per cent. in the matter of insurance, surely it would not be too much if the hon. mem. ber for Hamilton instead of asking for 17 per cent. on manufactures should ask 100 per cent. added to that. This was an indication that the Government were willing to concede the principle of protection. Was there any reason why the Canadian public should not be protected against local as well as foreign companies? It was not the interests of Canadian companies that this House was so much to look to as the interests of the Canadian people as against the companies, and if it required $100,000 from a foreign company to protect the Canadian people, was it not reasonable to suppose it would require an equal amount to protect the people against the local companies. He would not divide the House, but he desired to put his views on the journals. Mr. WILKES said it was not simply in deference to the finding of the Committee on Banking and Commerce that he supported the Bill, but because good and sufficient reasons had been shown for it. Fifty thousand dollars was not a sufficient protection. The real protection was afforded by inspection. We had no inspection of foreign companies, and it was advisable that they should deposit more than local companies. The amendment was lost on a division, and the Bill was read a third time and passed. THE NORTHERN RAILWAY. Hon. Mr. MACKENZIE moved the second reading of a Bill respecting the lien of the Dominion on the Northern Railway of Canada. to appoint a director who would have exclusive control, until that payment was made, of all expenditures beyond ordinary working expenses, and any future expenditure on new works or equipment would be under his control. The House would observe that the time was limited to 1st April 1876, which might be extended three months longer, but not to a more distant period. Mr. MASSON said that last fall a deputation waited upon the hon. Premier respecting railroads in the western portion of Ontario. In answer to a question regarding the Northern Railway, Mr. MACKENZIE was reported to have said that the reduction contemplated would not be made to the Northern Railway. From that statement he (Mr. MASSON) undertood that the Government were determined to exact from actually owed to the Government. the company every dollar which they That debt amounted to nearly £500,000 exclusive of interest which reached $1,300,000. If the road were one of national importance the Government might consider the advisability of making a reduction in their lien in order to enable the company to extend their line even to the Nipissing Railway. But he understood the company was not one of that national character. Moreover it was understood that the company was in a prosperous condition, and the Ontario Government held the opinion that it could pay interest at 5 per cent. on its indebtedness. The Treasurer of Ontario, Hon. Mr. CROOKS, stated that the total debt of the Government amounted to $2,300,000 without counting, and said: Upon an examination of the returns of revenue as earned by this railway, and after a liberal allowance for expenditure "on capital, &c., it appears to the undersigned that the company could with facility pay interest at the rate of five per cent. per annum on this amount of "the Provincial lien, and at the same time "exist in full efficiency, and make, from "time to time, such alterations and addi Mr. MASSON asked for explanations" of the Government proposal. Hon. Mr. MACKENZIE said that the matter was fully discussed and resolutions passed last year authorizing the proposed arrangement to be made. The Bill introduced by the Government in 1873 provided for a valuation of the lien at £23,750 sterling, but the Government❝tions as its traffic and the public had arrived at a valuation of the same lien in the sum of £100,000 sterling, and the country possessed £100,000 of second and third class preference bonds. That was the only explanation he had to offer except with regard to the second section, which gave authority to the Government Mr Oliver. "interest might require.” The company did not fulfil either of the conditions which would entitle it to the reduction of its lien. The company was not one of a national character, and it was not necessary for the prosperity of the country, though it might be for the dis trict through which it passed. A similar a large reduction on the Great Western measure was brought forward by the late Railway debt, but in this case the GovGovernment, but he (Mr. MASSON) and ernment were not giving the Northern several supporters of the late Government Railway anything, but were obtaining the strongly opposed it, as did, also, the Hon. fullest amount which the lien was worth E. B. WOOD, now Chief Justice in Mani- Mr. WOOD said it would be in the toba. recollection of hon. members that a similar Bill to this was introduced, relating to the Northern Railway, by the late Administration. It was true that the Government of that day were willing to take a smaller amount in compensation than the present Government. A very strong article on the subject appeared in the Globe, which