July 27, 1903

CON

Haughton Lennox

Conservative (1867-1942)

Mr. LENNOX.

I concur in what the hon. Minister of Finance says as far as he goes, that is, that it is quite proper to refer the question to the Speaker, or to take an appeal to the House ; and if we were to go upon the narrowest possible technical principles, the inference which the hon. Minister of Finance draws might now preclude us from referring this question back to the Speaker. But I submit that that would manifestly be entirely too narrow a view tc take of this matter, having regard to the circumstances as they exist in this case. It is clear to any hon. gentleman who was in the committee when we last sat that the sole object of the hon. member for Leeds was simply to have the ruling of the Speaker in regard to the point of order, and having obtained that, he would probably have been quite content to abide by it without further question. It is quite true that in the notice he gave-and I assume that it was not absolutely necessary that he should give a written notice at all-he used the word ' appeal ; ' but ' appeal ' as he used it is not to be construed in any technical sense, but with regard to what he manifestly had in view, namely, that he wanted the opinion of the Speaker, or the instruction of the Speaker to the chairman.

That being the case, it would not be treating this committee fairly if it were held that because the word ' appeal ' was used when it was made clear that what the hon. member for Leeds required was the instruction of the Speaker-that we were precluded from having the benefit of the opinion of the Speaker on a somewhat important point. It is not a question affecting the hon. member for Leeds alone, but the rights of this committee ; and I submit that if there were no other reason, the fact that the hon. member for East Grey (Mr. Sproule) persistently endeavoured and failed to obtain the eye of the Speaker at the time he was putting the question to the House, ought to be sufficient to show to this committee that it would be the veriest abuse of a technicality if this matter were not now referred to the proper authority to decide. When the hon. Minister of Finance

points out that it is manifestly wrong to bring this matter up now as it has already been submitted to the House and action taken upon it, I submit the matter lias never been determined by the House, because the House was never properly seized of the question. The Speaker, not knowing the position which the hon. member for East Grey was about to take, and taking the technical language of the notice, was probably for the moment not entirely seized of what the hon. member was aiming at. But now that we know exactly the position in which the matter stands, I would urge the committee to deal with it upon a broad and not upon a technical basis, and we will have the benefit of the opinion of the Speaker upon this question.

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LIB

William Alfred Galliher

Liberal

Mr. GALLIHER.

One thing which the hon. member for Leeds (Mr. Taylor) made quite clear at the last sitting of this committee was that the reason he took this objection in the first place, was because the hon. member for Stormont (Mr. Pringle), was absent and in order to enable him to get here and finish the speech he had so ably started at the previous committee meeting. The hon. member for Stormont being now here, that technical objection has entirely disappeared, and we are now prepared to hear him continue his speech. Moreover, I do not think the hon. member for Simcoe is very serious in his contention that the ruling of the Chairman is wrong. I do not think he will contend very seriously that one member having charge of the Bill cannot delegate his authority to another member to take charge of it in his absence. Taking these facts into consideration.

Motion of Mr. Taylor, negatived.

On the preamble.

Sir. PItINGLE. When the committee rose last Friday evening, I was quoting from the statement of the case made to the chairman of the sub-committee by the solicitors for some of the largest creditors.' I propose to continue quoting from that statement :

An action is now pending to compel the Philadelphia Company, to carry out the terms of their agreement and tasking the court to stop interest running on the Philadelphia Company's bonds so long as they -are so in default. The foreclosure suit of the Philadelphia Company is brought, on arrears of interest on the bonds. The principal of the bonds is not yet due. Will not be due until 1918. In addition we know that when the Philadelphia Company offered their block of bonds for isale they declined to give any guarantee of their title to same. They would only sell * their rights ' without guarantee or warranty of any kind.

I was not present at the final meeting of the sub-committee, but at a previous meeting it was conceded by all parties that no matter what Bill was reported, there should be a clause inserted in it making it subject to the final decision of pending litigation.

I think it is unfair that this sub-committee should report the Bill when there is litiga-Mr. LENNOX.

tion pending. We have the authority' of Messrs. Hutchison & Fisher of the town of Brockville, Mr. Hogg of this city, and of a gentleman from Gananoque, a solicitor of good standing, that there is litigation now pending with regard to the foreclosure of this property. Why should we ratify and affirm that purchase when there is that litigation pending ? The whole committee were unanimous that a clause should be inserted providing for the existing litigation. And it was to be without prejudice to the results of the litigation. Let me refer to another point, and on this also I challenge contradiction. This Bill was introduced as a Bill respecting the Brockville and Sault Ste. Marie Company. The committee never consented to the change being made to the Brockville and Western. And I am told that oil the filial day of the sitting of this committee, nothing was said in regard to the name of the company being changed to the Brockville and Western. I think it most important that a clause should be added to this Bill in respect to pending litigation. Referring again to this document presented by the solicitors, they state :

We submit, therefore, that Messrs. Holmes, Schmit et al. who claim under these bonds as to ninety per cent of their purchase money stand in the Philadelphia Company's shoes and are not entitled to say ' We bought the railway at a court sale without notice or knowledge of any equity and paid the price in cash.' They pay only ten per cent in cash plus what the bonds cost, and as a matter of fact are charged with the equities which attached to this block of bonds.

