20,000 00 30 Amount carried forward 1314,099 00 I' > r* I* 24 Amoiiut brought forward |314,099 00 To Plant as per Inveu ory, sections 9 and 15 10,696 79 ♦824.794 79 N.B.— The Government has nol proved that the amount paid on this section was necessarily spent, and how it was spent. Government ac(^ount must be wrong. See infra page 30. SUMMARY. Amount of contract 1868,620 6010 Amount of extras, damages and expendi- ture as above 324,794 49 1688,814 99 Received on a/c of contract and on a/c of extra work, damaifes and «>xpendi- turc as above 372,130 38 Balance 1816.184 61 And interest since 1st .Tuly '78. 80 GENERAL SUMMARY. CONTRACTS 9 AiND 15. Contract No. 9.— Amount of S5 Amount brought forward 11,820,660 99 Contrai't No. 9.— Rec'd on a/c of contrait, and on a/o oi' extra work, damages and ex- penditure |84tJ,668 09 Contract No. 16.— Rec'd on a/c of contract and on a/c of extra work, damages and ex- penditure 872,130 38 $718,798 47 Balance due $601,862 62 10 And interest since 1st July, 1878. SYNOPSIS OF CLAIM. I. — Damages. Item 18. Causkh. — 1st. Delay in monthly payments for the two sections. No {pay- ment before May, 1870. Nothing allowed for extras afterwards. Measurements not accurate. 2nd. Want of plans. 3rd. Delay in setting out works. Total, $20,000. Hon the Justice Tasohereau allowed $6,000 to Berlinguet & Co. on sections 3 and 6 for similar causes. There oq was also a claim for $2 ms, No8. 1, -2, 8, 6. Are for extra quantity of rock aud earth excavations. They are detailed in Exhihit D and are t laimed as being in excesa of Bill of Works. Total amount, 128,805. Befoiik SHA.NI.Y: BiTtrand •• 88, 89, 40, 41, 102, 108 Odell 189, 140, 141, 142 IMerson 260, 261, 263, 264. 266 Corrospondeuce 48, 66, 81, 91, 147, 211, 312 Before ('o.mmi.s8Ion : B.'r(nind 257, 261 I'elersou 287, 298, 298 10 Item, No. 4. At Station 285, n«'ar Ferguson Bridge, the Bill of Works provided for a level crossing ol tho Public Road, by lowering the same, a work which would have cost #75, acordiug to the schedule of prices. The engineers, instead, ordered 20 the diversion of the road to a higher point of the slopes of the railway and the construction of un over-head bridge. The cost of this structure is charged as an extra not provided for in contract. Bertrand .says it was understood he was to be paid extra lor this charge. For details of claim, see Exhibit D. #1,875.50. Correspondence -66, 80, 81, 84, 104, 189, 147, 150, 221, 826. '« Before Shanlt: Bertrand 89, 102 Odell 140 Bell 288, 289 Peterson 261, 262 Before Commission : Bertrand 268. 261 Peterson 294, 298 Smith 400 Item 5. — Abandoned. Items Nog. 7 and 11. 10 „ From Mr. Fleming's statement before Mr. Shanly, Re Duncan Macdonald, page 58, it api)eare that section 16 is the only one where the masonry exceeded the specifications. Mr. Shanly was inclined to make a considerable allowance under this head, and the claimants have reason to believe that his report will be found highly favorable. From a still later estimate. Appendix Q, page 2, the original quantity of the Bill of Works is repeated 12,100 C. yds It is certain that 4,000 C yds is the quantity of 2nd class masonry. Out of the latter quantity, 3,872 C. yds was made Ist class, involving an increase in cost, at $2, of $9,680. 