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Lethbridge Herald, The (Newspaper) - November 11, 1910, Lethbridge, Alberta Friday, II, 1910. THE LETIIBIilDGE DAILY HEKALD Page 13. and went to New York, where JMr. Clarke called on hltu ut his hotel, though, Mr. Cross oays, without any on his part. Mr. Cross states that Mr. Clarke vi'ished him to go with him to Ottawa, to introduce him to tho members of the Dominion Government In furthcrauce of his de- tire to.obtain a subsidy from the Do- minion for the railway. Later in the inonth of April Mr. Clarice, -with Mr. Miaty and Dr. and Mr. Cross, met in Ottawa, and Mr. Cross introduced Mr. Clarke to some oil the Dominion Ministers. Shortly after this Mr. Clarice went, to .England again and arranged-a sale of the bonds to the London and Paris houses of Mor- Sale of Bonds Before leaving, however, on the Sth of. May, he wrote Mr. Minty a letter, in Which he stated: ''It is iriy plan to "receive from the Bond Syndicate, "which must pay various small com-' "missions, to bankers, brokers, etc., an- other, and larger .commission for "a "consideration adequate to the syndi- "cate. In so far 'as the Trustee is "concerned, he need know nothing "about ibis commission, for he would the net proceeds of the bonds "from the manager of Bond Syndicate. my commission would be a large "one, 10 per cent, to 15 per cent., and "with the 'understanding on the part "of the Bond Syndicate that the mon- "ey would go "into the work. The rea- "son for receiving the money in" this "manner would be sufficient to salis- "ly the Bond Syndicate. YMat I would' "like to know is, whether an arrange- "nient of this kind be illegal "as regards the Government, the "Guarantee Act, etc." Mr. Minty replied'on the llth'.May advising, that, the proposed plan was not feasible, pointing out that the Act required that ALL moneys realized by the: sale of the bonds should be paid by the purchaser into the ap- proved bank to the credit of the Pro- vincial Treasurer. He points out, how- ever, Government is taking "the chances of the price at which the "bonds are cold, "being made such that -the purchasers'will pay the expenses, graders Bant of Canada as "to bring the threads together quietly "at some convenient place in "and why your part of. the matter will "need some adaption to the conditions. "At the present moment your-'part "of the plans stand-tb.us: -The is settled, but the Trust ''Company.is not chosen; (b) the Agreement is having concurred in omitting "the clause agree that the -Railway shall cost and in re- -taining the clause-that as each 10 is completed, except as to bal- last; .we get "Therefore 1 suggest that before, the "Premier Ifeaves tomorrow you have (a) An 0. C..approving.the and -authorizing the Presi- "denr-in-Council. (Mr. to "execute it. I would, suggest that, no "reference be made tojbe Trust Com- "pany, but when-if settles upon it the "'name can be -filled in: ex .post facto "or nunc pro tune (whichever Latin "phrase.is suitable) by on. a wire "from the Premier. This .will enable to semi Sir Frank Crisp now a "complete copy of the Order-in-Council "and. relative Mortgage, (b) An 0. C. Mr. Rutherford, as Pro- "vincial. Treasurer, to execute now bonds in the 1'orm in the rnort without coupons, to be hereafter by engraved-or lithographed "bonds and coupons, to be then exe- by. hini or the, then Provincial 'Treasurer, (c) An.O. C..authorizing 'the Construction- and di- its execution by the President "of the Counc.il. The specifications "will be attached. These will either "be approved now by, Mr. Rutherfbrd- ''absolutely or else sub- ject..to confirmation by 'Mr, Jones, "it the latter, I would :recommend that "the-Q. C.. be unqualified in form, but 'that "Rutherford should delay -execut- 4 ing .the agreement untiK be gets' a from Mr. .Tones." A copy of'the of the on account of fees, ex- penses and disbursements, followed by the issuing