March 25, 1914

CON

William Sora Middlebro

Conservative (1867-1942)

Mr. MIDDLEBRO:

My hon. friend from St. Antoine (Mr. Ames) reminds me that when Mr. Davis got his control, and when

he was allowed to wait for a year without doing a single stroke of work on it, he started to hawk it about and to endeavour to sell it like any other commercial commodity.

He had a good thing from the commission and he knew it. He had good prices. He started to hawk the contract around. He said to one man: I will give you the contract if you will give me 20 per cent. He offered it to another man if he would give him 15 per cent. At last he gave it to Mr. O'Brien for 10 per cent. I will read Mr. O'Brien's evidence at page 529 of the report:

Q. When you took these contracts Nos. 16 and 17 east of lake Nipigon, oft the hands of Davis & Company, did you go over the work?- A. We sent a man over it.

Q. And you looked over it?-A. Yes.

Q. And you made a bargain with Davis to take it off his hands?-A. Yes.

Q. Were you substituted for him in the contract or are you sub-contractors under him?- A. I think if my memory serves me right, that we just stepped into Mr. Davis' place.

Q. And his security remained?-A. Yes.

Q. Did you put up any security?-A. Not in that case, we are paying our share of the amount.

Q. What do you mean by saying you are paying your share of the amount?-A. We would have to pay that money anyway.

Q. Do you mean to say that you pay the interest on the deposit?-A. Half of it.

Q. And you also pay Mr. Davis 10 per cent on the gross?-A. Yes.

Q. How much more did you pay him?-A. That is enough, I suppose.

Q. I think so, but I was just wondering how generous you might be?-A. It is conceded that I am generous. '

Q. On that work which you took from Mr. Davis, do you think you will have a fair profit? -A. Yes, I think we will make a fair profit.

Q. You took the contract after sending a man over the work?-R. Yes, sir.

Q. Did you negotiate this bargain with the Davises?-A. Well, I concluded it in Montreal.

Q. When you negotiated with the Davises, did they want any more than 10 per cent?-A. Yes.

Q. What did they ask you?-A. 15 per cent,

I think.

Q. Did they also ask you to pay interest on the deposit?-A. Well, you see it was like this: Mr. Davis' deposit was up. His deposit is there yet. I said to them, the first thing to do was to leave that undisturbed, the commission is paying 3 per cent for this deposit, and the money will cost us more. Of course we could not get it for 3 per cent so I suggested myself paying the other 3 per cent, which made 6 per cent and it cost Mr. Davis nothing. My suggestion was accepted and that is the way it stands.

Q. So that you and the Government are paying the interest on the deposit?-A. Quite true.

Q. And Davis gets clean and clear 10 per cent on the gross cost of the work?-A. Yes.

Q. How did you bring him down to 10 per cent and give away half a million dollars difference between the 10 per cent and the 15 per

jvIARCH 25, 1914

cent?-A. We would not give him more than that and besides there were others who were negotiating as well as us and they were not offering as much, so that I think we went a little better to get the work,

Q. As compared with the prices on the adjoining contracts, how do the prices on contracts 16 and 17 compare?-A. I think they compare favourably with the prices on the adjoining works.

Q. That is to say they are higher?-A. That is what I mean.

Q. You could afford to pay Davis 10 per cent on the gross cost and still make as well out of it as you did on the adjoining works?- A. That is my recollection of the figures.

Q. That is the way you viewed it?-A. Yes.

Yet my hon. friends wonder why the Transcontinental railway has cost so much. When they can let the contract in such a manner, on such terms and allow the contractor to hold the contract over for a yeaT until the prices come down to such an extent that he can make $740,000 without doing a single turn and then hand it over to Mr. M. J. O'Brien who can still make a reasonably fair profit on the work, is it any wonder why the Transcontinental cost so much? As I said before, the Grand Trunk Pacific, backed by the Grand Trunk, came in and took $17,000,000 worth of the contract. What for? Are they behind the commission too?

