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PAPERS Relating to the Island Railway, the Graving Dock, and Railway Lands. British Columbia. Legislative Assembly. 1883

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 46 Vic.        Island Railway, Craving Dock, and Railway Lands. 453
PAPERS
Relating to the Island Railway, the Graving Dock, and Railway Lands.
By Command.
John Robson,
Provincial Secretary's Office, Provincial Secretary.
7th May. 1883.
The Lieutenant-Governor to-the Secretary of State, Ottawa.
Victoria, 10th February, 1883.
Sir,—I have tho honour to enclose herewith a copy of a minute of my Executive
Council, dated to-day, with reference to the questions of the Island Railway, the Mainland Railway lands, the Esquimalt Graving Dock, &c.
The Hon. Mr. Trutch, who leaves to-day for Ottawa, carries a copy of the above
minute.   I have, &c,
(Signed)       C. P. Cornwall, Lieutenant-Governor.
Copy of a Report of a Committee of the Honourable the Executive Council, approved by His
Honour the Lieutenant-Governor on the 10th February, 1888.
The Committee of Council having had under consideration the subject of the Dry
Dock, the Railway Lands, and tho Island Railway, beg leave to report as follows:—
Graving Dock.
That in the proposal formulated by the Legislature of British Columbia, when discussing the question of Union with Canada, and sent to Ottawa, it was asked that "The
" Dominion shall guarantee interest at the rate of five per centum per annum on such
" sum, not exceeding £100,000, as may be required for the construction of a first-class
" Graving Dock at Esquimalt."
ThafT in the Terms of Union (section 12) it is provided that " The Dominion Gov-
" ernment shall guarantee the interest for ton years from the date of the completion of
" the works, at tho rate of five per centum per annum, on such sum, not exceeding
" £100,000 sterling, as may be required for tho construction of a first-class Graving Dock
" at Esquimalt."
That it is obvious, from tho language employed above, that it was never intended
that any portion of tho cost of tho Dock should fall upon the Province, but that the
whole burden should bo borne by the Dominion; and tho above recited guarantee was
agreed to because it was confidently believed that it would secure the completion of the
work.
That the above provision was based on the assumption that work on the Canadian
Pacific Railway would be commenced at Esquimalt within two years from the date of
Union, and completed within ten years; and that to the failure on the part of the
Dominion Government to meet these expectations must be attributed the fact that
capitalists could not be induced to undertake the construction of the Graving Dock upon
the conditions set forth in the Terms of Union.
That upon the failure of the Government of British Columbia to secure the construction of the Dock on these terms, an arrangement was made whereby Canada agreed
to substitute a cash jjayment of $250,000 for the before-mentioned guarantee, and the
Imperial Government were induced to promise a like sum, contingent, however, upon
material alterations, involving an increase in the cost of the work.
That the Legislature of British Columbia was led to believe that, with these joint
contributions, it would bo possible to carry on the work to completion without entailing
any financial burden on tho Province, and that, upon this assumption, construction was
undertaken.
33 454 Island Railway, Graving Dock, and Railway Lands. 1883
That it is now found that to complete the Dock, conformably with the conditions
imposed by the Imperial Government, would involve an expenditure in all of about
$800,000, or $300,000 in excess of the joint contributions of the Imperial and Dominion
Governments, thus entailing upon the Province an expenditure altogether beyond the
capacity of its present limited revenue.
Railway Lands.
The Committee beg to report on the subject of the Railway Lands of British
Columbia:—
That under the Terms of Union a similar extent of public lands, not exceeding 20
miles wide on each side of the Railway, as may be appropriated for the same purpose
by the Dominion Government in the North-West Territories and the Province of
Manitoba, should be given by the Province to tho Dominion Government, and in estimating the extent of land, all lands which have been sold or pre-empted within such
limits should be made good to the Dominion Government out of contiguous lands.
That the lands which have been alienated by the Provincial Government within
the limits of the railway belt are estimated at 800,000 acres, and for which the Dominion
Government is entitled to receive an equivalent out of contiguous lands.
That the lands beyond the boundary of the Province, and which, if the line of railway had been brought further north, would be within tho railway belt, are estimated to
amount to 200,000 acres.
That on the 8th May, 1880, the Legislative Assembly of British Columbia passed
an Act transferring to the Dominion Government the unsold and unappropriated land
within the railway belt from Burrard Inlet to Tete Jaune Cache.
