Mr. MEIGHEN:
Show me in the specifications Where they are debarred.
Mr. GERMAN:
In regard to the traffic, the hon. member for South Renfrew said that according to Mr. Tye, 8-05
10 p.m. trains both ways each day would develop a traffic and an income sufficient not only to pay all the working expenses and the rental provided for in the agreement, but to leave a fair margin of profit as well. I am strong enough Canadian to say that when the seven-year term expires, not 8.05 trains a day only, but 8-05 trains a day both ways- yes, and double 8 05 trains a day both ways will be running on that line.
You will have to
change the Government first.
Mr. GERMAN:
I am inclined to think
the Government will be changed the very first time the people of the country are given an opportunity to do it, particularly when they thoroughly understand what the Government is doing in regard to this great national undertaking which they approved on two different occasions.
This country is big enough to maintain three transcontinental railways, and the Grand Trunk Pacific, being the best, will get the traffic. I do not wonder that the Canadian Pacific railway take a little umbrage at the high-class construction of the Transcontinental railway. I have heard men say, first-class engineers and leading railway men, that when the Grand Trunk Pacific railway is completed and in opera-136
tion, the Canadian Pacific railway will have to rebuild their line in order to compete with the Grand Trunk Pacific-and they are doing it now. They will have to rebuild their line and bring down their grades; any man who knows anything about railroad operation-and I know a little about it by reason of having talked to prominent railway men-knows that the railroad Which has the low grades gets the business and the railroad that has the high grades does not. My hon. friend dealt with the question of tenders, and in that connection I wish to make a reference or two to this precious document of Gutelius and Staunton, which says:
The rules adopted by the commission in advertising- for tenders, the unlimited security required to be furnished by the contractors, and the proposal to let the work for the most part in unreasonably large sections, resulted in only live contractors tendering for S06 miles of the railway, and eleven contracting firms secured all the work and sub-let it to upwards of 100 sub-contractors, who, had the work been divided into reasonably large sections and the security required in other governmental contracts only been exacted, would have in all probability competed in the bidding. As ah indication of the handsome profits derived by these eleven firms, it appears that they were paid $8,800,000 in profits for that part of their work which they let to sub-contractors.
They say that by making smaller sections a greater number of bids would have been put in and there would have been keener competition. I have heard that said in this House. There is no large work undertaken in this day of the world which is let out in small sections; that is a thing of the past, when work was done by horses and scrapers and ploughs and shovels and picks and wheelbarrows and wagons. Then you would let out work in small sections. But now,' when the work is done by means of steam shovels, steam drills and steam derricks, big sections have to be advertised. Why? Because the cost of the plant is so enormous that unless a contractor is offered a big section he will not bid, he will not take a small section. A contractor must have a section big enough to allow him to pay for his plant at least. The Welland canal has been referred to. I know something about that. I remember that when the present Welland canal was built, it was let out in small sections and hundreds of contractors were at work up and down the canal, many of them failing continually, and the Government was in trouble all the time with small contractors. What happens now? They are building a new ship canal with thirty-foot draft and enormous
locks, a canal which it is estimated will cost $50,000,000. It is divided into nine sections of an average of a little over $5,000,000 a section. There is one section, it is true, which is a very short one, only a mile in length, in which the work will cost $10,000,000. That had to be let in one section. There will be another section or two which will be short, but will cost a large amount of money. The average is over $5,000,000. What happened? Every small contractor in western Canada, yes, in the whole of Canada, began to inquire how the work was to be let, whether in small or large sections. Many of them came to me, and I inquired from Mr. Weller, chief engineer of the canal, what was going to be done. He said: I am certainly going to let that work in sections large enough to permit the contractor to pay for his plant at least during the course of construction. And so he has done. There was a great howl. The Minister of Railways had considerable trouble with his own party friends, who endeavoured to force him to have Mr. Weller divide this up into smaller sections so that smaller men could get the jobs. Mr. Weller said no, and Mr. Cochrane, the Minister of Railways and Canals, very properly backed him up in that and said it must be let in big sections so as to secure as prompt a construction of that work as possible. That is the only way in which a great work of that kind can be accomplished. That work is being let in nine sections. Only four contracts have been let but the sub-letting is going on now and always will. No large work has been done without sub-contracting. Take the Erie canal from Buffalo to Albany. That was let in enormous sections and there was not a section that was not sub-let, practically throughout its whole length.