Have they the favoured entrance? Are they, with the Grand Trunk, the firm that can put up the money? They have never built a line of railway; they have never owned a shovel or a wheelbarrow. They did not build a foot of the Grand Trunk Pacific although they took $16,000,000 or $17,000,000 worth of the contract. They simply came in as the favoured contractor who could put up a depoisit; they signed their name and handed the contract over to the man who did the work and took a rake-off of $850,000. Yet my hon. friends opposite ask why the Transcontinental railway has cost so much. It was partly due to their unbusinesslike way in calling for tenders.

Let me give you another instance of why this railway ha3 cost so much. I do not intend to give many of these instances because they become tiresome, but I will just give one or two instances to show what I mean. Contract No. 11 was called for in the usual way. There were several tenders on the contract. The lowest was that of the Grand Trunk Pacific at $1,691,000. The next lowest tenderers were Macdonell and O'Brien at $260,000 higher. Remember that. The Grand Trunk Pacific did not do any work. They never intended to do any work, 1301

and they immediately began to look for somebody to whom they could hand over the contract. They sold the contract to whom? To the man who had bid $260,000 higher on a contract of $1,691,000. Macdonell and O'Brien said: We will throw

off the $260,000; we will come down to your figure of $1,691,000 and will give you 5 percent as well. They gave the Grand Trunk Pacific $105,000 to step out and then according to their own evidence, they made a profit of $500,000. Is it any wonder that the National Transcontinental railway has cost $100,000 a mile, when this is the manner in which the contracts have been let?

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CON

Hugh Boulton Morphy

Conservative (1867-1942)

Mr. MORPHY:

Does that principle run through all the work?

Mr. M1DDLEBRO: Yes. Perhaps one of the easiest ways of making money is for the engineer to certify that the common excavation is solid rock, and that is one of the hardest things to detect. If the engineer says that, he converts thirty cents into $1.50 for every cubic yard of material he certifies in that way. The strangest thing about this contract is, that, notwithstanding the fact that the Government had stacks of information, that they knew this country as well as they knew their cwn home, in almost every instance the estimated amount of common excavation largely was converted into solid rock. Here is one instance. In contract No. 10, the estimated solid rock was 779,000 cubic yards. By some inconceivable means that was converted into 2,712,000 cubic yards or four times as much as the estimate. Do not forget, however, that excavation in solid rock is worth five times as much as in common clay. The excavation in loose rock was estimated at 211,000 cubic yards. That was converted into 1,513,000 cubic yards. Then they estimated that there were 4,242,000 yards of common excavation; but because common excavation is poor paying work, they got that down to 1,501,000 cubic yards. So far as the quantity is concerned, they were fairly accurate. The estimate of the total quantity was 5,233,000 cubic yards, whereas the actual amount returned was

5,727,000 cubic yards. Nobody will find fault with that. If they made a mistake of even twenty per cent of the quantity, nobody would find any fault. They made practically no mistake in the quantity, but in the quality, and the difference between the two qualities is what produces the money. This is how it figures out. According to their estimate there would be solid rock excavation to the value of $1,169,000.

Remember that this is only in a contract for 100 miles.

They converted that into $4,068,000. According to their estimates there would be loose rock $105,000; they converted that into $756,000. According to their estimates there would be common excavation $890,000; they cut that down to $315,000, with the result that according to their estimates this 100 miles of cutting and filling which was to cost $2,000,000, cost $7,108,000.

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CON
CON

William Sora Middlebro

Conservative (1867-1942)

Mr. MIDDLEBRO:

O'Brien and Mc-

Dougall. O'Brien was the gentleman who put up the large deposit; the same man who took the contract over from Davis at ten per cent; the same man who took the contract from the Grand Trunk Pacific at five per cent and made $500,000. According to the calculation which I have given they made a profit of $1,275,000 on these three materials alone, and on the whole contract they made a profit of $1,547,000. Let us see what Mr. O'Brien himself says in regard to this; you can get no better evidence of recklessness and extravagance than the evidence under oath of the men who get the benefit of that recklessness and extravagance. Mr. O'Brien had contracts for work on the Transcontinental railway amounting to $26,000,000; I am going to -read what he himself said with regard to this classification. I quote from page 533 of the report:

Q. Did you ever get paid for clay, where you had the three classifications of solid rock, loose rock, and common excavation; did you ever get paid for clay with these classifications at solid rock price?-A. I have no recollection.