of the company's cheque to Mr. Clarke, and its transfer ;lo the bank, to meet the overdraft. After the organization Uxo formal agreement was entered into with the Government and the mortgage executed. Everything had been sealed at this time except tho specifications. Mr. Gushing sub- mitted specifications which he .had' prepared by the engineers of his de- partment, were, however, re-- jected as. being loo severe. The staud-- ard to which the .road .is to bo built, instead of. being made '.liar of the main, line of .the Canadian Northern as in the case ot' the other guarantees.' is that of.. the Crow's. Kost Pnss Hail- way, between Lethbridge and Koote- nay Lake, and the witnesses all agree that what was meant the road as it was originally constructed some fifteen years ago. The specifications are admitted by Dr.. Wadddi to be lor Low Standard of tial commission out of the proceeds, but'was advised 'by his solicitor that he could not legally do it. it will be noted, however, letter of ad- vice contained a paragraph which to a shrewd man might indicate a way in which his purpose might be accom- plished to some extent by making an actual sale to a purchaser at a price !ess than the. market price, under an arrangement with him for a consider- ation, though not a commission, a ve- ry natural way being by a division, in such proportions as might be ag- reed, of the difference between the tale price and the price to be obtain- ceived, sho'ttld' allow the bonds to be sacrificed to the extent froai half to three-quarters, of a miiloin dollars. Almost-immediately alter the'sale of the 'bond issue a Construction Com- pany which had been in contemplation for some, tiino was formed for the pur- pose of building the road. This com- pany, with.'a capital, of was formed under the Dominion Companies Act on the I2xh day of November, 1909. the first incorporaiors 'being Mr. Min- ty and Bothers froni bis oQice. Their interests, wvm-h were only nominal, were subsequently transferred to Mr. B. R.-Clarke, wuo at the time the cv- ed when the bonds were sold on the- idence was taken was nominally tho cpen market- The letter im-imated that "this could only be prevented by a, desire to keep up the 'credit of the Company and the Province. If such. a desire, were lacking then there would tie -nothing in -the way if a suit- able purchaser, could be fo.und. In March of. year the Province had sold in through the medium and he stated that proposed I of the Imperial Bank, an issue of only person interested. This com- pany -made art agreement with'' the JRaihvay Company, .whereby it agreed -To "Build the Read and in al! the proceeds of 'the'bond ai! ol' the capital stock, and all the-, niher 01 ttie Railway-Company v.'.ere transiecied to taking of an interest in the piogress higher. It is apparent that the effect ot" the enterprise have been no of these concessions in .each indication of anything improper, but the amount.-of toe denial'of such interest might the denial'of such interest might su gest that" there is .something to be con- cealed. These.suspicious circumstan- ces, however, point to no definite con- make it available as' sooh'-'as without in any-way efit which the country -js.to receiveiin return, and without regard to the. oosi' in touch with Clarke. evid- enc.e shows that in of JS08 when encouragement 'of 'assistance in of .a .guaranteef of. borids "was it; 'Mr...Minty Mr. W. R.j Clarke.had no inieres; v.