Mr. FIELDING.

Is that the one my hon. friend called my attention to to-day ?

Mr. GEItVAIS. No.

FIELDING (Minister of Finance) moved for leave to introduce Bill (No. 171) respecting the government guaranteed bonds of the Grand Trunk Pacific. He said : The first purpose of this Bill is to authorize the Grand Trunk Pacific to pledge the bonds guaranteed by the government as security for the raising of money. The earliest legislation undoubtedly contemplated that the company should have the power to pledge the bonds as well as sell them. It would seem, however, that the machinery provided is inadequate and it is necessary to specifically give the com-Mr. NORTHRUP.

pany the power to pledge the bonds. If the market were deemed unfavoui'able to press the sale of the bonds, the company might raise money by pledging the bonds as collateral security. The second purpose of the Bill is due to certain judicial decisions given in England to the effect that when a bond is pledged in the way contemplated by this Bill, it is deemed to have been issued and the power of the company to sell it ceases. Consequently w'hen the bonds given as collateral security are restored to the possession of the company the company would not have the legal right to sell them. To remove all possible doubt, we propose to declare that the pledging of the bonds will not interfere with the right of the company to sell them at a later stage. The same difficulty will probably come up in connection with other companies and it may be necessary to pass general legislation upon. the subject. In the meantime, ns we are dealing with this particular case, we ask that the company be given the power to pledge the bonds as security in order to raise money and that this shall not interfere with their right to sell the same bonds when the company again obtain possession of them. The third purpose of the Bill is intended to facilitate the operations of the company in the construction of the railway. To avoid delays which, it has been found by experience, sometimes happen, and enable the company to make prompt payment for work done, it is proposed that we give them a letter of credit, practically as we do now in connection with our own departments, authorizing the company to expend a limited sum, not exceeding at any time the sum of one million dollars. That letter of credit is to be dealt with in the same way as a letter of credit under our ordinary financial operations. The expenditure must of necessity be used for the purpose authorized by the Transcontinental Railway Act. At regular intervals, say at the end of each month, the chief engineer must examine these expenditures and if they all fall under the Act and are such as he can certify to, he will certify accordingly. If it be found that, under this letter of credit, the company have used the proceeds thus obtained, or any part thereof, for any purposes not entirely within the meaning of the Act, then the sum so used must instantly be made good by a deposit in the bank to the credit of the same fund from which they were withdrawn. Before any letter of credit shall be issued, the Grand Trunk Railway Company, which is the parent company, must enter into an agreement to make good any money which may be expended in the unauthorized way to which I have referred. These are the three purposes of the Bill.

Mr. SPROULE.

I would like to ask the Finance Minister if he does not think this

is one of the Bills which should be introduced by way of resolution.

Mr. FIELDING.

At one time I was inclined to think as does my hon. friend, but I took advice on that point. It is not the money of the Consolidated Fund of Canada but money which belongs to the Grand Trunk Pacific, but inasmuch as it is raised on the credit of the government of Canada it is placed in a special account to the credit of the Minister of Finance and Receiver General and can only be drawn upon on certificates of the government engineer. The government therefore supervise the money very properly, but it is not a part of the consolidated fund. However, even if it were a part of the consolidated fund, this Bill does not create any new obligation in any way ; it simply gives directions as to the manner in which the fund already created shall be distributed. It does not create a new obligation or add to any former obligation of the government.

Mr. SPROULE.

Does it not give power to raise money ?

Mr. FIELDING.

No, it does not give power to raise money in the sense in which the word is used by my hon. friend ; the power to raise money has already been given by the granting of power to issue the bonds. This is a power to take the bonds to the bank, and to say : We do not find it expedient owing to circumstances to sell these bonds at present but we will leave them here as collateral. That is a power which all railways have under the General Railway Act, but for the special reasons in this ease it is necessary to introduce this Bill. There is nothing unusual in the Bill, I have had it looked into and I do not think it is necessary to adopt the suggestion that has been made.

Mr. FOSTER.

I understand the credit is based on money already in the funds.

Mr. FIELDING.

Quite so, and only on the money derived from these bonds. It is not a letter of credit on the consolidated fund at all.

Mr. FOSTER.

It is not an advance.

Mr. FIELDING.

Oh, no.

1. What amount per day is being paid to Messrs. Watson and Perron, as counsel for the prosecution of the inquiry before Judge

Cassels?

2. Are they now at work, and will their work be continued during the time the court is adjourned?

1. Mr. Watson is to be paid a retaining fee dependant upon the extent of the inquiry and $100 a day with necessary out of pocket expenses.

No arrangement has yet been made with Mr. Perron as to the amount of his fees.

2. The government is not informed whether counsel are now at work, but it is inevitable that considerable work 'will have to be done at times when the commissioner is not sitting for the actual hearing of evidence.