Q. If you signed a contract embodying the three classifications, solid rock, loose rock, and common excavation, in your most bountiful frame of mind you would never expect clay to be classified as solid rock?-A. Ordinary clay?

Q. Yes?-A. Oh, no.

Q. You would not have clay, no matter how hard, if it was not mixed with stones, classified as solid rock?-A. I think not.

Q. So therefore when you talk of solid rock you mean rock?-A. Do you means rock ledge?

Q. You mean rock, stone?-A. Yes.

Q. And when you talk of indurated clay, you expect that it is to be loose rock, don't you?- A. Well, it depends. As I said before if it is mixed with rocks of all sizes and kinds, then I think it should be classified as solid rock.

Q. Where did you ever get it before?-A. I never worked on specifications like that before.

Q. I am not talking about specifications, when, under Heaven, did any one ever pay you for clay mixed with rock of less size than a cubic yard, as solid rock, before the Transcontinental Railway Commissioners set the pace?- A. I have no recollection myself, except as I say in Nova Scotia in the eighties.

Q. In Nova Scotia, where you had signed a contract for solid rock, loose rock, and common excavation, did they ever pay you solid rock

[Mr. Middlebro. 1

prices for any kind of clay intermixed with stones of less than a cubic yard?-A. I have no recollection of it.

Q. You have no recollection, have you, of anybody or any railroad ever paying solid rock prices for clay intermingled with stones of less size than a cubic yard?-A. Well, where the stones are thickly assembled.

Q. Keep outside of the Transcontinental practice now, and give your answer?-A. I said before, so far as the other roads are concerned and under the specifications under which we were working, I had no recollection that it came that way, and perhaps we were not properly entitled to it.

Q. Have you worked for the Canadian Pacific railway?-A. Yes.

Q. Have you worked for the Canadian Northern railway?-A. Yes.

Q. Have you worked for these corporations in grading?-A. Yes.

Q. Now then, have you not, as a matter of fact, in the case of the Transcontinental railway, been paid for material as solid rock for which you were only paid as loose rock in these other cases, never mind the specifications now ?- A. I have no doubt as to that.

Q. That is right, is it?-A. That is right I believe.

Q. To use a familiar phrase, this assembled rock was a new one on you when you got Into the Transcontinental?-A. Do you mean that assembled rock is a new phrase?

Q. Yes?-A. Yes.

Q. It is a new phrase and a might good one for you, is it not?-A. It is very appropriate.

The contractor himself, therefore, admits that he got paid for material as solid rock which should not have been so -classified, and that he got paid for loose rock which should not have been so classified. In this way you will readily see that he would be overpaid to the extent of thousands of dollars, and the commission found upon this evidence-evidence which must be accepted, having been given by the persons most directly concerned-that $1,300,000 was lost to the country in that respect.

The hon. member for South Renfrew seems to think that because upon such evidence as this we complain of this loose classification, we are reflecting upon the staff of the Railway Commission and upon all the district engineers and subengineers connected with the work. That is not the point we -take. The point we take is that the head of the commission insisted upon these -classifications and the district and sub-engineers were bound to follow the instructions given. We charge that the commission smothered the opinions of Chief Engineer Lumsd-en and made him classify higher than he otherwise would have done. First Mr. Hodgins resigned because he refused to classify this material higher than he himself thought it should be classified. He was

kicked out, and Mr. Lumsden was appointed. Mr. Lumsden said his opinions were smothered and overridden, and he resigned because he was standing by the country and trying to resist the demands of the contractors. I will read part of his evidence, which appears on page 390 of the report, as follows:

Q. Will you tell us how you happened to be persuaded to make this compromise classification ?-A. While at La Tuque with the commissioners on their car, they brought up the subject of solid rock, the interpretation of the solid rock, and I then stated that my interpretation of it was that it meant rock in ledges, or boulders over a cubic yard, or masses of detached rock over a cubic yard. They all disagreed with me; that is, the commissioners and the contractors; and the only person who sided with me on that occasion was Mr. Woods, assistant chief engineer of the Grand Trunk Pacific. Then, after returning here, opinions were handed me by, I think, the chairman-I cannot be positive who handed me these opinions-of different K.C.'s on the interpretation of the specification.