Let us see what these tenders are. I intend to place on ' Hansard ' the successful tenderers, their prices and how those prices compared with the engineer's estimate and with the next lowest bidder. The commission stated that there were only a few tenderers so that it was divided up among a very few people, that there was no keen competition and that these contracts were given to the friends of the commissioners. The contracts were as follows:
Contract No. 1-
Engineer's estimate, $1,017,051.
Lowest tenderer, Grand Trunk Pacific Railway Company.
Awarded to Grand Trunk Pacific Railway Company at $989,895.
Below engineer's estimate by $28,000.
Below next lowest bidder by $157,020. Number of bidders, 3.
Contract No. 2-
Engineer's estimate, $326,341.
Lowest tenderer, J. W. McManus Co., Ltd. Awarded to J. W. McManus Co., Ltd., at $289,190.
Below engineer's estimate, $37,000.
Below next lowest bidder, $35,000.
Number of bidders, 4.
Contract No. 3-[DOT]
Engineer's estimate, $933,137.
Lowest tenderer, Grand Trunk Pacific Railway Company.
Awarded to Grand Trunk Pacific Railway Company at $767,434.
Below engineer's estimate, $166,000. Contract No. 4-
Engineer's estimate, $2,356,389.
Lowest tenderer, Grand Trunk Pacific Railway Company.
Awarded to Grand Trunk Pacific Railway Company at $1,898,124.
Below engineer's estimace, $600,000.
Below next lowest bidder, $103,000.
Number of bidders, 2.
Contract No 5
Engineer's estimate, $2,232,891.
Lowest tenderer, Kitehon Company. Awarded to Willard Kitehon Company at $1,646,253.
Below engineer's estimate, $600,000.
Below next lowest bidder, $48,372. [DOT]
Number of bidders, 7.
Contract No. 6-
Engineer's estimate, $1,478,395.
Lowest tenderer, Lyons and White. Awarded to Lyons and White at $1,385,941. Below engineer's estimate, $93,000.
Below next lowest bidder, $21,408.
Number of bidders, 6.
Contract No. 7-
Engineer's estimate, $3,139,367.
Lowest tenderer, M. P. and J. T. Davis. Awarded to M. P. and J. T. Davis at $2,377,409.
Below engineer's estimate, $700,000.
Below next lowest bidder, $135,079. Number of bidders, 3.
Contrast No. 8-
Engineer's estimate, $5,491,974.
Lowest tenderer, M. P. and J. T. Davis. Awarded to M. P. and J. T. Davis at $5,011,346.
Below engineer's estimate, $480,000.
Below next lowest bidder, $7,208.
Number of bidders, 4.
Contracts 9 and 10-
Awarded as one contract to Hogan & Macdonell.
Engineer's estimate, $6,172,000.
Lowest bidder, Hogan & McDonald, $5,279,000.
Below the engineer's estimate by $800,000. Below the next lowest bidder by $260,000. Number of bidders, six.
Contract No. 11-
Awarded to the Grand Tunk Pacific Railway Company.
Engineer's estimate, $1,776,000.
Lowest bidder, Grand Trunk Pacific Railway Company, $1,691,000.
Below the engineer's estimate by $85,000. Below the next lowest bidder by $260,000. Number of bidders, 3.
Contract No. 12-
Awarded to Macdonald & O'Brien. Engineer's estimate, $5,715,000.
Lowest bidder, Macdonell & O'Brien, $4,599,000.
Below the engineer's estimate by about
Below the next lowest bidder by $324,000. Number of bidders, 2.
Contract 13-
Awarded to Macdonell & O'Brien. Engineers estimate, $4,000,000.
Lowest bidder, Macdonell & O'Brien, $3,815,000.
Below the engineer's estimate by $200,000. Below the next lowest bidder by $61,000. Number of bidders, 2.
Contract No. 14-*
Awarded to the Grand Trunk Pacific Railway Company.
Engineer's estimate, $3,985,000.
Lowest bidder, Grand Trunk Pacific Railway Company, $3,986,000.
Above the engineer's estimate by about
Below the next lowest bidder by $436,000. Number of bidders, 2.
This is the first contract where the lowest bidder was above the engineer's estimate. The next lowest bidder to the Grand Trunk Pacific Railway Company was the Pacific Construction Company, (E. F. Fauquier). Mr. Gutelius said that this contract should not have been awarded to the Grand Trunk Pacific Railway Company but to E. F. Fauquier (the Pacific Construction Company). In that case the country would have lost $436,000.
Contract No. 15-
Awarded to E. F. & G. E. Fauquier. Engineer's estimate, $4,124,000.
