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New York 1*609 US* (716) *B2 - 0300 - PNon* (716) 288- 5989 - Fo» fU(^ /%•■ =?= GHIGNEGTO SHIP RAILWAY CASE MR. PROVAND ADDRESSES A MEETING OF SENATORS. He Explains the Position of British Investors in the Chignecto Ship Railway Project and Claims the Moral Obligation of the Government. Reprinted Iromthe Ottawa Eveniog Journal 4th May 1901. Pd /?>k ?t ^ Rtprinltd (ia put) from th< OtUws Joiin*!. 4tll Mty l^i, Chignecto Ship Railway Case Mr. Provand addresses a Meeting of Senators. He explains the poaition of Britlib Investon in the Chignecto Ship Rail- way Project and claims the Moral Obligration of the Government Mr. A. D. Provand, who is here urginjf the claims of the shareholden of the Chignecto Slup Railway Company to a settlement by the Government, add- ressed a meeting of Senators yestorday npon tlie subject. Senator Vidal pre- sided, and among those present were Sir Mackenzie Howell, Sir Alphonse Pelltier Senators Prowse, J. Wood, (Westnu.reland ;) Kirchhoffer, I3omier, Snowball, Perley. Dever, Baker, Yeo, Wood, ( Hamilton ; ) McDonald, (British Columbia ;) Casgra'in, DeUnardiere. Gilniour, Macdonald, (Victoria;) McKay, Maodonald, ( Cape Breton ; ) Sullivan, Macdonald (Charlottown; ; MoCallam, King, Lovitt, McSwecney, and others. Mr. Chairman and Gentlemen of the Senate, I am aware that this question of the Chignecto Railway may !« said to be primarily one for the House of Commons, and I have already hid the pleasure of addrrasing a nieetinj; of members, but, as the Government has not granted to us the opportunity of laying our case before Parliament and the country, namely, by the appointment of a Select Committee or to allow a Judge to hear and report the facts I am ooliged to adopt other means to bring the facts of onr case under Parliamentary and public notice. On behalf of those I represent.namely.the unfor- tunate investors in the Company, I therefore thank yon Gentlemen, for your courtesy in giving me this opportunity of addressing you on the subject of the Company's claim on the Government. And I hope I may be permitted to say that the responsibility for the Chignecto Railway was not alone that of the House of Commons. The acts by which we were induced to undertake the contract to construct the Railway were of your House also. Another reason why I have sought this meeting is because I believe the honour of Canada is involved in this case which I know is very dear to the gentlemen of the Senate. Onrclaiin ishaicd on tliom"nilandBeen the idea of construciint; a Ship Canal across tlie Isthmus of Chij^necto, but the scheme of a Ship Kailway was brought forward by Mr. Ketchuin, the Civil Engineer, as a better proposithm for tho purpose than a e.nal would bo. Ho placed his scheme before the Govern- ment wbosuhn.itted it to Mr. Collingwood Schricber, then Chief Enginear who reported favorably regarding it, and the Government thcrfore adopted the pro- ject and passe.1 two Acts in 18S2 subsiding and incorporating the Company These two Acts Mr. Kelchnm took lo London to seek for thu capital to carry", out the work which from the beginning was tho openly stated object of the Government. They had intended to make the Ship Canal with their own money but they adopted the Ship Railway project because it was letter and would be much cheaper if they obtained the capital iir England. On the original fernrs offered by thu ({overnmont in the two Acts, Mr. Ketchnm could not obtain the money in Loudon. ar,d therefore there were three more Acts parsed by Parliament amending and reamcnding the two original Acts and altering the terms until we unfortunately i.grtud to find the capital to construct the Railway. No one came to Canada seeking the business we did not ask for it. All the proposals made to us were tl„«e of the Govern' rnent and Parliament in the Acts brought by Mr. Ketchun,, through whom all the negotiations wore carried out. But I need not say more to prove that the Government and Parliament were the pro;„otor8 of the scheme because it has been put with point and clearness by the Hon. Sir Richard Cartwright, now Minister of Trade and Commerce. " The fact of rarlitment gnntinit a kubtidy of $i;o,doo a year for twenty year^ to thin railway will imply to the niinds of Knitliih capiialiitf, from whose jxKketi 1 take it that this money ix ex))ccted, that the Can- adian Onvernment has lked into the work, that ihey believe it to be a valuable work, and that it may fairly be implkd that the Oovernment be- lieve it to be reasonably prufitabtc to those people whose money we are practically securing in con9e(|jence of our hHvtng granted a subsidy." Tlio forc(roiiig laiigiiUL'c i« coiiclnsivc! aa t ) tliu (iovernmotit and Parliament promoting the Hallway and it correctly Btatt'B that w<' nndomtood by their offer of a siiliKidy thiittlicy liiiii lookoil intu thu 