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Date: 1867-05-11
By: Prince Edward Island (House of Assembly)
Citation: Prince Edward Island, House of Assembly, The Parliamentary Reporter; or, Debates and Proceedings of the House of Assembly of Prince Edward Island, For the Year 1867, 23rd Parl, 1st Sess, 1865 at 108-120.
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Loan Bill.

Hon. ATTORNEY GENERAL in moving the second reading of the Loan Bill remarked that on its introduction he had explained its principles and object. The sum mentioned in the Bill was £140,000. After having considered the matter, he intended, when the Bill went into Committee, to move an amendment reducing the amount to £100,000, the same sum as in the former Bill. He would repeat that he could see no reason why we should not obtain a loan on favorable terms, even without the Imperial guarantee. Other countries were able to do so, and as regarded the comparative amounts of our revenue and expenditure, we were in as good a position as they. That a loan from abroad was necessary to the proper working of the Land Purchase Bill he firmly believed. Hon. members should not treat this matter as a mere party measure, for it was not one.

Hon. LEADER OF THE OPPOSITION could not see the necessity for the Bill, when the Act which had been already passed, authorising the Government to raise money, was taken into consideration. He was not aware that there were at present any extensive estates in the market, but even if there were, the Government could purchase them without resorting to this loan. One object of the loan appeared to be the obtaining of money in the English market, with which the Government could pay off the securities now held by parties in the Island; in other words, they would take a foreign creditor in preference to one at home. This was an unsound principle, unless it was the case that money could be obtained abroad at a much lower rate than here. To show that this was not likely, he would mention that Mr. Adderly, in a speech in the House of Commons regarding a loan to the confederated Provinces, gave it as his opinion that with the Imperial guarantee the money might be obtained at 4½ per cent., but without such guarantee, it could not be obtained at less than 6. Canada was a country which was daily growing in wealth and resources, and the population of which was increased yearly, by immigration alone, to the extent of 25,000; and when it was stated that that country, when united with the Lower Provinces, could not of itself, obtain a loan at less than 6 per cent., he did not consider it likely that this Island would be more fortunate. To the interest there was also to be added the expense of negotiating a loan in a foreign country—paying agents, &c. He could not, therefore, see what advantages the Colony was to reap from the Bill. If it was intended to relieve the present commercial panic, that object would not be accomplished. The real cause of our monetary difficulties was the low price of ships in England, and depressions like these could not be remedied by legislation. As we had, in his opinion, all the machinery necessary for purchasing land under the Land Purchase Act as it now stood, he saw no necessity for supporting the Bill before the House.

Hon. LEADER OF THE GOVERNMENT said it was thought by some that the Banks had made arrangements for paying these instalments as they became due. But it appeared that it was not thought that the purchasing of the land would injure the other interests of the country; and it did not say much for the consideration of the late Government, when their arrangements had had that effect. Some seemed to think that this was not the case, while many more maintained and believed that it had been the cause of much of the embarrassment now felt in the Colony. When the Land Purchase Bill was first introduced, he never thought that it would injure the trade of the country, and, as an experiment, limited the purchase in the first instance to £10,000. But the late Government had extended the Bill to such a degree, without making any provision by which the payments could be made, that its effect had been to prostrate, to a considerable extent, the trade of the Colony; and although the Revenue had increased to a much greater amount than formerly, yet they had left the Colony in a worse position than they found it. If we were to extend the Land Purchase Bill, it could only be by a loan; and therefore an effort to obtain one could do no harm. If, as the hon. member for Belfast (Mr. Duncan) thought, we could obtain the money here, then it would be well to do so; if not, we could go abroad. There might be ten or fifteen thousand pounds lying in the Banks to meet the payments for the Cunard estate without yielding any interest, and there it must lie, in case these demands take them unprepared. Had the principle of the Loan Bill been acted upon, these purchases would not now be draining the specie from the vaults of the Banks, and thereby preventing them from discounting. If we obtained this loan in England, there might be a little expense attending an agency; but this would not amount to much; and under present circumstances would be unavoidable. When the Liberal Government contemplated getting a Loan before, it was intended to employ an agency, but Her Majesty’s Government said they would attend to this for us without putting us to the cost of an agency; and had not our arrangements been frustrated by the mis-statements of the Conservative party here, this item of expense would have been saved. If a Load was obtained now, an agent would have to be employed. It was better to make arrangements for a large amount, as the interest would be proportionably low. If we required a large amount, he believed it would be easier to obtain it than a small one, and we might also obtain it at a cheaper rate. No harm could result from trying. It would settle the question whether we could obtain a Loan outside of Confederation.

