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Speeches of Mr. De Cosmos on De Horsey's report, trade of British Columbia, and money paid to British… De Cosmos, Amor, 1825-1897 1878

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 Mr. decosmos
Monday, Feb., 18th, 1878.
Mb. DeCOSMOS moved for a copy
of" any reports in j>ossession °f tuo
Government made in 1877 by Admiral
De Horsey respecting the port or ports
most suited for a terminus of the Canadian Pacific Eaihvay in British 
Columbia, with a copy of any correspondence respecting the same with the.
Imperial Government. He said ho
was aware that the Admiral in com-
jnand of Her Majesty's squadron on
the Pacific had been invited by the
Admiralty, and he did not doubt by
the Government of this Dominion, to
make a personal enquiry as to the port
or ports most suitable for the terminus
of the Pacific .Railway on the Pacific
coast. He (Mr. DeCosraos) had given
notice of his motion before the report
of the hon. the Minister of Public
Works was sent down to the House.
He found that in that report uo mention whatever was made of any report
from Admiral De Horsey. He had
reason to believe, before he left the
Province of British Columbia, that a
copy of that report had been forwarded
to this Government. If they turned
to the report of Mr.
Chief Engineer of the
Pacific Railway, issued
spring or summer of
they  found   that
in     the
last   year,
had   been
received and condensed from different officers of Her Majesty's Navy who had
been on duty on the North-West coast,
but there was not a single mention
made of any seaport on Vancouver
Island as the terminus. Admiral de
Horsey having communicated his
report, as he- (Mr. DeCosmos) was
informed, to the Imperial Government,
and to this Government also, he now
asked that, before the great question of
the Pacific Railway was taken up by
this House, they should have laid
before them a complete copy of this
report, and not as they had last year,
an emasculated report, or reports
taken from tho reports sent by Her
Majesty's officers to the Admiralty,
in England. The importance of
selecting the best place on the Pacific
coast was so great that the House
required the very best information that
could be gathered on the subject, and
if it were not so late, he would endeavour to occupy the attention of the
House, for half an hour, in showing
both the domestic commerce and the
foreign commerce of the Pacific
Ocean with the American States
and territories contiguous to the
western terminus of the Central Pacific
Railway. But he would reserve his
remarks on that subject for a future
day, when he hoped the House would
have more opportunity to listen to
statistical information, as to the trans-
Pacific and trans-continental trade
which was now being done at San
Mr. TUPPER said ho would take
the opportunity to ask the First Minister when tho House might hope to
receive the report of the Engineer on
the Canadian Pacific Railway.
Mr. MACKENZIE said the hon.
gentleman would find that there was
a considerable report in the Report of
the Public Works Department which
had been presented to the House. The
report of Mr. Cambie and the Report of
Mr. Marcus Smith were there. Mr.
Cambie was the officer charged with
the Burvey in British Columbia during
the year, and the report of Mr. Smith
was a more general report.
Mr. TUPPER: Is it intended that
we should not receive any further report on the subject before we are called
upon to deal with ihc question of the
route of the railway.
Mr. MACKENZIE said he was not
aware at the moment of any further
report until the Government received
the complete report of Mr. Cambie,
with the maps, etc., and he was not
aware if that gentleman would have
anything in addition to doal with. If
there was anything further that it was
possible to bring down, it would
be brought down. The paper to
which his hon. friend behind him (Mr.
DeCosmos) referred, had come in very
lately from England as a document
communicated to the Government, and
it would be brought down as soon as
Motion agreed to.
Mr. DeCOSMOS moved for a return,
showing the receipts for Customs and
Excise in British Columbia for the six
months ending on December 31st last;
also, a return of the Customs and
Excise collected on Stickine River for
tho same period; also, a return of tho
imports and exports of the said Province for the same period; also, a
return showing the imports into tho
said Province of all merchandise, duty
free, or subject to Customs or Excise,
from the other Provinces of the
Dominion, from and including 1871 to
31st December, 1877, setting forth tho
respective quantities and values the
production and growth of Canada. Ho
.said the first of these returns would no
doubt be very brief, but it was
desirable, in some respects, to have
before tho House. So far as returns
in reference to the Stickine, were concerned, he thought it was-important
that the House should know somothing
about them. He was not aw; re that
they had anything about the trade of
that river in the returns before the
House. As to the last part of
his motion, he thought it* would
be interesting to have something
showing the Interprovincial trado between British Columbia and the other
Provincos of the Dominion, and he did
not see that any objection could be offered by any member of the Government, or any member of the House.
Mr. BURPEE (St. John) said the
first part of the return could be supplied
to the hon. member quite readily, but
he feared the last part could not. There
had been no account kept between the
different Provinces since Confederation,
and there was nothing to show the
trade between them.