That the Committee by an Order in Council of the 4th May, 1880, stated that, in the
event of railway work being actively prosecuted, the application of the Dominion Government through Mr. Trutch, contained in Mr. Trutch's letter of 14th April, 1880,
should receive a liberal consideration, and suggested that the lands which might be
considered valueless for agricultural or economic purposes should be defined, and that
the Dominion Government should indicate the lands which might bo desired in lieu of
the valueless lands, and to state how the Dominion Government proposed to deal with
them. That Mr. Trutch replied to this order by a letter dated 8th May, 1880, to which
no reply appears to have been given.
It is admitted that a very considerable portion of the lands included in the railway
belt, and of the lands contiguous to those lands which have been dealt with by the
Province, consist of impassable mountains and rocky lands useless for agricultural purposes. The Committee feel satisfied that a settlement of this question will conduce to
the best interests of the Province and enable the country to be settled up.
Island Railway.
On the question of the responsibility of the Dominion Government to build the
Island Railway, the Committee beg respectfully to report as follows :—
That on the 7th June, 1873, an Order of His Excellency the Governor-General in
Council was made fixing Esquimalt as the Terminus of the Canadian Pacific Railway,
and deciding that a line of railway be located between the harbour of Esquimalt and
Seymour Narrows.
That on the 10th June, 1873, a copy of the above Order, accompanied by a despatch
to the Government of the Province, was forwarded by the Dominion Government, in
which formal application was made for a conveyance, in furtherance of the construction
of the said railway, of a strip of land twenty miles in width along the Eastern coast of
Vancouver Island, between Seymour Narrows and Esquimalt harbour.
That the Government of the Province responded to that application by reserving
the twenty mile belt of Jand between Esquimalt and Seymour Narrows.
That the Government of the Dominion expressed itself satisfied with the action of
tho Provincial Government as set forth in a Report of a Committee of the Privy Council,
dated 3rd September, 1873, in language as follows:—"So long as the land" which is
" referred to is not alienated from the Crown, but held under reservation, as stated in
" the Lieutenant-Governor's despatch, tho object of the Government of tho Dominion
" will bo obtained, that object being simply that when tho rail-way shall como to bo
" constructed tho land in question shall be at tho disposition of tho Government of the 46 Vic. Island Railway, Graving Dock, and Railway Lands. 455
" Dominion, for the purposes laid down in the llth section of the Terms of Union with
" British Columbia."
That on the 8th May, 1874, Mr. J. D. Edgar, representing the Government of Mr.
Mackenzie, submitted to the Government of the Province a proposal to construct at once
the portion of railway from Esquimalt to Nanaimo; that this proposition was connected
with a request to modify the llth section of the Terms of Union to the extent of sanctioning delay in the commencement of the mainland portion of the railway, and it was
not entertained by the Government of the Province.
That tho default of tho Dominion Government in that it had failed to carry out its
railway obligations to tho Province under tho llth section of the Terms of Union, having
become the subject of appeal to the Imperial Government, and Lord Carnarvon having
agreed, upon the consent of the Dominion and Provincial Governments, to arbitrate
upon the matters in controversy between the two Governments, his lordship wrote to
the Earl of Dufferin, Governor-General of tho Dominion, that upon a review of all the
considerations bearing upon both sides of the cause, ho had concluded, among other
things, "that the Bailway from Esquimalt to Nanaimo should be commenced as soon.as
" possible, and completed with all practicable dispatch."
That the Dominion Government, on the 25th March, 1875, asked for a conveyance
of public lands along the line of railway between Esquimalt and Nanaimo, and stated
that it was " essential" to do so " prior to the commencement of any works of construc-
" tion on tho proposed railway from Esquimalt to Nanaimo which the Dominion
" Government have agreed to build under the arrangement made through Lord Carnarvon."
That the Legislature of the Province, in accordance with the request of the
Dominion Government, did pass an Act, assented to on the 22nd April, 1875, conveying
the lands along the line of railway from Esquimalt to Nanaimo to the Dominion Government for railway purposes.
That up to this period tho correspondence shows that the line of railway from
Esquimalt to Nanaimo was regarded by the Dominion Government as a section of the
Canadian Pacific Railway. The Order in Council of 7th June, 1873, fixing Esquimalt
as the terminus; Mr. Edgar's proposition on behalf of Mr. Mackenzie's Government,
dated 8th May, 1874, to commence construction immediately of that portion of railway
from Esquimalt to Nanaimo; and the request of the Dominion Government for a conveyance of land along the line of railway from Esquimalt to Nanaimo under "the
" conditions contained in the llth section of the Terms of Union," all show that it was so
regarded.