3. The sale at Brockville on 20th January last was not subject to a reserve bid. No report as to the value of the road and undertaking was made by a competent engineer or any other person and nothing was done to protect minority Interests in the least degree. It is then said : Why did not the minority interest, construction creditors and others appear in court and contest the action ? We say the minority interests were not large and none of them except those we represented ever received any notice of the proceedings. We do know that certain of them were advised, on good authority that before the road could be sold legislation must be obtained and they were waiting for application for this legislation. Once, notice was actually published of an application to parliament to dispose of the road. The minority thought that they would then have an opportunity of being heard. But the company abandoned their application and matters were allowed to drift. 1 None of the small creditors ever bad the means or a large enough amount at stake to litigate their rights with the Philadelphia Company, and1 incur a large amount of costs which would necessarily be involved.

4. At the present time the following litigation, however, is pending : In the foreclosure suit of the Philadelphia Investment Company vs. the Brockville, Westport and Sault Ste. Marie Railway, an appeal from the master's final report is now pending. This appeal is set down for hearing at the next sittings of the Divisional Court.

That appeal has not yet been heard. It is on the list of cases to be heard at the next sitting of the court. Why should this

Bill be passed unless we insert a clause ' without prejudice to the pending litigation ?

Another action is also pending brought by Mr. Carl W. Vollman against the Philadelphia Company. The Brockville and Westport and the new syndicate. This action will be ripe for trial at the fall sittings of the High Court at Brockville. This action attacks the sale of the railway to the syndicate, asks for a decree compelling the Philadelphia Company to complete the road according to the terms of the construction contract which was assigned to them, and asks for a declaration of the court cancelling interest on their bonds while the Investment Company is in default under the contract.

It was on this written statement as presented to the chairman of that sub-committee that, I think I am correct in stating, the majority of the committee considered it advisable that the clause should be inserted in the Bill. But still, the Bill has been reported without that clause.

In this action the plaintiff asks to set aside certain proceedings of the board of directors of the railway company because such board was illegally constituted, the directors not having been properly qualified. We submit it will seriously prejudice this litigation if the syndicate's Bill Is passed as it now stands. Even with a saving clause as was suggested by Mr. Barwick, the fact remains that parliament has confirmed the sale and even with a saving clause in the charter the effect will be to minimize the litigation and create a prejudice against it.

It is not conceivable to me why the subcommittee would not accept Mr. Barwick's suggestion. He represented parties interested and suggested the saving clause. Yet they do not seem to have seen fit to report the Bill with that saving clause in it.

5. In addition to all the above facts and circumstances we submit that by reason of the totally inadequate price paid for the road by the syndicate in comparison with its cost, the amount paid in bonus by municipality and government subsidy, one is forced to the conclusion that there is a nigger in the wood pile somewhere. It is not right that a few men should so manipulate bonds, issues, &c., so as to defeat the labourer who built the road, the material men who furnished the supplies. We don't appeal to you because the syndicate who bought the road are foreigners. We do say it is unfair to assist foreigners or resident citizens to acquire a franchise and confirm a purchase which had been acquired (even assuming it has been acquired within the strict letter of the law) in such a way that the natural result is to wipe out and utterly destroy the claim of the men who laboured through heat and cold, late and early, to build the road and the men who furnished the material to build and equip the road.

6. No franchise was ever sold. The Ontario court had no jurisdiction to sell a railway franchise without special legislation, and none was ever given in this case. The syndicate never purchased a franchise and they now ask you to grant them one. We submit you are justified in refusing a franchise until equitable claims receive a just and equitable consideration. Parliament has imposed similar terms before in the Toronto, Hamilton and Buffalo Railway case and in the Atlantic and Lake Superior Railway case.

and we ask you to follow the precedent laid down in those cases.

7. It must not be overlooked that the receiver of the railway after spending a large sum in erection of new buildings, purchase of new rolling stock, in addition to making ordinary repairs, has paid into court $11,480 to the credit of the foreclosure suit. If the sale of the railway to the New York syndicate is held to be valid these purchasers will be entitled to ninety per cent of this sum paid by the receiver. So the position of the matter will be as follows :

Price bid at auction for railway. $160,000 Of this there has been paid into court in cash, about 20,000

Balance by bonds turned in.. 140,000

Purchasers will receive out of court in cash ninety per cent of the sum paid in by the receiver, nearly $11,000.

We allege the bonds cost the syndicate $90,000, which with the $20,000 paid makes a total cost [DOT] of $110,000. Deduct share of cash from receiver and a balance of $99,000 remains, the actual cost of the railway, forty-five miles long completely equipped with rolling stock, and engine houses, tools, &c., &c. The railway received in municipal bonds and government subsidy $211,000, which with the sums put in by the contractors and the railway company in cash and proceeds of loans shows that the cost of the railway was between $800,000 and $900,000.

These figures should convince the most skeptical that if no provision is made for some equitable settlement for construction debts, a monstrous injustice will pe perpetrated.