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Hon. LEADER OF THE OPPOSITION was a Confederate, but did not think that the money could be had for less than six per cent.

Hon. LEADER OF THE GOVERNMENT.—If the Loan was obtained in the Colony, it would deprive private men from obtaining small loans from those who lent money here. Small loans to men of limited means were often of great service. Accommodation of this nature would cease if the Government absorbed all the money in the Colony. He considered it an advantage to have men in the country who could lend money for longer terms than it could be obtained at the Banks, and therefore he thought the Government should avoid a course which would place all the money securities of the Government in the hands of a few men. We might know that such would be the case from the large deposits now in the Banks. The Government only wished to do what was right, and most conducive to the good of the people of the Colony.

Mr. BRECKEN said the measure was an important one, and ought not to be approached in a party spirit. He fully concurred in the view that there were other interests beside those of the farmer in the country, and which ought not to be injured on account of arrangements relating to land. The interests of the mercantile community had, to some extent, suffered on account of the recent purchase of the Cunard property. It struck him that if the Loan were negotiated tomorrow there would be a supply of exchange for those who wished to purchase; but that a country was to be made richer by borrowing was what he could not understand. He did not think it would be wise in the Government to buy up the Debentures and other paper now afloat to make room for a loan. The mercantile interests demanded as much protection from the Government as any other, and if their interests could be protected, they had a right to it. Looking disinterestedly at the farming class of this Island who had purchased their farms from the Government, he did not think they were in a better position than those were in who had leases for 999 years; indeed his belief was that those were in a far better position who had the leases. But, if by negotiating this Loan, the public burdens could be removed, let us have it. It might be a temporary relief; notwithstanding so he felt satisfied that as the interest became due, and would have to be paid, it would then be found that it was nothing but a temporary relief. The interest would be an annual drain of exchange from the country. He did not believe that it would relieve the Banks, for if the merchants had the gold they could buy exchange at any time; if they had not, then, of what service would this Loan be to them? He did not wish to oppose this measure because it came from the Government. He would prefer supporting any measure which he thought would benefit the commercial and other interests of the country; for he did feel that the mercantile interests require relief at the present time.

Mr. McAULAY said this was a question which should be approached with great caution, and without party feeling. If the mercantile community was suffering for want of exchange, and if this measure was introduced for their special benefit, then there would be something reasonable in the arguments for introducing this Bill. But the object of the Bill was to purchase land—to make our people freeholders. This was the consummation aimed at by the introducers of the Bill; but this desirable end could only be attained by money, which was to be procured by contracting a loan abroad. He felt satisfied, however, that it would not be obtained at a lower rate than six per cent, which was the same as would have to be paid for it here. A very important fact to be borne in mind was, that the interest must be paid with gold from the Colony, which would cause an annual drain of specie from our Island; hence the probability, nay, the certainty, was, that in twenty years the loan would be returned in interest, while the principal would still remain to be paid. If the Government borrowed £100,000, during twenty years it would have to purchase the same amount in interest, and the debt would not be reduced one penny. Now, if there was to be an advantage in this he failed to see it. There might be some delusion about the matter which blinded him, and if so, he did not begrudge the hon. the learned Attorney General the happiness he enjoyed by this precious vision, which it was his (Mr. McAulay’s) misfortune not to possess. But he thought the hon. member might favor the House with a clearer view of the matter than he had yet done; and thus let him and other hon. members have a glance at the benefits to accrue from this loan, if it was to be obtained. It was true that in many places, on the credit of the Government, money could be had to borrow; and it could be had also on the credit of some men who wished to borrow. But for the Government to use the credit of the country for the reason assigned, he could not but characterize as equal to laziness. It was worse; for laziness sat still, and injured only those afflicted with such a complaint, but this would injure the whole Colony. It was true matter had not gone on in our commerce as well as usual; but the same would apply to other places also. When our shipping would rise, the gold would find its way back to the country.