That on the 20th September, 1875, in an Order of the Privy Council of Canada, the
position is first taken, in so far as the correspondence between the Dominion and Provincial Governments indicates, that tho Railway from Esquimalt to Nanaimo was offered
to the Province as compensation for delays in the commencement of construction of the
Canadian Pacific Railway, and not as a section of that railway which the Dominion was
bound to build under the Terms of Union. In the above Order of the Privy Council,
which was communicated to the Government of the Province under cover of a despatch
dated 10th November, 1875, an offer was made by the Dominion Government to pay the
Province the sum of $750,000 in lieu of the railway from Esquimalt to Nanaimo, and as
compensation for " unavoidable delay in constructing tho railway across the continent."
That this offer was not accepted by the Provincial Government, and the obligation
of the Dominion Government to build the Railway from Esquimalt to Nanaimo was left
unaffected.
That the question whether it was obligatory upon the Dominion to build the line
in question as a portion of the main lino, or as an independent railway given as compensation for delay in constructing the main line is for purposes of present consideration of
little practical moment.
That the reserve, for purposes of Railway construction, placed upon the lands along
the East Coast of Vancouver Island, between Esquimalt and Seymour Narrows, at the
instance of tho Dominion Government in July, 1873; the conveyance to tho Dominion
Government by the Act of the Legislative Assembly of the Province in April, 1875, of a
twenty mile belt of land for Railway purposes along the coast from Esquimalt to
Nanaimo which was also passed at tho instance of the Dominion Government, and the
revival, on tho 22nd April, 1879, of the Order of the Privy Council of 7th June, 1873, 456 Island Railway, Graving Dock, and Railway Lands. 1883
which fixed Esquimalt as the Terminus of the Canadian Pacific Railway, must be taken
as ample acknowledgement on the part of the Dominion of its obligation to build the
line in question.
That the land on the East coast of Vancouver Island has been continuously withheld
from settlement since July, 1873, up to tho present time, and the development of that
fertile tract of country, abounding in mineral wealth, has been retarded to an incalculable extent, and the commercial and industrial interests of an important section of the
Province have been prejudicially affected to a serious degree.
The Committee therefore recommend as a basis of settlement between the Governments of the Dominion and the Province of the Railway and Railway Lands questions,
that the Dominion Government be urgently requested to carry out its obligation to the
Province by commencing at the earliest possible period the construction of the Island
Railway and complete the same with all practicable dispatch, or by giving to the Province such fair compensation for failure to build said Island Railway as will enable the
Government of tho Province to build it as a Provincial work and open tho East coast
lands for settlement, and that the Dominion Government be earnestly requested to take
over the Graving Dock at Esquimalt upon such terms as shall recoup and relieve the
Province of all exjiense in respect thereof, and to complete and operate it as a Federal
work, or as a joint Imperial and Dominion work. And the Committee further recommend that in lieu of any expensive and dilatory method of ascertaining the exact acreage
of lands alienated within the Railway belt and otherwise rendered unavailable, there bo
set apart for the use of the Dominion a tract of land of 2^000,000 acres in extent, to be
taken up in blocks of not less than 500,000 acres in such localities on the Mainland as
may be agreed upon, the land to be taken up and defined within two years, and that it
be one of the conditions that the Dominion Government in dealing with lands in the
Province shall establish a land system equally as liberal, both as to mining and agricultural industries, as that in force in this Province at the present time, and that no delay
take place in throwing open the land for settlement.
The Committee advise that the recommendations be approved, and that a copy be
forwarded to the Honourable the Secretary of State for Canada, and also that a copy be
given to the Honourable J. W. Trutch, C.M.G., Agent of the Dominion Government in
the Province.
Certified,
(Signed) John Robson,
Provincial Secretary and Clerk Executive Council.
[Telegrams.]
Victoria, 17th March, 1883.
To Sir John A. Macdonald, Ottawa.
Government here anxious to get answer to Island Railway, Dock and Lands proposals before close of session. Members wish to leave. Telegraph reply soon as
possible.
(Signed)       Wm. Smithe.
Ottawa, March 20, 1883.
To the Hon. Mr. Smithe, Premier.
Mr. Trutch will return with instructions for adjustment of arrangements. Had you
not better adjourn your Legislature?
(Signed)       John A. Macdonald.
21st March, 1883.
Sir John A. Macdonald, Ottawa.
When will Mr. Trutch leave ? Our Legislature anxious to prorogue. Important
that wo should know whether our proposals are substantially accepted before taking
responsibility of continuing House in session so long.    Members already impatient.
(Signed) Wm. Smithe. 46 Vio.        Island Railway, Graving Dock, and Railway Lands, 457
21st March, 1883.
Hon. J. W. Trutch, Ottawa.