8. Thirty-eight thousand dollars of government subsidy is still unpaid in consequence of the railway not being finished to government standard. While the receiver was in possession he has proceeded with completion, and now a comparatively small amount of work remains to be done. This subsidy was assigned to Mr. Cooper, and his rights thereto have been recognized by the government. Mr. Cooper has offered to assign to the promoters of the syndicate's Bill his rights to this subsidy for fifty cents on the dollar of his judgment, excluding interest on judgment and costs. As to the unsecured claims, we have repeatedly offered the promoters of the syndicate's Bill to accept forty cents on the dollar of the claim exclusive of the interest and costs. A careful estimate of the sum required to settle the claims on this basis would be $60,000 to settle construction debts.

9. We represent railway employees whose claims total $1,822 for wages while working on the railway prior to the appointment of the receiver. By reason of this labour the railway company was able to operate the road and received the revenue for their own purposes, and we submit these wage-earners are entitled to consideration at your hands. They are willing to settle on a forty-cents-on-the-dollar basis.

10. At a former meeting of your committee, Mr. Holmes, representing the purchasers and other promoters of the Syndicate's Bill, stated that he and his associates asked no favours or privileges as to issue of bonds, &c.

We submit that in any event Mr. Holmes should be taken at his word and given no favours. The prospectus issued by the New York syndicate, a copy of which is filed with your committee, proves that the large bond issue and the large capitalization was part of a scheme to derive an enormous profit for this syndicate by manipulations of the stock and bond issue and its flotation on the market. In conclusion, we

submit: (a.) That the syndicate's Bill should not be allowed to pass until the litigation now pending is decided, (b.) That we have established our right to receive a fair and reasonable settlement of our construction claims before any franchise is granted to this new company who have purchased for a mere song a very valuable property, (c.) That a clause should be inserted in the syndicate's Bill providing for a fund to be paid into the hands of the Minister of Railways of at least $50,000 to be applied on construction debts.

This memorandum is signed by Messrs. Hutchison and Fisher, representing Cooper, Fairman & Company, and a number of other creditors. Now, Mr. Chairman, I consider that the sub-committee acted most fairly, and the minority of the members of the sub-committee acted most fairly and reasonably in this matter. The position I took and the position that other members of the minority of the sub-committee took, was this, that these gentlemen had purchased that property at a public sale, that under the Railway Act it was necessary for them to come to this parliament and ask for a Bill ratifying and confirming that purchase, and that we should recommend that Bill ; but if these gentlemen asked for larger privileges outside of that, then we should consider the whole of the three Bills which were before us, and treat them on their merits, and if we could equitably do anything for the creditors it should be done. Now, after a considerable discussion, at two or three meetings, it was decided simply to confirm the purchase, not giving any powers beyond the 45 miles. That we consented to, letting the other Bills stand aside. The minority members of the committee also were willing to authorize an issue of common stock to cover the purchase money. They were also willing to allow bonding privileges of $10,000. a mile for the betterment and equipment of the 45 miles, and for no other purpose. Now we submit that we should not grant these people power to issue bonds for $10,000 a mile on a road which has cost them $2,000 or $3,000 a mile, unless that money is to be used for the purposes of betterment and equipment. AVhy should they require bonding powers of $10,000 a mile unless they use that money for the purposes of bettering the road ? We are simply going to give to these men who have formed this syndicate, who I say are in league with that Philadelphia Trust Company, power to issue bonds to the extent of $450,000 upon a road which has cost them less than $100,000, and to go into the market and dispose of these bonds. I say when they ask that from this parliament they are asking us to grant them a great privilege, and we would be perfectly justified, under all the circumstances, in saying to them : If we grant you a privilege of

that sort, then pay $50,000 to be distributed rateably among the people who built that road, and who should have been paid by this very Philadelphia Investment Company.

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CON

Robert Abercrombie Pringle

Conservative (1867-1942)

Mr. PRINGLE.

That is one of the clauses of the Bill that I. as a member of the sub-committee, objected to very strongly. I did not think we should give them that wide power of bonding this road for $10,000 a mile.

Now, Sir, the minority members of this sub-committee also considered that, inasmuch as they were creditors for supplies, the fact of such claims should be stated in the report, so that this fact might be on record in case of any future application to parliament. One claimant, an assignee of the government subsidy, has passed away, I am now speaking of the late .Tames Cooper, who died since the committee made their report. Surely it is important, in the interests of the estate of the late James Cooper, that there should be something on record to show just the position that the committee who were dealing with this matter, took. I think 1 pm expressing the view of every member of that committee when I say that it was decided that the two Bills, the Bill which was being promoted in the interests of the creditors, and the other Bill which was before the committee, should be set aside entirely, and that they should be left in a perfectly free position to press their views and press their claims upon any future application to this parliament for a charter for an extension of that system. I think we are only asking what is fair when we ask to be put on record, so that if these gentlemen who are now the promoters of this Bill (No. 104) should- come before this parliament next session for an extension of the road from Westport to Sault Ste. Marie, the position of the other parties in Bill (No. 67) should not in any way be prejudiced. It seems to me it is only reasonable and fair that that should be put on record as the finding of the sub-committee. As I stated, I believe I am expressing the opinion of every member of that committee when I say that the committee were unanimous in their decision to dismiss this Bill, leaving all parties on an even footing as to the extension. The minority members of that committee deemed it very important that all three Bills should be dismissed, and pimply an appeal made in favour of a short Bill ratifying and confirming their purchase.

