->. 
 
 
 Ni 
 
 IMAGE EVALUATION 
 TEST TARGET (MT-3) 
 
 V 
 
 ^ 
 
 
 :/- 
 
 t/i 
 
 fe 
 
 1.0 
 
 I.I 
 
 M 12.5 
 
 ■so 
 
 I' 
 
 1^ 
 
 12.2 
 
 1^ ua 12.0 
 
 ^ iiiiim 
 
 
 1.25 
 
 : ..'-.V 
 
 II U 1.6 
 
 
 ^ 
 
 6" 
 
 ► 
 
 ?^ 
 
 / 
 
 
 Photographic 
 
 Sdences 
 
 Corporation 
 
 23 WEST \k%\V. STRICT 
 WEBSTER, N.f. 145*0 
 
 (716) 877-«^C3 
 
 
 "(fc^ 
 

 A 
 
 CIHM/ICMH 
 
 Microfiche 
 
 Series. 
 
 CIHIVI/ICIVIH 
 Collection de 
 microfiches. 
 
 Canadian Institute for Historical Microreproductions / Institut Canadian 
 
 de microreproductions historiques 
 
Technical and Bihiiographic Notes/Notes techniques et bibliographiques 
 
 The Institute has attempted to obtain the best 
 original copy available for filming. Features of this 
 copy which may be bibliographically unique, 
 which may alter any of the images in the 
 reproduction, or which may significantly change 
 the usual method of filming, are checked below. 
 
 D 
 
 Coloured covers/ 
 Couverture de couleur 
 
 I I Covers damaged/ 
 
 D 
 
 Couverture endommag^e 
 
 Covers restored and/or laminated/ 
 Couverture restaurde »t/ou pelliculde 
 
 I I Cover title missing/ 
 
 Le titre de couverture manque 
 
 Coloured maps/ 
 
 Cartes g^ographiques en couleur 
 
 Coloured ink (i.e. other than blue or black)/ 
 Encre de couleur (i.e. autre que bleue ou noire) 
 
 I I Coloured plates and/or illustrations/ 
 
 D 
 D 
 
 D 
 
 D 
 
 Planches et/ou illustrations en couleur 
 
 Bound with other material/ 
 Reli6 avec d'autres documents 
 
 Tight binding may cause shadows or distortion 
 along interior margin/ 
 
 La reliure serr^e peut causer de I'ombre ou de la 
 distortion le long de la marge int6rieure 
 
 Blank leaves added during restoration may 
 appear within the text. Whenever possible, these 
 have been omitted from filming/ 
 II se peut que certaines pages blanches ajoutdes 
 lors dune restauration apparaissent dans le texte, 
 mais, lorsque cela 6tait possible, ces pages n'ont 
 pas 6t6 filmdes. 
 
 Additional comments:/ 
 Commentaires suppl6mentaires: 
 
 L'Institut a microfilm^ le meilleur exemplaire 
 qu'il lui a 6t6 possible de se procurer. Les details 
 de cet exemplaire qui sont peut-dtre uniques du 
 point de vue bibliographique, qui peuvent modifier 
 une image reproduite, ou qui peuvent exiger una 
 modification dans la m^thode normale de filmage 
 sont indiqu6s ci-dessous. 
 
 I I Coloured pages/ 
 
 Pages de couleur 
 
 Pages damaged/ 
 Pages endommag^es 
 
 Pages restored and/oi 
 
 Pages restaurdes et/ou pellicul^es 
 
 Pages discoloured, stained or foxec 
 Pages d^colorSes, tachet^es ou piquees 
 
 I I Pages damaged/ 
 
 I ~| Pages restored and/or laminated/ 
 
 I I Pages discoloured, stained or foxed/ 
 
 □Pages detached/ 
 Pages d6tach6es 
 
 Showthrough/ 
 Transparence 
 
 I I Quality of print varies/ 
 
 Quality in^gale de I'impression 
 
 Includes supplementary materic 
 Comprend du materiel supplementaire 
 
 idition available/ 
 Edition disponible 
 
 I I Includes supplementary material/ 
 
 □ Only edition available/ 
 Seule 
 
 D 
 
 Pages wholly or partially obscured by errata 
 slips, tissues, etc., have been refilmed to 
 ensure the best possible image/ 
 Les pages totalemant ou parti:. iement 
 obscurcies par un feuillet d'errata, une pelure, 
 etc., ont 6t6 filmdes d nouveau de facon i 
 obtenir la meilleure image possible. 
 