-fcaifcver in ii j way IQ and that his was build a-road which would cost jbouds Qf lhe Province. The pricc-re. mission, but they need not be consid should provide for payment of .the PM- Jed', -for -they were for services such as c-eeds of the. bond issue only up to the performed Mr. Clarke iB re. actual cost from month to month. to the railway bond It This-, was cot done, however, and the would appea-1% therefore, that if 4 per company was given everything to the c'ent> bonds of 30 or 40 years, dur. into Company to build.at least 350 miles of railway, including branches and sidings, and terminals at Edmonton to cost at. least in both cases being the-limit of the guarantee auth- orized by the Act. It cloes not in terms agree to guarantee the bonds, but a bond Avas' executed for which is the largest amount authoriz- ation B p.c. bonds good h lg to _ ceived any other benefit or was inter-iCompany in sums ested in .any.other in jtsn constructed prise, ami it must be .held that the. cost Qf whichf aV. iience does not establish the contrary. It seems to.consider what the effect of the evidence is to- wards, establishing whether the Pre- nier or Attorney-General was or is in- terested in the enterprise. It wHI be apparent relation of, the facts that little if any .distinction, can be made between.the two except that Mr. Cross seems to have been more closely 'fay- evidence, would be. 7 that sum, it being placed at about 000 a mils by Mr. the Company's engineer, would-rthe'rifs- fore naturally not be at too low a figure, and who'-is'.'the onV is able to speak from sonal knowledge of the; conditions; estimate, includes. for contrac'tcr's profit, and is general line, the sidings" being estimst-: ed at something 'under mile. And after all-this, the: the bonds 'had-been sold their uaf been' a million dollars, is Company. The standard fi a road nbt: now therefore very. hard an'd, as the evidence; ly of .-a low class, whereas vin, the: bth-j er cases- the-standard-set mo'dern "-Voad .of -recognized Tne explanation offered for that- Vpfecifications which, crc the Original sdian Northern main line, in wh'lcli Mr" Manir. in' his letter specifications instalments'np-to March 1st. The 'prospectus states -that even at this divfde "it The guesuon, in "my opinion, if we resorted to so obvious -a subterfuge as to ar-. in the "4f j including for for would be more sidings. for rate they yield per cent., allowing tljat'-jtlie person-now controlling ''agreement and specifications could Jed by the Act to be guaranteed, and It.will.be seen that-there is a differ 'east. ('dj An 0. u approviiag of the "etc.; lint they know, on the other "hand "risk the than' the- full market price, lest you "should thereby be destroying the cred "it of the Company and 'of 'the Gov- "ernraent." The Plan of Campaign After-Mr. Clarke's return from Eng- some "correspondence passed, and early in September. Mr. Clarke and Mr. Minty came to Edmonton, accom- panied by Mr. McArthur and-Mr. Fish- er, bis solicitor, and also- solicitor for the Morgans.'. Certain cleiails of the or', hetter still, leaving the name of resolution and 'Guarantee Act were un- der disciission., in the' Legislature the Premier stated that, the first 'fifty 'uien-t ,ii Rutherford were to re- 1 turn, promptly after signing the pap- stated that for that portion of-the road, the guarantee- would be only to the ''ers, for by the Time the moneys were jextent oE-the cost, with a maximum taken over in.iSngland'.he could lof per mile. The agreement "be back and able to pass the Order- ih-Couhcil then, .an'd wire the name 'and authority to Mr. Fisher lor him 'to transmit to P. Co. Y.et 41. would recommend the ''the O. C. in in' order that "we may have the present coatrol, possibilities-that1 might by -any transaction were-conside-cu make a delay nereaJter. 