He was smothered by the commission; he was smothered by the contractors; he was smothered with legal opinions; he was smothered out of his opinion that these men were getting more than they were entitled to get. Finally, he said that he could not remain in there with dignity to himself, and he resigned his position as chief engineer of the National Transcontinental railway.

Let me for a moment refer to a few other similar cases. I may say that I have not had time to make as thorough a preparation in this matter as the hon. member for South Renfrew did; most of what I am giving I have picked up since the debate began. This afternoon, while the hon. member for South Renfrew was referring to us as maligning the district engineers, I looked over this evidence myself for the purpose of observing the attitude of these engineers. And I find that, almost without exception, these sub-engineers come forward to this commission and say: We did not believe

in the classification that was forced on us, but we were bound to do it in that way following instructions from the head office, from the fountain head of authority. One can hardly blame them. Being in that position, earning their daily bread, if they did not do as they were told they would be told to get out. I wish to quote briefly from the evidence of one of these sub-engineers named Halliday.

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CON
CON

William Sora Middlebro

Conservative (1867-1942)

Mr. MIDDLEBRO:

We have a pretty good idea, but we cannot quite prove it yet. Mr. Halliday, at page 269 of the evidence, was asked:

Q. Could you consistently have given any solid rock for that material which was composed of clay and sand, which we call cementing material, and stones less than a cubic yard ?-

A. No, sir.

Q. So that the instructions and the assembled rock clause is your authority for calling this material which is composed of loose rock, clay and sand, solid rock ?-A. Yes.

That man says: I did not believe it was solid rock, I did not believe they were entitled to $1.50 per yard. I would not certify it, but I had my positive instructions from headquarters and could not do otherwise. We are not blaming that man, certainly we aTe not blaming him to the extent that we blame the commissioners who issued the instructions and who seemed to have in mind the fact that tlmy wanted to make the roaid cost as much as it could cost. I remomibeT reading in the Globe not very long ago a report of a meeting addressed by the hon,. member for South Renfrew before the Liberal club of Toronto University, and one poor innocent young Liberal there, the chairman of the meeting, in introducing Mt. Graham, said: Look what the Liberal party have done for Canada, enumerating the various policies but winding up by saying: Look at the huge amount of money they have spent on the Transcontinental railway. Even my hon. friend himself had to smile when he heard that-but he is justifying it all to-day.

I shall take the evidence of another of these sub-engineers, Mr. Dick, found at page 261 of the evidence:

Q. Can you conceive of anything else being included in it, if you confine it to rock ?-A. No.

Q. But you did include something else in it, did you not ?

A. Yes.

Q. In your personal opinion, ought there to be anything else included in it ?-A. Well, I have just classified according to my instructions. We got instructions supplementary to the specifications, giving the chief engineer's ruling, and were guided by those instructions.

Now, while he does not say specifically that that was because of the changed instructions, I think that the fair inference is that he had classified it in that way because he had instructions from the head office.

At page 278 we have the evidence of Mr. Black, who had had eleven years experience on the Canadian Pacific railway. He was asked:

Q. In the classification on the Canadian Pacific railway work did you ever classify such.

material as is known on the present work as assembled rock as solid rock ?-A. No, sir, not as solid rock.

Q. Did you ever know of any material which was not rock being- classified as solid rock on the Canadian Pacific railway ?-A. I never had a case. .

Q. You never heard of anyone else, either, classifying mixed material as solid rock ?-A. No, sir.

So in the whole report you will find the sub-engineers, with few exceptions, would not have classified this material as solid rock, if left to their own judgment.