Mr. REILLY said the way he looked at the question was this: Ours was but a small Colony, and we had to pay our own civil list Bill, which, for a small Colony, was considerable. In addition to this our Land Question placed us in a different position from the people of the other Provinces, inasmuch as the manner in which our lands were originally disposed of, rendered it now a duty on the part of the Government to purchase them; therefore it might be said that we were actually called upon to buy these lands for the people, which, in the other Provinces, became the property of the Government by right. Our resources having been thus absorbed, we had no means at our disposal for the prosecution of those public works so indispensable in all young countries; hence the necessity for borrowing. The hon. member for Georgetown forgot that money made money, and until we could obtain and retain more money among ourselves, it would be impossible to proceed with any public works; and our roads, bridges, wharfs and small harbors must remain as they were. One of the principles acted upon by mercantile men was to buy in the cheapest market; and would not the same apply to money? If a loan was required, was it not wise and proper to go to the cheapest market for it? He did not know where this Loan could be borrowed, unless

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it was abroad. Some hon. members seemed to oppose this Loan, and it was to be noticed that those who were the most opposed to it, were those known to be the most in favor of Confederation. It would seem that they thought, Oh! the tighter the people were pressed, the more readily would they accept of the terms offered them to go into the Union. He thought that the present generation should not be called upon to pay what ought be paid for by posterity.

Hon. Mr. DUNCAN was opposed to obtaining the Loan from abroad, because it would cost more than it would if it was procured at home. As much money as the Government wanted could be obtained at home for six per cent. The Canada six per cent bonds were selling in the British market at 95. Now, if you took a five per cent bond and lost £5 on the £100 in selling it, what interest would that be if you paid it back at £100? A great many people thought that the pressure in the country was owing to the amount of money that went out of the Colony for the purchase of the Canard Estate. The amount which went out of the country was £12,000.

Hon. ATTORNEY GENERAL.—£40,000.

Hon. Mr. DUNCAN.—All that had as yet been paid was £18,000. There would be more to pay, but it had not gone yet. If money could be borrowed here at six per cent, why go abroad for it? The answer some gave to this question was, that if we went abroad the money could be had at a very low rate in England. This he doubted, because he believed that for some time to come bonds would be at a discount. He wished to know what benefit was to be derived from going abroad for money? If it could be borrowed at home was it not better to do so than to go abroad? If the Government secured a Loan in England, as a matter of course they would relieve the exchange temporarily; but the farmers would not be benefited by it. Those on the Cunard Estate had already paid over fourteen per cent of the whole purchase for it; and having done this, of course they had that much less money with which to buy goods. If the Government borrowed the money abroad, the interest of it would be going out of the country annually. The land was brought on the credit of the Colony, which was good; and the Government could sell Debentures to any amount required. If they were going to borrow £100,000 sterling, he would like to know what they wanted with it? They had £10,750 to pay in July, and the same amount in January next. They had £16,000 in the Treasury, besides the purchase money yet to come in, and a large amount of land on hand to dispose of. At one time we could not sell our warrants; but it was not so now. He never heard of a country going abroad for money if they could obtain it at home. The relief which a loan would give would be only imaginary. He would prefer paying six per cent for a loan at home to giving five per cent for a foreign one. You would have to keep an agency in England, which would cost something in addition; and, what was of more consequence, you would send the interest out of the country and benefit those abroad at the expense of the people here. Men could not live in England for nothing, or as cheaply as they could here; and if you employed a man there to do your business he would have to be well paid for it. He could see no necessity for a foreign loan. There was but £25,000 to pay this year. It was true there were some bonds which would become due in six years, but it was too soon to think about them yet. If he considered it a benefit to borrow abroad, he would not oppose the measure; but, in his humble opinion, it would be an injury rather than a benefit. Men in the town could get as much money to borrow as they wished, but men from the country could not; this was what the Tenant Union had done for them. (Hear, hear.) He did expect from what he heard, that when some men came here, they would do great things for the tenantry, but it appeared they only wanted to get their votes, and that was all they desired.

Hon. Mr. DAVIES.—If the Government could not carry this measure without the aid of the hon. member, they had better let it alone. It ill became any one who had made a fortune in this country to be speaking contemptuously of it, as the hon. member (Mr. Duncan) and some of his party had done. If the late Government had let trade alone, the trade of the Colony would to-day stand higher than it did. Instead of that some of them traduced the trade of the Colony, and spoke of the soundness of the trade of Canada. But the fact was, the trade of this Colony was as sound as ever it was or ever had been in Canada.

Hon. Mr. DUNCAN did not advice the Government to apply to Canada. He only referred to what their bonds were selling for.

