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To 
 
 A »ul)ject has aguM Leon incsentcJ for your considoration, wliicli in some slmpc lias occu- 
 pied the attonlion of tlie Legislaturo of this Province, a porlion of cath term of its Session wiihin ih« lust six 
 or sevsn years. 
 
 It is of sufficient imporlnnco to Imve so orrupieil public attention, and we have only to regret that a proper 
 estimation of its value, <lid not indnco an early and efficient support to the Stockholders of the W clluud Canal, 
 so U'' to have enabled them to complete that work three years since. 
 
 part of its most violent opponents are thus far disarmed, and the hope may reason:il.ly b<! entirtained, Uiut llio 
 support of a work so intimately connected with tliu commercial prosperity of the wiiolo country wjII be approved 
 by all. There was u time when there was some foundation for the fear that tho project would nllimalely fail, 
 and therefore some hazard was incurred in aidinc; the Company with jiublic funds. Tliat daii-cr, if it ever did 
 exist, must now be acknowledged to have passed. The simple question at present is, shall ihc Company bo 
 constrained to use the Canal in its jiiesent state, without availiiii,' tlKUiisulves of the advuntiigo of their local sit- 
 uation, by coniplclin!^ the western section for the larger vessels "! This qneslion would readily bo answered, it 
 the Company had in their own hands moans to do it. But cxiiausted as the funds of tho Company arc, they must 
 cither postpone the great advantage of tho extension or borrow money to accomplish it. 
 
 Trusting that no impression can bo made bv misrepresentation in a way to influence your opinion, with a 
 full knowledge ol the present state of the Canid", I have taken tho lilie- !v to address you, and think you will bo 
 satisfied that there is nut the remotest hazard on the part of the I'rovm.o to aid in compleiing the work to the 
 fullest extent desired, and also' that the adoption of such a measure as this will he productive of much good.— 
 The report of tho Directors for the last year has been delivered to you. From it will be seen that the Conii)aiiy 
 liave with the balance of stork on hand very little more than sufficient to p ly the lloatiii!' deni nid against tlieni. 
 The ;imount of their estate will enable them ultimately to complete their whole work, but from the sale of this 
 no money can now be realized. 
 
 ■ The Company I am told have made or are about to make an application for an additional loan from the Pro- 
 vince in order to enable them inimodialely to complete the whole line of Canal to L iko Krio direct. Inlercsled as 
 the Province is as stockholder and creditor it becomes important to ex tmino ! Whether it is prudent to give any 
 .'inihev aid to the cpcratioi,s of the Company, :uiu wImI pubhc benefit will bo derived from it? or wheiiier such 
 aid should be given in the way named by the" Directors in their report? Whether the best policy \vill not be to 
 make an entire change in the relative situation of tho Provincial Government and the Company, with regard to 
 its loans? In order to proceed satisfactorily in this examination, the present financial situation of the Company 
 must be given in general terms. On that the answers to all the enquiries entirely rest. I am wijlinir to assume 
 at tho outset, that if a safe prospect of repayment cannot be fully and confidently exhibited, no&rther advanc* 
 ought to be made. 
 
 The Company o\nc the Prouhicial Government, .C)0,000 Can. Cur*?y 
 
 To the imperial Government, j:50,(XJ0 Sterling, 5r),f)55 10 
 
 £105,555 10 
 
 In order to pay this they have the Canal completed for large vessels by way of tho Niagara and for Boats to 
 tho Giaiid River. To pay the interest on this debt, they require an income ot"neaiiy six thousand pounds. At 
 present, from want of means and consequently of vessels, we cannot iMWMfwith Uncertainty gf any large 
 immediate income; although we have assurances tiiat the merchants of Oswego will placifVcssels on the liiK^ 
 from Ohio to that place through the Welland Canal early in the spring. After the present season we may ^M^ 
 IBi with safety on thirty vessels in the Oswego and Ohio trade. Those vessels will average a double voyage in 
 15 days. The tolls on which at the most moderate calculation will be one hundred dollars up and down, m.ddng 
 $3G,400 the season. The trade on the Brhish side may safely be estimated at one half that amount $ 18,'JOO per 
 year or in all 5(54,000, leaving rent of machinery and the inland trade from Grand River, and what may bo 
 conveyed in boats, to pay the expenses of tho Canal. This is the immediate prospect. What may we reasona- 
 bly expect at the end of" ten years with a very fertile territory and rapidly increasing population ! 
 