Now, sir, I am sorry to take up the time of the House in discussing this matter, but I feel that a great injustice is being done to these parties unless it is made clear that when these people come before parliament again asking for an extension of this road, then the right of all parties can be brought forward and freely discussed. As I pointed out when Mr. Hervey took the contract for the construction of the Broekville, Westport and Sault Ste. Marie Railway, he was to receive all the bonds and all the stock of that company. He borrowed money from time to time from the Philadelphia Investment Company,

and subsequently the Philadelphia Investment Company made up their minds to take the contract out of Mr. Hervey's hands. Mr. Hervey assigned that contract to the Philadelphia Investment Company and Mr. Hervey has put in his report a statement saying that the consideration was that they were to pay the debts then incurred by Mr. Hervey. Now, I have a statement from one unfortunate creditor, and I will just give the statement to this committee to show how the sub-contractors on this road were treated, although they had the assurance of Mr. Hervey that the Philadelphia Investment Company, who owned all the bonds, who owned all the stock, and who were getting all the benefit of the work done by these sub-contractors, would pay the liabilities. This is the statement of Mr. Win. Robinson. He says that :

On or about the year 1897, Mr. Robt. Mitchell of Ottawa, (since deceased) and Mr. Wm. Robinson of Owen Sound entered into a contract with the Broickville,Westport and Sault Ste. Marie Railway Company

The contract I have amongst my papers.

__and Mr. R. G. Hervey of Brockville for the

construction of several difficult and heavy sections of the above railway. After working one month the contractors were promptly paid for the work done, and thus encouraged, proceeded more vigoutously in prosecuting the work-but, received no more money therefor until about seven months labour bill had been incurred under repeated promises from day to day that money would be forthcoming. The result of such treatment on the part of the company was that heavy labour bills were incurred by the contractors far exceeding their ability to pay unless the estimates, long overdue, were paid by the railway company. About Christmas a substantial payment was paid on account of labour done by Mr. R. G. Hervey thereby encouraging the contractors to complete the work and thus secure the subsidies which were to be paid by the government in ten mile sections when completed to the satisfaction of their engineers.

It was these very sub-contractors who completed the work so as to enable Mr. Hervey and the Philadelphia Investment: Company to get the subsidies from the government. They took the subsidies, put them into their own pockets and did not pay these sub-contractors.

After the second payment, on account, had been made from the company's offices no more money could be obtained, only the ' old time ' favourable promises and encouragement to ' go ahead,' ' dont't stop work,' ' the needed succour will surely be to hand before next pay day,' and such persuasion used, as secured for the company the completion of the road (practically at the contractor's expense). Our capital and resources being thus exhausted our horses, mules and all working plant were seized by the sheriff and sold at a ridiculous sacrifice on a market where such plant was useless except for contractors' purposes for which it was designed and realized an amount quite inadequate to satisfy the claims against it as well as depriving the contractors ' of their means of support.' However, we recovered from this ' knock-down blow' as best we could and sued the Brockville, Westport and Sault Ste. Marie Railway Company for the then unpaid estimates recovering a judgment against them for about $20,000

I have a copy of the judgment as obtained and the execution which was issued at the time against this company. The amount of the execution was for $19,402.75, besides an amount of $263 for costs, Interest, &c.

-which was afterwards transferred to Mr. R. G. Hervey under an agreement on his part to pay all our labour and material bills incurred in connection with the construction work and furnish us with final receipts therefor and in case of default in so doing we were to get an immediate judgment for the unpaid portion of our claim. While we were thus harassed by our labourers and others who had furnished the provisions for our camps and feed for our live stock, the company gave us a short-time note for $4,000 signed by the president and assured me that if 1 would get it cashed they would take care of it, at maturity. We were then forced to appeal t.o Col. R. R. McLennan who had faith in the promises and apparent intentions of the company. He endorsed same and I got the value therefor which was immediately applied towards settlement of the then most pressing labour demands. The aforesaid note matured and was renewed and renewed-finally paid by Col. R. R. McLennan who recently told me that it has never since been paid by the TY1 'fllfPTQ if T| n T '

Owing to the default in payment by the company which caused the entire loss of my plant, stock and equipment, including derricks and tools and machinery for heavy work-I have since been unable to operate as a railway contractor having expended upwards of $10,000 in said contractor's plant, every dollar of which belonged to myself, my partner, Mr. R. P. Mitchell. -only acting as superintendent-he had no interest in the outfit-and at the time of death owed me about $1,400. The railway company, so far as can he determined in the absence of the aforesaid receipts, or vouchers, representing the settlement of some of the labour accounts, now owe me about $14,000 with interest since the road opened for traffic together with their sole responsibility for the loss of my plant, making an actual total exceeding, $25,000. i

