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 THE 
 
 COAL MIS OF NOVA SCOTIA. 
 
 THE GOVERNMENT'S SCHEME 
 
 TOB 
 
 EXTENDING THE COAL TRADE. 
 
 si^eech: 
 
 or 
 
 HON. W. S. FIELDING, 
 
 Premier of Nova Scotia. 
 
 HALIFAX, N. S. : 
 Nova Scotia Printing Company. 
 1893. 
 
C( 
 
THE^ 
 
 COAL MINES OF NOVA SCOTIA. 
 
 THE GOVERNMENT'S SCHEME 
 
 fOB 
 
 E:k:TENDING THE COAL TRADE. 
 
 sipeech: 
 
 V 
 
 0V 
 
 HON. W. S. FIELDING, 
 
 Premier of Nova Scotia. 
 
 HALIFAX, N. S. : 
 
 Nova Scotia Printing Company. 
 
 1893. 
 
 liB 
 

 Extract from His Honor the Lieutenant-Governor's Speech from the 
 - Throne, at the opening of the Nova Scotia Legislature, Halifax, 
 January 79, 1 893. 
 
 The special business which has led to the early meeting of the Legislatiire, and 
 which will be laid before you immediately, relates to the development of our 
 mineral wealth. Believing that the coal trade of the Province is capable of large 
 extension, my Government have endeavored to enlist the interest of capitalists in 
 this great branch of industry. 
 
 I have much gratification in informing you that, encouraged by the provisions 
 of the Mines and Minerals Act of last session, capitalists have come forward to 
 undertake extensive coal mining operations. The high financial standing and 
 known enterprise of the parties, and the investments they have already made on 
 the faith of the assurances given them, are a guarantee of their intention to 
 vigorously prosecute the work they have undertaken, which I feel assured, will 
 largely increase the Provincial revenues and beneficially affect the many interests 
 connected with the coal trade, while it will, I trust, at the same time yield to the 
 investors the liberal return which their enterprise will lo well deserve. 
 
 I invite your most careful consideration to a bill which will be submitted to 
 you to confirm the arrangements which my Government have made with the 
 parties who have undertaken this very important work. 
 
NOVA SCOTIA COAL MINES. 
 
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 the 
 
 Speech delivered in the House of Assembly of Nova Scotia, 
 Saturday, January 31st, 1893, by Hon. William S. 
 Fielding, Member for the City and County of Halifax, 
 and Premier of the Province. 
 
 Hon. Mr. Fielding asked leave to introduce a bill entitled " An 
 
 Act for the further encouragement of Coal Alining." 
 
 In doing so 
 
 he said : — 
 
 I am not iniaware that the introduction of this measure has been 
 looked forward to M'ith great interest, not only by the members of 
 this House, but also by the people of the Province, and by the 
 people generally throughout the Dominion. Indeed, I do not think 
 it would be too* much to say that the proposed legislation has also 
 attracted much interest even in the great republic to the south of us, 
 and that it is at thi^ moment a (question of continental importance. 
 If any difference of opinion should arise in respect to the measure 
 itself, even if nothing further is attained, I believe that we can all 
 rejoice that the great mineral wealth of the Province, of which we 
 have boasted so long, has at last commanded widespread attention. 
 I am bound to say that some measure of the interest which has been 
 excited is due, not to any action of the Government, but to unfriendly 
 critics, whose erroneous reports of the measure have tended to 
 increase the public interest in the subject. AVithout being actuated 
 by the best intentions they have in this way done the Province a 
 service which I am willing to recognize. 
 
 MINERAL WEALTH OP NOVA SCOT' 
 
 We have for many years been accustomed to i of the mineral 
 
 wealth of Ncrva Scotia. We have recognized tL^ lact that in the 
 treasures of the earth we possess one of the most important factors 
 in promoting the progress and prosperity of the country. Providence 
 
4 
 
 has given us rich stores of gold, coal, cojtper, iron, lead, antimony, 
 manganese, gypsiun, and I should not forget the more modest build, 
 ing stone, nor the grindstones, which were of such value in the 
 County of Cund)erland in the days of tlie Reciprocity Treaty. All 
 these are important and valuable resources of the Province. The 
 air of romance which surrounds the search for gold will always 
 create a large interest in gold mining. It is a ])ractical as well as 
 sentimental question in Nova Scotia, for our gold mining industry is 
 very important. While here, as elsewhere, it has been associated 
 with much specuhition, we can jxdnt to many who, even without the 
 aid of the best ai)pliances, by the exercise of industry and intelli- 
 gence have made gold mining a success, and accumulated fortunes 
 through the pursuit of that industry. In future I trust that, with 
 improved methods and better management, we may be able to point 
 to still greater success. But, without under-rating the importance of 
 the gold mining industry, it is not too much to say that the more 
 practical men of the country will be inclined to think that we have 
 a greater source of wealth in the coarser minerals, one of which forms 
 the subject of tiie present bill, 
 
 PROGRESS OF THE COAL TRADE. 
 
 "We have long regarded coal as a very important element in the 
 prosperity of the country. We have been mining coal for many 
 years, and have made a fair measure of progress in relation to that 
 important interest. I have here a statement of the progress made in 
 coal mining from the inception of the industry in 1785, as to which 
 year we have the first record. The quantity produced in that year 
 was 1668 tons. It would consume too much time to go into the 
 matter minutely, but I will note a few of the figures. Down to 
 1827, when the General Mining Association acquired their rights, 
 there had been only about 150,000 tons taken out. In 1830 the 
 output of the year was 56,000 tons; in 1870 it had grown to 
 568,279 tons; in 1880 it was 954,659 tons; in 1890 it was 
 1,786,111 tons; and in 1891 it was 1,849,945 tons. The statistics 
 for 1892 are not yet completed, but the figures will not differ materially 
 from those of 1891. 
 
 There are, no doubt, many who think that that is a fair measure 
 of progress for the coal mines of Nova Scotia. If we look at that 
 statement alone, and remember that from year to year — with rare 
 exceptions, when there was a falling off — there has been a steady 
 
iiicreaso in the protluction, it is not nnnatural that many sliouKl 
 think the indnstry has been a flouri.sliing one, 
 
 COMPARISONS WITH SOME AMERICAN STATES. 
 
 But we should pay some attention to what has been done in other 
 places, and, for a moment, I would like to compare the profjress 
 made in the Province of Nova Scotia with the progress made in one 
 or two of the states of the neighboring repul)lic. In Xova Scotia in 
 1875 we produced 706,795 tons of coal. In 1890, 15 years later, 
 we produced 1,786,111 tons. That is an increase of two and a half 
 times in the quantity of coal ])roduced. Many may think that very 
 gratifying and vSatislactory. But if we turn to the State of Indiana 
 we find that the ]iroduction of that state during the same period 
 increased from 800,000 tons to 3,305,737 tons. That is to say, 
 while our production multiplied two and a half times, that of the 
 State of Indiana multiplied four times. Let us take another com- 
 parison. In 1873 the mines of Xova Scotia produced 811,806 tons ; 
 in 1890 the production was 1,786,111 tons. That is to say, we had 
 a little more than doubled the output in the Province of Xova Scotia 
 during that ])eriod, from 1873 down to 1890. But during the same 
 period the State of West Virginia increased her ])roduction from 
 672,000 tons to 7,266,494 tons. While we about doubled our out- 
 put, the output of West Virginia multiplied more than ten times. 
 Agnin, take the State of Kentucky, and we find that in the same 
 period that we doubled our output the output of that state multiplied 
 nine times. So that while we might, by glancing merely at our own 
 progress, feel that we were doing very well, a glance at what is being 
 done in the world around us leads to the belief that we should have 
 made a measure of progress much greater than our records show, 
 and more approaching that of the coal mining states of the neigh- 
 boring republic. We have thought, in view of the progress made 
 in the United States, that, under fair conditions, our Province should 
 do better than it has done, and we have from time to time aimed at 
 devising some method by which we could accomplish something like 
 the great results attained in the states to which I have referred. 
 
 THE UNITED STATES MARKET. 
 
 There is one feature of the coal question which has been to some 
 extent a matter of political contention. I shall refer briefly to that 
 aspect of the question, not for the purpose of arousing party discus- 
 
 56 
 
sioii, })ut forthfi purpose of stating wluit is matter of history. Down 
 to a conipivrutivoly rceeiit date, nobody in Nova Scotia (lou])te(l that 
 what we recpiired to promote the growth of our coal mining industry 
 was access to tlie markets of tlie United States. During the exist- 
 ence of tlie Reciprocity Treaty between the IJritish Provinces an<l 
 the United States, while business generally was improved, the 
 increase of the coal business was jiarticularly gratifying, and, 
 naturally, nnm have looked to the bringing about of similar condi- 
 tions to produce similar results. One of the arguments most 
 strongly used by those who advocated the adoption of w^iat is called 
 the National Policy, iind which had much weight ii the minds of 
 those who in this Province were influenced to support that measure, 
 was that, through the adoi)tion of the National Policy, we were to 
 obtain reciprocity with the United States. And while reciprocity 
 "with the United States was deemed desirable in many interests, it 
 Avas deemed particularly desirable in rehition to the item of coal. I 
 remember of reading a speech of Sir Charles Tupper, delivered at 
 Sydney, Cape Breton, in the election campaign of 1878. Sir Charles 
 knew that there he was sjjeaking in the midst of this great mineral 
 wealth, and he declared tliat what Cape Breton most needed wms 
 access to the American market. Even though Americans should sell 
 their coal in Ontario and (Quebec, he declared that what nature 
 intended was that the miners of Cape Breton should sell their coal in 
 the New England market ; and he told liis hearers that when we 
 had the American market again, as we would liave it through the 
 instrumentality of his policy, then would Sydney and Cape Breton 
 flourish as never before. While some men h ve changed their views, 
 I for one have never been willing to give up that bright hope. I 
 have been clinging to the idea that at some time we would realize 
 the brilliant picture which Sir Charles Tupper and his friends 
 presented, that by the shipment of large quantities of coal to the 
 United States we would add to the prosperity of the country. Sir 
 Charles Tupper said further that we would not only ship these large 
 quantities of coal to the United States, but that the home consump- 
 tion would be greatly increased by the production of large quantities 
 of iron, which would also add to the' prosperity of the country. We 
 have been clinging to the idea that at some time we would again 
 obtain access to the American market. 
 