shook the Government to its very centre. The present Government came before the House asking for powers almost similar; they asked that the country should give up a claim equal to about three million dollars for about one million dollars. In 1859 the company was in embarrassed circumstances. They owed a very large amount of money, and arrangements were made to place them in a better condition. The Government lien at that time amounted to £475,000 sterling, and the interest unpaid up to August, 1859, was £116,000, which brought the total up to £591,000. The company's bonds of various classes amounted to £243,738, which, together with £43,434 unpaid interest up to August, 1859, made a total of £287,172. The Hon. Mr. MACKENZIE said that his remarks on the occasion referred to by the hon. member were to the effect that the Government would not relinquish one farthing of what that lien was worth to the country. He was aware that the Government proposed to do so. The question, however, was not what they were open to receive, but what they could get out of the road; nor was it a question whether the road was of local or public importance. The hon. gentleman would be aware that between £500,000 and £600,000 sterling of bonds were placed in advance of the Government lien. They had to receive interest before the Dominion would give anything, but their lien was simply worth what it would bring after paying bondholders what they were now entitled to receive. That was the whole question at issue. The late Government came to the conclusion that the lien was only worth £23,000, whereas the present Government valued it at £100,000, and they had bonds of £200,000 or $1,000,000. If any hon. member could discover any way to get any more money out of the road than the Gov-amount required to cover the floating debt ernment was proposing to do, he would be very willing to receive it, but he had failed to see any such way yet, because they must stand between the bondholders and the results of any legislation forced on them against their will. Mr. SCATCHERD said that by reference to another Bill which had been introduced by the hon. member for Muskoka, it appeared that the first preference bonds amounted to £250,000; the second preference to £283,900; class A., third preference, £50,000; class B., third preference, £100,000; and then came the Government lien. So the question was not whether the road was worth only the amount the Government proposed to take in, but whether that amount could be received in view of the position occupied by the Government lien. The Government were taking out of the road all they could get. The hon. member for Terrebonne had, however, supported the late Government in making Ar. Masson. and place the road in an efficient condition was £250,000, while the stock subscriptions of that day still in force amounted to £169,000; making the total liabilities of the oompany £1,297,000. In 1859, an Act was passed, at the instance of the company, vesting its assets in the Crown, as a matter of protection against its creditors. The company afterwards was prosperous. A reference to the annual reports would show that notwithstanding what hon. gentlemen had said about the company being embarrassed, its annual income had increased until in 1872 it amounted to $900,000. The liabilities of the company in that year were $1,298,000; the gross receipts for the year amounted to $894,774. The ordinary expenditure was $528,509, or nearly sixty per cent. of the receipts, showing a balance of $366,265, which in all fairness belonged to the Government, the municipalities and the stockholders, without on whose assistance the road could not have got through its troubles in 1859. The company did not, however, so divide the money. It appropriated $185,723 for special works, leaving $180,541 for the purpose of paying interest on the first and second preference bondholders. The management of the road since 1864 had simply aimed at saving money and paying the interest the first and second class preference bonds. He would be quite satisfied if the Government would appoint a Royal Commission to inquire into the company's affairs, which he was sure would convince them that the debt was a good one, and would be repaid to the utmost farthing. They would not then come down to this House and ask an amount equal to two millions of dollars to be placed in the hands of the bond holders. The resolutions of last year were submitted at a late stage of the session, and were not thoroughly discussed. He therefore thought it was not quite fair that the House should be called upon to-night, on the faith of that resolution, to pass a Bill doing away with the existing lien of the country upon that company. The company was perfectly able to pay, and this was simply a means of putting a large amount of money in their coffers. Corporations of that kind were well able to take care of themselves. It was said that the company desired this Bill passed, in order that they should be enabled to change their gauge, add new rolling-stock and make extensions. There was no necessity why it should pass