That is including interest from the date of the judgment. That is only one of many cases, I say, of extreme hardship, and I think that the minority members of the sub-committee were not asking too much when they asked that sub-committee to make it clear in their report that in the event of any future legislation, or in the event of these parties asking for an extension of their charter to Sault Ste. Marie, these claims should be considered. That is only one of many claims. There is the claim of the Rathbun Company, besides that, who supplied ties, fence posts, lumber and other material required for the construction of the road. Then, there is the claim also, and a very important one, of the late James Cooper. No reference at all is made to this claim. I apprehend that if this Bill goes through in its present form, the

estate of tlie late James Cooper will not be able to obtain anything out of the subsidy if the government should at any time decide to pay it to this company. Now, I wish to make it clear that I, at any rate, as one of the minority members off that subcommittee, did not insist that any clause should be put into this Bill to pay either of these sub-contractors or these wage-earners. The position I took and the position, I think, that the other minority members of the sub-committee took was this: These people are entitled to a Bill ratifying and confirming their purchase. We will set aside the bill of the creditors, we will set aside the part of the bill asking for the extension of this road from Westport to Sault Ste. Marie, we will simply ratify and confirm their purchase and we will leave this whole question open, so that in the event of the claims of these parties coming up subsequently the matter can be dealt with.

It is fair and reasonable that we should ask to have a saving clause inserted in regard to pending legislation. Mr. Barwick, who represented these parties, suggested such a clause, but the committee did not insert it. I am informed that nothing was said at the committee with regard to changing the name of this company from the Brockville, Westport and Sault Ste. Marie Railway Company to the Brockville and Western Railway Company, and yet it is important that the name of a company should remain unchanged. In looking over ' Hansard' I find that the hon. member for Guys-borough and the late Hon. David Mills, and others on that side of the House, have taken strong ground that the claims of wage-earners and contractors should be safeguarded in legislation of this kind. We did not go that far, but all we asked was that fair treatment should be accorded to the wage-earners. I ask now that this Bill should stand until such time as we can put it in proper shape. I must say that Mr. Holmes, of New York, the promoter of this Bill, presented his case in a very reasonable manner, and he stated that they would pay whatever was due to any labourer on that work. In the constituency of Leeds there are a large number of workingmen who are yet unpaid and who can ill afford to lose their money. Several of them appeared before the Railway Committee, and one of them, a strong supporter of this government, represented that they were in no position to attend the sale and purchase of this road, but that he felt that when the Bill came before parliament the claims of himself and others should be provided for. I am informed that nearly all the workingmen to whom money is due by this company reside in the county of Leeds and are supporters of the present government, and it is for these men that the hon. member (Mr. Taylor) is making this fight to see that justice is done them.

I am bound to say that every member of Mr. PRINGLE.

the committee who supports the present government refused to insert a clause in the Bill protecting the wage-earners, although the gentleman from New York who was promoting the Bill made the distinct statement that he would be the last man to see these men deprived of their wages, and that he was quite willing that a clause should be inserted to protect them. Why did the Liberal members on that committee refuse to insert that clause.

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CON

Edward Frederick Clarke

Conservative (1867-1942)

Mr. CLARKE.

Did you draw the attention of the Minister of Labour to that situation ?

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CON

Robert Abercrombie Pringle

Conservative (1867-1942)

Mr. PRINGLE.

I did not call the attention of the Minister of Labour to that matter because I did not know that the Minister of Labour would be bothered looking after the labourers and wage-earners of the county of Leeds. But if he would, then he should see that there was an amendment added to this Bill by which they would be protected. I may also state that Messrs. Hutchison and Fisher, solicitors for the Bill, announced themselves to be willing, as Mr. Holmes was willing, that a clause should be inserted protecting the rights of the working people. Why is it that the majority on that committee not only struck out the proposition made by the promoters of the Bill, but also refused to insert the saving clause which Mr. Barwick, an eminent counsel asked them to insert. As I have said the minority of the committee asked for nothing unreasonable. They1 simply asked1 that| a clause protecting the wage-earners should be inserted ; that a saving clause be inserted as to pending legislation, and that there should be a report showing the reason why the three Bills were set aside and reserving the rights of all parties in the event of future application being made to this parliament. We did not ask that a clause be put in requiring the company to pay the creditors, but I find that in the case of other Bills passing through this House, gentlemen on the other side have insisted on clauses being inserted giving ample protection to the creditors as well as to the wage-earners. In 1895, when the Bill respecting the Toronto, Hamilton and Buffalo Railway Company wms before the House, the hon. member for Guys-borough (Mr. Fraser) made the following statement. ' Hansard,' 1895, page 3238 :

As that matter is disposed of I have another amendment, to which the same objection cannot apply, because it does not affect the main part of the Bill. I have here a petition which I wish to read to the House ; but before doing so. I wish to read the amendment which I intend proposing as clause 10 of the Bill. It is as follows

Before this Act shall become operative, the company shall pay all outstanding accounts for labour performed on the railway and olher works of the company, and also for material supplied to or for the use of the said company, the amounts and the accounts for labour and material to be ascertained by the mayor

of the city of Hamilton, and, when the said mayor shall certify to the Minister of Railways that aill lust claims as aforesaid shall have been paid, this Act shall become law.

