July 17, 1908 (10th Parliament, 4th Session)


William Frederic Kay

Mr. A. K.

MACLEAN (Lunenburg) presented the report of the Select Committee appointed for the purpose of investigating the conditions and guarantee under which the government of Canada paid moneys to the Quebec Bridge and Railway Company.
Mr. WILLIAM CHISHOLM (Antigonish) moved that the report be concurred in. He said : As we are within a few hours of prorogaton, it would not be fair to the House
for me to make any very extended remarks on this question. However, at the risk of wearying the House, I propose to make a few observations regarding it. The question of the construction of a bridge across the River St. Lawrence is an old question- one that has agitated the people of the province of Quebec, the city of Quebec particularly, for very many years. Indeed, about the time of confederation a report was made by an eminent engineer on the feasibility of a bridge at or near Quebec. Several times afterwards the question of bridging the St. Lawrence came up, and reports were made upon it, the tenor of which was that the project was a perfectly feasible one. In 1887 the Quebec Bridge Company was incorporated, and, as is usual in such cases, its charter was renewed from time to time. The company approached the then government of Canada and also the provincial and municipal authorities with a view to obtaining aid for the construction of such bridge, and assurances were given from time to time that upon its being shown that the scheme was a feasible and proper one, the necessary assistance would be rendered. Again and again Sir Charles Tupper and Sir John A. Macdonald promised assistance if the company would show that it was really in earnest. First when the bridge company was incorporated the capital stock was $1,000,000. It is alleged that this capital stock was very small for such a large enterprise.
It is true the enterprise was a large one, the construction of the greatest bridge ever undertaken, but I should have thought >that the time to discuss the question of the sufficiency of the capital stock was at the time of the incorporation of the Quebec Bridge Company. 1 do not think, however, this is a matter with which we need to " concern ourselves at present. The bridge company was incorporated in 1887 and there was subsequent legislation revising and amending the terms of the company's charter. In 1889, a subsidy of $1,000,000 was voted by the parliament of Canada, as set odt in this report, for the Quebec Bridge Company. Of this $1,000,000, $374,353 was eventually disbursed to the company. The assistance given by the Quebec government was $250,000 and the city of Quebec gave a subvention of $300,000 so that really this company started out, although its paid up capital was somewhat small for such a large enterprise * with assets to the extent of $1,550,000 in addition to its capital stock of $1,000,000 of subvention from the Dominion government, $300,000 from the city of Quebec and $250,000 from the province of Quebec as subventions, indicate that the scheme must then have been recognized as a wise, prudent and patriotic one, and the company capable of carrying out the scheme. The fact j that the city of Quebec and the province of Quebec contributed as liberally as they did goes to show what faith they had in this enterprise. When the Quebec Bridge Company