1 ly settled, and 'on the 12th of Se'pteru- '-shall keep a c.opy of this, so that we ber. just prior to-his departure 'lor ''can vefer. to our .programme. provided-for the payment to the-com- pany the proceeds of the- bond is- sue in accordance 'With the second al- ternative provided by the Act. namely, on completion of each ten miles with- out baJla-st. These arrangements being complet- ed, IIr. Cla'rke-'and Mr. IViinty proceed: .ed. to New complete the-bond Hale. By 31 r. arrangements wjth lhe Morgans this was to be done enee per .cent "between the sale price to and the sale price by the Mor-1 and the evidence in- that 3 per'cent, would be the limit of-a-legitimate broker's charge for underwriting. Some evid- ence was givec as' to the difference between the rate and Canad- ian terms, arid that "par Canadian at whicii'rate the bonds were sold byrClarke, was equivalent to ab- oat 103 per cent. -This difference was not explained, but it -appears that for j convenience of calculation, securities in ATceriran currency are London Stock Exchange at ?5 to the pound instead of would make a-diffsrer-ce of.2% on j ithe dollar, way. every-'interest and be satisfied with only ,50.0 shares out of As Mr..Minty points out. such a, con elusion is quite, beyond belief. -The fact .is also thay-Mr. AW R. Clarke c'ontinuetl to be the active person in' control, his B. R. Clarke, not appearing in capacity at all.'The- Winnipeg. Mr. Jlinty wrote the follow-j "if you concur in the above, please tj1an ?.ir --r" -have Mr. RuJherford take with film woods "and the Deputy ing letter to Woods: Sept. 12. 1909. Certified, copies'of the various "My Dear plan of cam- j'.Orders-in-Council for Mr. Fisher and "paign is for the "Premier to leave on for the east, and be a-way "until about the 3st .October. TTe also 'myself, fb) Such copies or evidence will enable him.to know that the mortgage and .bonds I pro- o east. Therefore the matters can to him for execution are agreed "most expeditiously be closed out This may be adequately met your telegraphing him' hereafter you receive the printed morf.- age that it is in proper form, and "there. What'I therefore propose is: "1. To have all requisite Orders-in- "Council passed before the Premier "leaves, giving-him in his appropriate "capacities powers to close out'all de- "tails while east. "2. To have the mortgage printed "in Winnipeg as soon as I arrive. The "primed v.-il! be executed. Pend- ing time of copies will bo "sent ro you for checking, and f.o Sir "Frank Crisp for liis final' sanction. "Sir Frank will cable liis approval, and "ivy that time 1 hope all will be in read-' for immediate execution. -Mr. then cable that the docu- "inents and bonds are duly executed, "and Use bond's wilL be deposited with "P. Morgan agents against the osit in England of the proceeds. tb.e bonds are. to be in the form of -the Cons.truct.ion Agreement, ''including specifications. "Yours faithfully, Provincial Treasurer, accompanied viieo :o look after lhe interests of the Province. Mr. Cornwall and MT...Cross al this time were both in the East..Mr.- Cornwall iu New York and .Mr. Cross in Toronto. 3'Jr. Cross arrived in New York morning, 1st of No- vember, the day on wuich the transfer r.-as made. He and Jhv Cornwall state that he to New York in re spouse.'to a. telegram from Mr. Corn- sugijesiirig that lie 'should' go and sec a New York election. IMr. Cross says that it not Ii. ers of which-. ulations. :No remedy these defe'ctis tions accepted.' ence of -lacik of 500 for equipment. It suggests that 'cent; should con- tingencies, and if there were any ial bridging (which there as thejas evidence shows) it .might come tip to the Railway Corroany a mile. It would be a fair as- UNFORTUNATELY, IN OF MR. CLARKE sumption that inVfurnisfiiHg; an esti- mate such :as this' on. an for a .guarantee, j NESS.'. NO CAN .not erMn. making estimate too ED ON .HIS PERSON ALfTY bw. This letter "was produced to" the _ Commission My the a POWERS., copy had been MEN dicate. When the negotiations AS TRUSTEES resumed in October, or Construction Company up to the eon- jnot a year after the receipt of.this let-: ter and Clarke was still the stranger he had he. got elusion--of. tae-.evidence had not be- come registered in. the Province, as re- quiredr "by the Prosiucial- law. Certain work...however, had. been, done on the proposed railway. The route for about AGREEMENT WITH "--'A. FOR WORK JO SE AND', MA KE ..CO NCESSIO N S JXASTiiY IN EXCESS Or a-promise