§ MR. SINCLAIR AYTOUN
, in rising to call attention to the manner in which a portion of the money authorized to be raised under "The Canada Railway Loan Act, 1867," had been applied, said, in 1867 an Act was passed for the purpose of enabling the British North American Provinces to unite themselves under one Government. The House was told that it was essential to the Confederation of these Provinces that the railway communication should be completed between Halifax and Quebec. Amongst other provisions contained in that Act, it was enacted that the Commissioners of Her Majesty's Treasury should be empowered to grant a loan of £3,000,000, to be raised by the Government of Canada, for the purpose of completing the Intercolonial Railway. Certain conditions, however, were imposed by the Act—one for the conveyance of troops; another that the line selected should be approved by one of Her Majesty's Principal Secretaries of State; and a third that the Treasury should not guarantee the loan until the Legislature of Canada had passed an Act for the appropriation and expenditure of the money upon the works of the Intercolonial Railway. A Bill was accordingly passed in the Dominion providing for the fulfilment of the conditions required by the Imperial Act. Mr. Rose, the Financial Minister of Canada, was in London is June and July, 1868, and expressed his wish that the British Government would afford the means of speedily raising the money sanctioned by Parliament. He stated that he was 1446 informed that the condition of the money market was favourable for raising the loan. In consequence of communications addressed to the Colonial Office and to the late Chancellor of the Exchequer (Mr. Hunt), the Duke of Buckingham approved the line, and the loan was then guaranteed. In a Memorandum to the Governor General of the Dominion, Mr. Rose stated that it would not be possible to lay out the money obtained under the guarantee at interest unless the Government of the Dominion were prepared to accept a very insignificant rate of interest, and he thought a preferable plan would be to employ a portion of the money in redeeming the debts of the Dominion. That Memorandum was approved by the Governor General, and the plan was carried out. It appeared from the Budget speech of Mr. Rose to the Parliament of the Canada Dominion that he had invested in the sinking fund at 6 per cent 270,000 dollars. He paid off the Imperial loan for constructing canals, 681,330 dollars, and had paid 985,562 dollars due to Messrs. Glyn, and 2,500,000 to the Montreal Bank." Altogether he had thus employed 5,808,595 dollars, being an annual interest of 350,000 dollars of the money raised under the Imperial guarantee, and he stated that there had been a total gain of over 126,000 dollars in the interest account. He (Mr. Aytoun) contended that such a disposition of the money was in contravention of the Canada Loan Act, the condition of the granting of that Act being the appropriation of the money to the construction of the line of railway in question. He did not call in question Mr. Rose's conduct, because Canada was virtually an independent country, and Mr. Rose was only responsible to the Parliament of Canada. All he wished to show was that Mr. Rose had contravened the Act of Parliament in spending the money raised, and that if the Intercolonial Railway was to be made, it must be made out of other money than that raised on the Imperial guarantee. The very fact that Mr. Rose talked of recouping the loan showed that he had appropriated it to other pur-| poses. The late Government were in Office at the time of these transactions, but they were not responsible for the non-compliance with the conditions of the Act of 1867. The principle of that Act was that the line should be approved 1447 by the Secretary of State. That was done, and the Act of the Canadian Parliament was passed, containing a clause for the raising and appropriation of the money; but the late Government would have acted in a more judicious manner if they had followed precedent, and raised the money here in small instalments, sending it over as required. At the same time there was no reason to believe that they in any way sanctioned the mode of appropriation adopted by Mr. Rose. They had acted strictly within the conditions laid down by the Act, and could not be blamed, nor could the present Government be held responsible for what was done by Mr. Rose; but what appeared extraordinary and reflected little credit on our public Departments was this, that the Memorandum recommending the application of this money in the redemption of a portion of the debts of the Dominion was submitted to the Governor General, and approved by him in August, 1868, without his communicating the fact to the Government at home. Another circumstance which was not creditable was this —that while the 4th section of the Canada Railway Loan (1867) Act required that there should be laid before both Houses of Parliament, within fourteen days of the beginning of every Session, a statement and account showing what had been done from time to time in execution of the powers of the Act by the Commissioners of the Treasury and the Parliament and Government of Canada, no such statement had been laid before Parliament till within a very few weeks. He had put a Question to the Under Secretary for the Treasury on the subject, and the answer he received was that the Session having commenced in November, and sat only a few days, there had not been time to lay the account on the table. Now this appeared rather an extraordinary way of interpreting an Act of Parliament—to say that because a thing could not be done within a certain time it should