Now, that is a very sweeping amendment ; it is tar stronger than anything we ask for; and yet it was supported by nearly all the members on the other side of the House. The hon. member for Bothwell, the Hon. Mr. Mills, at that time, in reply to Mr. Coatsworth, said :

I am rather surprised at the line of argument adopted by the hon. gentleman who is promoting this Bill, that because the parties have not been informed that such a Bill was before the House or the railway committee, and because they have not been able to make known their complaints, therefore the House ought to take no cognizance of it.

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Mr. COATSWORTH@

That is not my argument at all.

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David Mills

Mr. MILLS (Bothwell).

I do not say it was a serious argument, but the hon. gentleman made those observations. He went further, and said that the promoters of this Bill ought not to be made liable for the debts of the sub-contractors. Well, Sir, we have in the province of Ontario a statute which gives builders a lien upon the property upon which their labour or their material have been expended. Now, it seems to me that that Bill is founded on equitable principles and equitable considerations, and I do not know why that rule should not apply to a railway corporation, if it is their boundc-n duty, as the promoter puts it, to see that those who expended their time and their labour cn the work from which they are to derive advantage, should be paid by those to whom they have let the contract for the performance of this work. It is their bounden duty to see that those who spend their time and labour on the work from which advantage is derived by the company, are paid by those to whom the contract is let. If we undertake to put men of straw who do not reside in the country and have no property in the country forward as sub-contractors, 1-t is their business as a matter of due diligence to see that those who have done the work have been paid for it, or, if not paid, that the money is not handed over to the contractors. That seems to me to be a principle of simple justice, and, before the company are allowed to avail themselves of the labour of those men who work upon the road they ought to be made to give compensation for it. It is better that they should pay twice than that the parties who expended their labour on the work, and who have nothing else to subsist upon, should remain unpaid.

Apply that principle to this case. Here is a man named Hervey, who takes a contract for the construction of 45 miles of railway, for which he is to receive bonds and stocks of the company. He is not pro-eeeding very well, and the Philadelphia Investment Company, which has advanced the money, says, we will take that contract off your hands, we will take the bonds and stocks, and assume the liabilities. They urge on these sub-contractors to complete the road-why ? Because they want to obtain from the government the subsidy on the road, and they obtain it. The subsidy was given to them, and instead of paying

the sub-contractors and the wage-earners, they put the money into their own pockets. They receive the benefit of the work, and obtain the money. And these are the very gentlemen who are asking for this legislation. They can shape it as they like. They can say that these individuals purchased the road, but they purchased the bonds through the Philadelphia Investment Company ; and I say that we would not have been going too far if we had asked for a similar clause to be inserted in tills Bill to the clause which was Inserted in the Toronto, Hamilton and Buffalo Bill. But what I complain of Is this : We met the majority of the committee most fairly. AVe said, we do not want to hold up the applicants for this Bill in any way ; they are entitled to come to parliament and get a Bill ratifying and confirming their purchase ; let us give them just what they are entitled to; but, when we set aside the claims of the creditors and the other claims, let us make a report, so that, it will be clear that if these parties come to parliament next session asking for an extension of this road, the creditors can then come in and press their claims. But the majority of the sub-committee, whether intentionally or not, have not brought down that report, nor have they added the other clauses to the Bill which I say should have been added. Now, Sir, let me refer again to the position taken by the hon. member for Guysborough in 1895. Referring to the amount of $60,000, he says :

Yes ; that amount, has been owing ever Gince. And a large number of these men are feeling it very much. There are farmer^ and others who have worked upon that road and have not been paid a dollar -since -that time, and they feel the pinch. The company is -given the benefit of -their work. It will not do tor them to say : We give.the contract to Bracey Bros., and if a man works for Bracey Bros., he knew what he was doing. You cnuld get labourers every time -and avoid paying them by -throwing responsibility from one to the other in that way. This company are bound to -see that the men were paid, and if they made it possible for Bracey Bros., to leave the country without paying 'the men, then any further advantages granted ito them by the legislature should fcc granted upon the conditions 1 shall name,

I say this is a very much stronger case. Here is a case in which the contractors employed sub-contractors, and these sub-contractors absconded from the country owing these people. Our case is a very much stronger case. The Philadelphia Investment Company got the benefit of the work of these people, and agreed to pay them, when it took the work out of the hands of Robert G. Hervey, and it is really the Philadelphia Investment Company which is getting this legislation through these individuals. When the matter came before the committee, the hon. member for Guysborough made this motion :

I move to amend the Bill by adding the following clause :-

The company shall remain liable for all debts due for the construction of the railway of the said company, and, if such debts are due to contractors, shall cause all just claims for labour, board and building material, in respect of such construction, to be paid by such contractors or their assigns or assignees, and, in default thereof, shall' be directly liable to all persons having such claims.