LAROER OPKRATIONS NECESSARY. 
 
 Wo liavo felt tliat the coal trade could not bo carried on success- 
 fully in a small way. It is useless t(j expect an artii.'le of a cheap 
 character liko coal to he liandled successfully, unless hy tho combin- 
 ation of much capital and skill. I do not want to be understood as 
 undervaluin*^ the operations of the <,'entlemen who have been 
 interested in coal mining in Nova Scotia, but my belief is that they 
 have l)een carrying on their work on a much smaller scale than 
 similar operations have becm carried on in the neighboring repu])lic. 
 Now, what I say is, that if we expect to compete with the Americans 
 we must adopt modern methods and meet our (;omj)ctitors on even 
 terms. Therefore it seemed to us desirable, in ai)i)roaching this 
 question, that, in order to meet American competition, we should 
 adoi)t Ameri(;an ideas and methods in regard to tho mining, shipment 
 and handling* of coal. Even though the j)resent tariif conditions 
 should continue wo felt there was great need of improvement and 
 reform in regard to the methods at present employed in these 
 particulars. ■ ■ 
 
 THE CANADIAN COAL DUTY. 
 
 As respects the effect of the Canachan coal duty, that is a political 
 question, and I will only mention it in passing. There are those 
 who say that the duty imposed on American coal was of no advantage 
 to the Province of Nova Scotia. I have never taken that view. I 
 have always held that the protective system as a whole is a bad one, 
 and that any advantage which we have derived from tho coal duties 
 has been more than counterbalanced ])y the evils of the system. 
 But, while admitting that our coal trade up the St. Lawrence River 
 has been increased by tho duties, there is an important fact to which 
 attention should be called. While it is a fact that our coal trade has 
 increased, it has not increased as rapidly as the general consumption 
 of coal. Leaving out of the question the product of British 
 Columbia, if we take the total imports of coal into the Dominion, 
 and the output of the Nova Scotia mines for the year ending June 
 30, 1878, we find that 89-1,798 tons were imported, and the total 
 sales of Nova Scotia during the same year were 732,588 tons. Of 
 this total amount of coal consumed in the Dominion 55 per cent, 
 was imported, ami Nova Scotia contributed 45 per cent. Yet in 
 1891 we find that while there had been a large increase in the pro- 
 duction of coal, we had proportionately lost ground. While the 
 
8 
 
 Province of Nova Scotia produced more than double what it formerly 
 did, it is a remarkable fact that in the former year, 1878, we were 
 able to supply 45 per cent, of the coal consumed in the Dominion, 
 and now, with the coal duty, we only supply 36 per cent, of the 
 quantity used in the Dominion. While there has been a large and 
 gratifying increase in our output, the fact is apparent that it has not 
 kept pace with the general consumption of coal in the Dominion, and 
 that as years roll on we are not supplying a larger proportion, but 
 actually a smaller percentage than we did before the National Policy 
 was adopted. 
 
 NEW CAPITAL WANTED. 
 
 But, i)utting these questions aside^ we are led to the conclusion 
 that if we can find any reasonable method of enlarging our operations 
 we should stretch out our hands and endeavor to grasp it. That ha •; 
 been the view of the Government. We have felt that capital was 
 needed in order to enlarge operations. I have been accustomed to 
 hear our leading public men declare that we had an abundance of 
 resources in this Province, and that we only needed capital and skill 
 for their development. That has been the cry for generations. But 
 noM', when we endeavor to bring in that capital and skill, and are 
 about to succeed, doubts are for the first time expressed. If I have 
 to admit that these doubts are well founded I shall begin to question 
 whether we have not been all along on the wrong track. It seems 
 that there are some people among us who do not want capital and 
 skill to be brought in for the development of our resources. But, 
 while that opinion is expressed in some quarters, I do not believe 
 that it repre^-ents the opinion of the people generally. I believe, 
 and I think the people will agree with me, that we do want capital 
 and skill brought in. I have faith in the resources of this country. 
 I believe the people will support any government or party that brings 
 in capital and skill for the development of our mines, and I believe 
 too that the people will not be particular whether that capital and 
 skill comes from Great Britain or from any other part of the world. 
 
 t 
 
 WHY AMERICAN CAPITAL IS DESIRABLE. 
 
 If we had to make a choice as to the source from which this 
 capital should come, I do not hesitate to say that my choice would be 
 that, for this particular business, it should come from the United 
 States. If we have capital at home it is well to use it, but if our 
 
9 
 
 •capitalists at home are so engaged that they are unable to undertake 
 -such an enterprise then we should welcome capital from abroad. I 
 think, in view of the expectations which many of us have as to the 
 future development of trade with the neighboring republic, we 
 ought to prefer that capital from that country should seek invest- 
 ment here, because we might then hope to increase our trade with 
 that portion of this continent with which nature intended us to 
 trade. I do not believe in this foolish cry whic^ i^ i. w being heard 
 against American capital. I am prepared to h av4 v^ both hands to 
 any capital seeking investment in our Province. 
 
 AN OPPORTUNE TIME. 
 
 It is not my purpose to discuss the political questions of the 
 United States, but it is to be noted that ever since the presidential 
 election, previous to the one of last November, there has been an 
 agitation for tariff reform in that country, and though, to a certain 
 extent, it was a party question, and one political party became known 
 as the party of tariff reform, we had the satisfaction of knowing 
 that there was even in the Republican party a large and important 
 element, composed in part of influential merchants and manufacturers 
 of New England, who, while not sympathizing with other doctrines 
 of the Democratic party, were w'illing to support Mr. Cleveland's 
 trade policy to the extent of having free raw materials. It seemed 
 an opportune time therefore to approach the consideration of the 
 coal question, and to interest Americans in it. If the Democratic 
 party should win at the then pending election, as many of us thought 
 they would, it seemed desirable to prepare for the changed condition 
 •of affairs. Even if Mr. Cleveland should not win, we felt that there 
 was among the Republican party that leaven of tariff reform which 
 would soon lead to the free admission of coal into the States, and 
 then the mineral resources of Nova Scotia might be developed to a 
 larger extent. 
 
 THE HOME TRADE. 
 
 Even if we were obliged to put aside the prospect of freer trade 
 with the United States and assume that the present trade policy of 
 'Canada were to be continued, I should still think that we needed 
 some larger operations and improved methods in order to successfully 
 handle the coal business of Nova Scotia. I have been informed that 
 in Montreal the facilities for handling coal are of a somewhat primi- 
 tive character, and not to be compared to the larger facilities which 
 
'\ 
 
 10 
 
 i I 
 
 are employed in tlie United States. I am satisfied that the enter- 
 prise which we now propose, even if it is only to be regarded from 
 the standpoint of the Dominion's coal supply, will increase thft 
 development of the coal trade of Nova Scotia to an extent that could 
 not be accomplished by the old methods. ' , ■ 
 
 AN ENTERPRISING AMERICAN. 
 
 Then came the question as to how we should find the capitalists 
 that were necessary'. I think wc were fortunate in being able ta 
 induce Mr. Henry M. Whitney, of Boston, to become interested in the 
 matter. Ke is a gentleman whose reputation for high financial standing, 
 shrewd judgment and business integrity almost guaranteed the 
 success of any enterprise he undertakes. He was naturally interested 
 in the coal question from the standpoint of a large consumer He is 
 the President of the West End Street Railway of Boston. His 
 energy, industry and skill have given to the city of Boston perhaps 
 the finest street car system in the world. We felt that the man who 
 made such a success of that enterprise was just the man to make a 
 success of the one we now have before us. His railway company 
 have discarded the horse system, and are converting the whole into 
 an electric system, in the operation of which coal is of the highest 
 importance. His company will soon be one of the largest consumers 
 of coal in the United States. Upon the completion of their electric 
 railway system, his company will consume over 100,000 tons of coal 
 every year. Mr. Whitney is also president of the Metropolitan 
 Steamship Company, an important and successful company owning 
 steamers plying between New York and Boston, and necessarily a 
 large consumer of coal. When Ave found that Mr. Whitney was 
 disposed to go into the scheme we made every reasonable effort to 
 meet his views. His associates at the present dme are few. 
 
 A GREAT BANKING HOUSE INTERESTED. 
 