of assistan- ce far fabyond what had ever been ask- ED. BY; OTHERS ed for before. A guarantee1.of WORK, AND OF; WHAT ARE GRAtiT' Securities eu ,ur guarantee .OT wunrv, AINU vjr WHAT ARE GRAfiT' quoted on of 1 distance from Ed- a ?t 4 per cent. .had'., been askeo Eo'v TO OTHERS FOP" he-rate of rJoaton ty Fcrc had beea for..'and a. mile at 5 per. r, IT and portions of it graded, was given to this-Company. .Sidings noL-been.filed.or snd 'included in tion of the It is quite iui- material, for in the sale of the Provincial issue., and "in --both sales item' being considered, the pound is thougii tUe.-plaas.liad not-been .filed.or route-approved by the Railway .Act.- The evidence shows that this route, while rrot passing -through an good a co.uu- for settlement as either route pre- reckoned at It'maybe .said viously surveyed, permits of construe- that a reputable house would not lend itself: to" a secret arrangement'such as an Jess expense. The actual dist- ance. together the branch -to the suggested. That may or may not be! east end of Lac !a Biche, which lias G. D. MINTY. _.. iin Edmonton that he ivas going to The paragraph stating that Mr. Cross, had agreed to eliminate the to build a road costing a mile, besides suggesting that he Vv-as the minister negotiating on behalf of and repre- senting the Province, shows that at that time his attention had been drawn to the fact that there must have. been good reason to think that the roa'd could be built for less than S20.000 a (New York, but on the 30th of October Thorn. .Mr. Cross' private secre: tarv, in answer to an inquiry from Mr. Woods us 10 Mr. Cross' whereabouts wired TO .Mr. VToods: "Cross intends being in New York Monday morning., and likely star lor a. week.'r Mr. Cross dees not know how Mr. Thorn got the Information from which he; sent the telegram, and Mr. Thorn can throw no further light on it. except to sav that he got it by inquiring from someone. be'as soon as banking fat-Hides imile- or the Company would not have 'peraiir to Canada [asked to be relieved of thst term, and It'ne company was .in addition seeking "Frank will also doubtless ask for a "copy of 0. C., so I want one as a s'jbsidy the Dominion, "soon ;is possible for Mr. Fisher I0 as already Indicated, had obtained "send him. the case: It inay. however, be noted that-the prospectus issued by it ab- ove-mentioned that "The net proceeds of toe present issue will be applied "to the construction and equip- ment of the said railway and als." This is very far from being an accurate statement, of the fact. Un- der, the terms of tile agreement the proceeds are to be paid upon the ccm- s'.ruction of the road in tea mile see been surveyed, is 2S5 to 300 miles. Dr. Wadciell says chat at the time ol" the negotiations the length was discussed. that the main line survey sao-wed a dis lance of 2CS. miles, and adding the branc-li lines and sidings, it is figured out ro about, The sidings provid- ed for by the agreement are ft. for nine allies, which -would make about r2 on a line of 300 miles. snd been included in the special provis- ion was made for them increas- THE WORK TO. BE; DONE.6f HER1 S.N- THAT OFFERED BY: THs" guaranteed 000, and. fay for sidings, .if only REASONABLY. RISE. TO for the minimum sidings are built. The evidence shows that the cost, of sidingc may be less, but seldom is more than half the average cost per mile of the general line. In. trie guarantees given to'the Canadian Northern and Grand Trunk Pacific no special provision is made for sidings or terminals. This Company 13 permitted to sell all its bonds before the expenditure of any- thing on the road. This involves, of course a considerable loss of interest, on the capita! while" It is lying itiie be- fore it is actually earned. The roads Then, under the terms of the agree- ment, all of the money remaining on completion of the road is to be ._ the, negotiations, from Edmonton out to the company, who are -to -re- ceive a mile for each ten miles as completed. Consequently any pre- mium obtained OH the sale of the bonds would be ilie property of the Company.