The hon. member for Guysborough supported that motion throughout the whole discussion, and he was supported by Sir Louis Davies and a number of other government supporters. Now, let us look at the position in this case. We had before the committee Mr. Carter, representing the Rathbun Company. He explained to us that the Rathbun Company, in perfect good faith, had supplied all the ties and fence posts and other lumber that was required for that road. And they supplied these goods, believing that the Philadelphia Investment Company, which was getting the benefit of all the assets of this road, had pledged itself to pay for these articles. Let me for a moment refer to the Act confirming the charter of the Great North-west Central, chapter 85, 51 Victoria, 1888. I will only refer to section 27 of the schedule, which is as follows :

Provided always that the company hereby incorporated shall be and remain liable for, and shall pay and discharge all debts which were due on or before the second day of June last past by the North-west Central Railway Company, and the Souris and Rocky Mountain Railway Company, or either of them, for railway construction, and which have not since been paid and discharged, and the said company hereby incorporated in accepting this charter, do for themselves and their successors, covenant, promise and agree to and with Her Majesty the Queen, her heirs and successors, that they shall fully pay and discharge all such debts, and will cause all just claims for labour, board for labourers employed in or about such construction, and buildings, materials in respect of such construction due by contractors to be paid by such contractors.

That is a very sweeping clause, and very much stronger than anything the parties interested are asking for. In 18S8 a discussion took place in this House and the Hon. Mr. Edgar, in speaking on this very section, said :

There is no need of discussing in what way the charter was not in accordance with the Act; but I may briefly say that the Act required that the charter should provide for the payment of all the legal obligations of the former company, and the charter undertook to interpret what that meant by defining certain obligations which the new company was to be bound by. I do not know what parliament would have stated had it been asked to define the obligations more distinctly in the Act; but the government defined them by letters patent, and they have to admit that that part of the charter requires confirmation by an Act of parliament. I move for these papers, and I think they will show that the government are responsible for the delay in the construction of this railway through that rich portion of the North-west. Everything, apparently, was ready for the work two years ago.

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CON

Robert Abercrombie Pringle

Conservative (1867-1942)

Mr. PRINGLE.

This discussion arose on a motion by the Hon. Mr. Edgar for copies of all papers, documents, telegrams and correspondence in connection with that land grant to the Souris Rocky Mountain Railway Company, or relating to the construction of the said railway. With regard to the Toronto, Hamilton and Buffalo Railway Company, when the charter of that road was up for discussion in July, 1895, this clause was very thoroughly discussed. The hon. member for Guysborougli (Mr. Fraser) and his friends supported it throughout. I do not intend detaining the committee much longer. I was not present at the Railway Committee when the report came in, or I would have raised the question I am now raising. Nor was I present at the final meeting of the sub-committee. But I do feel very strongly that whoever made out this report did not carry out the views of that committee. They may have carried out their personal views, but not those of the majority of that committee. My hon. friend from Yale and Cariboo was there, and I will ask him now if tliis point was ever discussed in that committee while I was present, namely, the change of the name to the Brockville and Western ?

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LIB

William Alfred Galliher

Liberal

Mr. GALLIHER.

Not that I know of, while you were present.

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CON

Robert Abercrombie Pringle

Conservative (1867-1942)

Mr. PRINGLE.

Was it at any time ?

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LIB
CON

Robert Abercrombie Pringle

Conservative (1867-1942)

Mr. PRINGLE.

Certain amendments have been moved by the hon. member for Leeds, but I shall not now take up the time of the House with them, as they no doubt will come up during the discussion of the Bill. One of the first is that the words ' North-western ' should be struck out and the words ' Sault Ste. Marie ' be inserted in lieu thereof. I understand the reason was because the sub-committee never agreed to change tlie name of this company from the Brockville, Westport and Sault Ste. Marie to the Brockville and Western. I do not remember any discussion as to the powers of this company with regard to the carrying on of the business of navigation on navigable bays, lakes and rivers. The last time I was present in the sub-committee it was distinctly understood that all these powers were to be eliminated from the Bill, and we were simply to give this company a Bill ratifying and confirming its purchase, and if we gave bonding powers, they were to be only for the money to be used in the betterment and the equipment of the road. The matter is of a very great importance to a large number of people. It is of importance to the estate of the late James Cook, to the Rathbun Company, to Mr. Robinson and a large number of creditors in the district through which this road runs. I submit that the committee should give every reasonable consideration to these

claims, and if the promoters express their willingness to the sub-committee to pay the wage-earners, why not let them do it ? They are willing to have it incorporated in the Bill, and why cannot we put a clause in the Bill to afford this protection which the others are willing to give ? But the majority of this committee seem to have come to some other understanding with the promoters of the Bill by which they want to deprive the wage-earners of that to which they are justly entitled.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

The indisposition shown by the House to adopt the proposals made by the hon. member for Stormont and Cornwall (Mr. Pringle) to protect the creditors of this road is most unaccountable. It has been said by some hon. members that parliament has no right, in granting or amending a charter, to impose these conditions. But I am quite sure that no old parliamentarian will for a moment question- the right of parliament in this matter. It is a right which parliament has always asserted and not infrequently exercised. The hen. member for Yale and Cariboo (Mr. Galliher) shakes his head.

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LIB

William Alfred Galliher

Liberal

Mr. GALLIHER.