 It will thus be seen that the affairs of the Company warrant the declaration that no apprehension need 
 bo entertained on the part of its creditors even without any further advance, and if no other inducement to 
 granting additional aid existed on the part of the Government than the mere ^^afety of its funds, nothing 
 more is required to be done. But the Government of U. C. is also a Stockholder to an amount equal to its 
 loan, beside the stock owned by liic Province of Lower Canada. The adoption of a measure therefore that 
 will increase the value of this stock, will most effiictually promote the pecuniary interest of tho Government. — 
 It is only then necessary to decide whether the Western section of the Canal is of sufficient inijiortance to war- 
 rant the cxponditure of the sum requisite to complete it. 
 
 Tho advantage of continuing the navigation for the largest class of lake vessels, has boon repeatedly 
 -■n. This arises from several causes. To avoid the necessity of waiting for the opening of the outlet of 
 lie Spring which is commonly closed with ice, sometime after the Lakes and Canal may be used 
 ifficulty of ascending the Niagara River and the narrow part of the f^ ike. To save a distance 
 
 shew 
 
 Lake Erie in the 
 
 To avoid the d 
 
 rig 1 
 
 [Is-.j^lUlS 
 
 igara 
 :!.".ners 
 
 :Ua 1 nlu 
 
 a 18 
 
 River sniliniTt 
 
 ce 
 
 Tliis dist:incp 
 
 depends on the ultimate determination of the Directors in relation to the most eligible Bay of Lake Erie for 
 the termination of the Canal. 
 
 It is generally conceded that to complete this Western section is requisite to give tho Canal tho full 
 preference over any other route, that is claimed for it by its advocates ; and th?ro aro some who think that 
 without »ucli extcksion it cannot be advantageously used at all. , 
 
 ^ 
 
I bclicvfl f!i It H-iilioMt i'.)ni|)loiiiij ilio Witslrrn sf?t'tion it will Iji; generally mod ami be productive slock, 
 tint iIjc rdiitiiiii ilioii will ijiM! it so (liH-idud mi :rdvaiil;ii:<! in cvciy rcspctr, lliit if ilM cost were tivu tinius u% 
 iniicli ill h t.'siimiicd, I tvniild i,s a ,SiorkliiOd(;r diT|dy iiitoii'itud in lis success, bu an udvocaie lor tliu 
 ixpcnditiiru to .'iciuinjdi^li so dcslKdjIu ;in object. 
 
 It U mid tiiMt .C.''i,000 will br siilli'ient. I have Ioiil' ilncp avoided (diirin;; confidrnre in cstiniiites for 
 woil.i of ibis di.'sciiplion. It is well to look :it llii'iii, tlicy may alforil soino fjroond for coiijcctuio. Uul 
 su|)|)o.i(; llio cost sliooM bo donbli-, say JC.')(),()0() imludin;' tliu noccssaiy iinprovcniLnt of a b.irbor. Slill 
 ,.v,.,-v ,,„,,(-,„ -...nsid.-.;-!;! cf -rlvin';-"' ■,■.■ ri! I ;— )i;:r- iti brii:; djiu;. W'i.luMt a.iy fiiillicr cxaniiiialion of 
 liiif braucli of llio •iilijrf!, sojiiitiii,' your allcnlion to llic roiii-|ii-ivo jiroufs rrla'ivi- to it, lb it bavo bci-n 
 rf|i(,Mlrdly fornisJH'd, .md wliiib I forlicar to f.xliililt in detail becai^u lliey arc^ familiar to your niii'ds, I ibiok 
 II i-i ni iiiil.'s'ly tlie ilei.'id.'d iiiliTcst of lla: rro\iiice lo b ivo tbo wliolo wuik flal^ll(■d, and to fiiniisii tlio means 
 t.iat m ly bi: iciiiured, 'I'bi'ie hit 1W(i modes in wliirli ibis may bo done, eiiber by loiriin}; lo lliir Coiiipaiiv lliu 
 iiecessiiy s|Viilic .^om leijuiicd, K'lvi^ii,' tliuir present delils as tliey aie, or riian'^in,' tlie wbole |;ci'iiiiiaiy siloalion 
 