 This item is filmed at the reduction ratio checked below/ 
 
 Ce document est filmi au taux de reduction indiqui ci-dessous. 
 
 10X 
 
 
 
 
 14X 
 
 
 
 
 18X 
 
 
 
 
 22X 
 
 
 
 
 26X 
 
 
 
 
 30X 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 y 
 
 
 
 
 
 
 
 
 12X 
 
 
 
 
 16X 
 
 
 
 
 20X 
 
 
 
 
 24X 
 
 
 
 
 28X 
 
 
 
 
 32X 
 
 
The copy filmsd har« hat b««n raproducad thank* 
 to tha ganarosity of: 
 
 Library Division 
 
 Provincial Archives of British Columbia 
 
 L'axamplaira filmA fut raproduit grAca A la 
 gAnArotit* da: 
 
 Library Division 
 
 Provincial Archives of British Columbia 
 
 Tha imagat appaaring hara ara tha baat quality 
 pussibla conaidaring tha condition and lagibility 
 of tha original copy and in kaaping with tha 
 filming contract apacifications. 
 
 Original copias in printad papar covars ara filmad 
 baginning with tha front covar and anding on 
 tha laat paga with a ;>rintad or illustratad impraa- 
 •ion, or tha back covar whan appropriata. All 
 othar original copias ara filmad baginning on the 
 first paga with a printad or illustrated impres- 
 sion, and ending on the last page with a printed 
 or illustrated impression. 
 
 The last recorded frame on each microfiche 
 shall contain the symbol -^ (meaning "CON- 
 TINUED"), or the symbol y (meaning "END'I, 
 v/hichever applies. 
 
 Maps, plates, charts, etc., may be filmed at 
 different reduction ratios. Those too large to be 
 entirely included in one exposure are filmed 
 beginning in the upper left hand corner, left to 
 right and top to bottom, as many frames as 
 required. The following diagrams illustrate the 
 method: 
 
 1 
 
 2 
 
 3 
 
 Lea imagaa auivantaa ont Ati raproduites avac la 
 plua grand aoin, compta tenu de la condition et 
 de la nettet* de raxamplaira film*, et en 
 conformity avac lea conditions du contrat da 
 filmaga. 
 
 Les exemplaires originaux dont la couverture en 
 papier est imprimAa sont filmto an commanpant 
 par la premier plat et en terminant soit par la 
 darniira paga qui comporta una ampreinte 
 d'imprassion ou d'illustration, soit par la second 
 plat, salon le cas. Tous les autres exemplaires 
 originaux aont filmto en commen^ant par la 
 premiere page qui comporte une empreinte 
 d'impression ou d'illustration et en terminant par 
 la derniire page qui comporte une telle 
 empreinte. 
 
 Un des symboles suivants appacaitra sur la 
 derniire image de cheque microfiche, selon le 
 cas: le symbols «»• signifie "A SUIVRE". le 
 symbols V signifie "FIN". 
 
 Les cartes, planches, tableaux, etc.. peuvent Atre 
 filmAs A des taux de reduction diffArents. 
 Lorsque le document est trop grand pour Atre 
 reproduit en un seul clich6. il est film* A partir 
 de Tangle supArieur gauche, de gauche A droite. 
 et de haut en bas. en prenant le nombre 
 d'images ntcessaire. Les diagrammes suivants 
 illustrent la mAthode. 
 
 1 
 
 2 
 
 3 
 
 4 
 
 5 
 
 6 
 

 TO THE HONORABLE 
 
 Sir Charles Tapper, K.C.M.6., M.P., 
 
 Minister of Raihvays and Canals for the 
 Dominion of Canada, Ottazoa. 
 