-but would simply be -in. the _ Consequen'-ly, the present line Tvith guaranteed for the Canadian Northern authorized to be con- the Ccmpany already re- incorporated by Macken- zie Mann, under the name of The Alberta Midland Railway, and under the Act of Incorporation, ss already mentioned, bonds can be issued only in proportion to co much of the line as i. UVn t Ii LlJC1- 1 VtiU JAJ. LJWlw I i branches unu complete would (are chiefly ros tions without baliost or equipment. I J a. i lt. he than ?.1.> cues, structed bv H even though it may not take half the uy ir while 33o v.-ns Uie figure mentioned in ferred to as i Bum to accomplish such construction, t f discussion. A s raisht line as Mr. Cross says lie knew nothing ubout bank until the cosr.pleiion of the rosd, the transfer of the bond, and was stir- and the Company would lose interest. shown on the Government maps, which were available: at the time cf to the west end of Lac la Biche and thence 10 Fort McMarray, is 23u miles, a straight line along Lac la Biclie is about 2-3 nailes, making a to- tal of miles. Vslue cf the Evidence n: sonic length the HE SUSPICION THAT BEEN ACTUATED .BY -'SOME-' MO-- T'VE OTHER.THAN REGARV FOR THE INTERESTS IT DOTY TO PROTEC r. _ THE. !JV1FU- TATiON OF THE WJRDS. OF.THE RESOLUTION OF THE ASSEMBLY SET OUT IN THE COMMISSION JS THAT THAT MOTIVE IS -PERSON- AL INTEREST. MANY OF THE! FACTS AND Cl RUM-STANCES RE LATED ARE CONSISTENT SUCH A CONCLUSION. THE SUG- GESTED INTIMACY BETWEEN; MR. CLARKE AND MR. CROSS, .AND THE PROCEEDING WITH THE. BUILDING OF THE ROAD WITHOUT HAVING FULFILLED THE LEGAL REQUIREMENTS, actually constructed or under tract. The same restriction is impos- ed by the Dominion Act which author- ises the Grand Trunk Pacific branch linsc which the Province guaranteed. The payment is made to this Company, SUGGESTING "A, WARRANTING THE BELIEF THAT-THE GOVERN- MENT WILL APPROVE OF WHAT IS DONE, ARE ALSO-CONSISTENT WITH THIS VIEW. .BUI THE To Incorporate The Construe-f introduction to the Dominion Min- 30th October, in answer to an inq.uiry, isters, if no further, assistance from he received ;i telfsram from Dr. "VYad- prised 10 see Mr. Woods and the ota- Assuxntog that would be built (principal facts and circumsiancss [FACTS ARE CONSISTENT WITH ers There. Mr. Connvall had been iu'the Province would have no interest Xew York several days, and on the KvLatever in any premium. In thai view, It might no; seem anything very which seem to havo a bearing on l subject matter ol the inquiry, ii necessary to value l Company, which I shall do forth- "wiili while east. "-I. To organize the Construction any. which I shall do when enst. "Ti. To.talic out a license for the Company, which will "be clow practically simultaneously. To the Railway Com- which wili be sic "agents. (Mr. Cross Tor that purpose. t...... The criminal of this leUer Mr. Woods took from the Depart- and destroyed. This he said he clld in JTr. Minty's interest, and because he considered the letter a private one to himself. The "plan improper to mahe an arranges en 1.1 en together a.< e-'icer.ce ir, support oi dell telling him Clarke j which wouJu prevent that loss with- jlhe OOP.