 Who are to be connected with him depends on the question of who 
 will purchase the securities to be offered. He has, however, asso- 
 ciated with him one of the best known banking firms in the United 
 States, the firm of Kidder, Peabody & Co., of Boston. Any 
 gentleman who has had any large business transactions in Boston 
 knows that it is a banking firm of the highest reputation, whose 
 members would not associate themselves with an enterprise that was 
 not conducted on sound principles. 
 
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 LEGISLATIVE AUTHORITY. 
 
 There appears to be an impression in some quarters that the 
 arrangement with Mr. "Whitney was made in Boston within the last 
 few weeks. That is a seriou.-: mistake. The matter has engaged the 
 attention of the Government for nearly a year. To enable us to 
 deal with it we introduced into the Consolidated Mines Act, passed 
 last year, the following clause : — 
 
 " Notwithstanding anything contained in the 117th, Ii8th or 120th 
 section, or in any other part of this chapter, whenever it shall appear to 
 the satisfaction of the governor-in-council that any company or person 
 working, or proposing to work, any coal mine or mines, is willing to pay 
 to the province a greater royalty per ton than that fixed by the said 1 17th 
 section, or is prepared to prosecute coal mining operations on such an 
 extensive scale as would, without a higher rate of royalty, largely increase 
 the provincial revenue derivable from royalties, the governor-in-council 
 may authorize the commissioner of public works and mines to accept 
 the surrender of any coal lease or leases held by such company or person 
 under the law now existing, or any lease or leases that may be issued 
 under the provisions of the 155th section of this chapter, and may issue 
 in lieu thereof a new lease or leases, containing such terms and condi- 
 tions as may be deemed expedient as respects the area of any such 
 lease, the period for which the lease shall run, the rate of royalty to be 
 imposed during the whole or any part of such period, and the taxation 
 that may be levied on the property of such company or person. Provided, 
 however that in no case shall any such new lease fix the rate of royalty 
 lower » ' that fixed by the 117th section of this chapter." 
 
 With the authority obtained in that way from this Parliament 
 the Government felt that they were in a better position than ever 
 before to deal with an enterprise of this character. We had various 
 negotiations with Mr. Whitnev and his associates in Halifax and 
 Boston. These negotiations have been carried on for the most part 
 by personal intercourse between members of the Government and 
 Mr. Whitney and his associates. The correspondence, which I shall 
 have the pleasure of laying on the table of the House, will be found 
 to be brief, because a very little part of the negotiations was con- 
 ducted by correspondence. 
 
 CORRESPONDENCE WITH MR. WHITNEY. 
 
 The first letter which I have to read in the matter bears date the 
 
 13th of May, 1892, being shortly after the close of the last session. 
 
 It is as follows : — 
 
 Bos /on. May ij, i8g2. 
 Dear Sir : 
 
 Referring to the several interviews I have had with you in Halifax 
 and in Boston, with reference to my taking an interest in the coal 
 properties of Cape Breton, I desire to say that if upon investigation the 
 
if 
 
 laws and the leases of mining properties appear to me to be such that 
 we can undertake to do any considerable business without the danger of 
 friction with the Government or embarrassment to ourselves in these 
 matters, I am inclined to take the matter up actively. 
 
 I desire simply that the terms and conditions shall be such as to 
 make capital reasonably safe, and I infer from your position in the matter 
 that there is no difficulty in our arriving at a satisfactory understanding 
 about all these matters. 
 
 After we have had time for investigation, we will ask for 'a further 
 conference with you upon the subject. 
 
 Yours truly, 
 
 (Sgd.) Henry M. Whitney. 
 Hon. William S. Fielding, 
 
 Proiiincial Secretary. . ' 
 
 Halifax. 
 
 Tliat letter was h.anded to me by Mr. Whitney in Boston at the 
 
 conclusion of some interviews we had there. Shortly afterwards I 
 
 received the following letter : 
 
 Boston, May i6, iSgs. 
 Hon. William S. Fielding, 
 
 Paovincial Secretary ^ Halifax^ N. S. 
 Dear Sir : 
 
 Referring to the interviews we have already had on the subject, I 
 beg to say that since those interview, I have, for a substantial considera- 
 tion, obtained the right to purchase one of the important mines in Cape 
 Breton, and am expecting to pay out other considerable sums in order to 
 secure the right to purchase other large mining properties. I do this 
 with the intention of prosecuting coal mining in Nova Scotia on a much 
 more extensive scale than it is at present being carried on. 
 
 Before, however, going any further, it is important for me to know 
 upon what I can rely as to the form of lease to be granted under such 
 circumstances under section 159 of "the Mines and Minerals Act of 1892." 
 If any important details need the approval of the Legislature, 1 should 
 be glad to know that I may rely upon the support of your Government 
 in securing such measures as may be considered by both of us unobjec- 
 tionable in view of what it is proposed by us to do. 
 
 Yours truly, 
 
 (Sgd.) Henry M. Whitney. 
 
 On the 19th of May, 1892, I replied to Mr. Whitney's two 
 letters as follows : 
 
 Provincial Secretary'.s Office, 
 
 Hat/fax, May igthy iSgs. 
 Dear Sir : 
 
 I beg to acknowledge receipt of your letter of 13th inst., which was 
 handed to me in Boston, and also of your letter of i6th inst., which 
 reached me to-day, both in relation to your proposed coal mining 
 operations in Nova Scotia. 
 
 In reply I beg to say that after the very full discussion of the subject 
 which has taken place between us, both in Halifax and in Boston, and 
 
13 
 
 such that 
 
 danger of 
 
 s in these 
 
 iuch as to 
 the matter 
 erstanding 
 
 a further 
 
 the further interviews had with your representatives, I am encouraged 
 to believe that we may be able to prepare such a lease as will be satisfac- 
 tory to the Government and to you. I hope to be able to make a further 
 communication to you on the subject at an early day. 
 
 Yours faithfully, 
 
 (Sgd.) W. S. Fielding, 
 
 Provincial Secretary, 
 Henry M. Whitney, Esq., 
 
 8 1 Milk SI., Boston. 
 
 [ITNEY. 
 
 ton at the 
 terward.s I 
 
 , 1892. 
 
 ; subject, I 
 1 considera- 
 es in Cape 
 
 in order to 
 I do this 
 
 on a much 
 
 le to know 
 under such 
 LCtof 1892." 
 e, 1 should 
 overnment 
 us unobjec- 
 
 NEY. 
 
 itney's two 
 
 i, iSg2. 
 
 which was 
 inst., which 
 ;oal mining 
 
 the subject 
 Boston, and 
 
 RAILWAY TO LOUISBURG, 
 
 The next correspondence has relation to the construction of a 
 railway from Sydney to Loiiisburg, It is within the knowledge of 
 the House that some years ago an English coal mining company 
 which had invested a large amount of money in Cape Breton, built a 
 railway from the Reserve mines to the port of Louisburg. That 
 railway was operated for a time, but in consequence of disaster which 
 came to the company, the road, which was a narrow gauge one, fell 
 into disuse. One of Mr. Whitney's ideas is that he may build a 
 railway to Louisburg and ship coal in the winter. The idea that 
 Louisburg shall be a winter port has been the dream of many people 
 in Cape Breton, and it must be gratifying to these people that as 
 respects making it a coal port in winter Mr, Whitney has faith in 
 their views. The letter referred to is as follows : 
 
 Boston, May i 6th, 1892. 
 Hon. W. S. Fielding, 
 
 Provincial Secretary, Halifax, N. S. 
 Dear Sir : 
 
 I am mformed that your government has power under certain condi- 
 tions to grant a subsidy of $3,200 per mile of railway constructed, to aid 
 in the construction of any line of railway within the province of Nova 
 Scotia approved by the Government. 
 
 In case myself and associates determine to construct a line of railway 
 between Sydney and Louisburg, in the Island of Cape Breton, by an 
 approved route, would your Government consider favorably the granting 
 of said subsidy to aid in the construction of such line ? 
 
 I should be glad to hear from you at your earliest convenience. 
 
 Yours truly, 
 
 (Sgd.) Henry M. Whitney. 
 
 To this I replied as follows : — 
 
 Dear Sir 
 
 Provincial Secretary's Office, 
 
 Halifax, May ig, 1892. 
 
 I beg to acknowledge receipt of your letter of i6th inst., in relation 
 to subsidy for a line of railway between Sydney and Louisburg. 
 
 In reply I beg to state that our Government have long viewed with 
 favor the project of connecting the coal fields of Cape Breton County 
 
u 
 
 with the port of Louisburg, and have repeatedly expressed their willing- 
 ness to encourage any bona fide enterprise of that character. Some time 
 ago we had negotiations with other parties who proposed to undertake 
 the work, and although no agreement was ever made, we were disposed 
 to deal favorably with them. A« they have not taken any action we are 
 free to deal with any others who may be prepared to carry out the work. 
 We can only make a contract with a duly organized company. I have 
 no doubt that if you and your associates enter upon coal mining opera- 
 tions in the County of Cape lireton on the extensive scale which you 
 propose, our Government will be found ready to grant a subsidy of three 
 thousand two hundred dollars ($3,200) per mile to such approved line 
 as will connect the port of Louisburg with the coal fields. 
 