Lowest bidder, E. F. & G. E. Fauquier, $3,936,000.
Below the engineer's estimate by about
Below the next lowest bidder by $379,000. Number of bidders, 2.
We now come to contract Nos. 16 and 17, which have created such a disturbance in the minds of hon. gentlemen opposite. I will state the figures and come back to the suggestions of the Solicitor General in regard to these two contracts afterwards.
Contract No. 16-
Awarded to M. P. & J. T. Davis. Engineer's estimate, $3,224,000.
Lowest bidder, M. P. & J. T. Davis, $3,308,000.
Above the engineer's estimate by about $60,000.
Below the next lowest bidder by $94,536. Number of bidders, 2.
Contract No. 17-
Awarded to M. P. & J. T. Davis. Engineer's estimate, $2,004,000.
Lowest bidder, M. P. & J. T. Davis, $2,019,000.
Above the engineer's estimate by $15,000. Below the next lowest bidder by $80,000. Number of bidders, 2.
136}
Mr. J. E. ARMSTRONG:
Would the hon. member be good enough to give the actual cost on these contracts, instead of the estimates which are practically a guess?
Mr. GERMAN:
If my hon. friend wants the actual cost he will have to go to the Transcontinental Commission as this report does not give it, by any manner of means. The returns sent in to the Transcontinental Commission by the engineers will show the actual cost.
Mr. J. E. ARMSTRONG:
The report gives the actual cost up to the date of publication.
Mr. GERMAN:
My hon. friend has got
the report before him; he can look at it if he wants. I say it does not give the cost of the work up to the present time. You can only ascertain that from the progress estimates sent in from time to time by the engineers on the work.
Mr. ARMSTRONG:
It gives the actual
cost up to the date of that report.
Mr. GERMAN:
My hon. friend can read it if he wants to. I am giving the engineer's estimate in charge of the work, that is, the chief engineer of the Transcontinental Commission. I am giving the amount of the tenders and the number of the tenderers, to show that in every case the lowes bidder got the contract and in every case was far and away below the engineer's estimate.
Contract No. 18-
Awarded to E. F. & G. E. Fauquier.
Engineer's estimate, $2,326,000.
Lowest bidder, E. F. & G. E. Fauquier,
Below the engineer's estimate by $225,000.
Below the next lowest bidder by $91,000.
Number of bidders, 4.
Contract No. 19-
Awarded to O'Brien & Fowler.
Engineer's estimate, $7,864,000.
Lowest bidder, O'Brien & Fowler, $5,967,000.
Below the engineer's estimate by $1,900,000.
Below the next lowest bidder by $436,000.
Number of bidders, 4.
Contract No. 20a-
Awarded to O'Brien & McDougall.
Engineer's estimate, $1,513,000.
Lowest bidder, O'Brien & McDougall, $1,158,000.
Below the engineer's estimate by $400,000.
Below the next lowest bidder by $126,000.
Number of bidders, 2.
Now we come to contract No. 21, awarded to J. D. McArthur. Hon. gentlemen opposite have been throwing fire bags, I might say, at this contract, for which there were four bidders. I will give the figures:
Contract No. 21-
Awarded to J. D. McArthur.
Engineer's estimate, $13,756,000.
Lowest bidder, J. D. McArthur, $13,010,000.
is all very well for Gutelius and Lynch-Staunton to employ in Ottawa a couple of engineers to go over the sub-contracts which they got from the contractor and work out these figures given in the' report, but that is not doing the work. There is something else to do besides that. If my hon. friends opposite will look at the evidence of Mr. Arthur Moles-worth in the report they will find that the commission took the chance of asking Mr. Molesworth about profits received by sub-contractors, but they stopped there mighty quick.
Mr. GRAHAM:
They did not want
that.
Mr. GERMAN:
Mr. Molesworth told
them why the sub-contractors were losing money, and the contractors were actually paying the sub-contractors for their work rather than allow them to lose money. They were not bound to pay them, but they wanted the work to go on.
Mr. MURPHY:
Is that mentioned in the report? ; i ,
Mr. GERMAN:
That would not suit the complexion of these royal commissioners. It is not mentioned in the report, but it is in the evidence. Mr. Molesworth said: I knew that these sub-contractors were losing money. Mr. Lynch-Staunton stopped that sort of cross-examination at once; he said nothing about it in the report, and from the beginning to the end of the evidence he never asked another man that question. He never called a subcontractor to ask him whether or not the sub-contractors were losing money. Some of them probably were losing money. This, however, showts the character of the investigation. It is not an investigation.