'tork. Iwlit ■"na fich' ihiiriicter of the en- terpriso was beyond iincstion. Every stiiteinent iiiudu to iio sliowud that Canada was moat nnxioua that tlio Railwuy slinulil lie constructed. And when our iiivest=;,g i>las^('s were iiskud lo suhacribu lhc<-.i|iitiil it was not on roprcsfntatioiiB of ours, hut, on the tt;rms staled by your ow'i Pariiament as rhu subsidy clause in the let setting or.t the conditions and ti-rins wns printed in every copy of the prosjiectuB issued by the Coinpii.y. Everything connected with obtainiiiit the capital of the Company was doi;e on the authority and representations of the Ciovernment and Parliament in the Acta tl at were passed for it. 1 now l)cg tn refer to llio sole originating cause of the Company's difficulties, namely, by adding subsection 4 to claus" 93 of the General Railway Act of 18S8, which altered the law relating to issuing our bonds as it required one fifth of the whole cost of the Railway to be expended on it before we could issnu any of them. By this change in the law we were tiierefore prevented having our iHinds 8ul>8cribcd for when wH f.ir uacli tho U,ii.l,ahd both the bonda and the tbiini, >ro utill nearly »|| huhl bv th.iw to wh.>in tbov wore oriirinally allotted. • " ' Since June 1894 we have boea ready with our capital to recotnmenoa and flniah the Railway and this i, my oiKlilh vi.lt t„ Ottawa «ina« then, prewinx the Government to ruvotoour inUidy, to which I contend we are entitled, but go far without .iicoew. I have had only half promises an.l |««tp.,ncrner.t«. The only objootiona atated by the (iovernment for not rein.tatin- i„ i,ru l>ec!ni«e they i.ay they do not think the Railway would be cornincrcially nucwsfnl. and that we have had Mveralexten.ion» of time. The la«t .tutumcnt i» not the f«ct. We have had one extenaion only which was Riven to u* by Paiiiaineiit in 1891 after the reaaons, namely, ditBcnltiea encountered in tho coti«truotiim of the dt)ck» and baains had been fully itated in the House by the MinistcrH. It is now too late to consider whether the R.iilway would Iw commercially •nccessi. ' The Government and Parliament had the scheme before them for •ix years which was ample time to discuss and considci eveivth iri^ relating to it and they give the stnmgeiit proof they could that they believed the sciieine was" one m which we might safely invest our monev bv graiitinL' it a subsidy in order to induce ns to do so. I might eompare the busirius,^ to a partru-rship under whuh they promised if tho Company expended capital in building tlio Railway tho Government would furnish tlieirslmre in the form of a Subsidy. We have expended $4,000,000 and are prepared to expend tho balance re.iuirod to com- plete the Railway m order to earn the subsidy but the Government do not fulfill their part of the bargain by allowing ua to do so. In regard to extensions of time I must draw your attention to the different treatment accorded by your OoveramcHt to Canadian and to British investors My examples shall be instances near at hand. From the windows of this building yon can see the Interprovincial Bridge which has just been completed and opened Tho charter was granted in 1882. The time for completion was extended in 1890, in 1892, in 1896 and again in 18»8. No work was done until early in 1S98 and then only sufficient to comply with a condition on which the subsidy of the City of Ottawa was granted, namely : that work to the value of 851)000 must be done before the end of March 1898. And all these extensions of time were given toenablethecompany to obtain rublic money towards the cost of building the bridge, of which between »400,0»0 and $500,000 were given to it in snbsidiae In our case we were spending our own money entirely and could not receive one cent of public money until we completed the work to the satisfaction of the Government, and yet we have been unable to get the necessary time to complete Another Iiuteiioa i. that of tho Poiitiito I Vi«o Junotion lUilway 0..inp«ny'. brideei at Alainotte Ul.nd « few mile. u|> tho rivor fn.r,, hort-. The ohnrtur wh ljr«nl«cl id 1887. A .uUid;- wm v„lod in I8HS. Thu liinu wa. i-xioiidod in IHW The sDbtidy wu re«,tod in 1894. Tli« timu .