 Sir — 
 
 Th(^ under.signo<l, wlio tor the purposu lieruiiiafter stit 
 out, call theiuselves the Company, have the honor to mibniit 
 the following proposition for the construction and operation of 
 the Canadian Pacific Railway : — 
 
 1. For the better interpretation hereof, it is hereby declaied 
 that the j)ortion of Railway hereinafter called the Eastern section, 
 shall comprise that part of the Canadian Pacific Railway to be 
 constructed, extending from the Western teruiiinis of tin; ("anada 
 Central Rivilway, near the east end of Lake; Ni]iissing, known 
 as Callander Station, to a point of junction with that portion of 
 the said Canadian Pacific Railway now in the course of C(jnstruc- 
 tion extending from Lake Superior to Selkirk on the East side 
 of Red River ; which latter portion is hereinafter called the Lake 
 Superior sectitm. That the portion of said Railway, now pai'tially 
 in coui'se of construction, extending fr(jin Selkirk to Kamloops, 
 is hereinafter called the Centi'al section; an<l tlie portion of said 
 Railway now in course of construction, extending from Kamloops 
 to Port Moodj', is heivinaftiu- calleil the Westei-n section. Ami 
 that the words " tlie Canadian Pacific Railway," are intended to 
 mean the entii-e Railway, as described in the Act :}7th Victcjria, 
 cap. 14. The individual parties who .shall sign this ofl'er are 
 hereinafter described as the Company ; and the Governmen*; of 
 Canada is hereinafter called the (jiovernnuint. 
 
 2. The contractors, innnediately after the organization of the 
 Company, will ileposit with the Government Sl.OOO.OOO in ca.sh or 
 approved securities, as a security for the construction of the Rail- 
 way. The Government .shall pay to the Company interest on the 
 cash di^posited at the rate of four percent, per aniunii, half-yearly, 
 and shall pay over to the Company the interest received upon 
 securities deposited, the whole until defaul in the pei'formance of 
 the con<litions hereof, or until the repayment of the deposit, and 
 shall return the de[)()sit to the Company on the completi(jn of the 
 railway, according to the terms hereof, with any interest accrued 
 thereon. 
 
 '•i. The Company will lay out, construct and e(|uip the said East- 
 ei'n section, and the .said Central section, of a uniform gauge of 4 
 feet cSi inches, and in order to establish an approximate standard 
 whereby the (|uality and the chai'acter of the Railway and of the 
 materials u.sed in the construction thei'eof atid of the enuipment 
 thereof may be regulated, the Union Pacific Railway of the 
 United States, as the same was in liS7;{, is hereby .selected and 
 fixed as such standai'd. And if the Government and the Company 
 should be unable to agree as to whether or not any work done or 
 materials furni.shed are in fair conformity with such standard, or 
 as to any other ([uestion of fact, excluding (juestions of law, the 
 sulyeet of disagreement .shall be from time to time referred to 
 the determination of three referees, one of whom shall be chosen 
 by the Government, one by the Comjiany, and one by the two 
 referees .so chosen, and such referees shall decide as to the party 
 by whom the expense of such refei'ence shall be defrayed. And 
 if such two referees .should be unable to agree upon a third 
 referee, he shall be appointed at the instance of either party 
 hereto, after notice to the other, by tlie Chief Justice of the 
 
 235119 
 
Sujueme Court of Canada. And the decision of such referees, 
 or of the majority of tlieni, shall be final. 
 