-; iusfon :he tc-rms cf arrive at the ManJiattan Kotel, New iniurins anyone. YorJr, on Monday morning. He says, however, he knew nothing about Mr. Clarke's business in New York, TJOV when he saw Mr. Woods and Mr. Mac- leod did ho make any inquiry as (o the of campaign" proposed by Mr. Minty I reason of their presence there, nor did was not given effect to, and later the lhe learn what it was. lieve by my company organized in Edmonton in October, -two organization meetings "7. Then the Directors of the Rail- being: necessary, owing to some "way Company will while east mpon (formality about the first. A few clays after the completion of the rofiOluf.cn' referred to in the Com- The short trip of Mr. Clarke t.o Ens-'mission it will be seen :l.a: only land after the completion of the sale at 'ifte titf.j in New York through the Morgan's ugaiVuv whom agents' there aiso lends color to the view that the matter was not closed. The fact thai soon after he was able to pay Cornwall shows that-he had some available money atj< any su-spicion aro t.nt- ihci: Premier and and Mr Cornwall. With to Mr. ir. is adcan'.ed that, he re- and expects !i is al! at- their business in New York, Mr. i that time, for though he "was spoken i'rora Mr. Clarke, Clarke again went to England, but was of as a man of means and of financial i'.ril-.macle directly 10 Mt. CJark- gone only a few weeks. Shortly after'standing, there is no evidence of bis jivrlwayaud lus am: in -l-n' but.while it provides no penalty forjTHE CIRCUMS i ANTIAL EVIDENCE wire from my Edmonton Agents that formal organization of the Rail- Coniptiny is meet and the execution by the Presi- St-cretary of (a) the Agree- the Government, (b) the "bond morigage, (c) the bonds, (d) "c'ae Agrermont with the Const ruction "Company, and tho Construction Com- "pauy Directors will likewise meet "and authorize the execution of the Thereupon the "Railway Company Officials will exe- fa) the Agreement, "Mortgage, (c) the Bonds. (b) the The Capital Stock jhis return he paid Mr. Cornwall the (having made any substantial pay- at leasi. The fifty thousand dollars of capi- sum of spoken of before in jment, larger :U least than that re- ested in the enterprise. A? retards stock required to be subscribed and paid up in full was subscribed for connection with the arrangement re- specting ;he steamship enterprise. quired for the purchase of the option. ;ihe ihc cor.xrac: anil up to this time. Of course, with ihojbond sule, he professes, a bond issue in the bauk there, would bcjnorame. Ho ho? ttuic-. by Mr. W. R. Clarke B. R. jOne-quaner of ihc purchase price of Clarlte Wm. Bain Qlr. Minty's the bonds was paid or. ihe 1st of No- j little difficulty for him to obtain an json our .ci' seasor., hrother-in-law) and Mr. ?.Iinly jvcmber, and went to the credit of the j advance from o bank, and possibly j to interest, everyone in Jl.e o1, Mr, Bain and Mr. Minty never .'special account in the bank in due paid anything on their shares, and i course. The remainder was paid in simply held them as nominees of W R. Clarke. Not a cent of money was actually paid on this stock, though Premier, and the certificate of the managers of the three further instalments of one-quar- this money was obtained in this .way. ja railway lo Fort McMnrray, for we find that on the 29th November j March. U'OS, be siates he is sa-.- the Company negotiated a loan of hall 'istiec: thai. a. bond guarantee csn be ol) ter each st the beginning of Decem- [a million dollars from the Royal Bank. jtaineU fioni the Provincial Govern- ber, January and February following, lot' which, however, he only received irnem; and yet. from a coupif: o! of the without ballast, in ten QTHER CONCLUSIONS. AND IN AD- rrnis sections, with the result that at the end there may be with the paid ov j ESTIMONY er and no security for operation or ev en equipment or ballast except a com- pany which has not a dollar in it: treasury, ar.d has transferred.all of its stock and assets. On Dr. Rutherford's attention being called to this possible consequence, he TO THAT FACT, DIRECT IS GIVEN BY BOTH DR. RUTHERFORD AND. MR. CROSS EXPLICITLY DENYING ANY PER- SONAL INTEREST WHATEVER, AND IT CANNOT BE SAID THAT EITHER THE EVIDENCE ITSELF OR THE MANNER IN .WHICH IT jjstified the provision by saying that I WAS GIVEN, FURNISHES ANY REA- thc read must be operated as 50 mile sections were completed. It is per- fectly true thst the Act of Incorpora- tion provides that this shall be done, SON