Hon. Mr. DAVIES.—The first duty of a Government was to see that there was a certain amount of circulating medium afloat to meet the business requirements of the country. That was the position in which the country was when the late Government came into place. On coming into power they found a flourishing trade. The American ports were open for our exports, and the best influences at work for perpetuating a state of things mutually advantageous to both countries. All this was brought about, in so far as this Island was concerned, by the old Liberal party. And what had closed their ports against us but the feeling which was shown by the Tory party here in favor of the South? When the war broke out in that country, the Tory party here rejoiced in every defeat of the Northern arms; and in writing and speaking of them manifested such an amount of feeling in favor of the slave owners as had greatly offended the Northern States. As a natural result, they had closed their trade against us, and had bidden us go and trade with slave-holding countries. This was what the Tories had done, and it might be many a day before our trade could be on as safe and good a footing as it was when the late Government came into power. It was now the duty of the Government to show that such was not the feeling of the great body of the people of this Colony, but only of the Tory faction who, unfortunately for the good of the country, got into power at that time. That this was really the case those engaged in the fishing business and in general merchandizing knew. They knew that this policy of the late Government had procured this legacy for us. Those countries with whom we could have done a good business had thus been closed to us; and thereby we were necessitated to borrow money.

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We were asked also to do so at home rather than in England. He might say that this was an exploded idea of his hon. colleague. Why, if we could get it abroad on better terms, it would be the duty of the Government to go abroad for it. It was well known that when the Cunard payments were made they had to be made here. As matters were at present, the Government would have to go to the Banks. They anticipated this, as his hon. friend the Attorney General had said, and £40,000—his hon. friend might have said £60,000—would be removed from the circulation of the Colony. Let this be done, and where would the merchants get accommodation? Certainly not in the Banks. The Banks could only issue paper to an extent three times the amount of the gold in their vaults, and if the gold was withdrawn, of course these issues must stop. No person would deny that such was the case; and when these payments were made and the specie withdrawn, what amount of money would then be left upon which to issue notes? The duty of the Government was to see that trade was not disturbed by their own action; it should be left to regulate itself. If a Loan could be obtained abroad, no easier method could be devised for repaying it than that suggested by the minister of the Crown, which was to lay by fiver per cent of the capital every year in a sinking fund, which, at the end of twenty years, would meet the Loan. The hon. member (Mr. Duncan) had referred us to Canada, and said that no country would go abroad for money if they could get it at home. But as the hon. member had associated himself with the party desiring us to go into Confederation, he probably wished to press us into it. But where did Canada go to obtain money? Did Canada issue Debentures? No. He would not have replied to the hon. member, but he did an amount of business here and had attained a stand in this community, such men ought to be replied to. It had been asked if there was any land in the market. The late Government knew what offers had been made. The policy of the present Government would be, when they wished to buy as estate and were prepared to do so, if the parties would not sell, it was quite probable they would be looked after, at least he hoped so. But he was now only speaking his own opinions. Some such an opinion was put forward in the “Islander;” but he had not consulted his hon. colleagues in the Government on the subject. If the proprietors would not sell, he did hope Government would compel them. It was well known that private rights must give way to public necessity, and they would have to take some equivalent. I was well known that the buying of the Cunard Estate had been no great advantage to the country. The policy of the Government would be to relieve the people out of the hands of the proprietors, as was done by the people themselves who purchased from Mr. Haythorne; and if a proper offer was made to Miss Fanning and she did not sell, he hoped the public, through the Government, would compel her. He was sure his hon. colleague would be happy to assist him in aiding the electors of Lot 50.

DR. JENKINS expected to hear from hon. members of the Opposition something to enlighten him respecting the dangers of this measure, but he found they were as ignorant of them as himself. The ideas of the hon. member for Belfast (Mr. Duncan) were opposed to all the principles of political economy he had ever learned. If the idea was to increase the money in Great Britain, then, of course, the measure would not do at all; but the object was to increase the circulating medium of the Colony so as to enable mercantile men to extend their business to meet the demands of the country—trying to better the circumstances of our people. The hon. member spoke about borrowing the money here, which was a strange proposition, for how could we obtain it where there was none to be had. One of the reasons given for not going abroad was, that we should have to send so much away in the shape of interest. But it ought to be remembered that it was one of the maxims of political economy that money made money. If we deducted from the money now afloat in the country the whole amount which had to go abroad, he would ask the hon. member (Mr. Duncan) where the money was then to come from to carry on the ordinary business of the country. It did appear to him that to do so would greatly injure the trade of the Colony.