 Yours faithfully, 
 
 ■. (Sgd.) W. S. Fielding, 
 
 Provincial Secretary. 
 Henry M. Whitney, Esq., 
 
 81 Milk Street, Boston. 
 
 On the 23rd of May Mr. Whitney acknowledged receipt of both 
 letters. Mr. Whitney had in the meantime sent his solicitors and 
 representatives to Halifax to confer with the Government. 
 
 ill! 
 
 AN AGREEMENT REACHED, 
 
 We came to an understanding which was formulated in an Order- 
 
 in-Conncil. On the 26th of May, 1892, I addressed to Mr. AVhitney 
 
 the following letter : — 
 
 . Provincial Secretary's Office, 
 
 Halifax, May 26th, iSq2. 
 Dear Sir : 
 
 Referring to previous correspondence in relation to your proposed 
 coal mining operatioi, .n Nova Scotia, I have the honor to forward you 
 herewith a certified copy of an Order of the Executive Council of Nova 
 Scotia, passed at Halifax on the 23rd day of May, instant, and approved 
 by his Honor the Lieutenant-Governor, which states the terms and con- 
 ditions under which the Government are prep, d to grant lea=es of coal 
 areas to you and your associates. 
 
 In transmitting this document I desire to call your attention to the 
 importance of your proceeding with all reasonable dispatch to make 
 whatever arrangements are necessary for the carrying out of your plans. 
 While no time limit has been fixed in the Order-in-Council, it must be 
 obvious that an order of this character could not be allowed to .remain 
 as a standing offer for an indefinite period. If within a reasonable time 
 you do not avail yourself of the conditions set forth, it may be necessary 
 to cancel the Order-in-Council. 
 
 Yours faithfully, 
 
 (Sgd.) 
 
 Henry M. Whitney, Esq., 
 
 Si Milk Street, Boston. 
 
 W. S. Fielding, 
 Provincial Secretary. 
 
 lihi 
 
1 " 
 
 ;ir willing- 
 some time 
 undertake 
 ; disposed 
 ion we are 
 the work. 
 ^. I have 
 ing- op<:ra- 
 which you 
 iy of three 
 roved line 
 
 cretary. 
 
 pt of both 
 icitors and 
 
 1 an Onler- 
 r. Whitney 
 
 !*//, iSQ2. 
 
 ir proposed 
 orvvard you 
 cil of Nova 
 id approved 
 IS and con- 
 ;a=es of coal 
 
 ition to the 
 ch to make 
 f your plans, 
 it must be 
 d to .remain 
 ionable time 
 3e necessary 
 
 NG, 
 Secretary. 
 
 That letter refers to tlie following Order-in-Council which was 
 passed on the 23rd of May, 1892 : — 
 
 Copy of an order of the Executive Council of Nova Scotia, approved by 
 His Honor the Lieutenant-Governor, on the twenty-third day of 
 May, iSg2. 
 
 No. 1,720. On a report from the Provincial Secretary, dated May 
 2ist, 1892, in relation to certain proposed coal mining operations : 
 
 The Provincial Secretary reports that certain negotiations have been 
 carried on by him with Mr. Henry M. Whitney, of Boston, with a view 
 to the investment of capital by Mr. Whitney and his associates in the 
 prosecution of coal mining in Nova Scotia on an extensive scale, as con- 
 templated by the 156th section of the Mines and Minerals Act of 1892. 
 As a result of these negotiations, the Provincial Secretary states that a 
 form of lease has been prepared, which he believes will adequately 
 protect the interests of the Pro\ ince and meet to a reasonable extent the 
 desires of Mr. Whitney, which form of lease is submitted for approval. 
 He therefore makes the following recommendations : 
 
 1. That Mr. Whitney be informed that upon his organizing a com" 
 pany under the laws of Nova Scotia, and such company acquiring any 
 outstanding lease of a coal mine in the county of Cape Preton, the 
 Governor-in-Council will ratify the transfer of such lease to such company, 
 and, under the provisions of section 156 of the Mines and Minerals Act 
 of 1892, will authorize the Commissioner of Public Works and Mines to 
 accept the surrender of such lease, and to issue in lieu thereof a new 
 lease on the terms and conditions set forth in the form of lease hereto 
 annexed: 
 
 2. That Mr. Whitney be further informed that if his company 
 accepts the terms thus offered, and receives from the Commissioner of 
 Public Works and Mines any lease or leases as herein proposed, the 
 Government will at the next session of the Legislature introduce into the 
 Legislature and support a bill to ratify and confirm such lease or leases, 
 and give it or them in all respects the full force of law. 
 
 The Council, being satisfied that Mr. Whitney is willing to comply 
 with the conditions of the said 156th section of the Mines and Minerals 
 Act of 1892, concur in the report of the Provincial Secretary, and respect- 
 fully recommend the same for the approval of His Honor the Lieutenant- 
 Governor. 
 
 Attached to that Order-in-Council was a form of lease, in which is 
 involved the whole arrangement made with Mr. Whitney. It 
 subsequently transpired that there was a clerical error in copying the 
 Order-in-Council and in consequence of that error a further Order-in- 
 Council was passed on the 24th of October, 1892. 
 
 I have stated that from the 26th of May down to the 8th of 
 December Ave had no communication with Mr. Whitney on the 
 subject. During the greater part of that time I was myself in England, 
 and though Mr. Whitney was during part of the time in Nova 
 Scotia, he had no correspondence with the Government. But on the 
 
16 
 
 8th of December, 1892, I received a telegram from Mr. Whitney in 
 
 the following words : 
 
 Boston, Dec. 8, iSgs. 
 Hon. W. S. Fielding, Halifax. 
 
 Would like very much to see you. If impossible for you to come 
 here I will go to Halifax, but it would accommodate me very much if you 
 will come here, both on account of my engagements and because my 
 associates want to meet you. 
 
 H. M. Whitney. 
 
 Several telegrams followed, as the result of which it was arranged 
 that, at a date which was mutually convenient, I should go to Boston 
 for the purpose of meeting Mr. Whitney and his a ^>sociates. The 
 object of that meeting was that .Mr. Whitne}'' and his associates were 
 making arrangimients with Messrs. Kidder, Peabody Si Co., who 
 were to assist them financially, and as some questions had been raised 
 with regard to the form of the arrangement, they thought it desirable 
 that a member of the Government should be present. My visit did 
 not lead to any change in the arrangement. The only advantage of 
 my being present was to make explanations which facilitated th& 
 scheme. 
 
 Then, apparently, a difficulty began to arise ; the possibility of 
 the Act of the Province of Nova Scotia being disallowed by the 
 Government at Ottawa came to the notice of the gentlemen connected 
 with the project. Mr. Whitney had gone into the matter thoroughly 
 some time before this, and did not regard the point as of importance. 
 If he has done so we should have been obliged to communicate with 
 the ministers at Ottawa, in order to have the doubt removed. Mr. 
 Whitney did not think that was necessary at the time ; but, in the 
 course of the negotiations with Messrs. Kidder, Peabody & Co., the 
 point came up again, and it was thought better, if there was a doubt, 
 that it should be removed, and in consequence of that there seemed 
 to be a possibility of a slight hitch arising in the proceedings. 
 
 THE EARLY SESSION OF THE LEGISLATURE. 
 
 Meanwhile Mr. Whitney expressed a strong desire for an early 
 meeting of the Legislature. I am of the opinion, and I understand 
 that legal gentlemen are of the opinion, that the arrangement which 
 our Government made with Mr. Whitney is entirely legal, vaUd and 
 binding at the present moment. Nevertheless the slightest doubt 
 cast upon the validii,^ of the proceedings would be calculated to drive 
 away capital, and^ in view of this, the bankers said that in going ta 
 
 Ml !; 
 
if 
 
 'hitney ift 
 
 i8g3. 
 
 5U to come 
 luch if you 
 ecause my 
 
 ;tney. 
 
 IS arranged 
 ( to Boston 
 ates. The 
 ciates were 
 5 Co., who 
 been raised 
 it desirable 
 y visit did 
 Wantage of 
 ilitated the 
 
 Dssibility of 
 wed by the 
 n connected 
 thoroughly 
 importance, 
 inicate with 
 oved. Mr. 
 but, in the 
 & Co., the 
 tvas a doubt, 
 here seemed 
 ings. 
 
 for an early 
 understand 
 ment which 
 al, valid and 
 ^htest doubt 
 ited to drive 
 in going ta 
 
 I 
 
 their friends to assist them they would occupy a stronger position if 
 
 \\M had the legislature summoned, and the agivoment confirmed 
 
 beyond all doubt. It was not a case for much doiibt, but in their 
 
 opinion it was the i)olicy of wisdom to make assurance doubly sm-e. 
 
 We were willing to meet the wishes of the gentlemen provided wo 
 
 could be sure that the scheme would be advanced, but in view of the 
 
 doubt as to the effect of the disallowance question, the members of 
 
 the Government hesitated to advise an early meeting of the Legislature. 
 
 On the 28Ui of December I addressed the following letter to Mr. 
 
 Whitney : -, . 
 
 Provincial Sec tarv's Office, 
 
 Halifax, Dec. 2Sth, iSgs. 
 Dfar Sir : 
 
 Since my return from Boston I have had an opportunity of discussing 
 with some of my colleagues the question of an early meeting of the 
 Legislature, with a view to a ratification of our agreement with you. 
 Although such a course as you propose will be attended with considerable 
 inconvenience to the members of the Legislature, we are disposed, in 
 view of the importance of the matter in hand, to meet your wishes, if we 
 can be satisfied that all obstacles have been removed, and that upon the 
 ratification of the agreement by the Legislature, you and your associates 
 will be prepared to carry on your enterprise. 
 
