§ MR. SINCLAIR AYTOUNsaid, he wished to ask the Under Secretary of State for the Colonies, Whether the Governor General of Canada has approved the Report of a Committee of the Privy Council of Canada, advising the adoption of the recommendation of the Finance Minister of the Canadian Dominion that money raised under the Imperial Guarantee for the construct ion of the Intercolonial Railway should be applied to the payment of the general debts of the Canadian Dominion; whether such ap- 878 plication of the money raised under such Guarantee is not in contravention of the Canada Railway Loan Act, 1867; whether any Correspondence has taken place between the Colonial Office and the Governor General on this subject; and, if so, whether he has any objection to lay Copies of such Correspondence upon the Table of the House; and, why no Statement and Account has been laid before this House, in accordance with the fourth Section of the Canada Railway Loan Act, 1867?
§ MR. MONSELLsaid, in reply, that there had been no correspondence such as that alluded to by his hon. Friend between the Colonial Office and the Governor General of Canada; but somewhere about three weeks ago several Parliamentary Papers had been brought over from Canada by Mr. Rose, one of the Ministers of Canada, to the Colonial Office. Among those papers was one entitled "Correspondence respecting the Intercolonial Railway." It appeared that the Governor General of Canada, on the 27th of August last, approved a Report which recommended that certain floating debts bearing a high rate of interest should be paid off by the issue of interest bearing securities, in which a part of the colonial loan was to be invested. In order to secure that the proceeds of the loan should be available when waiting for the Railway, it was arranged that two credits, one with the Messrs. Baring and Glyn for £250,000, and the other with the Bank of Montreal for £500,000, should be appropriated to that special purpose, and that Exchequer Bills of the Dominion, receivable in payment of taxes, should be placed in the hands of the Receiver General as trustee for the Intercolonial Fund, which Exchequer Bills were not to be used by him till required for that object. The hon. Gentleman next asked whether such application of money so raised was not in contravention of the Canada Railway Loan Act. Now, that Act sanctioned the raising of £3,000,000 for the purpose of constructing the railway, but said nothing about the employment of the money in the interval between the receipt and. its application, and, as far as he could form an opinion, there was nothing absolutely illegal in what had been done by the Canadian Government. But whether the course they pursued was in accordance with the spirit of the transaction in 879 which they were engaged was another matter altogether, and one which was at present occupying the serious attention of Her Majesty's Government. In reply to the last question of the hon. Gentleman he had to state that, although various steps had been taken in respect of the loan with the approbation of the Treasury in the mouths of June and July last, still the absolute sanction of the Imperial Government had not been formally given till the beginning of the present year, the Session of Parliament having previously commenced. The consequence was that it was not considered that any statement of accounts in accordance with the 4th section of the Act should be laid before Parliament; but if the hon. Gentleman should think fit to move for a statement regarding the whole of the proceedings there could be no objection on the part of the Government to its production.