Hon. Mr. HOWLAN remarked that when the Loan Bill was passed some years ago the revenue of the Colony was only about half what it was now. At that time it was very little over £40,000; but last year it was more than double that amount; he therefore thought there could be no difficulty in obtaining a loan without the Imperial guarantee. The great want in this Colony was a sufficiency of circulating medium. If the Island was a manufacturing place, the case would be different, as there would not then be such a drain out of the country for importations. According to the Blue Book there was only £30,404 of specie in the Banks, and their issues in Notes were a little over £76,000. This amount, with some £7666 of Treasury Notes afloat, gave a circulation of about one pound per head. But if £30,000 of gold and silver in the Banks gave a circulation of £76,000, what would only £18,000 give? The answer to this simple question would be £45,000, or about 10s. per head of our population. Manufactories were beginning to be established among us, such as tanneries and the like; and the fisheries were also being prosecuted to some extent; but if our capital was drawn off in the purchase of lands, business could not go on. Our circulating medium, he believed, was much less than that of either of the other Provinces. He understood that in New Brunswick it was about $11, and in Nova Scotia some $8 per head of the population. By the Blue Book he also observed that there were about 25,377 tons of shipping sent from the Island, which at £6 per ton would amount to £152,262. These proceeds of our shipping were, in a great measure, what we had to give in exchange for goods; but our Imports for the year were £300,000.

Hon. LEADER OF THE OPPOSITION.—That was not the Blue Book for last year.

Hon. Mr. HOWLAN.—It was the one for 1865. He contended that when the Government made purchases involving a drain of money from the country, they should provide some way for its return, so that the trade of the Colony might not be crippled. When £12,000 at a time in gold or exchange were taken from the Banks, the country could not but feel it. If, however, money could be obtained here to pay off the instalments of the Cunard Estate, there was a clause in the Bill to enable the Government to secure it in the Colony. But he would ask any banker whether he would not rather see the loan procured abroad then taken up at home. The hon. member

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for Belfast (Mr. Duncan) maintained that as £11,000 had been pain in from the estates, the Colony had only to meet the balance of what had become due on the instalments. This was an unfair way of putting the case. Though £11,000 had been paid by the tenants, yet the Banks had to find gold or exchange for the whole instalments, consequently not only this sum but the amount of the issue of Notes which might be based upon it, was drawn off from the circulation of the country. If the trade of the Colony had been so deranged when some £40,000 had been withdrawn from the circulation, what would it be when £40,000 more were taken away? In view of the embarrassments to trade which these payments on the Cunard estate would cause, he contended that the Government were warranted in bringing this Bill before the House to remedy the evil before its consequences were too severely felt. If the late Government had experienced the difficulty from which the trade of the country was now suffering, he believed that they would have done the same thing. They could not have anticipated such a crisis. The Loan was also required, if the Government expected to accomplish anything further in extinguishing the leasehold tenure of the Island. The people of this Colony wished free land, and would not rest satisfied until the last remnant of the rent system was wiped out of the country. He believed that if the question were put to the people of the Island, whether they were willing for a loan or not, they would declare by a large majority in its favor. The abolishment of the leasehold tenure would be a benefit to every interest in the country. We should endeavour to make this Colony what it ought to be, a model of enterprise; and this could not be accomplished while the proprietary system held the sway. If this Loan Bill was carried, it would, he believed, be the means of putting an end to rent-paying in this Island.

Hon. ATTORNEY GENERAL rose to reply to the hon. member for Georgetown (Mr. McAulay) who remarked that it would probably be as difficult for the Colony to pay back the principal of the loan at the end of 16 or 20 years as it would be to pay the amount now. This reminded him that there was one part of the Bill which he had forgotten to explain—that in reference to the sinking fund. It was provided that five per cent of the amount borrowed should be set apart one year from the date of each debenture, and every succeeding year, as a sinking fund, which, in the course of twenty years, would secure the repayment of the principal of the Loan. Why, it had been asked, should we seek for a loan abroad? Why, he might ask, had Canada, Nova Scotia, and New Brunswick to raise loans in the British market? Simply because they were building railways, and the material had to be purchased in the Mother Country. The necessity of a foreign loan was to enable them to meet the payments which they had to make in Britain. So it was now with this Colony. The Government had purchased land from parties out of the country, and it must procure money from abroad to meet the payments, or the trade of the colony would suffer thereby.