Mr. DeCOSMOS said ho thought
the hon. the Minis!or of Customs
would be able to get the necessary information, from the fact that all merchandize was passed in bond over the
Pacific Railway ; therefore, the ports
through which merchandize was passed
to British Columbia would bo able
to supply the information. He hoped
the Government would allow the motion to pass, because he thought it was
a matter of great importance.
Mr. MACKENZIE : Wo will try.
Motion agreed to.
Tuesday, Vdth Feb., 1878.
The Speaker took the Chair_at Three
monet paid to british columbia.
Mr. DeCOSMOS moved for a return
showing; the respective sums of money
paid to the Government of British Columbia, and at what time paid, in accordance with section 2, chap. 17, Vic.
37, of the Statutes of Canada. In doing
so, he said he wished to bring before
the House the fact that, by the nonperformance of their agreement
on the part of the Government
of the Dominion, there had been
entailed upon the Provinco of British
Columbia a loss of some 8272,500. In
order that the House might follow him
in bringing to their notice this equit
able claim, he  took occasion to state
that in 1873 he was the Premier of the
Provinco of British Columbia. He found
that the Province was not in a condition to invite immigrants to come and
settle .in the country. The ordinary and
current revenue  of the Province was
only sufficient to meet the ordinary and
current expenditure.    In order, therefore, to prepare that country, in the
interests  of the Dominion, to receive
population from abroad, and thereby
con tribute to the revenues and the building up of the country, it was decided
that ho should go to the  Government
of the Dominion, and, if necessary, to
the   Imperial   Government   and   the
capitalists of Great Britain, to raise a
loan of some million of dollars to make
surveys, and open up colonization roads
through the accessible portion of that
Province.    In tho autumn of 1873 ho
arrived in this Province, some three
or four weeks before Parliament met in
extra Session.    He placed himself in
communication with the Government
of that day.    He told that Government
that the Provincial Government wanted
a million of dollars or less,—may be
$500,000 or 8600,000.    The Minister of
Finance of that day was absent in England, placing the bonds of the Dominion upon the London   market.     He
opened negotiations through the hon.
the then Minister of  Public  Works
(Mi*. Langevin) with respect to this
loan.    When the Minister of Finance
returned from England,—as the loan
could   not   be   concluded   with   tho
Dominion  Government until  ho had
returned,—it was  arranged that tho
Province of British  Columbia should ,
draw on application the sum between
the allowed debt and the actual debt of
the Province at the date of Union, as
increased by the Act increasing tho
debts  of the respective Provinces in
1873.    In order that the House might
follow him in this matter, he would
read the  Order in Council that was
passed by the Dominion Government
of that day, respecting this matter :
" la a memorandum, dated 30th Oct., 1873,
from the hon. the Minister of Finance, submitting an application from Mr. DeOosmos on
behalf of the Government of British Columbia,
asking that the Dominion may advance for
local improvements a sum equal to the difference between the actual debt of the Province
and the debt allowed at the Union, such
advance to be at the rate of 5 per cent., to be
J secured upon the subsidy, and to be repaid by
a Sinking Fund,—
"The Minister states that he considers it
inexpedient that the Dominion Government
should undertake a loan on the terms specified ;
but that there is no doubt that if the Province
wishes to enter upon local improvements and
borrow money for the purpose, it could be done
on more favourable terms in the manner pro-,
posed than by procuring a loan elsewhere; and'
he suggests that the same object can be gained
in another way, which would be quite legitimate : That the excess of the debt allowed
over that outstanding at the date of the Union
is in fact a debt of the Dominion, upon which
it has to pay five per cent, annually on the
subsidy, and that there can be no objection to
the Dominion, if it thinks proper, redeeming
this debt by paying the money to the Province.
" The Minister, therefore, recommends that
authority be given to advance to the Government of British Columbia, for local improvements, such sums, from time to time, as may
be applied for, to be charged against the debt
of the Province to the extent of the amount
by which that debt falls short of the debt
allowed. Should the Provincial Government
at any time wish to refund any portion of the
advances so made, the refund, the Minister
observes, would, on the same principle, be
credited to the debt.
"The Committee concur in the foregoing
recommendations, and submit the same for
your Excellency's approval."
He desired to direct tho particular
attention of the House to the words,
I such sum or sums as may from time
to time be applied for." There was no
promise or suggestion whatever that
there would be any influence brought
to bear against or any exception taken
to any application made by tho
Province of British Columbia to
take over tho difference between
tho actual and the ' allowed debt.
They had, therefore, the fact that,
when the late Administration retired
from office, there was an arrangement
made by the Province of British
Columbia with the Dominion to
obtain for surveys, reads, and bridges,
&c., the means for opening up that
extensive Province, an arrangement by
which a large sum of money—nearly a
million dollars—might be obtained
from the Dominion at a lower rate of
interest than the Province could obtain
it elsewhere. Shortly after Parliament met, the Ministry of the day
resigned. His mission was not merely
to the Dominion Government, but
it extended also to England, with
regard to the Graving-dock. Before
proceeding to England, he thought it
would be wise on his part to obtain
a confirmation, from tho present
Government, of the arrangements with
respect to the advance or loan. He
did so, and he (Mr. DeCosmos) had the
authority in a letter from the Prime
Minister, in which ho agreed to make
that advance. The letter was as
follows:—    ■
I Ottawa, 4th Nov., 1873.