When do you leave ? Cannot keep House in session much longer without reasonable assurance that arrangement will be completed satisfactorily to the Province. If
necessary reply in cipher.
(Signed) Wm. Smithe.
Ottawa, Ont., March 22, 1883.
To Hon. Wm. Smithe, Premier.
Trutch leaves next Tuesday. Canadian Government are prepared to submit to
Parliament your propositions, with such modifications as may be settled on with Mr.
Trutch and concurred in by us.    Telegraph.    Tour Legislature must legislate first.
(Signed)       John A. Macdonald.
Ottawa, Ont., March 22, 1883.
To Hon. W. Smithe.
I start positively 27th inst., fully empowered to treat with British Columbia Government. I am confident that on my conferring with you Island Railway, Graving
Dock and Railway lands matter will be definitely settled on terms satisfactory to both
Governments, so that necessary legislation may bo effected forthwith both at Victoria
and here. It is absolutely essential, therefore, that your House be not prorogued until
after I reach Victoria.   Please acknowledge.
(Signed)       J. W. Trutch.
23rd March, 1883.
Sir John A. Macdonald, Ottawa.
Your telegram received.    The House here has  adjourned for a week; wo regret
the delay necessary, but will not prorogue until after Mr. Trutch arrives.
(Signed) Wm. Smithe.
23rd March, 1883
Hon. Mr. Trutch, Ottawa.
Your telegram received.   We regret the delay but await your arrival.
(Signed) Wm. Smithe.
Victoria, 25th April, 1883.
Sir John A Macdonald, Ottawa.
Government here anxiously awaiting ratification from your Government of terms
of settlement agreed upon by your agent, Mr. Trutch and this Government, and telegraphed by Mr. Trutch on the 18th inst. Legislature has been kept in session a lengthened period already, and cannot be kept much longer.    Settlement most urgent.
(Signed) Wm. Smithe.
Ottawa, Ont., 30th April, 1883.
To Hon. Wm. Smithe.
Sir Charles Tupper's illness has somewhat delayed matters.    Will be attended to in
a day or two.
(Signed)      John A. Macdonald.
Victoria, 1st May, 1883.
Sir John A. Macdonald, Ottawa.
Continued delay exceedingly embarrassing.   House has been kept waiting several
weeks, is now out of all patience.    Adjourns from day to day without doing business.
(Signed) Wm. Smithe. 458 Island Railway, Graving Dock, and Railway Lands. 1883
Ottawa, Ont., 3rd May, 1883.
To Hon. Win. Smithe.
Have wired Mr. Trutch in full.    See him.
(Signed)       John A. Macdonald.
The Hon. Mr. Trutch, C.M.G., to the Hon. W. Smithe.
Victoria, B.C.,
5th May, 1883.
Sir,—I received, last night, a telegram from the Premier of Canada, conveying the following propositions, to be submitted without prejudice, for the consideration of the Government
of British Columbia:—
1. The Government of British Columbia shall amend the Act (43 Victoria, Chapter 11)
of 1880, granting certain lands, to the extent of twenty (20) miles on each side of the line of
the Canadian Pacific Railway in British Columbia, on the Yellow Head Pass route, so that
the same extent of land on each side of the line of the Railway through British Columbia
wherever finally located, shall be conveyed to the Dominion Government, in lieu of the lands
conveyed by the above Act.
2. The Government of British Columbia shall grant to the Government of Canada a portion of the lands set forth and described in the Act of British Columbia (45 Victoria, Chapter
15) entitled the "Vancouver Land and Railway Company," to be conveyed to the said Company for the purpose stated in the said Act, viz., the portion of the aforesaid lands commencing
at the Southern boundary thereof and extending to a line running East and West, half way
between Comox and Seymour Narrows, and also a further portion of the lands conveyed by
the said Act to the Vancouver Land and Railway Company, to the North of and contiguous
to the portion just before specified, equal in extent to the lands within the limits thereof which
may have been alienated from the Crown by Crown grants or pre-emption right, or otherwise.
3. The Government of British Columbia shall convey to the Government of Canada three..
and a half millions of acres of land of fair quality in the Peace River District of British
Columbia, in one rectangular block adjoining the North-West Territory of Canada.
4. The Government of British Columbia shall procure the incorporation,"by Act of their
Legislature, of certain persons to be designated by the Government of Canada, for the construction of the Railway from Esquimalt to Nanaimo.
The Government of Canada, on their part, shall—
1. Appropriate the lands on Vancouver Island, above provided to be conveyed to that
Government and seven hundred and fifty thousand dollars ($750,000), to be paid as the work
proceeds to the Company to be incorporated by Act of the Legislature as above provided, such
Company giving satisfactory security for the completion of the Railway from Esquimalt to
Nanaimo within three and a half (3|) years from the date of their incorporation.