 "' l!"' '_' |>any ia relaliuii lo iis c•|•(:di;o^^. 'i'lie Canal lias now cost X.JUO.tlflO. Of ibis jCjdO.OOO is "sidiscribed 
 
 sloi-k .C"i(l.();i() ol' uliiili is iiwiii .! by llii> I'lovinre and Jli-a.ODO by llie |)rovin(C of Lower C-'.niada. Tbe loan 
 from ibi- I'roviiiceX.iO.nOt), 'I be siMiniiy fir lliis money is poslponed lo llie lien of Jt;.)(i,()()() Steilin;,' beld by 
 tlis I iipi'ii d tidvoiiimrnl. Sli.iuld il beroini; necessary for llej sat'ely of its funds, llii; rrovinee must ollimately 
 |)i()vi h; for liqiii, latin,' llie debt doe to llie Imperial (iovernmeiit; tiiat iruieases tbe inteiest of ibe Province to 
 more lliaii liilf its cost, lo lids sl.ito of ibiie.'s (be means can be I'oriiislied by tbe I'rivincc to pay tbc debt of 
 lilt! (.'ompaiiy to tlie Iiiiperiil (ioverniiient and linisli tbe WestiMii section of tbe f-'ana. too, wilboiit incni riie^' 
 iuiy lia/,ird. Tbc present coloni il debt is direct with ibc creditors of ;Iii; Colony. Tbo (y'anal is not known 
 ill il. In some iif ibo United Stales adifiereot course bis been adopted. Wlienevcr aid lias been u'iven to 
 privato colerpri/.e eii'^tt;ed in a work proinisin.; to be of public utility, tbo stale lias eillier subscribed to tbo 
 Rioi'k or 1 laaed its creilit to tbo Company takiii:; svcuiity upon tlioir [iroperty ; tbc Company providing for ibn 
 ])aymeiit of iiilurost und priiici]nl. 
 
 Tbe State of New Voikloaneil tlic credit of tlio Stale to the [Indson and Delaware Canal Company for 
 J<'U)(),lKJO, a (.'anal possessiie^ no advantages lliat can be compareil to tbe W'ellaiul Canal. Tbeir pecuniary 
 .siuialion wis similar lo ibat of tin- Welland Cuial (,'oiii|iaiiy, some proj;ress bad iieen made in their work, ibo 
 expenses bad exceeded tin; cstimales and llio wliolo amount of subscribed stock was expended. In ibis situalion 
 tbo Si lie of ,\ew York passc'd an act bianiiit; its credit by tbc issue of debentures pay.ible lo tliat Coinjiany for 
 $S0n,000 beariiii; an interest of live per cent, per annum payable in Iwetity years — granlini; tbo Company per- 
 mission to pnrcliaso said ilebeiiiures witbin tbe said time, have tbuni cancelled, and credited to said Coni|iany 
 in sums nut less than jJJOOO at any one time. 
 