^ain oxti-iided in ISUd. and mt in- formatior ia that no work whatever haa been done. Bnch in.UDcea could bo innltiplied indeflnately, and M:nrca of them are iriv.n in Carrier', Index to Railway LeRiilation. It i. ,h« ,„lo and practice of yonr Parliament to revive charter, and revote anbaidiea. Th. Vhi.in-d., Raihmy Com- fany u the only exception you have mcuU. Permit me to refer to another point which illnstratco how diffcrrnt oi'-troat- ment ia from that given to Canadian Cumpanic. Yo.ir l^rlianiunt, liliu otiicr. haa innnmerable bill, introduced aeekin^ charter, and Mih.i.li.,. the terms »f' m»nyof which are unreaaonablo and would 1h3 vorv nnjuKt if pawd • l,nt thu conatant practice of Parliament haa been l« read Huch l.ills an w\ time and re fer them to the Railway Committee. I haveconmiltid the Hutlmriiiu* and find that there haa been no exception to this rule save one and that »a« the bill intro- duced by thia Company in 1896 to revive the charter whi.li v thrc.wr, out on a anap diviaion by a majority of one. I mention thi« matter iay btcansoin the printed correspondence circulated thia inorninK ym will (i„,| that a. an in- ducement to us to reintroduce that bill, the Goverinnent haa jfiven mn an a*8ur. ance that they would aa.iat meao far a. neceaaary to secure a second re«din« ' ■ the bill and a reference to the Railway Committee. This is t., be ^iven m a fav • for wh.ch we are expected to be grateful. May I ask.gentle.nen, how I n„, to o,- plam to the nnfortunate investor., whom I represent, who have on your invita tion, expended W.OOO.OOO on your Ship Railway scheme, why thcy were so treat- ed m 1890 and aho why. if that hill were reintroduced, that they will require aa a hvor the asaistance of the Governu.ent to obtain for it a second reading and reference to the Railway Cammittee,-lreatment which i, always accorded to the bdl of a Canadian Company, no matter how unreasonable its terms might Iw ? From (he practice and precedents of your own Parliament and Government we were nndoubtedly entitled to have onr snUidy revoted in 1894 when we were ready to recommence work and complete the Railway. We are still ready to do so, or to accept as compensation a sum which may be fixed by arbitration. All the facts are known to the Government, but not generally, we are therefore willinK to submit our case to a Select Committee or to a Judge sitting as a Commissioner to hear and report to Parliament, but none of these proposals has been accepted by the Government. Permit tiiii a brief roferoiico ti some of the f icts I have placed befe>ro you. Wo came liere l)y ymir invitation, your Government and Parliament pro- moted tlie Kailway and wc liave cxijendod $4,000,000 on your own scheme for the benotit of your coniitry. Knrthennoro we subscribed this money on tlio faith of the subsidy the terms of which, as in the Act, wore reprinted in the prospectus. Tlio alteration mude by Parliament in 188S in the law relating to bond issues was the sole originating cause of our company's misfortunes. Your treatment of n3 ia totally contrary to your treatment of Caiiiidian in- vestors. According to all your precedents we were entitled to have had our subsidy revoted when we were ready to finish the Railway. I am forced to ask why this is so? Why are we made the sole exception to the rnlc and practice of your Parliament an.l refused our subsiily ''. And. let me add, that we are not only treated totally different from Canadian investors, but different also from what would be the case in any other count-y. There is no instance on recr which enormous araonnts of capital will he rapiired for ,iev,.|„pinent during tl... hmgest futnre wc may con- sider and I venture t.i siy that in the case .if the Chignecto Railway you are tak- ing the snr.'st moth. id of preventing yourselves oliti-ining it on terms to which on other grounds y.m are entitled to secure its benefits. KKMAKKS BY SENATOKS. Senator Hever sni 1 many of 'lie Senators were familiar with the Chignecto Legislation and intimated ho expected to he governed by it. Senator Wood aske.l if the snbsiuy voted by Parliament had not been made conditiomd on the success of the Railway. SIR MACKENZIE BOWELL. Sir Mackenzie Howell said thai, was ipiito true. To cam the subsidy the Company had to complete the work and then operate it to the satisfaction of the Government. lie said Mr. Provand did not claim he had any legal right, but put his claim on moral and ciuitablc grounds and on the ground that all other sub 1 .idized enterprises exeept this one had been given r.^ewuls wh™ thev fail..,| ,„ earry out their vr„rl< in the «,st instance. He kne«- „f no „tl,.,- C^upanv than the Ship Railway Cunpany but hail lieen treatwl ,„l„..,wiK.. Mr I'n.van,i's »,,Htin„ was "treat us as yon have treated oiher., otherwise f;ive ns cun.punsatinn " lie claimed the investors had looked at the Aets ..f Parhament, and seein.. that they were ensured so mucli had therefore put their money into the project" ■riiK i.wKsroKs' kisk. Senator Prowse said Mr. Provand apix..arcd lo blame the (Jovermnent lie thought the investors had taken some of tlie risk. The fact that thev had tried to secure T per cent, interest was evnlence that they felt there was risk because money was not worth nearly that inncl, in fn-;h,nd. He said Mr Provand's admissions showing that Mr. Kecchum and not the Govern.nent whs the promoter A Senator— "Why did the Government listen to him (Mr Ketc-hem)>" Mr. Prowse ssked if Mr. Ketchnm had received any remunerati.m from the Company. Mr. Provand said he had hear