on that account, for the line was an independent one, and no change of gauge was required. Hon. members were told that the Great Western Railway had received a large reduction of their debt from this Government, but the circumstances were entirely different. The Government loaned the Great Western Railway an amount of money at six per cent. which they had themselves borrowed at 41, and the Great Western Railway was simply repaid the 1 per cent. difference between what the Government had themselves borrowed the money, and the rate at which they had loaned it. There was, therefore, no parallel between the two cases. The Northern Railway Company came to Parliament and asked to be forgiven for a debt of $3,000,000 for which the Government would simply receive £100,000 in cash and £50,000 Mr. Wood. | of third-class preference bonds which might be worth 50 or 75 cents in the dollar. This really meant a payment by the company of 30 cents in the dollar. He protested against the Government giving the Northern Railway any more than they were entitled to, and they were not entitled to receive $3,000,000 out of the taxes of the people. Hon. Mr. MACKENZIE said he had explained already that the Government were not giving away one dollar but were receiving for its lien the fullest amount possible. There was an amount of $169,000 preference stocks, and these shareholders had never received one cent of dividend in any shape, and they would not receive any now as far as he could see. They had endeavoured to raise a loan in London last year sufficient to re-organize the company and pay off the bondholders but it was found practically impossible to do so, although every effort was made to effect some accommodation. The city of Toronto had given up its lien, and would be content in future to consider it simply as a bonus, it having voted £50,000 sterling towards the road. The longer the road was allowed to go on in its present condition the less were the prospects of the Government ever obtaining anything from it, and they were losing interest on the money the whole time. He desired to be understood as not in any way advocating the interests of the company, but as advocating measures that were in the interests of the public. M1. WOOD—Have you ordered an investigation into the affairs of the Company? Hon. Mr. MACKENZIE—I have not. Mr. MASSON — I should like to see the report of the valuation, and how it is arrived at. I have been unable to see a complete report. Hon. Mr. MACKENZIE report. - I have no Mr. MASSON-How is the valuation then arrived at ? Hon. Mr. MACKENZIE--I valued it. Hon. Mr. CAMERON said it would be known to hon. members that the original stockholders of the Northern Railway had never received any dividends. When the county of Simcoe and the city of Toronto had agreed to allow their subscriptions to be considered as bonuses to the Company, Toronto asking to have a repre ง sentative in the Board of Directors, it was not asking too much to apply to the Government to give them relief. He was a bondholder of the second class for many years. For many years they were paid interest at the rate of 21, 3, 31, and at one time 6 per cent, but afterwards they occupied a worse position. It was generally felt that the Northern Railway was like a Grand Trunk-a leading line, and opened up the northern position of the country. It was true that the Great Western had occupied an excellent position to that of other companies; at one time, however, the dividends ran up to 9 per cent, although | at the present time the bonds were in an inferior position. The Northern Company was deserving of consideration at the hands of the hon. members, and he hoped no difficulties would be placed in the way of the Government measure, which would be not only a boon, but a necessity. Mr. LITTLE would support the action of the Government as it would be the means of placing the railway in a better position, for it was a national work, despite what hon. gentlemen had said, and of great importance to Ontario and to through trade, inasmuch as it was one of the leading thoroughfares to the NorthWest, and as great a national work as the Welland or Baie Verte Canals. The line was not in good working order; a change of guage was required, and a double track should be laid down. The County of Simcoe had done all it could in this matter, and he desired to thank the hon. Minister of Public Works for having brought the matter before the House. Particularly as the county of Simcoe in Council had memorialized the Government to take action in the matter. Mr. COOK (North Simcoe) did not rise to oppose the measure, but the Northern Railway Company was now endeavouring to sweep away from before them every claim, municipal or any other. The hon. member for Muskoka had introduced a Bill to consolidate the Northern Railway and its extensions antl branches, and also a line of boats. He was in favor of the Government measure, from the fact that the time was past when this company might have added to the revenues of the country which it could have done, if it had not been for the mismanagement of the company