" My Dear Sir,—Your proposal to the
Dominion Governmeut respecting the payment to the Local Government of British
Columbia of such sums as may be applied
for from time to time, to be expended on
local improvements to be charged against
the debt of the Province, until the sums so
advanced will, with the existing debt, reach
the amount of the debt allowed by the terms
of the Union, is one which will require the
8anctipn of Parliament. This being the
case, no absolute promise can be given until
Parliament meets. I see no serious objection,
however, to the proposal, and we will submit
a measure to Parliament to carry it int©
" I am, &c,
" A. Mackenzie."
The House had then before it the fact
that the late Government and the
present Government of the Dominion,
with a view, he believed, at that time
of advancing the interests of Canada,
and the Province of British Columbia
in particular, had agreed to advance
the money at a lower rate of interest
than it could be obtained elsewhere,
and in the same way as the Dominion
had obtained guarantees for its bonds
from the date of Confederation from
the Imperial Government. The House
had the fact before it that this and the
late Government had agreed to advance
the difference betwoen the actual and
allowed debt. The next question arising was what was the difference
between the actual and allowed debt ?,
The actual debt of British Columbia at
the time of the Union was $1,000,405;
the allowed debt, increased by the Act of
1873, was $1,946,284. The difference
between the actual and allowed debt in
1873-4 was $945,878. And the agreement for the advance of money, in tho
nature of a loan, with a right of repayment of the whole or any portion
covered this amount. The next point
was as to the Statute. In order to carry
out that agreement, chap. 17, 37 Yic.
was enacted, the 2nd section of which
read as follows :—
"The Governor in Council may, in his
discretion, advance from time to time to any
Province of Canada, such sums as may be required, for local improvements in the Province, and not exceeding, in the whole, the
amount by which the debt of the Province
for which Canada is responsible then falls
short of the debt with which the Province
was allowed to enter the Union—such advances to be deemed additions to the debt of
the Province, with permission to the Province
to repay them to Canada, on such notice, in
such sums and on such other conditions as
the Dominion Government and that of the
Province may agree upon; any amount so
repaid being deducted from the debt of the
province in calculating the subsidy payable
to it."
That section was intended not merely
to include tho Province of British
'Columbia, but every Province in the
Dominion. When he opened these
negotiations with the present Dominion Government, for the purpose of
taking over the difference between
the actual and allowed debt of that
Province, the proposal seemed to be a
novelty, but on passing it under consideration it was discovered that it
might be an advantage, not merely to
the Dominion Government, to extend
its influence in that manner through
the Provinces, but a great advantage
to the Provinces themselves. The
point to be observed in that matter
was this: that, owing to the negotiations between the two Governments,
the Dominion and British Columbian,
it was agreed that, when the Province
applied for the money, it was to be
paid over to the Provincial Government, and that without qualification.
On enquiry, so far as he was
able to gather, tho' amount paid
to the Province of British Columbia,
amounted to $189,258 in 1874-5, and a
further sum of $150,000 was paid in
1875-6, and charged subsequently
against tho debt of the Province.
When the Provincial Government applied for the money, they were not
properly met by tho Dominion Government, and there was no prompt fulfilment of the bargain which he (Mr.
DeCosmos) had made with the present
Government and its predecessor. The
first application to the present Government was for the sum of $439,150.
$189,000 out of that amount had been
expended, and the Province wanted
$250,000 more, to meet the additional
expenditure on its public works. Tho
Dominion Government refused to advance that amount.    Stated briefly,
the Province receivod from tho present
Government $189,000, and was refused
$250,000. Tho question would naturally arise as to why tho Dominion
Government, whoso word ought to be a
word of honour, refused to carry out
their agreement. If there wore good
and sufficient reasons why they should
not carry it out, he believed the
House and the country would be prepared to endorse their refusal. But, as
far as he had examined the facts of the
case, ho found there was no good and
sufficient reason why they should have
refused, and particularly so as tho
Government of British Columbia was
engaged in opening up that vast
country, and in doing so was opening
up a part of the territory of Canada
over which it had jurisdiction. But, if
they traced the matter to the bottom,
he believed the true reason for refusing
to honour their pledge would be found
to be a desire on the part of the Dominion Government to check-mate the
then Government of British Columbia,
led by Mr. Walkem ; in other words, to
embarrass the Provincial Government
financially, in order, if possible,
to bring them under the influence of the Federal Government. It was
open to the ' Government to explain
that statement, and if they could by
any possible means explain away tho
reasons which were popularly given
in that Provinco for the refusal, no one
would be happier to accord them full
credit and release them from the
charge of having attempted to embarrass the Government of that Province
than he would be. It must be remembered that the demand for $439,150
was made in April, May or June, 187.5.