had approached the late government the answer in every case was : Show your good faith, show your sincerity in this scheme, by contributing yourselves. Therefore that company was incorporated and the citizens of Quebec, irrespective of politics, actuated mainly by patriotic views and by the desire to have this route across the St. Lawrence which would be not only of national importance but of great local importance contributed towards the scheme. It is true they contributed in small sums in many cases but this goes to show that this was not one of the wild-cat schemes we too frequently see, but was a genuine scheme. The list of shareholders contains the names of some of the very best men of the province and city of Quebec-merchants, bank presidents, vicepresidents and directors, presidents and vicepresidents of railways, Conservatives and Liberals alike.
In 1900, the Quebec Bridge and Railway Company entered into a contract with M. P. Davis for the construction of a substructure and in 1903 entered into a contract with the Phoenix Bridge Company of Phoenixville, Pa., for the construction of the superstructure. Before the company entered into the contract for the superstructure, tenders were asked from various bridge companies in America. Tenders were called for by public advertisement throughout Canada and the United States. Quite a number of plans and oilers were submitted by different companies. The determination of which was the best plan to adopt was a matter of vital importance. Inquiries were made as to the most competent engineers on the continent and the directorate of the Quebec Bridge Company after most careful considr eration of the information obtained became convinced that Mr. Theodore Cooper was the most eminent and competent engineer in America. The plans were submitted to him, he examined them all and ultimately arrived at the conclusion that the best plan to adopt was that submitted by the Phoenix Bridge Company, and he so advised the directorate of the Quebec Bridge Company. It is not alleged and cannot be alleged that the Quebec Bridge Company did not take all necessary precautions to ascertain the best plan and scheme for the construction of the proposed bridge, and to have it constructed on the best terms possible. In fact it is quite sufficient to say that such men as the directors of the Quebec Bridge Company, business men of experience as they are, would of course take all precautions. There is abundant evidence that they proceeded with the greatest care with respect to the selection of a plan and getting a company to build this work, as indeed they did proceed, in all the different matters with which they had to do.
As to Mr. Cooper, the report of the Royal Commission which investigated the causes of the collapse of the bridge speaks of him in the most complimentary words. It is Mr. W. CHISHOLM.
admitted on all sides that he is and was regarded at that time as the best authority who could be secured. The plans submitted by the Phoenix Bridge Company were prepared by Mr. Szlapka, the designing engineer for the Phoenix Bridge Company. After the plans had been prepared they were submitted to Mr. Cooper who carefully examined them. They were also submitted to a government engineer, Mr. Schreiber. It will be observed that the greatest care and caution were exercisd by the government to see that the plans were properly drawn; they were not satisfied with the opinion of their own engineer but called in a more expert and eminent scientific authority iu whom they might have the fullest confidence. They therefore selected Mr. Theodore Cooper. On October 19, 1903, an agreement was entered into between the government of Canada, and the Quebec Bridge and Railway Company which provided, among other things, that the company should release any claim it had to any unpaid balance of the subsidy of $1,000,000 voted in 1899. The government of Canada agreed to guarantee the bonds of the company, not to exceed in amount $6,678,200, which amount was considered necessary to meet the liabilities of the company as at that date, and to complete the construction of the bridge.
It is alleged that at that time the government should have taken over the assets of the bridge company. In what better position would the government have been in if they had done so? The Quebec Bridge Company, it must be admitted! on all sides, had constructed the work up to that date as economically and carefully as possible. It was their interest to do so. The evidence, I am sure, shows that they exercised the greatest care and had carried on the construction in the most businesslike way. Could the government have done better ? I submit, it could not. I submit that for every dollar expended there was a dollar of work there. In fact, I go further and say that, according to. the testimony of Mr. Parent, the bridge company had got for about one and one quarter million dollars substructure and approaches for which the government would have paid at least two million dollars. One can readily understand how that could be ; the work would be conducted more economically by a comnany than by the government. I do not mean to say that government works are constructed extravagantly or that in all cases it is inadvisable to have work done by the government: but we must admit that often, and particularly in the case of these very large works, a company can build more economically than the government can.
Now, it is alleged that when the government undertook to guarantee the bonds of the Quebec Bridge Company, they did not take sufficient precautions iu the way of

providing a competent engineer to look after their interests in the work. What happened ? Immediately after the government became responsible under this agreement of 1903, it provided for the appointment of an engineer to look after the government's interests. The minority report states that an order in council was passed that such an engineer should be appointed. I believe that is true. It was not true, however, that it was on the suggestion of the Quebec Bridge Company's consulting engineer or of the bridge company, this course was not pursued, that is, that the employment of an expert bridge engineer who was to act independently on behalf of the governemnt was dispensed with. Now, that is not correct. The evidence is entirely the other way I would refer to the evidence of Mr. Parent at page 181 :
Q. When the difficulty arose about the employment of an expert, by Mir. Sohreiber, why did not the bridge company insist that such expert be appointed and act so that the company might benefit by the advice of that expert, without having to pay the cost of an investigation ?
A. The bridge company never objected to that; on the contrary, it was favourable to the government's suggestion. I met Mr. Cooper myself in regard to that matter, .in New York; Mr. Cooper objected entirely to Mr. Niohol being associated with him in the construction of the bridge.
Mr. Nichol was the engineer suggested to the government by Mr. Scbreiber. So far as -the bridge company was concerned they interposed not the slightest objection to the employment by the government of Mr. Nichol or any other man. But Mr. Cooper did object to any other engineer being associated with him. Mr. Parent went to New York to see Mr. Cooper and tried to persuade him that it was proper the government should have an engineer. But he objected to any one