2. The Government of Canada shall purchase from the Government of British Columbia
the Esquimalt Graving Dock, paying for the same, with all the lands, approaches, and
appurtenances belonging thereto, the sum of Two Hundred and Fifty Thousand Dollars ($250,000),
and shall complete and operate the same for their own benefit, receiving the Imperial appropriation therefor.
3. The Government of Canada shall, with all convenient speed, offer for sale the lands
within the Railway belt on the Mainland of British Columbia on liberal terms to actual
settlers; and
i. Shall give persons who have squatted on any of the said lands within the Railway
belt on the Mainland prior to this date, and have made substantial improvements thereon, a
prior right of purchasing the lands so impr^od at the rates charged to settlers generally.
The Government of Canada submit these proposals upon the further stipulation that
should they be approved by the Government of British Columbia, such acceptance shall be
ratified by Act of the Legislature of British Columbia as in full of all claims whatsoever of the
Government of British Columbia against the Government of Canada.
I have, &c.,
(Signed)       Joseph W. Trutch,
Agent of Canada for British Columbia. 46 Vio.       Island Railway, Graving Dock, and Railway Lands. 459
The Hon. W. Smithe to the Hon. J. W. Trutch, C.M.G.
Victoria, 8th May, 1883.
Sir,—Referring to your letter dated the 5th instant, upon the subject of our recent
negotiations, I have the honour to enclose a copy of an Order in Council of yesterday's date,
embodying the acceptance by the Government of the proposed arrangement for the construction
of the Island Railway, the opening of the Railway lands to settlement, and the completion of
the Dry Dock as a Federal work,
I have, &c,
(Signed)       Wm. Smithe,
Premier.
Copy of Report of Executive Committee approved by His Honour the Lieutenant-Governor
May 7th, 1883.
The Committee of Council have had under consideration the letter elated 5th May, of the
Honourable J. W. Trutch, C.M.G., Agent of the Dominion Government to the Honourable
the Premier, conveying propositions from the Premier of Canada, and submitted without
prejudice for the consideration of the Government of British Columbia, upon the subject of the
settlement of pending questions between the Governments of the Dominion and the Province
relative to the opening of the Railway lands of the Province to settlement, the construction of
the Island Railway, and the Esquimalt Graving Dock, and report thereon as follows:
That whilst it is felt that the claims of British Columbia upon the Dominion of Canada
for compensation for injury sustained in the past from the non-fulfilment of the Railway clause
of the Terms of Union, and from the locking up from settlement of the lands set apart for
Railway purposes within the Province, have not been adequately considered by the Dominion    >r
Government, it is nevertheless a matter of vital importance to the Province that the questions
which  have so long agitated the public mind, and have tended to embitter the relations      e
existing between the two Governments should be settled, and that the Dominion and Province     '6
should unite in a common endeavour to open the country to settlement in the fullest manner
possible; and it is deemed to be desirable,  in order to attain those ends, to accept the settlement proposed in the terms of the letter referred to from the aforesaid Hon. J. W. Trutch to
the Premier.
The Committee, however, wish it to be understood that certain matters of detail arranged
verbally with the Agent of the Dominion, the Hon. Mr. Trutch, which are not embodied in
the letter referred to are to be taken as part of the settlement. The assumption by the
Dominion Government of all Graving Dock liabilities, and the commencement, within four
months, of the construction of the Island Railway being, among other matters of importance,
overlooked in the letter embodying the terms of the settlement. The employment of white
labour exclusively upon the works at the Graving Dock is important, and the Committee
recommend that the Dominion Government be asked to accept the stipulation that Chinese
labour be excluded from the work in the future as heretofore.
The proposal with reference to the construction of the Island Railway is in language
somewhat indefinite, but the Committee are of opinion that the practical meaning is that the
completion of the Island Railway within three and a half years is assured.
The stipulation contained in the last paragraph of Mr. Trutch's letter, that if the proposals be approved by the Government of British Columbia, their acceptance shall be ratified
by Act of the Legislature of British Columbia as in full of all claims whatsoever of the Government of British Columbia against the Government of Canada, can only fairly mean in respect
of the premises to date, and in that sense the Committee recommend its acceptance.
The Committee advise that the recommenr^tions be approved, and that a copy be
forwarded to the Secretary of State for the Dominion of Canada, and the Hon. J. W. Trutch,
C.M.G., Agent of the Dominion Government in the Province.
Certified,
(Signed)       T. Elwyn,
Deputy Clerk of Executive Council

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