was therefore subject to contingencies which really made it a yearly arrangement. Dr. Sproule declared that the arrangement was open to grave suspicion because it was signed on October 9th, and as the elections occurred on November 7th, must have been made during the very time the writs were being prepared.

Mr. W. F. Maclean declared that it was a secret contract with a capitalist unknown to the public until four months after the elections were over. With the bounties, moreover, the rails would cost the public $40 a ton while, at the time he was speaking, $24 was the ruling price for rails, rolled in America and delivered in England. The inclusion of nickel in the steel also made the price in future very doubtful and would enable Mr. Clergue to in great measure control it. He considered it a scandalous transaction and for a "free trade Ministry" a most extraordinary one. Mr. R. L. Borden, the Opposition Leader, criticized the Minister for his claim that there was no five year contract; for making the contract without a clause requiring the approval of Parliament; for not calling for tenders so as to give other Canadian capitalists an opportunity of competing; for not guarding against the probability of the British market being an uncertain basis of price because of the nickel in the rails. After another brief speech from the Minister of Railways the matter was allowed to drop.

Another phase of Mr. Clergue's varied interests came up in the House on April 12th in connection with the third reading of the Bill to incorporate "The Clergue Iron and Nickel Steel Company of Canada." Mr. Charlton asked where the operations of the Company were to be carried on and whether the large capital of $10,000,000 was to be employed in the Dominion. Mr. A. E. Dyment, of Algoma, who was in charge of the measure, replied that the works were to be of an extensive character involving the capacity to build steamships and bridges and were to be located at Sault Ste. Marie. Dr. Sproule thought that the permission given to "acquire and operate coal, iron, nickel and other mines, timber limits and other sources of fuel supply" was a very considerable grant of power-in fact too extensive to be wise. Mr. C. B. Heyd pointed out that the concern already possessed a million acres of pulp and hard-wood. He thought the privileges were confined sufficiently to the industries in which they were at present engaged. The Bill was then read a third time and passed. In accordance with a motion of Mr. Dyment the Company is to be known as the Algoma Iron, Nickel, and Steel Company of Canada.

On April 23rd the whole question of the Government's relations with Mr. Clergue, the contract for steel rails and the position of the Minister of Railways in the affair, was brought up in Committee of the House by the Hon. Mr. Blair. The difference between his statement of the terms of the contract and the understanding of the Opposition speakers regarding it was explained at length; though not to the satisfaction of the latter. The matter was further debated on April 24th and May 15th-largely as a party question.

Speaking on this subject and of the earlier debates in the House, Mr. Clergue told the Montreal Star, of April 27th, that he had asked the Government a year before to state that in all future subsidies to railways there should be a guarantee of the use of Canadian-made rails and that this request had been acceded to. Then followed the agreement with the Government for the establishment of a steel plant to construct rails for Government roads during a five year period. He seemed to have no doubt as to the contract being practically for that period. "I think," he added, "that it can be claimed as a well known fact in Canada that since our Canadian undertakings have been projected, we have faithfully carried out our publicly declared purpose of utilizing Canadian materials only, within Canadian boundaries." Without the favourable influence of the Government they would never have undertaken the construction of a rail mill in Canada. The entire plant was now in hand and he hoped that operations would begin on August 1st, following. It may be added that considerable work of a preliminary character was done during the succeeding months but from reasons partly connected with transportation difficulties matters were not completed at the end of the year though an early start in 1902 was expected.

Dominion

Aid to

Steel Ship-
Building

The question of building steel steamers for ocean use in Canada was widely discussed during the year and was a natural outcome of the iron and steel industry movements of the time. Lake vessels of a superior class had already been successfully produced in Ontario, and Mr. Clergue at the Sault and Mr. Whitney at Sydney were supposed to be reaching out after further development upon these lines. The old-time wooden ship trade in which Canada had once so excelled and by means of which she had covered the seas of the world with ships made in Quebec and Nova Scotia had dwindled until the export of ships in 1901 was valued at $66,468 and the import of ships and ship machinery was only $329,274.