Mr. PROWSE thought he would not be justified in giving a silent vote upon such an important question. He believed there was no probability of this Loan being obtained at present. A similar Bill was introduced several years ago, which was expected to receive the Royal assent, but its friends were disappointed. Again when the Commission was sitting on the Land question, they recommended that the Imperial Government should assist the Colony to secure a loan of £100,000 to buy out the Proprietors’ claims; but the authorities at Home positively refused a guarantee. If then the parent government refused to guarantee a loan, could we expect that British capitalists would come forward and give the money? That loan was recommended simply for the purchase of lands, but this Bill provided for general purposes, a circumstance which he thought would destroy the prospect of obtaining money on reasonable terms. Hints had been thrown out by hon. members opposite that a Conservative majority could not be trusted; he would not be so rude as to say that the Liberals could not be trusted, still he would act in regard to this measure as he thought to be his duty. If, however, the loan should be obtained, and be well worked, he would be pleased. It had been said that a loan would be a benefit to farmers in enabling them to procure money to pay for their farms. If they had to borrow money to pay off their instalments, they might about as well pay rent as interest. One hon. member had made a remark to the effect that we should not allow ourselves to remain in difficulties for the benefit of posterity. He (Mr. P.) feared that if this loan was obtained future generations would blame us for saddling the country with a debt. The hon. member for Belfast (Mr. Davies) had referred to the state in which the Conservative party left the Colony. He (Mr. P.) thought it would compare favorably with the position of affairs when the previous Liberal Government gave up the reins of government. Was the paper of the Colony selling at a discount of 15 or 20 per cent. when the Conservatives gave way for the present Government? This was a question for the hon. member to answer. Other members of the Government held out the idea that this measure was for increasing the circulating medium of the Island; but the general tenor of the Bill would lead us to suppose that the loan was for the payment of land. He did not think it would be proper to borrow money unless it was clearly understood to what object it was to be applied. He would therefore move that the Bill be read this day three months.

Hon. LEADER OF THE GOVERNMENT thought the hon. member for Murray Harbor was acting inconsistently; he had said that he would be pleased if the Bill should work well, and here he was making a motion against it. But after all it was what might be expected from one of the Conservative party, for they petitioned against the former Loan Bill. The Bill for guaranteeing the Loan had passed the first reading in the House of Commons, and just before it was to be read a second time the petition from the Conservatives of this Island was placed in the hands of the person who had the Bill in charge, and of course it was dropped. He considered it was not proper that the Opposition should thus thwart measures which were for the good of the country.

Hon. LEADER OF THE OPPOSITION.—As you did in voting against the purchase of the Selkirk Estate.

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Hon. LEADER OF THE GOVERNMENT at that time did not know that if the House refused to entertain the purchase of the Estate, it would be bought by a proprietor the next day. He was not in the secrets of the Government of that period, and could not be expected to act from motives with which he was unacquainted. But here we had hon. members saying that they would be pleased if the Loan should work well, and still they were going to oppose the Bill.

Mr. PROWSE did not speak so approvingly of the measure. If the Government obtained the loan on their own responsibility, and worked it well, he would be pleased; but he was not prepared to share that responsibility by voting for the Bill.

Hon. LEADER OF THE GOVERNMENT.—The hon. member had also referred to the state of the Colony at that time was not in so depressed a state as it was now, for then the Banks discounted freely. The difficulty that existed to get warrants cashed had been remedied, and before the party went out of power they were cashed at face. Had not the Bank assisted the Conservatives when they took the Government, they would also have been in difficulties. He believed that now the Conservative party outside this House called more for a Loan than did the Liberals. Whether the measure was lost or not was no great object to him; but as it was a pet scheme of his, of course he would like to see it pass through this House with a unanimous vote. Should a Loan not be obtained abroad, that part of the Bill which authorized the Government to raise money in the Colony would enable them to proceed in purchasing land. Though he was in favour of buying up the proprietors’ estates, yet he had always said it should not be done to the injury of the commercial affairs of the Colony. As to the objection that the Government, were the Loan obtained, would employ the money for purposes besides purchasing land, he contended it was not of a valid nature. The other Colonies did this same thing when the procured loans to [illegible] public works. We should not allow trade to be crippled with the purchases which had been made; and if even resident proprietors offered lands for sale, say £[illegible] worth or so, we should be in a position not to ask them to go to the Banks for payment. As to the argument that it was improper to tax the rising generation by saddling them with the payment of this loan, he would say that if the loan was for their benefit why should they not pay for it? The free lands of the Colony would be their portion. There was no country in North America which had so much to contend with as this Island in buying up land any paying for it to parties abroad. He was sorry to hear that the Bill was going to be opposed, still he thought the Government were able to carry it. It was more probable, however, that the loan would be obtained if it went forth that the measure was supported by both parties in the Legislature.

Hon. LEADER OF THR OPPOSITION wished to answer some statements which had been made by the hon. Leader of the Government. That gentleman had said that when the Conservatives came into power in 1850, the finances of the country were in a prosperous condition. He had looked into the Journals of the House for the session of that year, and found that in the report of the special committee on the public accounts, a very different opinion was expressed. He read an extract as follows:—

“Your committee have also to report that it appears by the Road Correspondent’s account that, ‘by the authority of an order in Council.’ Warrants were discounted for the Road Service, on which a loss of £298 9s. 3d. was sustained. The manner in which these discounts were made appear to your committee to be most objectionable, inasmuch as from 5 to 10 per centum discount was submitted to—one individual alone receiving £111 6s. 3d. as discount, at the rate of 10 per cent.”