 I am aware that the solicitors of Messrs. Kidder, Peabody «fe Co., the 
 bankers who are co-operating with you in your undertaking, have recently 
 raised a question with respect to the possible exercise of the power of 
 disallowance by the Governor-General of Canada, as respects " the 
 Mines and Minerals Act, 1892," and also as respects the charter under 
 which you propose to organize your company. 1 discussed this question 
 with you and your associates at an earlier stage of our negotiations, and 
 I understood that the possibility of disallowance was not regarded as an 
 obstacle to your proceedings. If, however, Messrs. Kidder, Peabody St 
 Co. attach so much in.portance to this point as to cause them to delay 
 action until the expiration of the period within which the power of 
 disallowance may be exercised, I do not see that any advantage would be 
 gained by having an early meeting of the Legislature for the purpose of 
 ratifying our agreement with you. 
 
 1 shall be glad to have a further statement from you before asking my 
 colleagues to come to a decision respecting the early session. 
 
 Yours faithfully, 
 
 (e \.) W. S. Fielding, 
 
 Provincial Secretary. 
 HENRy M. Whitney, Esq., 
 
 81 Milk Street, Boston. 
 
 Mr. Whitney, on receipt of that letter, sent me the following tele- 
 
 BosTON, Dec. 31, i8g2. 
 Hon. W. S. Fielding, Halifax. 
 
 Disallowance matter no obstacle. Have already taken Caledonia. 
 
 Henry M. Whitney. ' 
 
 gram: — 
 
u 
 
 And on the 4th of January of tlio present year he addressed mo 
 the following letter confirming his telegram : — 
 
 BoSTOH, /an. 4, /Sg^. 
 Hon. William S. Fielding, 
 
 Provincial Secretary., 
 
 Nova Scotia. 
 Dkar Sir : 
 
 » 
 
 I replied by telegram to your letter of 28th ult., and confirming that, 
 I have to say that we do not expect to delay on account of the possible 
 exercise of the power of disallowance by the Governor-General of Canada. 
 As soon as we obtain the legislation which has been talked of we shall 
 at once go on. We shall organize and take hold of the properties and 
 get to work. 
 
 I expect to be in Ottawa within a few days, and I shall explain the 
 situation to the authorities there, and if I then have control of the Cale- 
 donia, I shall ask to withdraw their names as petitioners for this change, 
 and on their behalf I shall ask that the Act of last year be allowed. 
 
 , Yours truly, 
 
 ' . (Sgd.) Henry M. Whitney. 
 
 Still we thought we sliould have a further assurance of Mr. 
 Whitney's readiness to go to work before we took the responsibility 
 of advising His Honor the Lieutenant-Governor to summon an early 
 meeting of the Legislature, ar.d, on the 4th of January I addressed 
 the following letter to Mr. Whitney : — 
 
 Provincial Secretary's Office, 
 
 Halifax, Jan. 4, i8gj. 
 
 Dear Sir : 
 
 I daly received your telegram 31st ultimo, as follows : — 
 
 " Disallowance matter no obstacle. Have already taken Caledonia." 
 
 This telegram was quite satisfactory, and, if nothing further had 
 occurred, action would already have been taken to summon Parliament. 
 But it came to my knowledge immediately after receipt of the telegram 
 that Mr. Winsor, of Messrs. Kidder, Peabody & Co., and Mr. Snow, one 
 of their solicitors, arrived in Halifax for the purpose of inquiring into the 
 question of disallowance, as well as into other matters. This would seem 
 to show that they had not dismissed the matter from their minds. I 
 think it right to call your attention to this fact, and ask you whether you 
 are in a position to confirm the assurance given me in your telegram 
 above quoted. 
 
 Yours faithfully, 
 
 (Sgd.) W. S. Fielding, 
 
 Henry M. Whitney, Esq., 
 
 81 Milk Street, Boston. 
 
 Provincial Secretary. 
 
ildrcssed mo 
 
 4, 1S93. 
 
 ifirming that, 
 f the possible 
 al of Canada, 
 ^a of we shall 
 iroperties and 
 
 11 explain the 
 )1 of the Cale- 
 r this change, 
 allowed. 
 
 /HITNEY. 
 
 ranee of Mr. 
 responsibility 
 men an early 
 V I addressed 
 
 CE, 
 
 4, 1893. 
 
 zn Caledonia." 
 
 g further had 
 m Parliament, 
 the telegram 
 vir. Snow, one 
 jiring into the 
 is would seem 
 leir minds. I 
 u whether you 
 your telegram 
 
 NG, 
 Secretary. 
 
 , 19 
 
 On receipt of that letter Mr. Whitney, on the 7th January, tele- 
 
 graplied nie a.s follows : — 
 
 lJosTON,/rt!/;. 7, iSqj. 
 Hon. W. S. Fieldinc, Halifax. 
 
 I beg to confirm the assurance in my telegram of December thirty- 
 first. I think our friends will not delay on account of this disallowance 
 matter. Hut the thing is going ahead when you give us the legislation, 
 either with or without all my present associates. 
 
 Henry M. Whitney. 
 
 I then notified Mr. Whitney that the Legislature had been sum- 
 moned, and there was an exchange of telegrams in reference to the 
 withdrawal of signatures to the mining conii)anies' petition to Ottawa 
 asking for the disallowance of our Act of last session consolidating the 
 Acts resj)ecting Min«!s and Minerals. Mr. Whitney telegraphed under 
 date iJoston, Jan. 10, 1893, tliat Mr. Henry, as solicitor, would with, 
 draw on behalf of the Caledonia, International and Little (jlace Bay 
 companies. I replied on the following day that if the petition were 
 withdrawn a settlement of the disallowance matter might be hastened, 
 but that the withdrawal of the companies named, while others re- 
 mained on the petition, was of no conse([uence. 
 
 That, sir, is all the correspondence that the Government has had 
 with Mr. Whitney and his associates in reference to this very im- 
 portant matter. - 
 
 PARTICULARS OF THE AGREEMENT. 
 
 Now we have reached a point when it becomes necessary to give 
 particulars of the precise arrangements we have made. Although the 
 matter has not been laid before the Legislature, it has been much dis- 
 cussed in the press, and there has been raised a somewhat wide-spread 
 cry of monopoly. Let us first understand imt a monopoly is, and 
 what proceedings must be taken to establish it. I could mention 
 combines existing not very far from this place to which we might 
 reasonably reject as being bad. But what I wish to suggest is that 
 there may be good combines as well as bad. When two men are 
 doing certain work which could be more economically done by one, a 
 combine for the purpose of producing the same result at a smaller 
 expenditure may be a good to the community rathei- than an evil. 
 Therefore the mere fact that certain gentlemen propose to place a 
 number of jjroperties under one management, with a view to economy 
 and better results, does not necessarily imply monopoly. If we gave 
 to one man or one corporation certain privileges, and guaranteed that 
 
iM 
 
 that niiin or (;nri)oration alnnn shnuM fiijoy thoso i)riviI('jj;o.s, that wo 
 "would not iicniiit any one else to enjoy thoni, that, as 1 niult'istand 
 it, wouKl ho a niono[)oly. 
 
 NO MONOPOLY. 
 
 Hut we have j^'ivon no monopoly to Mr. Whitnoy and his asso- 
 ciates. ]f Mr. Whitney wanted a monopoly in coid lie would have 
 been a foolish man to coiiu! to this (jovernment for it. And for two 
 rensoiLS : First, because the members of this (lovernment mo not 
 understood to favor monopolies ; secondly, because if Mr. Whitney 
 wanted a monopoly he could b(!tter obtain it by not coming to the 
 Government. 1 would like lion, gentlemen to mark that ev(M'y possi- 
 ble criticism that can be ottered against this uK-asure will l)e found to 
 be really a criticism, not of the measure itself, but of the law as it 
 stands to-day ujwn the statute book. If the objection is to monopoly. 
 I say that monopoly is possible tmder the law as it exists to-day. 
 There is no monoi)oly in this bill ; on the other hand, there are checks 
 which will render it ditHcult, if not impossible. If Mr, Whitney 
 wanted monopoly to-day, what is there to prevent him from ol)taining 
 it^ Monopoly is largely a question of money, and if ISlr. Whitney 
 has money enough to buy up the le?.se of every mine in the province, 
 what is there to prevent him from doing it ? I assert that there is 
 nothing, and that if Mr. Whitney wants monopoly he can get it with- 
 out coming to us for it. But it is because Mr. Whitney does not want 
 monopoly, but wants to work the mines vigorously, under conditions 
 more favorable to the public and to himself, that he comes to us to 
 make arrangements with him. I repeat that there is nothing to pre- 
 vent Mr. Whitney getting a monopoly if he desired it as the law now 
 stands. There is only one feature of tlie Mining Act which could put 
 a check upon it, and if that is pointed to I can satisfy any member of 
 the House that it is practically a dead letter, that it cannot be en- 
 forced, but can be evaded as often as a man has brains and money 
 enough to get around it. 
 
 TUB CONCESSIONS REQUIRED. 
 