I would not dignify it by that name. It is an inquiry to find out what kind of evidence could be obtained to build up a mountain of attack against the Liberal party and against the Grand Trunk Pacific Railway Company. I submit that this document will be a disgrace to the public archives of Canada as long as it stays there.
My hon. friend the Solicitor General said that a large amount of money was lost on the Cap Rouge viaduct. If he would read the evidence of Mr. M. P. Davis, he would see the whole cause of the difficulty. Cap Rouge is a neck of the river. There is tidal water there; the water rises from sixteen to eighteen feet.
There is a mud bottom. The contractors were to put in that tidal water a concrete foundation. The engineer of the commission and the engineers of the Grand Trunk Pacific decided that piles should be driven and an open caisson built on those piles. Messrs. M. P. and J. P. Davis got the contract and went down there to look over the work. In his
evidence, Mr. M. P. Davis said: I
will not be responsible for that foundation on an open caisson in that tidal water. 1 will not build it. You can take the contract and build it yourself. I will do the rest of the work if you wish me to or you can do the whole work yourself. When the engineers discussed the matter with him, he said that they should build the foundation using a pneumatic caisson. Mr. M. P. Davis is an expert on pneumatic caissons, one of the best in America and certainly the best in Canada. After the engineers of the commission and the engineers of the Grand Trunk Pacific had discussed the matter together, they decided that a pneumatic caisson was required. They built the pneumatic caisson and that is what made the extra expense. Yet Messrs. Gutelius and Lynch-Staunton criticised the commission for adopting the suggestions of engineers who knew fully as much as Mr. Gutelius and very much more than Mr. Lynch-Staunton in that regard.
My hon. friend speaks about the overbreak. There was a considerable amount of overbreak on the McArthur section, contract No. 21. My hon. friend said that $500,000 was deducted by the arbitrators under the old Government. I would like the House and the country to understand that long before Gutelius and Lynch-Staunton appeared on the scene, or had anything to do with this matter or knew anything about it, the whole matter had been settled by Mr. Schreiber, Mr. Gordon Grant and Mr. Kelleher. Gutelius and Lynch-Staunton say that there was over classification, great expense, two great returns, overbreak, &c. That whole matter had been settled by the board of arbitration before Gutelius and Lynch-Staunton appeared on the scene. Messrs. Gutelius and Lynch-Staunton asked a lot of questions in regard to matters which were all known to the commission and to the Grand Trunk Pacific Railway Company's engineers who made the complaint. Messrs. Gutelius and Lynch-Staunton report this as though they had discovered it. They say that they are the wonderful discoverers in this particular;
that they were appointed a royal commission to investigate; that they delved into this matter and dug up all this iniquitous transaction. That is not the case. The whole matter was known before the late Government went out of office and not only so, but the board of arbitrators went over the whole work; they settled the whole matter and settlements were made by the late Government, so far as they were made, on the report of that board.
I wonder if this Government could say the same. We will find out. Settlements were made by the late Government on the basis of that arbitration and award. These commissioners say: We find that all this money was paid out. There wa3 money paid out, but it was kept back out of these contractors by the former Government in the final settlement made with them, and kept back under the provisions of that award. Now, how about Mr. McArthur's contract? Mr. McArthur's evidence stated the amount in question at about $600,000. I found out today on positive authority, from men who know all about the transaction, that it was $550,000 that the arbitrators decided should be kept back from J. D. McArthur for overbreak and overclassification under that contract.
Mr. GRAHAM:
Under the late Government..
Mr. GERMAN:
Yes, under the late Government. McArthur kicked, and his subcontractors kicked, of course, for most of it came out of them land not out of McArthur. Now, let me call the attention of the Solicitor General to what happened. He says it was $660,000, but-
Mr. MEIGHEN:
It was that much more.
Mt. GERMAN:
After this Government
came into office they settled with Mr. McArthur for this overbreak and overclassification, and instead of settling on the basis of the award made by the arbitrators, the Government, or ratheT this great construction engineer, Mqjor Leonard, settled on the basis of $150,000 where the arbitrators declared that the basis should be $500,000, so that in this way, McArthur was given $400,000 of the people's money.
Mr. MEIGHEN:
I suppose the hon.
gentleman has the facts there. Will he please put them on ' Hansard? '
Mr. GERMAN:
I am putting them on
' Hansard ' by my statement. I have not got the documents here. But let the hon.
gentleman go to Mr. McArthur. Let him go to MajoT Leonard.