As regarded the loan, he could not understand how people were to be benefitted by it in obtaining exchange. The Banks would not discount for parties unless they were sure that the paper, when it became due, would be honored; and the payment of their notes would not be affected by a loan from England.

Hon. Mr. HENDERSON wished to correct a statement which had been made regarding the Haythorne Estate, viz., that the Tenant League had purchased it from the proprietor. He (Mr. Henderson) had Mr. Haythorne’s own statement in contradiction of this, that gentleman having told him that the Tenants and not the League had purchased the land. He (the hon. member) had not been convinced of the necessity for a loan by any of the arguments which had been brought forward.

Hon. Mr. DUNCAN could not help expressing his astonishment at the remarks which had been made by his hon. colleague, with reference to the Reciprocity Treaty. He was really surprised to hear a business man talk such buncombe, for he must be aware that treaties of that sort were made by the Imperial Government—that this Island had no power in the matter. The United States repealed the Treaty because they wished to raise additional revenue. His hon. colleague did not clearly understand what he was talking about.

Hon. Mr. LAIRD thought that the loan was opposed by some because they wished to keep poor people down. Men of independent fortune could afford to do without accommodation, and the less of this accommodation that was afforded the richer they became. They wished to see the poor crushed that more might go into their own pockets. It had been argued that the present financial depression here was owing to the bad state of the market for vessels in England, but as he had been informed by a person acquainted with the matter that three-fourths, at least, of the value of these ships was already drawn, he did not believe that the depression was caused by their slow sale.

Mr. BRECKEN alluded to the expense of negotiating a loan, remarking that the money could not be obtained at less than six per cent., with two, three or four per cent. depreciation. He could see no object in obtaining the loan, since there were no estates now in the market. Those people who, at present, found it difficult to obtain exchange to pay for too heavy importations, would not be helped by it, for, unless their positions were sound, they would find it no easier to buy exchange. He (Mr. Brecken) found that nearly every merchant in good standing was opposed to the loan. He was surprised to hear the hon. member for Belfast speak as he did about the abrogation of the Reciprocity Treaty. He (Mr. Brecken) never knew that the late Government favored the South, in fact the most important public demonstration in favor of the Confederacy which he had known, was when the Posse Commitatus was called out, and that gentleman, who was one of those summoned, struck up a song as they left Southport, the chorus of which

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was, “Hurra, hurra for Tenant rights hurra,” to the tune of the “Bonny Blue Flag,’” the Southern popular air. The Liberal Party, it would appear, from what the hon. member had said, deserved the whole credit of the Reciprocity Treaty. This was rather new. He (Mr. Brecken) had always thought that Lord Eldon was the person who took the most prominent part in the matter. It was simply absurd to suppose that any political party here could exert the slightest influence for or against the Treaty. As regarded the policy of a loan, the Government should show how it was to benefit the tenantry or the merchants by some better argument than mere assertion. It might, perhaps, be a temporary relief to the Banks, but he would like very much to see how the merchants were to obtain the money. If a man’s business was not in a sound state, if he had not the quid pro quo, he would not be relieved in the least. It was not becoming in the members of a Government, when bringing in an important Bill like that before them, to talk so much buncombe; it made it appear as if it were all buncombe together, and the Bill only brought in to answer a purpose.

Hon. Mr. HOWLAN thought that the representative for the city would have advanced some more definite opinions regarding the effect of the loan in relieving the present depression, and increasing trade. He doubted the truth of his assertion that the leading merchants were opposed to a loan. He believed that, with few exceptions, they would say that the necessities of the times demanded it. The best proof that a loan was needed was the fact that the Banks, looking forward to the payment of the next instalment of the Cunard Estate, would not discount the very best paper. It was all very well for men like the hon. member, who had their fortunes made, to talk cooly about the matter, and attribute all to over trading. Trade, if left to itself, would not be in the state that it was.

Mr. BRECKEN had said that to a great extent, the men in business were opposed to it. The hon. member need not try to place an erroneous construction on his words.

Hon. Mr. DAVIES.—The hon. member said that any merchant, in anything like tolerable circumstances—

Mr. BRECKEN had said that those who were in good standing were opposed to it, and thought now, and said that such was the case.