 Well, now, what did Mr. Whitney want 1 He thought that there 
 could be some improvement in our mining law. What was it that he 
 objected to 1 Gentlemen may say, and there are many no doubt in 
 this Province who will say, in view of the outcry last year against the 
 increase of royalty from seven and a half cents a ton to ten cents a 
 
 f 
 
 il iiii 
 
 ----i- 
 
21 
 
 j»ns, thiit wo 
 I uiitlur.stivml 
 
 mil his iisso- 
 i would Irnvc- 
 
 Antl fur two 
 iKMit iir<' not 
 Mr. Whitnoy 
 Dining t<i tho 
 t iiS'ory possi- 
 11 be. found to 
 tho law as it 
 to monopoly, 
 exists to-day, 
 ore are checks 
 ^Ir. Whitney 
 roiu ol)taining 
 Mr. Whitnoy 
 
 the province, 
 
 that there is 
 m get it with- 
 does not want 
 der conditions 
 ;onies to us to 
 lothing to pre- 
 s the law now 
 hich could put 
 liny member of 
 
 cannot be en- 
 Ins and money 
 
 Light that there 
 , was it that he 
 iiy no doubt in 
 'ear against the 
 1 to ten cents a 
 
 ton, " We know what Mr. Whitnoy complained of ; it was th.at you 
 " increased i\u' royalty from s(jven and u half to ten cents." MtMi 
 said last year that by doing so w(! were driving capital out of tho 
 country ; that if W(^ incre.isi'd the royalty we cduld not get any oni; to 
 invest u dollar here. Naturally it might bo supposed that Mr. Whit- 
 ney asked us to repeal the law increuslng the royalty, and to go back 
 to tho seven and a half cents a ton. Ihit Mr. Whitney did not .say 
 anything of tho sort. Ho did not grumble at the ten cents a ton 
 royalty, but said, ** We wouhl lik(! a longiir leasee" The law as it 
 stands enabl(!s tho (lovoi.. intuit of Nova Scotia to issue lea.ses for a 
 period of 80 years. Tho most important leases now outstanding had 
 80 years to run from 186(5, and have consoipiontly 5 1 years yet to run. 
 If tho.s(! leases fell into tho hands of tho Oovornment, or if wo i-ssuod 
 new lenses to-day of newly discovered areas, the law enables us to 
 i.ssue them in terms of 20 year.s, with rights of renewal which extend 
 the terms of the lease to 80 year.s. Mr. Whitnoy nted a longer 
 period than that, and, after del)ating the matter, Wo greed to otter 
 him leases of 99 years, where tho law now authorizes us to give leases 
 of 80 year«. Then we put in a clause, which I should mention, which 
 however only takes elf(!ct by mutual agroement, providing that if, at 
 the end of the term of 99 years, tho Government wish to continue the 
 arrangement, it may bo continued by mutual con.sent for a further 
 period of 20 years. J]ut if there is any objection to this on either 
 side, the lease will terminate at the expiration of the period of 99 
 years. 
 
 RESPECTING PROVINCIAL TAXATION. 
 
 Then Mr. Whitney wanted something else. lie .said that they 
 did not understand the royalty in the States ; that ^hey did not pay 
 royalty there ; that when they bought a mine they bought it outright, 
 and then got all that they could out of it. But we reminded him 
 that if they did not have to pay royalties there, they had a State taxa- 
 tion, and we were able to i)oint out that while in the States tho State 
 Government gets a revenue from the imposition of taxes upon mining 
 corporations, we get it in the suape of a royalty ; and that whether 
 the amount that the State gets is called a royalty a State tax makes 
 comparatively little difference. We were able to show that in this 
 respect we were on even terms. Mr. Whitney admitted that this 
 freedom from taxation was important, but he contended that if it was 
 to be any value to him it must be guaranteed to be continued. It is 
 sometimes said in Nova Scotia that we are going to have direct taxa- 
 
ii 
 
 ■ 1 1 
 
 '! 'j 
 
 I ! : i 
 
 i 
 
 tion for Provincial purposes. We, of course, on this side of the House 
 do not believe that. W, said to Mr. Whitney, " We have no State 
 *' tax here ; instead of that we have royalties, and we are willing to 
 " guarantee that so long as you pay royalties we will not tax you 
 " for Provincial purposes." 
 
 NO EXEMPTION FROM MUNICIPAL TAXATION. 
 
 Then we said : " But you must remember, Mr. Whitney, Ave have 
 " municipalities in this Pi'ovince, and we do not jjropose to interfere 
 *' with their right to tax you. Whatever property you may have 
 " \,hich comes under the municipal assessment law of the Province 
 " you must ])ay taxes on to the town or municipality, as the case 
 " may be." He was willing to consent to that, ])rovided we would 
 assure him that the coal undeveloped in the seams would be exempt 
 from taxation. Upon that point there was no difficulty. This coal 
 in the seams is crown property. Even Mr. Whitney, when he gets a 
 lease, does not get the ownership of the property. He only gets the 
 right to work it ; consequently the coal in the seams, being still crown 
 property, would not be the subject of taxation. We agreed, therefore, 
 to guarantee to Mr. Whitney that his company should not be taxed 
 by the province except in the way of royalty, and that they should 
 not be taxed by the municipalities for undeveloped coal in the seams. 
 
 TRANSFER OF LEASES. ' 
 
 The Legislature has given to the Government a discretion with 
 regard to the transfer of raining lea?es from one party to another. 
 The Government have never found tliat power was of much practical 
 good, except as to enforcing the p.iyment of royalty. I do not know 
 of any instance where a Government of Nova Scotia refused to grant 
 to a company the right to transfer its lease to another company But 
 the regulation h's occasionally been found useful in the way of 
 collecting royalty. Thus, when a company was about transferring its 
 lease we would examine the company's account with the Government, 
 and, where necessary, call attention to the fact that certain royalty 
 had not been paid, and that royalty was accordingly paid before the 
 transfer was completed. Mr. Whitney asked us to agree that the 
 discretion conferred upon the Government to permit transfers of leases, 
 which ])ermission had never been refused, should be exercised when 
 required — that whenever he bought the interests of another company 
 from the lease holder and paid the price mutually agreed upon, 
 
 "3r 
 
23 
 
 of the House 
 lave no State 
 ire willing to 
 1 not tax you 
 
 ;ney, wo have 
 
 to interfere 
 
 ou may have 
 
 the Province 
 
 as the case 
 
 led we would 
 
 Id he exempt 
 
 y. This coal 
 
 'hen he gets a 
 
 only gets the 
 
 ing still crown 
 
 ed, therefore, 
 
 I not he taxed 
 
 t they should 
 
 in the seams- 
 
 iscretion with 
 ;y to another, 
 nuch practical 
 [ do not know 
 fused to grant 
 )nipany But 
 I the way of 
 ransferring its 
 ! Government, 
 ertain royalty 
 lid before the 
 igree that the 
 sfers of leases, 
 (ercised when 
 )ther company 
 agreed upon, 
 
 and came to the Government for a transfer of that lease, the 
 Government would then exercise that discretion favorably and grant 
 the right of transfer which thev had never refused before. The 
 Government agreed to that. 
 
 RESTRICTIONS ON THE COMPANY — ONE COUNTY ONLY. 
 
 Now, I think I have stated to the House every material point on 
 which we have granted any concession to Mr. Whitney. The lease 
 that we have agreed upon is a very elaborate document, necessarily 
 full of the old forms, and I will not weary the House by reading 
 extracts from it. Having discussed with Mr. Whitney what he 
 wished us to do, we thought it was about time to talk to him about 
 what we wanted him to do. We felt that there would be some alarm 
 on the score of monopoly, and we were determined to- tako reasonable 
 precautions against anything of the kind. We therefore considered 
 as to whr*^ was a reasonable extent of coal field which we would 
 permit Mr. Whitney to obtain under our proposed new lease. We 
 said to him that we thought the County of Cape Breton was a field 
 large enough to give him ample sco[)e for the operations which he 
 proposed to carry on, and that we would not extend the privileges of 
 the now lease to him as respects any mine outside of the County of 
 Cape Breton. When I state that the Government took this position 
 and that Mr. Whitney agreed to it I am sure that the public will see 
 at once how unfounded the monopoly cry has been. It has been 
 proclaimed throughout the country that we have agreed to give Mr. 
 Whitney control of all the mines in Nova Scotia. I would regard it 
 as undesirable that all the mines of Nova Scotia should get under the 
 control of one man or one company, and therefore we stipulated that 
 he should not be permitted to take under this lease any mines outside of 
 the County of Cape Breton. It is true that that is a county in which 
 there is a large coal field. I'erhaps there is more coal in the County 
 of Cape Breton than in the same area in any other part of Nova 
 Scotia, or indeed in any other part of the world. 
 
 GREAT COAL FIELDS NOT INCLUDED IN THE LEASE. 
 