 4. The work of construction shall he connnenced at the eastern 
 extremity of the Eastern '.seetiun not later than the first day of 
 July next, and the work u',)()n tlitj Central section .shall he com- 
 menced by the Coni[)any at such point towards the eastern end 
 thereof on the portion of tie line now under construction as shall 
 be found convenient and a.^ shall be approved by the Government, 
 at a date not later tlian tlie 1st May next. And the work ujion 
 the Eastei-n and Cential .sections, shall be vigorously and contin- 
 uously carried on at such rate of annual progress on each section 
 as sliall enable tlie Company to complete and e(juip the .same and 
 each of them, in running order, on oi' before the first day of May, 
 IH!)1, by which date the Company shall complete and e(iuii) the 
 aaiil sections in conformity with this proposal, unless prevented 
 by the act of Ciod, the (Queen's enemies, intestine disturbances, 
 epidemics, floods, or other cau.ses beyond the control of the Com- 
 pany. And in ease of the interru])tion or obstruction of the 
 work of construction from any of tlie said causes, the time fixed 
 for the completion of tlie railway shall be extende<l for a corres- 
 j)onding period. 
 
 5. The Company shall pay to the (i(j\ernment the cost, accord- 
 ing to the contract of the portion of railway, 100 miles in length, 
 extending fi'om the City of Winnipeg westward up to the time 
 at which the work was taken out of the hands of the contractor 
 and the expenses since incurred by the tJovernment in the work 
 of construction, but shall have the right to assume the .said work 
 at anj' time and comi)lete the same, ])aying the cost of construc- 
 tion as aforesaid so far as the same shall then have been inciUTed 
 b the (iovei'nment. 
 
 (i. Unless j)revented by the act of God, the Queen's enemies, 
 intestine disturbances, epidemics, floods (jr other causes beyond 
 the control of the Goveinment, the (ji)vernment shall cause to lie 
 completed the said Lake Superior section, by the dates fixed by 
 the exi.sting contracts for the construction thereof; and shall also 
 cause to be completed ti.j portion of the said Western .section 
 now under conti'act, namely, from Kamloops to Yale, within the 
 period Mxed by the contracts tlierefor, namely, liy the thirtieth 
 day of June, 18S."); and shall also cau.se to be completed, on or 
 before the first day of May, l<S!)l, the reiiiainiiig portion of the 
 said Western section, lying between Yale and Port Moody, which 
 .shall be ccmstructed of ecjually good (juality in every resjiect with 
 the standard hereby created for the jiortion hereby tendered for. 
 And the said Lake Supeiior section, and the j.ortions of the said 
 Western .section now under contract, .sliall be completed as nearly 
 as practicable accoi'ding to the specifications and conditions of the 
 contracts therefor except in so far as the san\e have been modified 
 by the Government prior to the 21st day of Octolier, LSHO. 
 
 7. Tlie Railway constructed under the terms hereof .shall be the 
 property of the Company: and pending the completion of the 
 Eastern and Central sections, the Government shall transfer to 
 the Company the possession and right to woi'k and run the several 
 portions of the Canadian Pacific Railway already constructed or 
 as the .same shall be completed. And upon the completion of the 
 Eastern and Central .sections, the Government shall convey to the 
 Company, with a suitable number of station buildings and with 
 water service (but without ecpupment), those portions of the 
 Canadian Pacific Railway constructed or to be constructed by the 
 (Jovernment which shall then be comjdeted; and upon completion 
 of the remainder of the poi'tion of railway to be constructed by 
 the Government, that portion shall also be conveyed to the Com- 
 pany, and the Canadian Pacific Railway shall become and be 
 thereafter the ; b.solute property of the C(jmpany. And the Com- 
 pany shall thereafter and forever efficiently maintain, work and 
 run the Canadian Pacific Railway. 
 
 8. Upon the receptifm from the Government of the possession 
 of each of the respective portions of the Canadian Pacific Railway, 
 the Company shall eijuip the same in conformity with the stand- 
 ard herein established, and shall thereafter maintain and efficiently 
 operate the same. 
 