not be done at all. The statement ought to have been laid on the table in February, or, at all events, in March. He had now stated to the House the facts of this case, and his reasons for thinking that there had been a contravention of the Canada Railway Loan (1867) Act. If he was right in his conclusions, the occurrence appeared to be one of a very serious 1448 nature. What was to become of the control of that House over the public expenditure if, after Acts passed providing for that expenditure on particular objects, or guarantees of money to be expended in a particular manner, the conditions under which those Acts were passed were disregarded? He therefore hoped the House would not refuse to express its disapprobation of the manner in which the money raised under this Act had been applied. The hon. Member concluded by moving the Resolution of which he had given Notice.
To leave out. from the word "That" to the end of the Question, in order to add the words "this House is of opinion that the application of money raised under the Imperial guarantee, in pursuance of 'The Canada Railway Loan Act, 1867,' to the redemption of a portion of the debt of the Canadian Dominion is contrary to the intention of that Act; and that no further guarantee should be given by the Commissioners of Her Majesty's Treasury under the above Act, except in such form and manner as shall ensure the direct application of the money so guaranteed to the construction of the Intercolonial Railway,"— (Mr. Sinclair Aytoun,)
§ Question proposed, "That the words proposed to be left out stand part of the Question."
§ MR. HUNT
said, he should merely call attention to the provisions of the Act under which the loan was guaranted, and according to which the Commissioners of the Treasury under the late Government had acted. The Act provided that the Commissioners of the Treasury were to guarantee a loan at 4per cent of a sum not to exceed £3,000,000, to be raised for the construction of railways within the Canadian Dominion, provided they were satisfied certain conditions specified in the Act had been complied with. Under that Act it was the Canadian Government, and not the Imperial Government, that was concerned in raising the loan. If the conditions named in. the Act were found to have been complied with, then the Treasury was to give the guarantee, and it appeared to him that the conditions had been complied with. The hon. Gentleman (Mr. Aytoun) stated that the Treasury had acted strictly in conformity with the Act; but that instead of guaranteeing this large sum to be raised at 1449 once, it should have been by instalments. It was left under the Act to the Canadian Government to raise the money, and not to the Imperial Government; and they thought they acted in accordance with their interests, and in furthering the interests of Canada, by enabling Canada to raise the money on the most favourable terms. It was stated to the Imperial Government that the then state of the money market was exceedingly favourable for the raising of the money, and it was also advantageous both to this country and Canada that the money should be raised on good terms. Under these circumstances the late Government did not hesitate to accede to the request of Mr. Rose on the part of the Government of Canada, that the money should be raised on our guarantee in the way it was done. The question raised was whether it was the duty of this Government to see to the ad interim investment of the money? That question was considered by the Government, and it appeared to them that the Act did not cast that duty upon them, and that if they had imposed that condition it would have put terms upon Canada in addition to those imposed by the Act. The late Government maintained that the Act imposed no such duty upon them, and no such condition upon Canada; and if the bonds had been given with that conditional guarantee they would have been much prejudiced in the market. The late Government being satisfied that the conditions had been duly complied with, considered it was their duty to give an absolute guarantee, so that no question should be raised in the money market. That was the view taken by the Treasury at the time, and he had no reason to suppose that it was not a sound view. He did not, however, understand that the hon. Gentleman impugned the conduct of the late Government in that matter, but the question was whether Canada had acted in violation of the Act. It was unfortunate that the hon. Member should have brought forward this question before the Papers on the subject had been presented to the House. He (Mr. Hunt) had no official knowledge of what had been done in the matter; but he understood that two most important documents that contained a full statement of what had actually taken place had reached this country, but that they were not before the House, 1450 and, consequently, he was not prepared to form an opinion upon the subject until he had seen them. He thought the Canadian Government were justified under the Act in investing the money they did not actually want at the time for the railways, in good securities; but in the absence of official information he was not prepared to give a positive opinion. He had stated frankly what had taken place under the late Government in that matter, and what were the considerations which had influenced them in reference to it, and he hoped that statement would be satisfactory to the House. He regretted that he had been compelled thus early to address the House; because if the conduct of the late Government in respect to the matter was impugned, he would be prevented by the forms of the House from addressing them again upon this subject.