 But there is outside of Cape lireton County, in the Province of 
 Nova Scotia an ami)le supply of coal to guarantee the people against 
 monopoly. Out of the one million eight hundred thousand, tons of 
 coal produced from our mines last year we only raised about half in 
 the County of Cape Breton. We are therefore leaving to compete 
 
 ( 
 
24 
 
 1 1 
 
 with Mr. Whitney all the mines in Xova Scotia outside of the County 
 of Cape Breton. At Springhill, Cumberland Co., there is one of the 
 most valuable mines in the country, free to compete with Mr. Whitney. 
 There are also valuable coal fields in Pictou County, equally free to 
 compete. There are also the valuable coal mines at the Joggins, in 
 Cumberland County, which promise to be even more vigorously 
 conducted than before, owiug to the investment of new capital, and 
 which will be free from the control of Mr. Whitney and his associates. 
 I have mentioned the working collieries but it is well known that 
 there are large areas of coal undeveloped, and which are not and 
 cannot be embraced in the lease to Mr. Whitney. Broad Cove, in the 
 County of Inverness, has one of the finest coal fields in the country. 
 Mabou and Port Hood have also coal fields known to be valuable, 
 and none of th«se coal fields are touched by the lease to Mr. Whitney, 
 So also in Victoria County there are coal deposits of value which are 
 not touched by this lease, and at Carribou Cove, in Richmond County, 
 there are coal deposits which are not en ' raced in the terms of this 
 lease. There are also, I have no doubt, many seams of coal yet 
 undiscovered in Nova Scotia, which of course are not covered by this 
 lease to Mr. Whitney. When 1 point out these facts, surely it will 
 be seen that there is no shadow of justification for the cry that we 
 have proposed to give all the mines of Nova Scotia to Mr. Whitney. 
 
 A LARGE GUARANTEE OF ROYALTY. - 
 
 Well, we put another check upon Mr. Whitney's operations, one 
 in Avhich he gave us a substantial guarantee cf his good faith. We 
 proposed that whenever his company should have obtained possession 
 of pioperties out of which there were taken, in the year 1891, 
 250,000 tons or more of coal, we would impose an additional check 
 upon its operations. I believe that Mr. Whitney has already 
 obtained control of several properties to make the clause I refer to 
 operative at once — the mines he controls produced more than 250,000 
 tons in 1891. It was said that there was danger of closing up the 
 mines. We anticipated that point, and in order to take every 
 precaution against such a thing we imposed a check upon Mr- 
 Whitney and his associates which is not imposed upon any other 
 mining company in Nova Scotia. We said to him that whenever he 
 obtained control of a number of areas to the extent I have just 
 described, he and his associates should be obliged to pay the Govern 
 ment of Nova Scotia every year a royalty on an output not less than 
 
26 
 
 i the County 
 
 is one of the 
 
 ^Tr. Whitney. 
 
 [ually free to 
 
 e Joggins, in 
 
 'e vigorously 
 
 capital, and 
 
 tiis .associates. 
 
 known that 
 
 are not and 
 
 Cove, in the 
 
 the country. 
 
 be valuable, 
 
 ^r. Whitney, 
 
 ue which are 
 
 lond County. 
 
 erms of this 
 
 I of coal yet 
 
 ir'ered by this 
 
 urely it will 
 
 cry that we 
 
 r. Whitney. 
 
 jrations, one 
 
 faith. We 
 
 id possession 
 
 year 1891, 
 
 tional check 
 
 has already 
 
 ;e I refer to 
 
 ,han 250,000 
 
 3sing up the 
 
 take every 
 
 k upon Mr- 
 
 1 any other 
 
 whenever he 
 
 I have just 
 
 the Govern 
 
 lot less than 
 
 the output that had occurred in the year 1891, which was the 
 largest output in the history of mining in Nova Scotia. We recjuired 
 him to guarantee that even if he never took a pound of coal out of a 
 mine covered by his lease he would be obliged to pay the Government 
 of Nova Scotia royalty on the basis of the output of 1891. I shall 
 show you in a moment what that provision involves. 
 
 THE COMPANY TO PAY HIGHER ROYALTY. 
 
 We said that we were desirous of giving Mr. Whitney a fair and 
 reasonable bargain, but we thought that, in view of the terms we were 
 giving him, he should give us, not merely the royalty of the past, the 
 seven and a half cents ; not merely the royalty of ten cents a ton, as 
 provided by more recent legislation, but that he should give us some- 
 thing more. What, you say, do you mean more than ten cents 1 We 
 were told last year, when we increased the royalty from seven and a 
 half to ten cents, thut the business would not afford it ; that we would 
 drive capital out of the country ; that men Avould not buy coal areas. 
 And yet we asked for more 1 Yes, we did, and Mr. Whitney is going 
 to pay us for every ton of coal taken out of Cape Breton, not 7| cents, 
 not 10 cents, but, for every ton of coal taken out he will pay 12^ 
 cents into the people's treasury, which means that much more money 
 for education, that much more money for roads and bridges, that much 
 more money for steamboats, packets and ferries, that much more 
 money for everything that we are interested in. When that fact is 
 stated to the public, in addition to what I liave previously said, I 
 think they will reach the conclusion that this bargain, while fail to 
 Mr. Whitne}', and giving him the opportunity of carrying on his en- 
 terprise with good prospect of success, is going to be a pro ti table one 
 for the province. 
 
 WHAT ASSURANCE OP OPERATION 1 
 
 But I have heard it asked, " Will they put out the coal — what if 
 the mines close 1 " My answer is that we do not ask any other mine 
 owner to make terms that he will put out any given quantity of coal. 
 We do not ask Mr. Cowans, of Springhill, or Mr. Fergie, of the 
 Drummond, or Mr. Poole, of the Acadia, to agree that if they do 
 not put out so much coal we will forfeit their leases. We hiive to 
 take it that the law of supply and demand will regulate these things- 
 And if we do not ask such conditions of Mr. Cowans, Mr. Poole or 
 Mr. Fergie, who pay us ten cents per ton royalty, why should we ask 
 them of Mr. Whitney when he agrees to pay us 12^ cents per ton 1 
 
! li 
 
 i i 
 
 1 ;; 
 
 ill 
 
 26 ., 
 
 With respect to the possibility of closing the mines, the law as it 
 stands does not give us any special power, and if every mine in the 
 province were to be closed by the lessees T do not see what we could 
 at present do to prevent it. There was a time when we had a for- 
 feiture clause in the law to meet cases of non-working, but we found 
 that if it had been carried out to the letter we ^' ould have been all 
 the time forfeiting leases. For a time there was a limited demand 
 for coal. We could hardly force men to operate the mines when there 
 was no market for the product ; and of late years the Legislature has 
 not adhered to the forfeiture clause for non-working. Instead of that 
 it has said that so long as a man pays royalty or rental he shall not 
 have his lease forfeited. I am asked what would you do if the mines 
 were closed 1 I reply that as in the case of existing leases, we do not 
 legislate to meet such a contingency as that, so, in regard to this lease, 
 we do not make special legislation except in regard to payment of 
 royalty Eut if people should enter into a combination of the charac- 
 ter talked of, and shut up our mines in order to give employment t^ 
 men in a foreign country, I have no hesitation in saying that in the 
 event of such a thing as that being done, any men who meet in this 
 Legislature would have to regard it as an act of war, and that it would 
 be their duty to protect the public interests at any cost. That state- 
 ment I do not hesitate to make. But we do not anticipate such things 
 with respect to the mines working to-day, and we do not see why we 
 should deal differently with the enterprise proposed by Mr. Whitney. 
 
 A HEAVY PENALTY. 
 
 Close the mines ! The thing is ridiculous. Does anyone consider 
 what the consequences would be ? Mr. Whitney would be compelled 
 to pay the Government royalty on a quantity of coal equal to the total 
 output of 1891. And this would not be royalty equal in amount to 
 that paid in 1891, but royalty on the same number of tons at 12| 
 cents per ton, that being the amount of royalty established by this 
 lease. Let us consider for a moment how that works. There w^re 
 taken out of the mines of Cape Breton coiinty, within which ..ir. 
 Whitney is free to pursue his operations, in the year 1891, 982,392 
 tons of coal. If we apply the 12| cents per ton rat6 to that we find 
 that for the privilege of closing up the mines of one county Mr. Whit- 
 ney would have to pay the Government the sum of $122,799 per 
 annum. That is a pretty heavy penalty. Most people will say that 
 when we have provided a fine of $122,799 per annum as a penalty for 
 
27 
 
 s, the law as it 
 ery mine in the 
 i what we could 
 
 I we had a for- 
 g, but we found 
 
 II have been all 
 
 limited demand 
 
 ines when there 
 
 Legislature has 
 
 Instead of that 
 
 ital he shall not 
 do if the mines 
 3ases, we do not 
 ird to this lease, 
 to payment of 
 »n of the charac- 
 ! employment to 
 ying tiiat in the 
 i^ho meet in this 
 lid that it would 
 isr. That state- 
 pate such things 
 not see why we 
 )y Mr. Whitney. 
 
 anyone consider 
 lid be compelled 
 qual to the total 
 lal in amount to 
 ■ of tons at 12 J 
 ablished by this 
 <s. There v"^re 
 thin which ..ir. 
 r 1891, 982,392 
 
 to that we find 
 )unty Mr. Whit- 
 f $122,799 per 
 pie will say that 
 
 as a penalty for 
 
 Mr. Whitney and his associates closing the mines, we have provided 
 a penalty which will lead him to work them provided there is 
 any market. 
 
 SEVEN MILLION DOLLARS REQUIRED. 
 