If tho Dominion G overnment had been
without funds, or had had large claims
coming due which would prevent it
from fulfilling that agreement, there
might have boon some excuse; but,
when he turned to the Sessional papers
and to the statement of the assets and
liabilities of tho Dominion in the Public
Accounts, he found that, at the end of
June, 1875, which was the end of the
financial year, there was to the credit
of the Dominion, in British and Cana-
ian banks,and other places $10,462,586;
in other words, a month or two
after the $400,000 and odd were
asked for by the Provincial Govern-
J ment, it was found, by a return laid
before the House, that $10,462,586 was
set down by the Minister of Finance as
the money assets of this Dominion.
Against that they found liabilities due
1o other banks amounting to nearly
$2,150,752, leaving a surplus to the
credit of the Dominion Government, at
the banks, of $8,311,834. Ho put it to
the House whether the Government
could bo justified, from what they
knew at present, in refusing to fulfil
its obligation to tho Province of British
Columbia, when tho Dominion had
nearly nine million dollars to its credit
at its bankers ? Ho had called the attention of the House to the fact that
the money was to be paid to British
Columbia, when applied for. It was
to be observed that tho money was
to be paid from time to time. There
was no question that i tho nego-
ciations which had taken placo between
himself, on behalf of British Columbia,
and the present and the late Governments in regard to the advance of the
difference between its actual and
allowed debt constituted a bond fide
agreement between the parties. Remembering that there had been a bond
fide agreement entered into—for that
amount of money had been contracted
by the Dominion Government to be
paid to the Provinco, what did they
next find ? The report of the Committoo
of the Privy Council, approved on 20th
May, 1875, showed the following:
" Upon the application of the Government
of British Columbia for the sum of $439,150,
whereof $250,000 is asked for on account of
the Graving Dock, the remainder for local
improvements, the whole to be advanced in
accordance with the provisions of Vict. 37,
cap. 17.
" The Hon. the Minister of Finance, to whom
this application has been referred, observes,
' in a Report dated 19th May, 1875, that, with
respect to the sum asked for the construction
of the Graving Dock, certificates of progress
of work are required by the Terms of the Act,
and that such certificates have not, so far as he
is aware, been furnished by the Government
of British Columbia.
" With respect to the remaining advances,
he further observes that it is entirely optional
with the Government of the Dominion to
advance any sums on said account; and, inas-"
much as inconvenience may arise if expenditure
should be undertaken in any of the Provinces,
under the impression that the Local Governments or Legislatures are at liberty to draw at
pleasure for the balance of debt referred to in
said Act, he suggests that the Secretary of
State be directed to notify the local authorities
of the several Provinces that the consent of
the Government of Canada must be expressly
obtained before any advance on account of
local improvements, as specified in the above
Act, is authorized ; but that the sum of $189,150
having been spent by the Columbia Government, it is recommended that this sum be
" The Committee concur in the foregoing
Report, and submit the same for Your Excellency's approval."
He might remark, with reference to
tho closing portion of the second
section of the report of the Committeo
of tho Privy Council, that the $250,000
referred to was not asked for in aid of
tho construction of tho Graving Dock,
but for an entirely different object.
From that document they discovered
that the present Dominion Government
refused to carry out the obligation
they had entered into with the Province of British Columbia, and they
endeavoured to make British Columbia,
when it had entered into a special
agreement under two Governments,
occupy a similar position to a Provinco
that had made no agreement whatever.
In the next placo, they found that, on
the 4th February, 1876, Mr\ Langton,
the Auditor-General, wrote as follows:
" I am directed to advise you that the
$150,006 was distinctly refused as an advance
against debt, but it is granted as an advance
against subsidies."