3 
 
 y. Ill ('c)iisi(Iurati(in of tlic prciiiis, , tlic (lovciiiniriit sliall ;,'raiit 
 to the ('()iii|iaiiy a siilisiily in iikhu'v of i*:J2,()()(),()0(), ami in laiul 
 of 22,()()(),()()() acics, for wliicli siilisiiiics tlic eonstniction of tlii^ 
 Caiiaiiian I'ac'ific. Railway shall lie (•onii)lt't('il ami tlic same shall 
 liL' oi|ui])[)i'(l, niaintaincil ami oiiui'atiMJ, the saiil siilisidics resuuc- 
 tivL'ly to In; ))rti(i and ^lanttMl as thf work of constnutioii shall 
 j)i'oct'('(l, in iiiannrr and upon the condltiniis following', that is to 
 say :— 
 
 a. The said siiiisidy in nionuy is Iicrchy ilividcil and appropri- 
 atud as follows, naiiiuly: — 
 
 CENTRAL SKCTION. 
 Asaunu'il at I,!).')!) miles — 
 
 1st. !I0() inilijH, at .ij;,;);!.').;!:) icr niilo ;$.'t,fi(M),(IO(» 
 
 'iiul.— 4,")0 miles, at ?!1'.',000 pur mile .■),4(H),000 
 
 «12,(I00,000 
 
 KASTKRN SKCTION. 
 
 AsHiimed at U~)U niilug, subHidy equal tn 9ir>.MS4,6l per mile I(),IH)0,000 
 
 .•?'.''J,000,000 
 
 And the said subsidy in land is hcrcliy dividi'd and appropri- 
 ated as follows, siiliject to tho rescivf hereafter provided for: 
 
 CENTRA I, SECTION. 
 
 Ist. !MI0 niili'3 at 10,000 acres per mile (1,000.(100 
 
 2ml. — 150 miles at I'), 000 acres per mile (i, ""'0,000 
 
 ir),;.-)0,0C0 
 
 EASTERN SECTION. 
 
 Aaaumed at Ii.'i0 miles, sulisiily equal to !),0irj.3.'> acres per mile (i,2r>0,<MH) 
 
 22,000,(K)0 
 
 b. Upon the construction of any portion of the railway not less 
 than ii) miles in length, and the completion thereof so as to admit 
 of the riinninj;' of reifiilar trains thereon, together with such e(|uip- 
 ment thereof as shall lie rei|uireil for the tratlic thereon, the (!ov- 
 erniiieiit shall ]iay ami gniiit to the Company the money and land 
 siihsidies ai'plicahle thereto, according to the division and appro- 
 priation thereof made, as hereintiefore providi^d ; the C'omiiany 
 having thi; option of receiving in lieu of cash, teiniinalile lioiids 
 of the (Jovernnient, hearing such rate of intei'cst for such period 
 and nominal amount as may he arranged, and which may lie 
 e((uivaleiit according to actuarial calc\dation to the corresponding 
 cash [layment, the (Jovernnient allowing foui- per cent, interest on 
 nioneys deposited with them. 
 
 <■. If at any time the Company shall cause to he delivered on or 
 near the line of the said railway, at a ])lace satisfactory to the 
 < Joveriiiiieiit, steel rails and fastenings to \\v used in the construc- 
 tion of tin' railway, hut in advance of the re(|uireiiieiits for such 
 construction, the (iovcrniiieiit, on the reciuisition of the Company, 
 shall, upon such teiiiis and conditions as shall he ileteniiined by 
 the (iovei'iimeiit, advance thereon three-fourths of the value 
 thereof at the place of delivery. And a proportion of the amount 
 so advanced shall he deducted according to such terms and con- 
 ditions from the suhsidy to he tlu'reafter paid,U]ion the .settlement 
 for each section of 20 miles of railway, which [iroportion shall 
 correspond with the pr(i]i()rtion of such rails and fastenings which 
 have been u.sed in the construction of sucli .sections. 
 