Hon. Mr. DAVIES.—Yes, and the hon. member had stated as much as would lead one to suppose, that those merchants who were in favor of it were approaching to a state of bankruptcy. He did not see how, or why, the hon. member should come here and state what the circumstances or standing of any man was.

Mr. BRECKEN had never said anything of the kind. He had never seen the petition in favor of the loan until it came here. If he had given offence he could not help it; he would state the truth, and again say that the most of the merchants were opposed to it.

Hon. Mr. DAVIES thought the hon. member would draw in.

Mr. BRECKEN was not drawing in. He had said the truth. He had not examined the petition, nor had he cast any reflections upon those men who had signed it. Three of the influential merchants whom he had spoken to, were opposed to the measure.

Mr. P. SINCLAIR said the manner in which hon. members in the Opposition spoke against the Tenant Leaguers—although the subject before the House had no bearing upon the League—was very remarkable. He could assure the hon. members, that he had given as little countenance to the League by contributing to their funds, or swelling their ranks, as they did. Nevertheless, he was well aware that many were in their ranks who were as honest and as intelligent as were those hon. members who delighted in reviling them. Hon. members would find that the closer they kept to the question before them, and the less they had to say about the Leaguers, the more creditable it would be to them and profitable to the country.

Mr. BRECKEN asked if the hon. member alluded to him? He had made no personal allusions, but simply referred to what had taken place. He believed that there were respectable men who had connected themselves with that organization.

Mr. P. SINCLAIR did not allude to the hon. member for Charlottetown. Some other hon. members on his side of the House were more chargeable for these onslaughts than the hon. member for the city. The Bill before the House was of weighty importance. £40,000 was no trifle to be drawn out of the Colony in one year. It would certainly be a large drain upon our exchange. If this sum was payable to parties living in the Colony, it would materially alter the case; but when these payments were to be drawn through our Banks to another country, he considered it a wise policy on the part of the Government to endeavor to raise it abroad in order to meet the exchange. The sum embodied in the Bill was more than he could wish, but as the home part of it (providing the foreign could be attained) was only to be drawn as land came into the market, it was not so objectionable. To all appearance this was going to be a hard season. Breadstuffs were much higher in price than usual, and if borrowing the money in England in place of this Colony would make money accommodation more easy in the county through the Banks, it ought not to be overlooked.

Mr. McLENNAN thought the hon. member for New London ought not to have made such a broad charge. If he had taken his words down correctly, he thought he plainly spoke as though every member of the Opposition, when they rose to their feet, made improper allusions to the Tenant Leaguers. These remarks of the hon. member were not fair. It appeared to him (Mr. McLennan) that the strong Government wished to annihilate the Opposition altogether. He was surprised to hear the hon. member for Bedeque, (Mr. Laird) who was supposed to be a middle man, expressing himself as he had; and yet he did not hear anything coming from him about the position which he ought to sustain. With respect to the loan he would merely say, that we were not sent here to legislate for the merchants, or any one class, but for the good of the whole Colony. He was afraid that borrowing this money was not going to benefit the people very much.

Mr. BELL.—It was very generally conceded that something was required to relieve us out of the present embarrassment in which the late purchase of land had placed the Colony. The pressure on the Banks and the scarcity of money in the country was such, that the general impression seemed to be that the Government

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must either issue irredeemable paper, or obtain a loan. He would support the loan as the better scheme of the two.

Mr. McNEILL said it was conceded by all that something must be done to relieve the colony from its present position. The repeal of the Reciprocity Treaty with the United States had been a loss to those engaged in fishing, and other interests had also suffered. If we must borrow, our duty was to go to the cheapest market, which he believed would be found to be in the Old Country. In regard to the way in which the debate had been conducted, he would say, as has been also remarked by the hon. members for New London, that there were some hon. members on the Opposition side of the House, who, in the most abrupt and uncalled for manner, were continually referring to the Tenant Union men. He noticed, also, that the hon. member for Charlottetown was very fond of drawing attention to them, forgetful of the unconstitutional position which he held of Attorney General, while another received the salary. There was also the hon. member for Belfast, from whom any allusions of the kind came with a very bad grace.

Mr. GREEN had listened with a great deal of attention to the arguments used in favor of this loan by hon. members of the Government side of the House, and they had all failed to convince him that it was required. They argued as if it was our duty to undertake to relieve the Banks and the mercantile community. He could not admit that this was a sound principle, or one upon which it was the duty of the House to act.

On motion the House then resolved itself into Committee on the Bill. Mr. Bell took the chair of the Committee.

Progress was reported, and the House adjourned.