TO DOUBT ITS CORRECTNESS AND THE ONLY REASON FOH RE- JECTING IT WOULD' BE BECAUSE fsiiurc to comply with this term, it I IS IN CONFLICT. WITH IT, AS may also be pointed out that all of the THERE ,s ROOM THAT proceeds can be withdrawn before a QF PERSONAL w. si.nale mile of roaa is completed, be- cause, as is aircady shown, the money TEREST IS THE ONLY REASON- paid out. under the terms of the statute and agreement, "upon the completion (except as to which clearly indicates that ballast is necessary before the road is complete in the contemplation of the ABLE INFERENCE TO SE DRAWN FROM THE CIRCUMSTANCES RE- LATED. AND IN VIEW OF THE POS- ITIVE DENIAL, IT CAN ONLY BE SAID THAT, IN THE OPINION-OF ,j.-e, and consequently before the Com- YOUR COMMISSSONERS, THE and deposited in the same way. The i one-half. With this sum and one-half jmcntbs laier. when Mr. Clarke assum-jpany can be called in to operate it. JDENCE DOES NOT WARRANT THE .Merchants Bank was produced were declared by Mr. Clarke to of the difference between the two sell-ies the interests of the -Atnahasca Syn ins tho sr.ra of to the credit of The company. This was arranged by "You will appreciate the fan. that jan overdraft permitted Mr, Clarke, by Directors and Officers of he drew his cheque for i.liat "Railway Construction Company will j amount and deposited there ro the "be so selected as to enable them to j credit of the company, with the under- "act at. any place where Mr. Clarke "and I may be, although the formal "shareholders' meetings will be held "at. Edmonton and Winnipeg by dum- standiug that no money should aci- ualiy be paid out. of the bank. The arrangement was carried through by means of a resolution being passed. have been sold at par. and. the am- ount which was paid was exactly the able.considerably less than the 10 per {he seeir.s to have los face value, together with the interest on the three deferred payments. This money is now in the banks, and it is quite clear that no one received any of it. If it comprises the entire pro- ceeds of the bona' sale it is slso clear M As to mileage, even Dr. Waddell put it at 335 at the outside, but for some unexplained reason it was put in the cent, or 15 per cent, which he proposed I tho matter.-. He says IK- uui no; know agreement at 350 exactly, thus involv- ing- he would still have avail-Idicaie, it one is to aceci-i hi-: evidence. 10 obtain. On a question of probabil- jwhat progress was bolug mack-, ant! ities one has 10 consider which is I made no inquiries, and did nc; con- moro improbable, that such an arrange i cern himself in any way. In view ot ment. should be made or a man whose- life experience that Mr. j the- interest he professed in the- coun- sxperience hry, UK- any.iety he haa displayed in lig the building snd the paying for at bast 15 miles on Dr. Waridell's tncn showing, and 30 to 5C miles as shown Ly actual work or. the ground, of road quite unnecessary for the carrying out that no one !ias received any portion liiad. been chiefly with financial insti- trying to get and his cf the undertaking as disclosed by the of the proceeds of the bond Ir ni.Pons, of several ot whicn IIP, wp.s financial i n't crest? ti.Pt be alTecr. documents, and the drsft Act referred as soon as the company was organized, has been seen, however, that Mr. President or Vice-President, and who led by such p. road, it ii difficr.il t.o Tin- ta, suggests that if the Legislature had "This outline show how we" have i directing the payment, to R. Clarke Clarke did intend to retain a substan- I1 would therefore not be likely to be dc- 'derstami surjh a frame of miuci. The approved it might have been put even FINDING THAT THERE WAS OR IS ANY SUCH PERSONAL INTEREST ON THE PART OF DR. RUTHER- FORD OR MR. CROSS, AS IS SUG- GESTED BY THE WORDS OF THE RESOLUTION OF THE ASSEMBLY. A. 11 of which is respectfully submitt- ed. L SCOTT. HORACE Dated at iSdmomon, August 23, ;