in years past Hon. Mr. Cameron. when lumbering was active, and when The Northern exten sion would help to establish a connection door for Government assistance and relief from its municipal obligations. By this Government aid the railway would be better able to secure the trade of the North-West, but they would require to improve the Harbor of Collingwood. The town wanted a bonus for dredging the harbor, as it was only deep enough for vessels of light draft; and he thought there should be a stipulation by which the railway company would be bound to deepen Collingwood harbor within certain time. If this was not done they would find the Northern Railway before many years asking the Legislature for a some additional relief. There was one The thing that had been overlooked by hon. worth two millions of dollars-and he Mr. COCKBURN did not rise to take any part in the debate, but simply to take exception to the remarks of the hon. member for Simcoe with reference to his reflections upon the officers of the company. He was not afraid to say that there was no better managed road in the whole country than the Northern Railway, and it was only an act of justice to the managers. of the road to make that statement. Mr. McCALLUM said this was considered in 1873 a good asset of the Province, and capable of paying interest at the rate of five per cent., and in support of this statement he quoted the following extract from a memorandum to the Lieutenant Governer of Ontario in Council on the 3rd May, 1873 : Mr. THOMSON (Welland) would Government was to give up the lien for only speak about the remuneration or £120,000 stg.; the present Government rather the amount the Government pro- | had £200,000 stg.; which was a much posed to allow for the aid to the Northern better bargain, and which was he believed Railway. His impression was that the as much as could be got. Government was making a very good bargain. When he saw the Northern | Railway unable to pay any dividend on stock for the last ten or fifteen years, and when it was unable to meet its debt to the Government from the moment they borrowed, he came to the conclusion that the Government had a claim against the Company which they could not collect. How was the Government going to collect a debt from a railway? Would they take charge of the railway ? He thought it was qne of the greatest absurdities for any Government to write up interest on the debt as a part of the debt. They should under the circumstances, and as the people who had benefited by the road were the aggregate creditors, consider the original amount of the debt as sufficient. The Northern would never be in a better position to pay than it was now, as he considered the Muskoka extension and other extensions would weaken the road as far as paying the Gov-amount of the Provincial lien, and at the same ernment was concerned. He spoke without the slightest interest in the Northern Railway, and had offered the same application some years ago because he thought there was a scheme in it, but as Toronto had given up $200,000 and the county of Simcoe $200,000, he would support the proposition. As to the property in Toronto it was like this Parliament Building, they could not sell it bcause, they needed it for the business of the road. Hon. Mr. BLAKE said he agreed with his hon. friend from Welland regarding this matter, and from a careful investigation of the affairs of the company, it would be ruined if it were compelled to meet its obligations. Had a different policy been pursued by a former Government a different result might have accrued to the country. The sum his hon. friend proposed to ask was as much as he could procure from the road, and he believed any larger demand would result in rendering impossible a basis for the re-organization of the company, involving the payment of the amount required by the Government. He believed the extension projects were likely to render the road less able to pay this debt than it was now. The proposition of the late Mr. Thomson, Upon an examination of the returns of revenue as earned by this railway, and after a liberal allowance for expenditure on capital the company could with facility pay interest at account, etc., it appears to the undersigned that the rate of five per cent. per annum on this time exist in full efficiency, and make from time to time such alterations and additions as its AD. CROOKS.. It seemed strange to him that the Company should not still be running the road at a profit. If it were the Government were giving away as much money as possible. As one of the representatives of the people, he must enter his protest against this thing. Were we to pay six millions, including land, for the building of a road to Georgian Bay, and then to be asked to give away three millions to keep this road going? He thought the hon. member for South Bruce had changed his mind within the last three years. Hon. Mr.. BLAKE was surprised at the hon. gentleman being so ignorant of public affairs as not to know that he (Mr. BLAKE) was not a member of the Ontario Government in the fall of 1872,, and that he was |