I wish to say a word or two with reference to wooden trestles. My hon. friend from South Renfrew seems to claim now that it is not proper, economical railway policy to build standard wooden trestles when constructing a railway. I may say that the best v ay of estimating what is the most economical way of building a railway is to see what those men are doing who are experts in that line. The hon. member for South Renfrew has told us that Mr. Kelliher, engineer on the Grand Trunk Pacific, is a man whose experience and whose intelligence as a railway engineer cannot be questioned. He is am engineer of the Grand Trunk Pacific 'and the engineer supposed to be directing the building of the western section of that railway; and we must assume that the Grand Trunk Pacific, who will own* the road, are going to build it in the most economical fashion possible so that they can carry freight at the lowest possible rates. What do we find on the western section of this railway? Do we find all steel and concrete structures in their bridges and trestle work there? No, we do not. I have a letter heTe from Mr. C. Schreiber-and by the way the hon. membeT for South Renfrew will not question the accuracy of Mr. Schreiber's statement, because he said that he is one of the most reliable men we have on the railway engineering in Canada. If it is a good thing, an economical thing to do as we have been doing on the eastern section of the Transcontinental railway, that is to go in at once for expensive steel bridges instead of doing as is usually done, build trestles and fill them up afterwards when required, by train haul fill, when you can haul economically, can any one tell me why that course was not adopted on the western section? On the contrary, we find that on the western section, the Grand Trunk Pacific, who are building it themselves for their own use as their own road, in the most economical manner, built, on the prairie section, eleven steel bridges and 197 wooden bridges

and 1,687 wooden culverts. On the mountain section, they built 57 steel bridges and 209 wooden bridges and trestles and 1,388 wooden culverts. I think that proves conclusively that the proper, economical manner of building a railway to produce the best results and the cheapest freight rate is to do as those do who know what they are talking about, the Grand Trunk Pacific, the Grand Trunk railway and the engineers of those railways. It is evidently not the proper method to do as has been done on the eastern division, apparently for the purpose of increasing the cost in the first instance, building permanent steel structures from the first, thus increasing the cost and delaying the completion of the road.

I wish to speak briefly on the Transcona shops. I do not pretend to have studied the question of the Transcona shops from the legal standpoint, but what passes through my mind is that if it was intended that these shops were to be built by the Government, would there not have been some specific mention of an item which was to cost $4,500,000? In the second place, if it was intended that these shops were to be built by this Government and to be used exclusively for the eastern section of the Transcontinental railway, was it not reasonable to suppose that they would have limited their use to the rolling stock of the eastern division of the railway? What do we find? We find shops costing $4,500,000 placed at the end of the Government railway, placed at the centre of the complete railway from the Pacific down to Moncton. That looks to me very much as if the shops were intended to be used by the Grand Trunk Pacific for their western section, 1,800 miles, just as well as for their eastern section. In other words, we are supplying shops so large that they must be intended for the use not only of our own line but of the entire Grand Trunk Pacific line, the western line as well. The hon. member for South Renfrew says that these shops are admittedly larger than is called for for present use, but that they will provide for future development. Where will the future development come from? It cannot come from eastern section branch lines because we have no eastern section branch lines, and the development will have to come from the western section and its branch lines, such as that from lake Superior junction to Port William. The Grand Trunk Pacific ooimipany have now been authorized by this Parliament to build 8,000 miles of branch lines in the West. They have built 1,000 miles of branch lines. They have had the-'r

bonds guaranteed to the extent of $15,000,000 by the provinces of Alberta and Saskatchewan for the purpose of building these branch lines and these two provinces have authorized an issue of bonds for five more branches.

And these two provinces have authorized an issue of bonds for five more branches, and the inference is that those shops were put there at a cost of probably two or three million dollars more than they should have been, for the purpose of meeting the development of the western section of the Transcontinental railway and making the Government of Canada pay for it by placing it at the end of the eastern section.