From this they discovered a second refusal on the part of the Government a
year later, to do what they agreed to
do in tho autumn of 1873. Now he
presumed that the House might gather
some fair information of the state of
this case. In the first place, the Provincial Government had agreed with
the Dominion Government for an advance equal to the amount between the
actual and the allowed debt; that the
Provincial Government applied for
$439,150 to the Dominion Government,
which was refusod, and that the Dominion Government had the sum of
$8,000,000 or $9,000,000 in its Treasury
at its command, some of which was
drawing interest and some of which
was not drawing interest, and yet they
refused to carry out a solemn agreement with that Province. Before he
proceeded further to show the loss of
money entailed upon that Province by
the violation and, as he took it, the
deliberate violation of tho agreement
with that Province by tho Dominion
Government, he would again call the attsntion of the House to the fact that
1his Government had sent its delegate
to British Columbia to negotiate a relaxation of the railway section of the
terms of union. It so happened that
the two Governments could not agree
and an appeal was made to England by
the Executive of the Provincial Government. He took it, therefore—and
he repeated again as he said before
—that the whole and sole object of
the Dominion Government in refusing to advance the money that it
had agreed to was to embarrass
the Local Government of British
Columbia. They had no other object;
and that in the face of the repeated
declarations made on the part of the
existing Government when a party
in Opposition : that they wished to
keep the federal distinct from provincial affairs, and that they believed in
decentralization, instead of centralization. This was his statement; and
this" was tho view which tho people of
British Columbia took of it. As he
had before remarked, it was open
for the Government to explain away
this view, and to give them a satisfactory reason for their conduct. Let
the House now see what pecuniary
loss 1he Government had entailed
on the Province of British Colum:
bia. At the time the latter
had latge contracts let, and with
respect to part of those contracts payment on them had matured, and consequently the Government wanted
money to pay the contractors; but
the Dominion Government refused to
advance the money. The Provincial
Government then had to apply to tho
banks and outside capitalists in order
to raise enough money to meet their
liabilities, and had to pay as high as
eight per cent, per annum for money;
and that when the Dominion Government had enough money in its
Treasury to spare for that object to
fulfil its agreement. The result was
simply this: that the Provincial Government, in round numbers, had lost by
having to borrow money at eight per
cent, the difference between five and
oight per cent, and that was three per
cent. The loss under that head,
placing it at a minimum— and he believed that it was more like 100 per
cent, more   than  fhat—was at least
$10,000. In order then to get rid of
their liabilities, they had to place
bonds in the local market to tho
amount of $350,000, and hypothecate
them to tide through that year. If
it was the object of this Government to embarrass the Provincial
Government of British Columbia,
the former was successful, as the
latter Government ,was financially
embarrassed. The Provincial Opposition having been tutored by agents at
Ottawa, or by the present Government
at Ottawa, or by writers from Ottawa,
the agents of this Government in the
Province of British Columbia were
the first to communicate the news to
the public that the Local Government
was embarrassed in its finances, the
Dominion Government having refused
to advance them anything more.
Having tided over the year 1875-6,
the existing Government of the Province found it was compelled to pass an
Act to enable it to borrow $750,000
in the English money market. That
$750,0ftp.was sold in the marketof London at 96, and it cost one por cent .for
commission ( Vide B.C., Debates, April,
1877.) The loss, therefore, sustained in selling at a discount these
$750,000, which tho Provinco ought to
have received from the Dominion
Government at five per cent., was
$37,500. These bonds were issued at
six per cent, to mature in thirty
years ; and that is one per cent,
more than tho rate at which
the Dominion Government had
agreed to pass this money over to the
Province. One per cent, over the five
per cent.upon that amount was equal to
$7,500; and, hence, during thirty
years, the Province would have to pay
that $7,500 annually. It would also
have paid at the end of thirty years,
$225,000; and this amount the Province of British Columbia would havo
to pay to the parties from whom it
borrowed, simply because this Government refused to fulfil its bargain.
More than this: the management,
he took it, of the Sinking Fund connected with this $750,000 loan, during
the coming thirty years, would be at
least $10,000. And adding the extra interest over five at eight per cent.,
the loss by discount on the bonds
and the increased interest for thirty years, he found that the manner in
which the Dominion had treated the
Province in this matter, would entail
a loss on the Province of British
Columbia of $272,500. In other
words, that was the cost to the Province of British Colombia, of having
this Federal Government engago in
what he might regard as the unholy
work of embarrassing a Provincial
Government. And not only did they
entail a loss of $272,500 on the Province, but the Dominion also, actually
and absolutely, lost the sum of $30,302
odd. Allow him to explain:—When this
advance was agreed to by the late
Government, the Finance Minister had
just returned from England where he
had sold his bonds. He believed they
were five per cont. bonds and commanded a premium of five per cent. Now,
paying off the difference between the
actual and the allowed debt of the
Province, the Dominion Government,
by floating its own fivepor cent, bonds
at five per cent, premium, would have
made $47,264.
Ma. CARTWRIGHT: I may remark
to my hon. friend that they were not
five per cent. bonds,but bonds raised on
the Imperial Government guarantee at
four per cent.
Mr. DeCOSMOS said the hon. gentleman would have his opportunity for
replying further on. He, however,
thought that the hon. gentleman, if he
referred to the money which was
obtained on Imperial guarantees and
Government guarantees, would find
that both went off together. He only
spoke from memory on this point
and was subject to correction.