-ho even went so faT as to say hat if we insisted he would resign his position. He even came to Canada to meet Mr. Sohreiber and discuss the question; the government had to choose between the resignation of Mr. Cooper and ithe appointment of Mr. Nichol.
You will Observe therefore, that the statement of the minority report, that the bridge company's consulting engineer objected to or prevented the selection of an independent engineer is at variance with the facts. And further on :
Q. Why could Mr. Cooper object to the government employing the person it desired to employ in order to assure itself of the efficacy of the plans?-A. The reasons given by Mr. Cooper were these: If the government appoints an expert or a bridge engineer, that man might probably take upon himself to do certain things or to give instructions during the building -that -might -clash with that which I might myself do; and as the affair is a large one I do not w-isth that any one but -my-self should interfere in the control of the entire
construction. His fear was that suoh a man might give instructions contrary to his own. Mr. Cooper considered -at the time that Mr. Ho-are was all he -needed and that the latter would not -taike_ upon himself to do -anything without consulting him.
Now, what could the government do under these circumstances ? If it persisted in taking Mr. Nichol, who, it is admitted, was not as competent, by any manner of means, who had not so high a reputation as an engineer as Mr. Cooner, they would have lost the services of the latter. Then, if the bridge had gone down as it very likely would have the government would have been accused of negligence ; it would have been said that they failed to avail them-sedves of the service of the most competent man and had taken a second rate man. This is clearly set forth in the evidence of Mr. Parent, who said :
Q. If the expert the government had decided to employ had found out the defects in the plans that have caused the disaster, would it not have been -a good -thing?-A. Here is what might have happened: Mr. Coo-per pretended that there was no man -w-ho could go over his work and I think that -w-as pretty much the opinion of eminent engineers at that time; and on the other hand, if the government had -appointed Mr. Nichol, if Mr. Cooper -h-ad resigned and that -the accident of -the 29th August had taken place all the same, the government would have been blamed far more for having set Mr. Cooper aside, he who -was considered the best of authorities-to take Mr. Nichol, -wiho was not such; the situation would then have been worse.
Therefore, the action of the government in continuing Mr. Cooper and not selecting Mr. Nichol is quite justified by the facts. And why should not Mr. Cooper have been continued ? It is true, he was the consulting engineer of the Quebec bridge company. But it is observed that the Quebec Bridge Company's interest and the government's interests were identical. If Mr. Cooper had been the Phoenix Company's engineer, it would have been a different case, for their interest and that of the government might have not always been the same. The Quebec Bridge Company's interest and the government's interest coincided, and the engineer employed was the most eminent engineer to be found in America. And this man's services were continued.
Now, I come to another point. In the agreement in the Act of 1903, it is provided that before the government guarantees the bonds of the company, the company was to procure subscriptions to $200,000 additional stock. I may say that the company had delivered bonds to the extent of $472,000 to M. P. Davis for amount due on the substructure. These bonds were sold at 60 cents to Mr. Davis himself, who was the only person then to accept them.
The discount of forty per cent, that is to say the difference between par