My hon. friend has referred to the question of the letting of contracts for the Welland canal, which of course he is quite entitled to do. I want to say to my hon. friend that I have taken the trouble to look into those contracts to see the conditions of tendering there and I find that the contractors were asked to put up a certain deposit and they knew they could not be called upon to put up any more. They were not called upon to put up any more. Those deposits in the aggregate were less than five per cent of the aggregate contract price. What is the result? The result is that for the first section there were ten tenderers, for the second section seven, for the third section nine, and for the fourth section nine tenderers. With regard to the Grand Trunk Pacific there was one tenderer for one contract, and only two tenderers for each of the other eight contracts. In one case we have competition and no competition in the other, with the Tesult that the work of the Welland^ canal is all being constructed within the estimates of the Government engineers. That is the difference between the two contracts.

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CON

Thomas Wilson Crothers (Minister of Labour)

Conservative (1867-1942)

Mr. CROTHERS:

Less than the estimates.

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CON

William Sora Middlebro

Conservative (1867-1942)

Mt. MIDDLEBRO:

My hon. friend says at less than the estimates. I say they were at least within the estimates.

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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

Not built yet; it makes all the difference in the world.

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CON

William Sora Middlebro

Conservative (1867-1942)

Mr. MIDDLEBRO:

In conclusion, I think I have shown that this railway will never be able to reduce freight rates in the West because of its exceptional cost. If the Grand Trunk Pacific at any time are charged with having an excessive rate what will their answer be? They wil come before the Railway Commission and say: This railway has cost us $102,000 a mile, heTe are our working expenses, here are our

bonds and our stock; we are not able to pay a dividend nor even the rental and we cannot possibly reduce our freight rates. You are in the position then of having paid for something which does not answer the purpose for which it was intended and have paid three or four times the estimated cost. And this Government having been elected on the representations which they made to the people it is high time something was done by a commission for the purpose of letting the people know exactly what the railway is costing and the reasons therefor, and that there is no prospects in future of reduced railway rates in Canada by reason of its construction.

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LIB

Frank Broadstreet Carvell

Liberal

Mr. F. B. CARVELL (Carleton, N.B.):

At this very late hour, I hope my hon. friend will pardon me if I do not attempt to follow him in his very interesting historical references to things that took place ten years ago: matters of policy that have been discussed and rediscussed both in Parliament and in the country, questions of policy upon which two general elections were run, and decided adversely to the views of my hon. friend. I want to get down to the real question under discussion. Do not let us get away from the fact that the question we are discussing now is an amendment on going into Supply, condemning this Government for submitting to this House and the country the report of Messrs. Staunton and Gutelius in regard to the construction of the Transcontinental. So far as I am concerned, I will keep pretty close to that subject.

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LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

My hon. friend says,

hear, hear. I hope that when he has an opportunity to address the House, he will not do as my hon. friend from North Grey did, but will get down to brass tacks and talk about Mr. Gutelius and Mr. Staunton.

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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

Let Laurier finish his

work.

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LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

My hon. friend from Calgary seems to be somewhat excited.

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CON
LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

My hon. friend from

North Grey has discussed the real subject of the report to some extent, and before I am through I promise that I will try to answer any arguments he has put forward in reference to such matters as classification. When gentlemen opposite assumed the reins of office a little over two years ago, we all knew they were seized with a bum-