 But that is not all. I have the means of knowing something of 
 the way in which this scheme is financed. It may be interesting to 
 state, in view of the idea that the Americans are going to gobble up 
 our mines, that while Mr. Whitney and his present associates are 
 going to put a large amount of capital in this enterprise, they do not 
 propose to put the whole of it in, but they will invite others to 
 contribute. Others who desire to do so will have the opportunity of 
 buying the securities which are to be issued. If there are in the 
 Province of I^ova Scotia or in Canada any persons who think that this 
 is going to be such a bonanza that they want a share in it, Mr. Whit- 
 ney is generous enough to give it to them, provided they pay for their 
 shares as he does. The securities will be offered for sale by Kidder, 
 Peabody & Co., and will be sold to the men who oflfer the most for 
 them. If any man wants to invest in the enterprise, then let him 
 make an offer for the bonds, and he will find the promoters of the 
 enterprise willing to sell. At an early stage of the operations of the 
 company they will require a capital of at least $7,000,000. Ulti- 
 mately they will require a larger sum, but what I mean is that at 
 the beginning of the enterprise, in order to buy the present leases, 
 to build the raihvay to Louisburg, which will have to be constructed 
 on an expensive scale so as to stand the heavy traffic, and to 
 establish terminal facilities, and to obtain the steamships included in 
 one of the properties, the company will have to expend about 
 $7,000,000. A portion of this will go to pay for steamships, which, 
 in the event of the mines being closed, could be employed in some 
 other direction. The steamers now used are not of the class that Mr. 
 Whitney proposes to employ in future. The elements upon which he 
 relies for success are better facilities for transportation of coal, better 
 means for handling it, so as to avoid the loss by breakage under 
 existing me^^hods, cheaper methods of management, more modern 
 machinery, and, in fact, the employment of all those methods which 
 have brought success to coal enterprises in the United States. These 
 are the points in connection with which Mr. Whitney expects to make 
 a saving and to do a good thing for'the pro^^ince of Nova Scotia, while 
 ■at the same time getting a fair return for his own capital. Xow with- 
 
28 
 
 liH' ! 
 
 out going into the construction of larger steamers, anil confining our- 
 selves to the early stages of the enterprise, I believe that the statement 
 that it virill call for an investment of $7,000,000 is lot an exaggerated 
 one. Probably $6,500,000 of that will be fixed capital invested in 
 the purchase of existing leases, the construction and equipment of the 
 railway to Louisburg, and the supplying of terminal facilities in 
 various places. It is proposed, in order to raise the sum required, to- 
 issue securities at rates bearing from 6 to 8 per cent, interest. There 
 will be several classes of stock. I am informed that it is proposed to 
 issue securities in preferred stock and bonds, the bonds bearing 
 interest at the rate of 6 per cent, and the preferred stock at the rate 
 of 8 per cent. 
 
 Mr. Cahan — Can you give the amount of preferred stock and 
 bonds 1 
 
 Hon. Mr. Fielding— They will issue $3,000,000 of preferred stock 
 and $3,000,000 of bonds. The balance will be obtained from the 
 common stock of the company. I do not guarantee this in detail ; I 
 give the figures as I have obtained them, and I understand that the 
 operations at no remote day will involve the ]>roviding of a larger 
 capital. $6,500,000, as I have said, will be fixed capital invested in 
 things that cannot be converted to any other use. Xow let us assume 
 that $6,500,000 are invested here, bearing interest at the rate of 6 
 per cent. The interest on that amount for one year will be $390,000. 
 If the company close the mines they have to lose that amount. Now, 
 add to that interest on capital invested the sum of $122,799 roy !ty, 
 which they will have to pay the Government of Nova Scotia in any 
 event, and we find that for the privilege of closing up the mines of 
 one county in Nova Scotia this company would have to sacrifice 
 $512,000 a year. That is to be the penalty for closing the mines, if 
 such a thing were attempted. I do not think that any company 
 would be willing to pay for such a privilege, even the sum which this 
 company would be compelled to pay to the Government of Nova 
 Scotia, but when we find that in addition to that the company would 
 have to allow capital to go to waste, the interest upon which would 
 bring the penalty up to $512,000, I do not think it reasonable to 
 believe that these people will ever attempt to close up the mines in. 
 the county of Cape Breton. 
 
 I think when it is seen that Mr. Whitney was willing to come 
 into this Province and submit to all these guards and checks, some of 
 
 H 
 
 ^ ^ 
 
[ confining our- 
 t the statement 
 an exaggerated 
 ital invested in 
 uipnient of the 
 al facilities in 
 im required, ta 
 iterest. There 
 ; is proposed to 
 bonds bearing 
 ock at the rate 
 
 •red stock and 
 
 preferred stock 
 lined from the 
 lis in detail ; I 
 rstand that the 
 ing of a larger 
 ital invested in 
 V let us assume 
 t the rate of 6 
 11 be $390,000. 
 iniount. I^ow, 
 22,799 ro> Ity, 
 a Scotia in any 
 ip the mines of 
 Lve to sacrifice 
 ig the mines, if 
 any company 
 iuni which thia 
 iment of Nova 
 iompany would 
 1 which would 
 ; reasonable ta 
 p the mines in. 
 
 illing to come 
 hecks, some ot 
 
 29 
 
 vrhich are not imposed on any mining company in Nova Scotia, and 
 "when it is known that he is a gentleman of great enterprise, zeal and 
 integrity, it should not be needful for nie to discuss the matter further, 
 believing as I do that the measure will commend itself to the judg- 
 ment of the people. 
 
 ADVANTAGES OP OAl'E BRETON MINES. 
 
 But why should Mr. Whitney's company want to shut the mines 
 of Cape Breton county 1 There is no place on the continent of 
 America where coal can be put on ship board at tide water so cheaply 
 as it can in Cape Breton county There may be one or two })oints in 
 the United States where mines are so favorably situated that they can 
 raise coal cheaper than we can, but when you remember tliat the 
 mines in the United States are in most cases inland, and that they have 
 a long haul before tliey reach tide water, it will be evident that the 
 county of Cape Breton has special advantages in that respect. Why 
 then should Mr. Whitney's company want to shut up these mines in 
 the county of Cape Breton ? I want the House to consider the vast 
 amount of coal used in the United States. The amount we use here 
 in Nova Scotia is small in comparison. I do not see how it could pay 
 any company carrying on operations here to shut down the mines in 
 the county of Cape Breton ; but if that possibility exists it cannot 
 oi)erate as a criticism of the measure before the House, but rather as 
 a criticism of the present condition of our mining laws. We have no 
 mining law to-day in Nova Scotia that will compel any company to 
 take out a fixed quantity of coal. 
 
 There is one point that Mr. Whitney very properly stipulated for 
 when we proposed to impose the penalty I have referred to, in order 
 to prevent the shutting up of the mines in the county of Cape Breton. 
 He said he was willing to agree to the imposition of that penalty on 
 condition that it should not apply to the closing up of the mines from 
 unavoidable circumstances, such as an explosion or accident. We 
 therefore agreed to insert a condition in the lease giving him the right 
 of arbitration in such cases and providing that if he could satisfy the 
 arbitrators appointed under the laws of Nova Scotia that his mines 
 were not producing the full quantity of coal produced in 1891, in con- 
 8P uence of circumstances which were beyond the control of the com- 
 pany, we should not enforce the penalty against them. 
 
 Mr. Cahan asked if the Whitney company had organized 
 
30 
 
 Hon. Mr. Fielding — I am not in a position to state whether thoy 
 are actually organized as yet under the laws of this Province, but of 
 course before the undertaking can be carried out they must be 
 organized under the laws of Nova Scotia. That is, however, a matter 
 about which we are not particularly concerned at present. The pro- 
 posed enterprise is a large one and well worthy the attention of the 
 Legislature and the public. If anybody can show that Mr. Whitney 
 has got a very good bargain out of this undertaking we shall not regret 
 it very much, for we want him to have a good bargain. We want 
 the venture to be a success, and M'e want the investors to reap the 
 benefit of their enterprise. We desire to be able to show Mr. Whit- 
 ney and the gentlemen associated with him that the mineral wealth 
 of Nova Scotia is a solid reality, and I trust that their success will be 
 the means of bringing many other capitalists to invest in developing 
 the resources of this province. We have boasted so much of 
 the mineral wealth of IVova Scotia, and have proclaimed so frequently 
 that all the Province wanted was to have its great natural resources 
 advertised, that I trust our wishes in that respect will now be accom-^ 
 plished and the mining interests of Nova Scotia will flourish to a 
 much greater degree than ever before. 
 
 In the name of the Government of Nova Scotia, I submit this 
 measure to the people's representatives with the fullest confidence 
 that every reasonable eflFort has been made to guard the interests of 
 the people, and that if this measure is adopted it will be the meana 
 of adding greatly to tl\e wealth and prosperity of Nova Scotia. 
 
 li ; 
 
 "i 
 
 "I 
 
 > li'ii' ' 
 
 ! i 
 
 ''^. 
 
be whether thoy 
 Province, but of 
 they must be 
 )wever, a matter 
 isent. The pro- 
 attention of the 
 at Mr. "Whitney 
 I shall not regret 
 jain. We want 
 tors to reap the 
 show Mr. Whit- 
 mineral wealth 
 r success will be 
 st in developing 
 sd so much of 
 3d so frequently 
 atural resources 
 I now be accom* 
 i^ill flourish to a 
 
 I, I submit this 
 Uest confidence 
 the interests of 
 ill be the meana 
 Ek Scotia.