and the price at which the bonds were sold to Mr. Davis, the contractor for the substructure, had, according to the terms of the agreement referred to between the government and the company to be paid up by the stockholders before the government guaranteed the bonds. What happened with regard to that? It is alleged that the whole amount of $200,000 of stock was not actually paid up before the bonds were guaranteed. The way that happens is set out in the majority report, clause 7 :
It was urged before the committee that contrary to the provisions of the agreement ratified by chapter 54 of tho Acts 1903, the issue of the said bonds preceded the payment of the $200,000 of additional stock by reason of the fact that a cheque of M. P., Davis given in payment of subscription stock, in the sum of $94,900 was not immediately converted into ^ cash and that there was therefore, in this respect, not a compliance by the company with section 4 of the agreement of October 19, 1903.
The company regarded this cheque as cash and so certified to the government and (hereupon the government became guarantor of the bonds. The directors did not deem it advisable that the contractor should be too large a holder of this stock.
It was agreed by the Grand Trunk Railway Company that it would take up a certain amount, and it was expected that the Quebec Central Railway Company would also have taken a certain amount of-this stock, and in that way the amount of stock in Mr. Davis' hands would be lessened. It was a wise precaution for the directors to endeavour to prevent the contractor having the control of the stock to be issued and paid up. When they got his cheque for $112,000 they regarded it as cash, although they did not cash it and deposit the proceeds. They expected, as I have said, the Grand Trunk Railway to take a portion and the Quebec Central another portion of these 112,000 shares. The Grand Trunk did come later on and take a portion of this stock, paid for the same and a new cheque was given by Mr. Davis for $94,900, the original cheque having been returned to him. That is to say, Mr. Davis first paid up $112,000 for the new stock by giving his cheque therefor, but the Grand Trunk took the difference later on, and Mr. Davis' stock came down to $94,900. The Quebec Central, it was expected, would take over a certain other portion of this 94,900 shares, but it happened that the Quebec Central was not in a position to do so owing to the fact that its charter did not permit it at that time to purchase stock. Later on this company did actually buy stock from the Hon. John Sharpies. As soon as it became apparent that nobody else would take any portion of the 94,900 shares, the bridge company cashed the cheque of M. P. Davis. The question arises as to whether that cheque should be regarded as cash. The Mr. W. CHISHOLM.
Quebec Bridge Company did regard it as cash. The evidence of Mr. Price and Mr. Lemoine, who are gentlemen of the highest financial standing justifies one in holding that the cheque meant cash. At any rate the company did regard it as such. It was cashed and was placed to the credit of the company. The time when it was cashed is not material. I mention these facts to show why the cheque was held so long. The stock was issued to Mr. Davis just as soon as he gave his cheque. It was merely a matter of delay in going to the bank and getting the cheque cashed.
Now objection is made that the Quebec Bridge Company disposed of their bonds at 60 cents on the dollar. Regarding that it must appear to any person that these bonds must be disposed of at the highest price they would bring on the market. Now what is the evidence regarding the wisdom of selling these bonds at 60 cents on the dollar ? Take the evidence of Mr. Price. Mr. Price was a director of the old company, is a large lumber merchant and is associated in many commercial undertakings. He is also a leading Conservative in the city of Quebec and a man of high standing in that city. On page 94 he says this regarding the sale of bonds :
Q. Do you consider that a good bargain, or otherwise, made by the company from a purely business standpoint ?-A. Well, when you can only get one man to buy something that nobody else will buy you are generally satisfied with your bargain. ,
Q. Of course you have got to take the circumstances into consideration. Taking the circumstances that existed into consideration, do you consider that the company showed good business judgment in making this deal with Mr. Davis ?-A. Absolutely so, because if the substructure had been completed and the superstructure had never been completed, the bonds would be absolutely valueless.
Here is the opinion of Mr. Price, who says it was absolutely a good bargain. Then Mr. Gaspard -Lemoine, who is also one of the leading men in the city of Quebec, who was formerly president and vice-president of the Lake St. John Railway and now a director of the Quebec bank, says that was a good bargain, that in his opinion the Quebec company acted wisely in disposing of the bonds at 60 cents. In fact he says they could not get that much anywhere else. To the same effect is the testimony of Mr. Thomas McDougall, who was the banker with whom the bonds were deposited by Mr. Davis for advances. He says on page 126 of the evidence :
Q. Will you as a bank manager probably dealing in these matters, tell us what you think about it ?-A. Of course when we took this bond from Mr. Davis we took it as collateral security for his account which was a running account with us for the construction of the bridge. We did not go minutely into the exact value of it, Mr. Davis handed it to us and told us he had a good contract and we knew that he knew his business well.