§ MR. T. BARING
said, he had not gathered from the speech of the hon. Gentleman who brought forward that question anything but these two points —first, that he condemned the mode in which Mr. Rose had employed the money obtained by the loan; and, next, that he wished that Her Majesty's Government had exercised a stronger control in the matter. It was unnecessary to go into the history or objects of that loan. It was well known that our North-American Provinces held an intercolonial railway to be a necessary condition of their union. It was thought in those provinces that their union would strengthen their power, and at home that it would lessen their dependence upon this country. When the loan for the making of the railway was proposed to be guaranteed by the Imperial Government, the idea was scouted that the Imperial Government should exercise any interference in the disposal of the money. It was stated that we should give the guarantee for the loan; but that we should not be responsible for its disposal —that Canada must dispose of it and would employ it for the purposes for which it was given. It was hardly just, and certainly not generous, to throw a suspicion upon the Canadian Dominion as to the application of that money. Canada had shown its power to redeem it, and its readiness to meet its engagements fully after the loan of 1842. Every penny of that loan had been re-paid; this country had not lost a fraction by 1451 that advance to Canada, and there was no reason to doubt that the same course would be pursued in the present instance. Then, how was the Dominion of Canada to make contracts for an expenditure of £4,000,000 sterling without having something more than a promise to send the money? The money must be there, and must be forthcoming when wanted. Contracts had been entered into in various quarters of the Dominion to the extent of about £1,000,000 sterling. By the Act the raising of the money was left entirely at the option and decision of the Government of the Dominion. It was not attempted to borrow the whole amount, but one-half of it, or £2,000,000 sterling; and a more favourable time for raising it could not have been chosen. The hon. Gentleman supposed that all the money had been disbursed, and that there would be nothing at the command of the Canadian Minister; but he believed that the whole amount would be at the command of that Minister, who had placed it in securities on which he could borrow again if desirable, or which he could sell whenever he wanted the money. Supposing the case were the case of this country, and they had a large loan, say for the West Indian Indemnity, or for the relief of the Irish, or for fortifications. The money raised by the Government would, he supposed, in the interim, before it was wanted for its specific purpose, be employed in some way or other; and what better investment could they have for it than the security of the country itself? The credit of Canada was good; there could be no doubt that that money was available and would be forthcoming when wanted; and the contracts that had been made would be gradually met. Mr. Rose, the Finance Minister, had, he thought, acted very judiciously in the way in which he had employed the money. If the guarantee had been accompanied by such restrictions as the hon. Member thought desirable, either the guarantee would have been declined and the whole arrangement upset, or, if it had been accepted on those terms, this country would have made it more onerous for Canada to carry these operations into effect, and more difficult for her to fulfil the objects of the Act. The object was to facilitate the operations of the country in obtaining the money on the best terms. In conse- 1452 quence of the operations of Mr. Rose, the charge incurred in consequence of the loan would be much lightened, and he might add that the general result of the transactions had been, up to the present time, extremely successful. It was, he thought, unjust for them to exhibit constant suspicion and distrust with regard to the colonies in matters of that kind. He believed that the English people did not approve of such a course, and he was confident that the people of Canada deserved different treatment. As to Mr. Rose, those who knew him must be perfectly aware of his personal worth; and anyone who had watched his political career must know that he would be the last man to violate the law, or do anything inconsistent with good faith. He (Mr. T. Baring) thought it desirable that the House should know that the raising of this question of morality—for such it was viewed in Canada —in this country had created a feeling of soreness in the Dominion which it was most desirable to remove.