 I>y till! last messaL'o of the (Jovoinor of tliat Slate, it appears that tbc Company have already given satis- 
 factory evidence that ibis aid bus been so Useful and ellicient as to enable them willi ease to fulfil their engafje- 
 ment wiili tbo Slate. The Slate of I^ouisiana lias also adopted ihc same plan and issued its debentures in sums 
 ol ^IO(K) each (or !>i l,00i),()()0, lo an agricullural associ.uioii, who have assigned or endorsed the same in blank. 
 This latter loan is payable in London, and is held by capitalists ibeic. 
 
 This niodo of aidinrr possesses greater advantafres than any other Tbe property of the Company forms tha 
 pledge ill the hands of ibo (Government to redeem the debt and prevents the necessity of creating any other. — 
 riio Capitalist feels an assurance of great piincluality in the payment, interest and principal, in conscijuenca 
 ot holdiiin: the double respoiisibilily of the (iovernmeiit and the provided fund of the Company, which cannot 
 be diverleil from its proper channel. If it shall bethought prudent lo adopt this plan with regard to the Wel- 
 land (Janal Company, the whole arrangement would easily be made at a reasonable rate of interest. The pre- 
 sent debt of the Province is payable at a short day. Suppose a law should be passed loaning the credit of tim 
 I'rovince to the Welland CanalCompany for CJOO.OOO in debentures of £'200 each bearing an interest of five 
 jier cent, per annum payable semi-annually and the principal in 23 yeaisin London — with permission to pay in 
 these same debentures at any lime witbin oi at the expiration of that period in sums not less than two thousand 
 ])ounds at any one time ami have such payment credited to said Company until the whole debt for which tbo 
 Provincial credit shall bo so loaned shall be paid. The effect of this would be, that all attention lo provide 
 for the payment of this debt would be transferied to the Company, and much would be saved to them in thoir 
 direct negotiations. 
 
 le £^0,000 SlcijU||g to ilic-IiqpMi^ Government would be paid and their lien on the Canal removed ; and 
 unfcasonablo to assume the position, that the payment of the one-ninth of the cost of the Canal promised 
 liy tbo dispatch of Lord Batlmrst in 1826, and withheld in consequence of the loan of £50,000 must on the 
 re-payment of that loan he paid to the Company. All the transactions in relation to the Canal would be nMB 
 immediately connected with the Colonial Government solely. The whole of ibis sum might not bo required by 
 the Company ; but in order to place it on a footing to command the transportation through the Canal of all tho 
 produce of the Upper L ikes, a id to renilor tha passage into and through it from the different quarters where 
 it may be profitable, porfoctly easy, will require an expenditure that has not been estimated. By this arrangement, 
 provision will bo made lo furnish the Company with such funds as they may require, and no loss will be incur- 
 red on the debentures they shall not find it necessary to use. Whenever the Company discover that they will 
 not bo needed, they may then be returned in the way I have named and credited upon the debt. Much incon- 
 venience has been experienced by the precarious manner in which the funds for operations in progress have ne- 
 cessarily been provided. 
 
 It is a fact well known and well understood in the cotnmercial world, that borrowers must pay an interest 
 not in proportion to their actual property responsibility but in proportion to their wants, their estimated 
 responsibility and |)unctuality, and that estimation is often made by the persons most interested in depressing it 
 and yet most assured of its safety. By such an arrangement all hope of speculation on that ground will be 
 ended. The responsibility will have a shape the most acceptable to the capitalist, and the confidence in the 
 company will enable them to enforce their contracts more advantageously than they liave hitherto had it in their 
 power to do. 
 
 There will be some advantage with regard to the finances of tho Province. The idea of its being a debt of 
 the Province is removed, and provision is made for its p.iyinent by the companv. It is distinct from and dis- 
 connected wiiH other provincial operations. 
 
 With the greatest respect, 
 I am, Sir, 
 
 Your Obedient Servant, 
 
 J. B. YATES. 
 
 The 
 it is not 
 
 4- 
 
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