Q. Give us your opinion as a banker, for Mr. Davis ?-A. As a banker I think he took very considerable chances on these bonds.
Q. As a banker you think he took very considerable chances in taking those bonds on his contract ?-A. Yes.
Q. Do you think that price could have been obtained in the bond market for them ?-A. Never.
To the same effect is the testimony of Mr. Scott and Mr. Duinoulin. Now as to the conduct of the affairs of the bridge company the evidence of the solicitor went to show that it was conducted on thorough business lines. The testimony to which I refer was the testimony of men whose judgment-and Integrity cannot be questioned and whose standing every man admits. They say that under the management of Mr. Parent the affairs of the Quebec Bridge Company were conducted in a thoroughly businesslike manner and it must be very gratifying to Mr. Parent to receive the testimony of such gentlemen as those who appeared before the committee. The opinion they gave of his management was Indeed very flattering and does high credit to the integrity and ability of the president of the Quebec Bridge Company, the present chairman of the Transcontinental Railway Commission. As far as the management is con-cernedj I think, it must be admitted on all sides that everything was done thoroughly and well.
Now, I come to the falling of the bridge.
It is true that the bridge fell but whose fault is it? It is not alleged that it was the fault of any party in so far as the actual work itself is concerned. The report of the Royal Commission is to the effect that it was due to a mistake on the part of Mr. Cooper, the consulting engineer. It is all very well to be wise after the fact but could anybody forsee that such a calamity would happen. If the government had undertaken to build that bridge would it not have proceeded in the same way? It appears now that the proper course would have been to have selected three competent engineers to direct and control the undertaking. That suggestion has been made in the report. But, if these three competent engineers are selected, have you any assurance that another accident may not occur ? Experience will be of great assistance In guiding these engineers but we have no assurance that the employment of even three of tlie most competent engineers, whoever they may be, will prevent an accident occurring. If the government had taken over the assets of the Quebec Bridge Company in 1903 it is reasonable to suppose that they would have done the very same thing in the matter of continuing the work that the Quebec Bridge Company did. These men who were at the head of the Quebec Bridge Company were men of eminent business ability and capacity. The accident is due to no fault of the Quebec Bridge I 424
Company. They exercised the greatest caution possible. It is alleged that Mr. Hoare did not possess the scientific skill that was necessary. Who could tell anything about Mr. Hoare's scientific skill or whether . he was defective in that regard at that time? You have to take Mr. iHoare as you find him. The Quebec Bridge Company knew that he was a man of extensive experience, that he was a man recognized as possessing great professional skill. He had been for thirty years engaged in general railway and bridge work. He had been with the company since its inception and lie was familiar with the development of this work. He supervised the building of the substructure. He did one of the finest pieces of work in the world. It is admitted that the substructure is one of the best pieces of work of that kind to be found anywhere in the world and the best evidence of that is found in the fact that it stood the very severe strain which was put upon it by the falling of the bridge. Mr. Hoare was recognized on all sides as a_ man having the necessary professional skill and as being eminently qualified for this position. But, with the caution which characterized the Quebec Bridge Company, they went farther and retained the services of Mr. Cooper, a recognized authority. Referring to Mr. Hoare, I will read from page 103 what Mr. Price says :
Q. Did you know, or do you know, that Mr. Hoare was over connected with any great bridge construction work, apart from the ordinary bridge on the railway ? A. I do not know exactly what work he has done; I know he has had a varied experience.
Q. In the way yon have spoken of?-A. Generally on bridge work, on railways and on general engineering work?
Q. But are you able -to say that you do know he. was connected with any large, very large, bridge construction in metal?-A. I believe he built the largest bridge for the Lake St. John, or the Great Northern at Huwkesbury, I believe a cantilever bridge. _
Q. He built an iron or steel bridge I presume?-A. Yes.
Q. Dor the Lake St. John Railway?-A. Or tlie Great Northern.
The testimony of the directors is to the effect that they were perfectly satisfied that Mr. Hoare was the right man for the place -otherwise they would not have engaged him at all-and they had every reason to believe that he was fitted to assume the re-sponsibilty because of the wide experience he had had. It is true that it is stated in the rep.ort of the Royal Commission that Mr. Hoare did not have the high technical skill which a man in that position should possess. It is very easy to say that now, but would these gentlemen have made that report previous to the collapse of the bridge at which time he was regarded as a man of excellent practical ability? Previous to the fall of the bridge nobody thought there was anything wrong, nobody thought that

the bridge was not in charge of the best engineers that it was possible to secure and nobody intimated that the business of the company was not conducted in a proper way. Now that the bridge has fallen people naturally try to find excuses and to throw the blame on somebody and in this case it is thrown on the Quebec Bridge Company with the view, perhaps, of making a little political capital against the government. But, if you look at it fairly and squarely, I submit there is nothing in the evidence or the circumstances which would justify the charge that there was any carelessness or negligence whatever on the part of the government or of the Quebec Bridge Company. I submit that under these circumstances there is nothing that the House can do except concur in the majority report. The majority report does not pass judgment on the cause of the fall of the bridge which is a matter that scientific men alone can pass upon. On this point it refers to the evidence taken before the Royal Commission where experts dealt with the question. But the minority report undertakes to throw the blame on Mr. Hoare. If there is blame to be thrown on anybody it must be thrown on Mr. Cooper, but I do not think that anybody will say that Mr. Cooper was not recognized as an authority. It is true that his judgment failed in this case, but the greatest scientists in the world make mistakes and their judgment is apt at times to be at fault. I move therefore that the majority report be concurred in.

Full View