 (/. Until the first day of January, 1X.S2, the Company shall have 
 the option, instead of i.ssuing land grant bonds as hereinafter pro- 
 vided, of substituting the payment by the Government of the 
 interest (or part of the interest) on bonds of the Company, mort- 
 gaging the railway and the lands to lie granted by the tJovern- 
 nient, running over such term of years as may be approved by the 
 Governor in Council in lieu of the ca.sh subsidy to be granted to 
 the Company or any part thereof under the terms hereof ; .such 
 payments of interest to be eijuivalent according to actuarial calcu- 
 lation to the corresponding ca.sh paynient,the Government allowing 
 four per cent, interest on monej's dejiosited with them ; and the 
 coupons representing the interi'st on such bonds shall be guaran- 
 teed by the Government to the extent of such eijuivalent. And 
 the proceeds of the sale of such bonds, to tho extent of not more 
 than !!J2.>,000,000, shall be deposited with the Govennnent, and the 
 
liillniicc of siicli |iiu( Is nIiuII 1,.. |.|ii(.(m| clsfwliciv l.y tile Coiii- 
 
 piiiiy, to the siitiNt'actiiiii, mill iiinlcr (lif i.xchi.sivc i-oi'itiol of tlu' 
 
 (ioviriunciit ; fiiiliiiu \v|ii,.|i last coiiditioii tin- 1 Is in excess of 
 
 those solil slwill leiiillill ill tlie liailds of the ( fovi'lllllieiit. AikI 
 from time to time as the work proceeds, the ( loveiiiiiieiit shall pay 
 over to the I'ompaiiy . firstly, out of the amount so to lie plaei'd 
 hy the ('om|iaiiy and, after the e.\|ienilituie of that amount, out 
 of the amount depnsited with the (Jovernmeiit sums of monev 
 
 liearini,' the sa iMoportion to the milea^n' <'asli siilisidv hereli'v 
 
 •i^'"' ' I'l"'"' ^vhieh the net proe Is of such sale (if the 'whole of 
 
 •^"••'i ' 1>* 'ire sold upon the issue thereof) or, if such lionds he 
 
 not all then sold, the net proceeds of the i.ssue, calculated at the 
 rate at which the sale of part of them shall have heeii made, shall 
 hear to the sum of 8l'.'.,()(M),(M)(). Hut if only a i.ortion of the hond 
 i.ssue lie .sold, the amount earned liy the ('ompany, accordiiii,' to 
 the proportion aforesaid, shall he ]iaid to the Company, partly out 
 of tile lioiids in the hands of the ( loverimieiit, and piirtly olit of 
 the cash i|e|)osited with the (Jovi'inmeiit, in similar proportions to 
 the amount of such lioiids sold and remaining,' unsold respeetivelv; 
 and the Company .shall ivcei ve the l.omls so paid a.s oish at tlie 
 rate at which the said [lartial .sale thereof shall have lieeii made. 
 And the (iovernmeiit will receive and hold such .sum of money 
 towards the creation of a siiikin;,' fund for the redemption of 
 
 such lionds and upon such terms and conditions as shall he a;,'r 1 
 
 upon iietweeii the ( Jovei ii nt and the Company. 
 
 I. If the Comiiaiiy avail themselves of the option ^.'r.iiited hv 
 clause (/, the sum of .S2,()()() per mile for tln' first ei;;irt hundre'd 
 miles of the central section shall he deducted /ir<i nitu from the 
 amount payahle to the (Company in respect of the said eij,dit 
 hundred miles, and shall he ai)|)ii'ipriated to increase the mileri-<- 
 cash suhsidy appropriated to the remainder of the .said central 
 section. 
 
 10. Ill further consideration of the premises the (Joveiiiment 
 shall also ;;rant to the Company the lands iei|uired for the road 
 lied of the railway, and for its stations, station j^'rounds. work- 
 .shops, dock o-rouiid and water frontajie at the termini on navii,'alile 
 waters, huildini;s, yards, and other appurtenances reiiuircd for 
 the cimvenient and ctlectual construction and working; of the rail- 
 way, in so far as .such land .shall he vested in the (lovernmeiit. 
 And will convey to the Company, at cost )ifice, with interest, all 
 rails and fa.steninjfs iKMiyht in or .since the year l.S7!l, and other 
 materials for construction in the ]io.sse,Hsion of or [lurchased hy 
 the (ioveriiinent at a valuation; such rails, fa.steniiifis and mate- 
 rials not lieiii^reiniired hy it for the con.struction of the said Lake 
 Siijierior and western sections. 
 