20 But this latter quantity was not only made Ist class, 16,100 C. yds was made "granite" upon the recommendation, which practically was equivalent to an order, of the engineers, at an increase of $15 C yds, or a total of #241,500. There is no doubt that granite was expressly ordered for T6te a Gauche and Nipissiguit Bridges. The correspondence, pages 200-206, shows that beyond doubt. See items 24 and 28 of sections 9, and evidence under it. See also Cor. 109, 135. IMAGE EVALUATION TEST TARGET (MT-S) k f/. ^/ ^ o*?^ .V < ^« ,^ v^ fe 1.0 1.1 11.25 IS? IS £ la j20 ■Uuu 1.4 i^ ^ >. ... V, y V iV ^ :\ \ 4 .,«>'> ^\^\ ? h ^ vV ^1 ■ 28 Corre8pondence-67. 109, 136, 160. 200, 201, 202, 204, 205, 206. See Appendix K, p. 2, as to value 124.81. and Correspondence under items 9, 10 and 12. <'$ Befobb Shanlt : Bertrand ' Odell "»• '*« Burk *«« 217 Berlingnet Peterson 266, 267. 268, 269. 277. 287. 292, 293, 294 and 296 Bell 246 10 Before Commission; 179-186 Berlinguet Bertrand 262-272, especially 270. 271 Items Nos. 9, 10 and 12. 1,000 C. yds at Nipissiguit Bridge and 900 C. yds at T6te k Gauche of back- ing masonry made the same as facing, at an extra cost of |6. 111,400. 720 sup. f. of cutting in granite for steps, to be used as foundations to abutment of Nipis- siguit Bridge, at 76 cents, |616. To expenses and damages caused by the above changes, which had for immediate effect the non-completion of the structures in fall of 1871, $3,000,20 106 C. yds extra excavation in foundation of two piers at T6te a Gauche Bridge, at 50 cts., 152.60. 37 C. yds Ist class masonry added to foundation of the two piers, at |20 C. yd, $740. as Pumping and working coffer dams occasioned by above change, $475. See to value of masonry at Nipissiguit Bridge, Appendix K, p. 2, $24.31. i^ J_ 29 Correspondence— 67, 68, 74, 75. 77, 78. 79, 80. 81, 82, 85, 91, 92, 103, 108, 114, 115, 117, 129, 132, 134, 138, 145, 149, 160, 152, 153, 154, 155, 156,157, 158, 159, 162, 163, 165, 168, 177, 184, 185, 199, 200, 201, 202, 203, 204, 206, 207, 209. 221, 358. Bbfoee Shanly : Bertrand 41, 43, 104 Odell 143 Smith 337, 338, 339 Peterson 271, 272, 274, 275, 277 Before Commission: Berlinguet 179 Bertrand 273, 287 Peterson 330 Smith 409, 410, 411 10 Item 8. The Bill of Works calls for 100 acres of clearing, two acres of close cutting and six grubbing, which gives altogether 108 acres (Appendix Q, p. 4). Ap- pendix D, p. 3, gives altogether 152 acres, which, according to the ordinary rule of calculation, gives as extra 5 acres grubbing, 4 acres of cutting, and 31 acres clearing, of the value of $1,240. The value is proved partly by the 20 testimony of Mr. Berlinguet and partly by Mr. Fleming's own estimate (Appen- dix a, p. 2). Bkfoue Shanly : Berlinguet 216 Peterson 297 80 ESTIMATE OF WORK TO BE DONE ON NO. 15 TO COMPLETE CONTRACT AS PER " SPECIAL" MEASUREMENTS. See Page 313 Book of Correspondence. " Engineers " Quantities Remaining to be Done ON THE 31st Dec, 1872. Monied out at Rates claimed by Claimants. Clearing........ 12 Acres @ $lt) 00 $ 192 00 Fencing 113,300 1. f. " 7 00 7,93100 Rock 630 c. y. " 2 00 1,260 00 Earth 236,549 c. y. " 27 64,408 00 10 Under-Drains 12,606 1. f. " 12 1,512 72 , Rip-Rap 116 c. y. " 5 00 680 00 1st Class Masonry..680 ) „ gS 00 3,092 50 2nd " " -.657 ) Paving 33 " 5 00 ' 165 00 O.H. Bridges 2 " 600 00 Beam Culverts 40 ft. " 2 00 80 00 Farm Crossings 25 Single " 10 00 250 00 22 Double " 15 00 330 00 $80,501 22 20 LESS. Work done from 31st December to 31st May, 1873, estimated in pro- ffress estimates as 18,130 38 $62,370 84 Commissioners' Statement of Grross Expenditure to Complete No. 15... 96,666 32 Difierence $34,194 48