This Government under pressure
had advanced, as he had previously
stated, two . sums, $189,238 and
$150,000; and the money saved by
floating the Dominion bonds at five per
cent, premium on the amount of money
which was advanced by the hon. the
Minister of Finance—the profit really
. made by the Dominion Government in
. this regard was $16,961. ,By refusing
to advance the further sum of $606,055,
tho Dominion Government lost the five
per cent, premium on that sum, and
that was a loss of $30,302. The aggregate loss, therefore, of the Dominion
Government and the Provincial Government by the refusal to carry out the
agreement made with the Province of
British Columbia by the Dominion
Government was $302,802; and he
again repeated that this loss was made
in the face of a surplus in the Treasury
of the Dominion, of $8,311,834. And
the loss to the Province of British
Columbia on the sum of $272,500,
would be six per cent, per annum
besides the whole amount for ever.
Probably his honourable friend the
Finance Minister would be able,
with his actuary, to find out what
the total loss to the Provinco of British
Columbia would be on that $272,500
for ever. The interest on the sum lost
by the Province of British Columbia
for over by the refusal of this Government to carry out its contract would be
equal to even one-twelfth of tho total
annual subsidy received to-day by tho
Province. He appealed to the
House if some explanation—if a
full explanation was not required
and ought to be given to the
country to show how this Government could justify the taking away,
by its own deliberate act, one-twelfth
of the subsidies guaranteed by the
Act of Union. He had only on a other
word to say; and this was that, if there
was justice, if the equities of this
case were heard by dispassionate gentlemen, and if the case of British
Columbia in this matter was heard
and understood, the Dominion Government owed a debt—as indemnity—to
the Province of British Columbia
approximating, in round numbers, to
nearly $300,000 ; and it would be for
the present Government, or their successors, in due course of time, to pay
over to the Province the penalty of
their deliberate violation of the agreement, that was in the interest of both
the Province and the Dominion.
Mr. CARTWRIGHT said there could
bo, of course, no objection whatever, to
the hon. gentleman obtaining the information he required. The facts con-
dected with it, so far as his memory
served him, were briefly these : he believed the hon. gentleman had correctly enough stated that, some tho
Session of October, 1873, he (Mr.
DeCosmos) made application to tho
late Government to have an advance
made in the form of which he spoke;
and he had no doubt, that the hon,
J gentleman  had   correctly quoted the
Order in Council under which the late
Government had consented to make that
advance.       He     (Mr.     Cartwright^
understood, that subsequently, about a
week  afte- the  present Government
assumed office, the hon. gentleman renewed this application.     He was not,
himself, in Ottawa at that time, being
•engaged in  conducting his  election;
but he understood  that the  hon. gentleman had had  some  communication
with the hon. the Premier, who advised
him u <■:>   that  occasion,  that  in  his
judgment it was  not possible for the
Government   to   entertain any   such
application without obtaining Parlia
montary  sanction for   such advance,
probably in the shape of an Act.    He
must, however, correct the misapprehension under which tho hon. gentleman appeared to labour regard ing tho
letter his hon. friend the First Minister
as   at   all   implying   what   he   (Mr.
DeCosmos) appeared   to  conceive   it
meant.     That  letter did not,  as he
understood  it, or as bis  hon.  friend
(Mr, Mackenzie) understood it, at all
mean  that   the    Province  of British
Columbia, or any other Province, was
to bo entitled, at its discretion, without
due notice, to draw cheques upon them
to the extent of the whole amount of
the payment unliquidated.      Now, in
compliance with what his hon.  friend
had agreed to do, among the Acts that
were passed at the Session of 1874
was the  Act to which this hon. gentleman referred.    That  was cap. 17,  37
Vic, by which,  as the House would
see, it was expi-essly provided, and for
very excellent and good reasons, that
these advances should be made at the
discretion  of the   Government, upon
proper    notice   having   been    given,
and on their being  convinced of the
.expediency of the work. ' The   reason
for all this was obvious.    It was quite
impossible that they should make this
advance   to   one   Province    without
allowing other Provinces to obtain,  if
they desired it,  the  same  benefit on
like conditions.   It was also perfectly
obvious that in view of the very large
engagements which this country had
then assumed, it would  be  the  most
dangerous   thing    to    allow    many
millions of money to be drawn at call
from the public Treasury to serve the
needs of the several Provincial
Executives; and it was for that reason,
and after full consideration, that the
Government introduced the Act
entitled Cap. 17, which expressly
provided that this advance should be
made in their discretion and for local
improvements. He regretted that no
Hansard appeared to have been
preserved for the year 1874, because
his recollection was that, at the .time
this Act was introduced, he (Mr.
Cartwright) expressly explained the
reasons which had induced the Government to word this particular section in
that fashion; and he then had
expressly called the attention of the
members, among whom, if he remembered aright, was the hon. gentleman
himself to tho fact that notice must be
Mr. DeCOSMOS : Of what ?
Mr. CARTWRIGHT: That notice
must be given that these moneys were
wanted, and also to the fact that it
must remain at the discretion of the
Government of the Dominion, because
it would have been a most dangerous
addition to their then existing liabilities
to empower the several Governments
at their pleasure to come down suddenly
upon them for sums a mounting, collectively, to several millions of dollars.