ing desire to create a scandal, if possible, out of the construction of this great national enterprise. By hook or crook a scandal must be created. Of course, the most important thing in the whole matter was to find the machinery by which to create the scandal. They hunted this country from one end to the other to get the men. Finally they got two men against whom, personally, I have not a word to say. One is a lawyer, a Tory, a would-be politician, from the city of Hamilton, a man who is stated to have said in this city before men who are in this city to-night, that it did his Tory heart good to get a chance to get after these horrible Grits. The other man is an engineer who was, I understand, originally a United States citizen. I am not saying anything against hiim on account of his citizenship because, if he possesses the proper engineering qualities, he is qualified to pass judgment on the work of the late Government and the late commission. He came to this country ten or twelve years ago, and shortly after coming here was employed by the Canadian Pacific Bailway Company to do a certain amount of work in the West. When that work was finished, this gentleman was taken to the head office in Montreal and placed in a position of some responsibility, I admit. I understand he was assistant to the chief engineer. That chief engineer resigned and went back to the United States, but Mr. Gutelius was not promoted to the vacancy. Another man was appointed, and Mr. Gutelius still remained in his old position. That man retired, and still Mr. Gutelius was not promoted. After remaining in the office in Montreal for some time, with no experience whatever in field work, classification or construction work, simply doing ordinary routine work in the office, Mr. Gutelius was taken out of the engineering department of the railway and sent to North Bay in the operating department, and made divisional superintendent in a road which was completed twenty-five years ago. All he had to do was to report on what went on from day to day, and month to month, a position which has frequently been referred to as the bone-yard by engineers and railway employees of that great company. For some strange reason not made public, this is the gentleman whom my hon. friend the Minister of Bailways took up out of the woods around North Bay and brought down here, not only to blacken, if possible, the character of the late Government that is a small matter-but to make

a report which has done Canada more harm and will do Canada more harm than this Government could do it good in ten years. The report has gone out to the people of this country and to the financiers of the world from whom we borrow money, that the Grand Trunk Pacific can never possibly earn enough money to pay its expenses and interest. It has placed the Grand Trunk in a position where they will find it almost impossible to borrow more money. It has told the people of this country that we have squandered $40,000,000 of money. It has done this country incalculable injury. These are the two gentlemen employed by my hon. friend to make this report, and it is with this report, and this report alone, that I wish to deal in the few remarks I shall make.

We know that some four or five months ago an inspired article appeared one morning in the Conservative press throughout this country to the effect that the Investigating Commission had found that something like $44,000,000 or $45,000,000 had been absolutely wasted, and worse than wasted, in the construction of the Transcontinental. That was heralded all over the country, and sent to Europe, to the United States, in fact all over the world.

The hon. member for Mackenzie (Mr. Cash), at the beginning of this session, produced' here a paper published in Los Angeles, California, with a great big headline declaring that: The Liberal Government of Canada stole $45,000,000. Then you will remember that we had the further statement in the Conservative press of this country that the Liberal party had stolen a lot of money. Finally they screwed up their courage sufficiently to bring down a sort of synopsis of what the report was going to be and they sent that broadcast over the country. If you want yellow journalism in its very essence-yes, in its quintessence-go into the library and get the front page of the Montreal Star the morning after that statement appeared. All the lesser Tory journalistic lights throughout the country published practically the same report only they could not afford as much space and they could not put on as big headlines.

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LIB
LIB

Frank Broadstreet Carvell

Liberal

Mr. CAEVELL:

My hon. friend (Mr. Murphy) says there was not as much in it for them, but in so far as it paid them

they pursued exactly the same tactics all over Canada. We at once wanted the evidence upon which this most wonderful report had been made. We were told that they would get it for us as soon as they could. The evidence was being printed in a newspaper office in the city of 'Montreal and, day by day, as the evidence was printed, certain deductions from the evidence were dribbled -out to the Tory newspapers and the people of Canada were flooded with these unfair and dishonest statements for over a fortnight before we even could get the documents in our hands. Finally we got.the documents in our hands and wanted to discuss them a week ago in order to place the matter before the country at the earliest possible moment, but we were politely asked to allow it to stand over for another week and of course we had to consent.

Now we are here to discuss this matter but after the wonderful and masterly speech made by my hon. friend from South Renfrew (Mr. Graham) yesterday and this afternoon, it is almost unnecessary for any hon. member of this House to take up any further time. But in order that we may supplement, if it be possible,- to some extent, the exhaustive statement made by my hon. friend from South Renfrew, I desire to say a few words upon this important question. In so far as I am concerned, and I think I am speaking for all my hon. friends on this side of the House, we intend to give the truth of this matter to the people of Canada. We hope that this truth will filter beyond the bounds of Canada and that those people in other parts of the civilized world who have read the false and damaging statements sent out as a result of this report will be to some extent placed in possession of the facts and that they will entertain a somewhat different view of the people of this country than that which no .doubt many of them have entertained as a consequence of reading these reports.