There were reasons for the non-development of this industry and the fact that while a steel ship-building business had been going on in Canada for a dozen years past its operations had been desultory and success precarious. The chief trouble had been in the lack of the wide industrial production necessary to give cheap materials for the complex contents of a steel ship. Coal and iron, engines and boilers, wood-work and high-art furniture; the labours of the cloth-maker, the glass-worker, the cutler, the porter; heavy forgings and castings; steam windlasses, steam winches, and electric lighting machines have all had to be imported.

A majority of of these products were far higher priced in Canada than in Great Britain and the duties upon others were and are so high as to make the cost of a ship beyond the competitive limit. Mr. W. E. Redway, in Industrial Canada for March, estimated the advantage in prices to the British shipbuilder at 25 to 30 per cent. In this article he referred to the $20,000,000, per annum which the United States proposed to spend during the next nine years for

the construction of a merchant marine and declared that it would be

an immense source of profit to that country. "Until means are adopted for fostering the construction of steel ships in Canada the transportation problem will remain unsolved and the first storey of the superstructure of Canada's future greatness (to be laid upon the foundation laid by the manufacture of iron and steel) will remain unbuilt."

Speaking in the House of Commons on April 18th, Mr. W. F. Maclean came out in the most straightforward manner in favour of a ship-building industry for Canada. "We must find a policy of building our own ships whether for inland or ocean navigation." The Maritime Provinces had every natural facility and a splendid class of population for the making of sailors. It would be better to encourage this project than to promote even a steel-rail industry. "We could give bounties on ship-building, and we could go to one of the great ship-yards in England and induce the proprietors to transport their industry and their men to Canada." He believed it possible to have a fast Atlantic service commencing with two steamers made in Canada out of Canadian material.

On April 30th the Hon. E. G. Prior drew the attention of the House to the condition of British Columbia in this respect. In 1900, 879,497 tons of coal were shipped from its collieries and 60,000,000 feet of lumber from its mills. Sixty vessels carrying British Columbia lumber were paid $850,000 in freight while American shipmasters actually discriminated against the ports of the Province. They charged British Columbia lumbermen 60 cents per thousand feet, board measure, more than they did the Puget Sound lumbermen. Last year, the latter had sent 63,000,000 feet to Australia-more than the whole export trade of British Columbia in lumber. If upon equal terms in the matter of ships they could capture that trade. He also referred to the ship subsidy measure then under consideration at Washington which would make it practically impossible to compete in prices with American manufacturers. They would capture the entire Pacific trade. The shipbuilders of the Province asked for a bonus and it should be given them as it had been given to the iron and steel industry of the Dominion.

Mr. Maclean reiterated his views on this question and declared that a broad policy of encouragement to ship-building should be inaugurated, whether in wooden ships on the Pacific or steel ships on the Atlantic. Steel ship-building was a natural complement of an iron industry. "We want to have both." The Prime Minister pointed out that Congress had been a long time in coming to any conclusion upon the ship subsidy question and in the meanwhile "we can very well afford to allow the matter to remain where it is."

Some discussion upon this point occurred on May 21st, in connection with a fast Atlantic line debate. Mr. Maclean declared that we could never have such a line, satisfactorily, until we built our own steamships. Two would be enough to begin with, and they need not be very large. If they were modern and up-to-date it was the chief

thing. There were men now considering the matter in Cape Breton and Halifax. Sir Richard Cartwright remarked that the construction of first-class steamships, capable of a high speed, required a very large and expensive plant as well as great skill. "If men possessed of the requisite capital and experience and skill were to see their way to transfer their ship-yards, or a portion of their ship-yards, to this side, it might be very well worth considering." The establishment of the great concerns on the Clyde and at Belfast had cost an immense expenditure of capital, and the money invested in the works of Harland and Wolff alone was between one and two millions sterling. The getting together of skilled and experienced artisans would also be a matter of difficulty. He thought, however, that the works at Sydney might so develop as to make this industry a possibility of the future.