So much for the reason why this Act
was introduced, and for the construction
which the Government then and now
put upon it. He begged to inform the
hon. gentleman and the House that
they had had no intention whatever of
embarrassing the Government, to which
the hon. gentleman had alluded. The
reasons which had induced the Government in 1875 to decline to advance a
sum amounting to nearly half a million
of dollars} although that was' subsequently modified by agreeing to refund
to the Government of British Columbia
the sum of $189,000, were, that in that
particular moment, enormous sums
were required to be met by the Government of this Dominion, amounting, in
the space of two or three months, from
the date of which the hon. gentleman
had spoken, to, he thought, the sum
of twelve or fourteen millions of dollars.
Whether the hon. gentleman was correct or not in the statement he (Mr.
DeCosmos) made that, in June or July, 10
1875, a large-balance remained with
the bankers of the Dominion, he was
not sure;?but assuming, for the sake of
argument, that the hon. gentleman was
quite correct, he could tell him (Mr.
DeCosmos) that at that moment their
engagements   required  every   penny
they had in their coffers, aud they had
had enormous sums to pay; and, further,
were obliged, in consequence of the demands made  upon  them, to antedate
the period for the negotiation of the
loan in 1875, because the resources at
their command were hardly sufficient,
to enable them to meet their then engagements, which were  very large, a
considerable portion of them being on
the account of British Columbia itself.
As to the calculations which the hon.
gentleman had made regarding the loss
which he stated the Province of British
Columbia had sustained in consequence
of this, he could only say he very sincerely regretted that the Province of
British Columbia   should   have  been
exposed to any loss whatever.    If ho
had understood the   hon.  gentleman
aright—if   not,   he   (Mr. DeCosmos)
could    correct   him—the  sum   total
which that Province would have been
entitled to would have been $900,000.
Of that  turn the hon. gent,  himself
admitted that they received $330,000,
which  certainly would not leave the
sum   of $750,000  available;   so that,
even if they had obtained the full sum
which the hon. gentleman had said was
promised   him,  he   (Mr.   DeCosmos)
would not have been  able to  obtain
quite the loan he  wanted.    However,
he (Mr. Cartwright) would only point
out as to the calculation the hon.gentle-
man had made, that he did not see on
what principle   he  (Mr.  DeCosmos)
assumed   that   the   annual   payment
of $75,000, ranging over thirty years,
was to be treated as a present cash loss
to the Province of $225,000.    He (Mr.
Cartwright)   should   be   inclined to
think that it would be much less than
one half of that sum.
Mr. DeCOSMOS : I did not Pay it
was a present cash loss; I said it would
entail a loss of $225,000.
Mr. CARTWRIGHT said he was
jjlad to be corrected.   He had understood the hon. gentleman to add to his
other enumerations the damage which
he claimed that Province had sus--'
tained, about 818,000 or thereabouts,
as being the cash interest on this
loss, which was the loss of British
Columbia from this time out on
the $500,000 which the hon. gentleman said the Dominion 'owed them.
As to the little matter in dispute, tho
guarantee loan, floated in 1873, he
could inform the hon. gentleman that
it was not Dominion five per cents., but
guaranteed Imperial four per cents,
which were not properly applicable for
a purpose of the kind to which he
(Mr. DeCosmos) alluded. Speaking
generally, the House would perceive
that this Act was passed for a good
reason, and he might also say that, if
the application of' the Province of
British Columbia was declined, it was
not with a view to embarrass the Government of that Province in aryway,
but simply because, at that particular
time, the Dominion Government had so
many and such heavy demands made
upon them that it was a matter of very
great difficulty, at the moment, to see-
how they were to meet the current liabilities that came crowding upon them
without serious inconvenience to the
general public service. He need not
remind the House that at that particular time the distress in Canada in
commercial circles was very serious,
and very great difficulty was then experienced in obtaining from the several
places in which money was deposited
the sums that the Government really
required to meet the wants of the
public service. Any other discussion
that might be had on this subject he
thought would be more fitting when
the several papers to which the
hon. gentleman had referred were
brought down, and they would bo
brought down at the earliest possible
Mr. DeCOSMOS said the last excuse
given by the hon. the Minister of
Finance for not passing this money
over to British Columbia was that
distress then existed in Canada. By
that, he presumed, he (Mr. Cartwright)
meant old Canada; and this made up
a large shsre apparently of the arguments of hon'. members of the House,
who seemed generally, when dealing in
their disputes about matters of finance, -
to refer to old Canada as the Dominion,- 11
forgetting that there were besides the
Maritime Provinces, with one
million of people, another Maritime
Province, which he hoped before
long would also have its million of people in this Dominion.