If the right hon. Gentleman (Mr. Hunt) had not much to say on this subject, I think I have still less to say. But there are two purposes for which I rise. One is to state what I conceive to be the nature of the question now raised. The hon. Member who has just sat down has replied with a warmth and generous feeling, which everybody must commend, to the attacks made upon the Government of Canada, and has deprecated a repetition of such attacks; but I apprehend that he has been making an answer rather to criticisms which have been made elsewhere than to anything said in this House. I do not think my hon. Friend intended in any manner to impugn the good faith of the Government of Canada; and I hope it will be understood that, as far as Canada is concerned, there is no question of imputation or aspersion, great or small. Indeed, I should no more think of casting doubt upon the good faith of the Government or Ministers of Canada than I should of casting doubt on the good faith of the Government or Ministers of this country. In that place both Governments ought to be recognized as standing upon one and the same footing, and topics of such a nature ought to be excluded from discussions like the present. It is perfectly true, however, that there is such a thing as punctuality in 1453 complying with the provisions of an Act, and any neglect in such compliance might deserve the censure of the House. But, independently of any reference to Canada, it is no doubt the duty of the House to watch strictly over the application of Acts of Parliament, and most of all over those which deal with the subject of guarantees. This subject will, doubtless, be brought forward again at some future time, and I wish to say, on the part of myself and my Colleagues, that if any of the correspondence now going on between the different Departments of the Government and the Government of Canada should appear, I hope it will be considered subject to the general principle I have laid down— namely, that the whole question raised is one of technical and strict compliance with an Act of Parliament. It is the duty of the Government to raise the question; but they have raised it simply as a matter of business, without in the slightest degree impugning the good faith of the Canadian Government. Independently of that, I desire to point out to my hon. Friend some reasons why he should not take a vote on his Motion to-night. In the first place, the Motion, though it does not directly impugn the good faith of the Government of Canada, is certainly in the nature of a censure on the proceedings of that Government. My hon. Friend is not justified, however, in taking up such a position, because he is not in possession of the information necessary to enable him to form a correct judgment as to the conduct of the Government of Canada. In his Motion my hon. Friend speaks of a reduction of a portion of the debt of the Dominion of Canada as a thing to be censured; but the hon. Gentleman who sits opposite (Mr. Baring), who is perfectly acquainted with the subject, speaks not of a reduction of debt, but of investment and security; and he says it was quite right that the Government of Canada should provide that its balances should not lie idle. My right hon. Friend near me (the Chancellor of the Exchequer) is a Commissioner for the Reduction of the National Debt, and is one of the largest holders of his own securities, but he does not thereby redeem any portion of his own debt. The two things are perfectly distinct. I think my hon. Friend will do well not to press his Motion at the present time, on the simple ground of the respect due to the Canadian Go- 1454 vernment, and the total inadequacy of the information possessed by us. The second part of his Motion says—That no further guarantee should be given by the Commissioners of Her Majesty's Treasury under the above Act, except in such form and manner as shall ensure the direct application of the money so guaranteed to the construction of the intercolonial Railway.I think it would be very unwise for the House to commit itself upon this latter part of the Motion, because the House is very imperfectly acquainted with the dealings of the Canadian Government, and still more unacquainted with the proceedings of the Government at home. The Government at home have thought it their duty to examine into the question whether all the proceedings have been conformable with perfect regularity, and whether the intention of the Act has been complied with; and that being a legal question, we intend to be guided by legal advice. They are in deliberation at the