All I say is that we do not dispute that.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

Some hon. members of the committee, I am told, have taken that view. So, I am glad that the hon. member (Mr. Galliher), who is promoting the Bill, agrees that parliament has this right, _ for it seems to me perfectly clear. This is a Bill to confirm a sale and amend a charter, and parliament has the same right in connection with it as with any other. The only question is that of expediency-should we impose these obligations? This is the question. I need not review the arguments advanced by the hon. member for Stormont and Cornwall. To my mind, they are most cogent. We must remember that the purchasers in this case are the same parties who incurred the obligations. The purchasers are the Philadelphia Construction Company, and they are the same parties who managed to get the road built under the sub-contractors and who benefited by every dollars worth of labour and material that went into the.road and was not paid. This being the position of the parties, it seems to me perfectly fair to hold them accountable for these obligations standing against the road, especially as they have bought and taken over the franchise and all belonging to this road practically for a song. So, they above all others, have received the benefits of the labour that went into the road, the iron to make the track, and all the supplies used in connection with the construction. There was a substantial subsidy given by the government to assist in building this road ; and we have always recognized as one of the rules that when the government gives a subsidy to build a railway, the first claim

on that subsidy is the labour that takes part in the construction. In this case, the subsidy was diverted to other purposes, and the labourers who built the road yet remain unsatisfied. As the subsidy we gave was not used for the payment of labour and supplies, that is all the Stronger reason that we should provide that whatever company purchase that road should be required to accept the obligations hanging over the undertaking. If there was no precedent for this course, if we had never done it before, those who say that we have not the right to impose these conditions might have stronger ground for their contention. But the fact that parliament has dealt with similar cases over and over again, and has established the precedent of imposing such conditions, not once or twice, but three or four times, is all the stronger reason why we should take this course in the present case. These precedents have been referred to by my hon. friend from Stormont and Cornwall. First, there was the case of the Toronto, Hamilton and Buffalo Railway Company. When the attempt was made to present the claims of the unsatisfied creditors of that road before the committee, it was contended that they had no status and no right. But the committee, after going fully into the inquiry, decided that as the government had given a large subsidy to assist in building the road, the intention of parliament and the government being that the labour that went into the construction should have the first claim upon that subsidy, it was quite reasonable to provide that the purchasers should pay these claims before parliament would give them the consideration they asked for. In that case, it must be remembered, the people who were seeking the legislation refused to have this condition put in the Bill. But parliament said : You cannot get your Bill through unless you accept these conditions. And they did accept the conditions and liquidate the obligations. In this case, the purchasers of the road, we ai-e informed, are willing that a condition should be put in the Bill making the payment of these claims obligatory. And the strangest part of it, to my mind, is that, in the face of this, parliament refuses to embody such a condition in the Bill. That is, to my mind, unaccountable.

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LIB

William Alfred Galliher

Liberal

Mr. GALLIHER.

I did not wish to interrupt my hon. friend, but I think he must have misunderstood what the hon. member for Stormont said. -

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CON

Robert Abercrombie Pringle

Conservative (1867-1942)

Mr. PRINGLE.

If the hon. gentleman will allow me-Mr. Holmes, who represented the New York syndicate, came before us when application was before us for the three Bills. There was a creditor's Bill, there was a Bill by New York men, and there was a Bill in which the Brockville names were added as well ; and he then stated that he was quite willing to have a

clause inserted to pay the wage-earners, but he drew the line at paying the contractors. We then endeavoured to get a clause inserted in regard to the contract, but we could not agree upon that, and we ultimately agreed to put all the Bills to one side and simply give to these people a Bill ratifying and confirming their purchase. That was the last committee meeting at which I was present. We agreed to put them in the position that they were bound to come before parliament in a year to get that legislation. But, that is where we find an entirely different Bill. Instead of simply ratifying and comfirming that purchase and leaving the rest to stand until some subsequent application was made to parliament, when these matters would be brought up, we find a Bill giving them bonding powers, giving them powers to issue so much capital stock, giving them powers to go into navigation, and so forth. That was never the understanding or the agreement by the subcommittee when I was present, and I was very much surprised when I came back to find that this Bill was reported with all these clauses in it.

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LIB

William Alfred Galliher

Liberal

Mr. GALLIHER.

There were two propositions submitted by the hon. member for Stormont (Mr. Pringle). The one that the hon. member for Bast Grey (Mr. Bproule) was referring to was the one in which Mr. Barwick, the solicitor of these companies, was willing that a clause should be inserted that pending litigation, their claim should not be prejudiced in any way. That is what I thought the hon. member for East Grey was referring to, namely, the agreement of Sir. Barwick the solicitor.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

The hon. member for Cariboo (Mr. Galliher) is entirely out in his reasoning, if he desired to contradict the statement I have made because I was absolutely correct.

' Mr. GALLIHER. If the hon. gentleman was referring to wliat Mr. Barwick said he would agree to being put in the Bill, I am correct; if not, I apologize.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

I was referring to the willingness of the parties who were desiring a confirmation of their purchase and said they were willing to do it, and afterwards Mr. Barwick on their behalf, expressed his willingness that that should be done.

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July 27, 1903