Why had not the hon. the Finance
Minister, when he was dealing with the
distress existing at that time in
Canada, remembered that considerable
distress would be entailed by his action
in the Province of British Columbia
as well. He (JM r. DeCosmos) thought
that that Province was as much
entitled to the hon. gentleman's consideration as this or any other Province, and he, therefore, took it that
the hon. gentleman's excuse on that
ground was neither full, nor complete,
nor satisfactory. The hon. gentleman
also said that he (Mr. DeCosmos) had
made an error about the $750,000 loan,
and that the real difference between
the actual and allowed debt not paid
over, was some $600,000 odd; but
would any one suppose it to be desirable that any Government should go
to the British Market, or any foreign
money market, to borrow the difference
between $600,000 odd and $750,000.
H they would, not do so, then the
reason why this $750,000 was borrowed
was to enable the Provincial Government to meet the liabilities which had
been incurred. If the Dominion Government had paid this $600,000 odd,
there never would have been any
earthly necessity to issue bonds for so
small an amount as the excess over
$600,000; hence the hon. gentleman's
allusion in that particular fell to the
ground. The hon. gentleman said
the Dominion Government had no
intention to embarrass the Government
of his Province. The Government of
that Province was embarrassed, but
the hon. gentleman's kindness was
shown towards the bankers and others
and the commercial people on this side.
The hon. gentleman's whole soul was
apparently engaged in sympathy with
the bankers and the merchants on this
side, with whom he (Mr. Cartwright)
had previously no obligation, and not
with British Columbia, with which the
Government had an obligation. The
hon. gentleman could not say that this
Act cap. 17 was permissive, and could
not state here on the floor of the House
that the Province of British Columbia
had to give notice. He accepted from
the hon. gentleman, to a certain extent, the necessity for notice; but
not to the extent in which he (Mr.
Cartwright) had put it. For the Province of British Columbia had given
notice, and had negotiated with the
Government of the Dominion for
the advance of this mone3r. The hon.
the Premier of this Government had
agreed with that Province, and the hon.
the Finance Minister of the late Government had agreed with that Province
to do so. And the hon. gentleman
himself (Mr. Cartwright) had stalked
through the Privy Council Chamber
when the arrangement was made with
the present Premier of the Dominion. His hon. friend the Minister
of Marine and Fisheries knew that it
was a deliberate and understood thing
by the leading members of the Ministry
when they came into power, and before
the hon. gentleman (Mr. Cartwright)
went to his constituency, that this
money should be paid over to the Province of British Columbia; and, if he
(Mr. Cartwright) came down to
the House to-day, and told it that the
Province had to give notice,that the Act
was merely permissive, and that the
Dominion Government could do as it
pleased, he (Mr. DeCosmos) took this
occasion to state that the hon. the
Minister of Finance either made a very
great error in this matter, or that the-
hon. gentleman's memory was exceedingly treacherous. It was obvious
that it would not be proper to allow
the other Provinces to draw without
notice—and in this he certainly agreed
with the hon. gentleman—on the
Dominion Treasury, at their will and
pleasure, without notifying them ; and
in this case of the Province of British
Columbia, they had given notice, and
had a positive agreement, and hence the
objection of the hon. gentleman would
not come under that head at all. With
respect to the hon. the Premier, he-
knew full well when he brought
his resolutions to go into Committee of Supply that the advance
was to be made to British Columbia—
for he (Mr. DeCosmos) had spoken to
him on the subject, where he now satr
several times,and more than that he had
written letters to the hon. the Finance- 12
Minister, which he (Mr. DeCosmos)
had in his possession at the present
moment, with respect to this matt "—
in which he (Mr. DeCosmos) had astfed
when he was going to bring down his
measure—and what for ?—to carry out
the agreement with British Columbia,
not merely with respect to this loan,
but also with respect to the graving
•dock. Hence, the statement that this
Bill was introduced into this House, and
that British Columbia was placed in
the same position as other Provinces,
was an orror; and that it was an
error, he , believed; was capable of
full and complete proof. The hon.
gentleman said he knew nothing
about this matter. He would rein hid (he hon. gentleman that, when
sitting in the Privy Council Chamber,
he himself was there when this matter
was understood, with other members
<>; the Government. If it was not
brought to the notice of the Finance
Minister of this country he could not
conceive why it was not; for it had
been discussed over and over again by
the hon. the Minister of Marine and
Fisheries and others; and he was told,
when he wanted to get the confirmation of this agreement with the late
Government, tbat they saw no difficulty
about this matter. He believed it
was on his own suggestion to the
Premier that this privilege should be
extended to all the Provinces, that
it was extended in the Act they had
before them.
Mr. TUPPFjR said he quite
concurred with the remark made
by the hon. ' the Minister of
Finance, that it would be more convenient for the House to take a discussion on this question, which was
certainly a very important one, as presented by the hon. member, when the
papers were all brought down and the
facts were all before them.
Motion agreed to.
Parliamentary and Departmental Printers, Ottawa, Ont


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