I have read every word of the evidence which has been submitted to us and if one will refer to that evidence he will find that these two commissioners were obsessed by certain ideas. They had not bees in their bonnets but one would imagine that they might almost have had wheels in their heads. Mr. Lynch-Staunton had but one theory and that was to prove by every witness that there had been overclassification and that the overclassification existed in allowing as solid rock what has been called

assembled rock and also the converting of what he called common excavation into loose rock. Mr. Gutelius, on the other hand, did not care two straws about classification but his theory was: Wooden trestles and

velocity grades. That is the substance of the examination of all the witnesses by these two gentlemen.

I was not only pleased, but somewhat surprised, something like a week ago, in attending a dinner given by McGill students in Montreal at a statement made by Mr. C. H. Cahan, a gentleman well known to the right hon. Prime Minister (Mr. Borden), a gentleman well known all over eastern Canada as a lawyer of repute and not merely a lawyer of repute, but, as he stated on that occasion, a Tory of the Tories, a man who had opposed the Liberal party 'all his life and who was the leader of the local Conservative Opposition in Nova Scotia for some years. My hon. friend may have seen in the newspapers what the hon. gentleman stated on that occasion. The newspapers did not put it half as strongly as Mr. Cahan stated it but he said that it was not playing the game fair, as the hon. Minister of Trade and Commerce (Mr. Foster) used to say to us, by means of a star-chamber investigation_ to take people before them without the assistance of counsel and to get information which was false, which characterized one-half of the people as dishonest and the leader of a great party as being responsible foT this condition. It was not playing the game fair, he said, to send these reports broadcast'over Canada and over the civilized world. Let any man acquainted with the principles of fairness and justice recognized in courts of law in getting at the facts of a case, read this evidence through, and he will come to the conclusion that there has been a determined attempt to paint the picture as black as it could be painted. If you read this evidence through you will find that these two gentlemen have acted, in the prosecution of this inquiry, very ' much in the regular police court style.

They brought witnesses before them, and practically all the witnesses, except three or four, were men in their own employ who were being examined, men with families that had to be fed, men whose positions meant something to them and men to whom it meant a good deal to ^ be summarily dismissed from the positions that they occupied as resident engineers. This was the class of men that these gentlemen brought before them. This was the class

of men who were dragooned, in so far as it was possible, into making statements which would bear out the theories of these two inquisitors, because I cannot call them commissioners. If my hon. friends want an illustration of the manner in which these witnesses were treated I would refer them to a witness by the name of Mr. Charlton. I do not know who Mr. Charlton is, but we find his evidence at page 225 of the case. Hon. gentlemen will find evidence extending over four or five pages showing that Mr. Lynch-Staunton went at him ten times, and Mr. Gutelius ten times. They had to take ten runs at the man in order to get him to give the kind of evidence they wanted. The kind of inquisition which they conducted regarding this man practically characterized their treatment of every man who appeared before them. There was a deliberate attempt to bulldose the men under their control, to bulldose the men to whom they were paying money, to bulldose the men who were looking to them for a living and this was done in order to induce them to make statements to carry out the pet theories of these two inquisitors.

There is one thing that I will give these two gentlemen some degree of credit for and that is that they have carefully avoided making the direct statement that there was fraud on the part of anybody from the head man down to the resident engineers.

I submit that you can read that report from cover to cover and you cannot find a solitary statement imputing fraud to anybody. You do find there statement after statement that the road cost more money than it should have cost. You find statement after statement that if wooden trestles had been used instead of solid fills it would have cost less money. You do not have to go to Mr. Staunton or Mr. Gutelius to have them tell you that. Why, any ordinary farmer in the country could tell you that.

Topic:   THE NATIONAL TRANSCONTINENTAL RAILWAY.
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LIB

Henri Sévérin Béland

Liberal

Mr. BELAND:

And you would not have to pay him so much for the information.

Topic:   THE NATIONAL TRANSCONTINENTAL RAILWAY.
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March 25, 1914