present time. With regard to the form of the loan, of course they will be responsible on that subject to my hon. Friend and to the rest of the House. Considering that these proceedings have not been brought to a close, I hope my hon. Friend will be satisfied with that assurance. One word more in relation to the Government of Canada, in addition to what I have said with respect to the unquestionable good faith of that country. This Act of Parliament itself, I must own, is not a very clear and satisfactory Act of Parliament. I am not casting any blame on anyone. I do not know at what time the Act of Parliament was drawn, but I think it is drawn in less distinct terms than it ought to be. The right hon. Gentleman opposite said, truly, the main question was respecting the first of the conditions in the 3rd clause—that is, the condition that the Treasury should not give a guarantee under the Act until an Act had been passed in Canada providing for the appropriation and expenditure of the money for the purpose of constructing the railway. I cast no censure upon the late Government, nor do I know whether the late Government were cognizant of that to which I am about to refer; but if the late Government were cognizant that this money was to remain in the custody of private firms— [Mr. HUNT said, that the late Government had not been cognizant of it.]—I understood they were not cognizant of 1455 it, but there was nothing in the Act of the Canadian Parliament to prevent it, because it left an entire discretion as to the management and investment of the loan; and if that Act of Parliament were judged satisfactorily here, I am not surprised that the Canadian Government should not have taken upon themselves to question it. All they were required to do was to pass an Act that would meet the approval of the Government here; and whether their proceedings were consistent with the Act or not, it is no wonder that they should use without control their discretion, as if we had nothing to do with it whatever. The question is not ripe for discussion. If discussion shall at any time be required— on which I give no opinion at all—but if a discussion should arise, it is a question more particularly connected with the duty of the House respecting the custody of public trust funds than a subject bringing under censure the conduct of the Legislature and Ministers of the Canadian Dominion.
§ MR. MONK
said, he entirely agreed with what had fallen from the hon. Member for Huntingdon (Mr. Baring) as to the credit of the Canadian Government. Nothing less than an act of bankruptcy could prevent the expenditure of a sum of money equivalent to the loan which had been guaranteed by this country on the formation of the Intercolonial Railway. A portion of his hon. Friend's Motion stated—That this House is of opinion that the application of money raised under the Imperial guarantee, in pursuance of 'The Canada Railway Loan Act, 1867,' to the redemption of a portion of the debt of the Canadian Dominion was contrary to the intention of that Act,and his right hon. Friend the Prime Minister said that the House had no information on the subject. In the Papers laid upon the table the House had no information. They were indebted to the Press of this country and of Canada, and to a speech of Mr. Rose for the information they possessed. Mr. Rose said that the Government of Canada invested a portion of the guaranteed loan in the Intercolonial Fund at 6 per cent, thus reducing their debt by 270,500 dollars, and then he proceeded to say that they paid off the Imperial loan, the advances from Messrs. Baring and Glyn, and the Bank of Montreal, bearing 7 per cent interest, and the balance owing to the Ontario Government. Now, 1456 if that was not a redemption of debt, he did not know what was. Instead of being applied to the construction of the railway it had been—temporarily he granted—applied towards the redemption of the debt. That could not be controverted, as it had been stated by Mr. Rose himself. The fact was, that the Canadian Government found itself in the possession of considerable funds, and they thought it would be a convenient opportunity for reducing their debt. He believed, with the information furnished by the right hon. Gentleman the Under Secretary for the Colonies, his hon. Friend had been perfectly justified in bringing forward the subject; but he did not think it would be desirable that the House should, at the present moment, express any opinion upon it.
§ Amendment, by leave, withdrawn.
§ Main Question, "That Mr. Speaker do now leave the Chair," put, and agreed to.