Mr. Maclean suggested in reply that the Government should let it be known in Great Britain that they were prepared to negotiate with some of these big firms. We have the iron and the coal and the capital, and we need the ships." The Hon. Mr. Fielding intimated that this had already been done. "The real difficulty is in assembling the material, and also in the importation of a large amount of skilled labour. The difficulties of that character are much greater than those connected with the manufacture of steel plates." Mr. R. L. Borden pointed out that the character of the work in steel ship-building was not unlike that which had come into operation during the old days of wooden ship-building in the United States. The Hon. Mr. Blair believed that both Parliament and the country were impressed as to the importance and desirability of pursuing a policy which would lead in the direction of steel ship-building in Canada. His constituents and the leading business men in St. John were now pressing the matter to the front. There was a strong feeling on the subject all over the Maritime Provinces.

Speaking in Toronto, at the launching of a large dredge from the Polson Iron Works, on September 2nd, the Hon. J. Israel Tarte, Minister of Public Works, pointed out that there were many capitalist in that city who could aid in establishing an important ship-building industry. "The Government of the country might, perhaps, help. We have helped the iron and lead industries. I do not know whether the country would be willing that we should help the ship-building industry. It is a question to be thought over, and I, for one, invite discussion upon this point. What I say is, we must have boats. We have spent millions upon our canals; I am spending a lot of money in improving the St. Lawrence; it will be in vain if we have not the boats to carry our trade through." Mr. F. B. Polson, in a brief speech, stated that continuity in orders and the carrying on of continuous work were essential to the creation of a ship-building industry.

Meanwhile, the Collingwood Ship-building Company, Limited, had completed its organization early in the year, with Mr. Hugh Calderwood as Manager, and before many months had built and launched the package, freight and passenger steamer Huronic, for a

Sarnia transportation company. She was said to be the largest vessel ever built in Canada, could carry 3,000 tons of freight and 300 passengers, and was valued at $325,000. The Huronic was launched on September 12, 1901, the ceremony being performed by the Hon. J. Israel Tarte, who followed up his speech in Toronto by re-asserting the hope that a great industry would be established and by more than hinting at Government aid. "We will have to spend money," he said; and then continued: "We are short of Canadian bottoms, but we are not short of courage, and we have the spirit and enterprise and the skilled labour to make good the deficiency." Upon the completion of this vessel, the Company at once commenced the construction of a four hundred foot freighter for Mr. Clergue, of the Sault, which was to have a carrying capacity of 7,000 tons of iron ore.

The Montreal Herald of September 14, 1901, published a long interview upon this subject of Government aid with the Hon. Mr. Fielding, Dominion Minister of Finance, and formerly Premier of Nova Scotia. The Minister took the ground at once that if Canada was to win its share of the carrying trade of the world, it must be by means of either buying or building steel ships. The latter, he hoped, would gradually be done, and he had already expressed the belief that iron and steel development would be followed by steel shipbuilding. Experiments had already been made. The firm of Matheson and Company, of New Glasgow, N.S., had built a steel steamship for the Intercolonial Railway some years ago, and the Government shops at Sorel, P.Q., were now making steel dredging vessels of moderate size. The Polson Iron Works at Toronto, and those of the Bertrams, had turned out several large lake vessels, while the Collingwood Ship-building Company was, he believed, well equipped for the building of steel ships. He reiterated his opinion as to the carrying trade. "I think the possession of a fleet of steel ships is of the utmost importance to Canadian trade. If we can build them ourselves, so much the better. The carrying trade of the world remains to be done as before, and we know that we cannot do much with wooden ships It would be better that we should buy them abroad than to be without them, but it would be still better to build them ourselves, if that would be feasible, and I have a strong hope that we shall gradually do so."

He referred to the recent speeches by the Hon. Mr. Tarte. "If any aid were given by the Government it would have to be given on some general plea which would apply equally to ship-yards on the coast and ship-yards on the lakes." Some assistance was already given to wooden ship-building by a draw-back intended to be equivalent to the amount of customs duties paid on the materials entering into the construction of such vessels. Much can be said in favour of extending this policy to the new conditions proposed, in which case it would be only logical that the draw-back should be increased to correspond with the increased cost of steel ships as compared with wooden ones." There was also a Government bounty on iron and another on steel. He would not commit himself as to a possible bounty on steel plates.