Alberta and Great Waterways Railway Scandal - The Scandal - J. R. Boyle's Resolution

J. R. Boyle's Resolution

On February 21, Boyle gave notice of a resolution to expropriate the rights of the A&GW and build the line directly. He asserted that the government had guaranteed to the A&GW more than was necessary, as a line of 230 miles (370 km), barely two thirds what had been guaranteed, was sufficient. The next day, Boyle further alleged that Deputy Attorney-General S. B. Woods had tampered with the government's files on the A&GW before Boyle and Bennett had viewed them. Attorney-General Charles Wilson Cross strongly disputed this allegation.

Debate on Boyle's resolution began February 25 in front of a full public gallery. Cushing, breaking his silence, opened debate. He explained that cabinet's original intention had been for $20,000 per mile to be the maximum guarantee, with less promised for more easily-built portions of the line. He claimed that he had taken ill at a time that this understanding was still in place, only to have Rutherford move responsibility for railways from Cushing's Public Works department to a new Railways department, headed by Rutherford himself. He recounted his discomfort with Rutherford's refusal to consult with Public Works engineers on the actual costs of constructing the line, and his relief at Rutherford's assurance that Cushing himself would be consulted. He claimed that he had not been, and that, upon seeing the agreement between the A&GW and the government, he had decided to resign. Rutherford disputed this version of events, noted that Cushing had been at all relevant cabinet meetings, and cited the report of government engineer R. W. Jones in disputing that the line could be constructed for less than $20,000 per mile.

Boyle followed, alleging that Rutherford had privately committed himself to the $20,000 figure as early as November 14, 1908, before a government engineer had even been appointed. He also accused the government of negligence in failing to verify the paid in capital of the A&GW before committing $7.4 million of government loan guarantees to it. He closed by repeating his demand that the government expropriate the company's rights and build the line itself. Cross rebutted for the government, questioning Cushing's sincerity and quoting a March 1909 speech in which the then-Minister of Public Works had defended the government's railway policy against Bennett's attacks. Cross also reminded the legislature that no money was to be paid to the A&GW until tracks were actually constructed.

On February 28 Liberal member and Cushing-ally Ezra Riley proposed an amendment to Boyle's resolution, striking out the proposals to expropriate and substituting a statement that "the contract and agreement entered into between the Government and the Alberta and Great Waterways Railway Company are not such as to commend them to the judgment and confidence of this house". The same day, an amendment to this amendment was moved by Liberal John William Woolf and seconded by Liberal John Alexander McDougall proposed redrafting the agreement along the lines proposed by A&GW President Clarke in a letter to Rutherford. This letter proposed that the A&GW should offer to the government its construction equipment and other assets in guarantee of its construction pledges.

This latter amendment was considered friendly to the government, but Rutherford was not yet in the clear. Independent Edward Michener attacked the government for receiving only par value for the bonds when they had been sold at ten percent above par, an argument that was supported by McDougall. Though McDougall had seconded Woolf's pro-government amendment, it became apparent that his reasons for doing so were less support for the government than aversion to the province using its law-making power to extricate itself from inconvenient contracts.

Opposition to the government came to a head March 2 when Conservative leader Bennett first spoke. Bennett was renowned as one of the province's finest orators, and his five-hour speech earned plaudits even from the Liberal Edmonton Bulletin, which praised its "splendor in diction the physical endurance of the orator" and called it a "high water mark for parliamentary debate in Alberta". Bennett lashed out at the government's handling of the A&GW file, accusing it of culpable negligence in failing to properly oversee the company's activities. He claimed to have been approached directly by "great financial interests" intent on preventing his participation in the debate, and homed in on the terms of the bonds' sale. He argued that the discrepancy in the sale price of the bonds and what the government had received for them meant that Clarke and his associates had realized a profit of between $200,000 and $300,000. He closed with an accusation that Cross had sent an emissary to a telephone company that wanted to install an automatic telephone system in Calgary agreeing to reverse his opposition to the deal in exchange for a $12,000 contribution to the Attorney-General's campaign fund. These charges, corroborated by Cushing but hotly denied by Cross, were not related to the A&GW affair, but were designed to damage the credibility of the government's de facto house leader on the eve of the vote on Woolf's amendment. The government side adopted similar tactics: Agriculture Minister Duncan Marshall accused Boyle of being motivated by bitterness over having been denied the solicitorship of the A&GW; Boyle admitted that he had applied for this position, but denied an accusation from Peace River MLA James Cornwall that he had requested Cornwall's assistance in lobbying for the position.

The Woolf amendment came to a vote the evening of March 3. In a victory for the government, the amendment passed twenty-three votes to fifteen. In addition to Michener and the two Conservatives, the amendment was opposed by twelve of the legislature's thirty-seven Liberals, including Cushing. Charles M. O'Brien, the legislature's lone Socialist representative, voted on the government side.