 11. The u-raiit of land as herein mentioned to he made to the 
 Company, .shall he so made in alternate .sectiiais of (i-tO acres eacli, 
 e.Ueiidine- hack 24 leiles deep on each side of the railway, from 
 WinnipeiL; to Ja.sper Hou.se, in so far as such lands .shall he vested 
 in the (iovernmeiit, the Com]iany receiviiii,' the sections hearinj,' 
 uneven numheis. But .should any of such .sections consist in a 
 material degree of laiul not fairly tit for settlement, the Company 
 .shall not he ohlijred to receive them as part of .such i,'iaiit, and the 
 deticieiicy therehy causeil, and any further deficiency which may 
 ari.se from the insutlicient (piantity of land alonj,' the said portion 
 of railway, to complete the .said 22,()()(),()()() acres, or from tlie pre- 
 valence of liJves and water stretches in the sections !,'ianted (which 
 lakes aiul water .stretches shall not lie computed in the acreage of 
 such .sections), .shall he inadeuji from other portions to lie selected 
 hy the Company in the tract known as the fei'tile helt, that is to 
 .say, the land lying hctweeu parallels 4!) and T)? degrees of nortli 
 latitude, or elsewhere at tlie option of the Company, liy the grant 
 therein of similar alternate sections extending hack 24' miles .leep 
 on each side of any hrancli line or lines of railway to be located 
 hy the Company, and to he shown on a map or plan thereof 
 •leposited with the Minister of Railway.s ; or of any common front- 
 line or lines agreed upon between the Government and the Com- 
 jiany, tlu' condititins hereinbefore stated as to lands not fairly fit 
 for settlement to be applicable to .such additional grants. And 
 the Company may, with the consent of the Government, .select in 
 the Noitli-West_ Territories any tract or tracts of land not taken 
 up as a means of supplying or partially supplying such deficiency. 
 
Hut siicli >,'rinits sliiill lie iiiiiili' iiiily iVmii IiukIm n'liirjiiing vested 
 ill till' ( loMTniiiciit. 
 
 12. Till' ( lovi'iiiiiii'iit sliiill I'xtin^uisli tlie liiilian Litlf uH'cctinj,' 
 till' liiinls liiTi'iii ii|)|(n)iirint('il, ami to lie lifi'wit'tci' ;;mnteil in aiil 
 i>( till' mil way. 
 
 I.'l. Till' ( 'iiiiUPiiiiv sliali liavr llir iiijlil, sulijci't to till' apiiriival 
 of till' (iovi'i'iiDi- in Cimiicil, to lav out ami locatf the line of rail- 
 way licrcliy coiilnn'tiil for ax tlii'V niiiy ii'i' tit, |ii('si'i'viiij,' tliii 
 I'ollowii.j.' ti'iiiiiiial jpoiiits, iiMUii'ly ; IVoiii I 'allainlcr station to tlic 
 |)oiiit of jiiiH'lioii willi tile Lake SiiiK rioj- M'l'tion ; anil t'loin Si'l- 
 kirk to till' imiclion \\itli tin' wt'stcrn M'ction at Kaiiiloo|iH liy 
 way of till' ^'l•llo\v Hi'iul Pass. 
 
 14. Till' ('oiii|iaiiy slmll has r tlif lij^'lit, fioiii tinii' to tiiut', to 
 lay out, ('onstiiict, I'liuip, maintain ami work inaiicli liiii's of rail- 
 way, from any )ioinl or |ioints almij; tln'ir main line of railway, 
 to any point or |poinls witliiii tin' territory of tlic Doiiiinio.n 
 I'roviili'il always, tliat lu'forc (•ommcncin;; any luancli, tlwy shall 
 tirst ili'|iiisit a iiiap ami |ilan of siidi luancli in tlii' |)('|iiirtmi'nt of 
 Kailways. Ami tlic tloxi'rniiiciit shall ^rant to the ('oiii|iiiiiy the 
 lamls it'i|iiir('i| for lli' loail ln'l uf such liriinchcs. anil for the 
 stations, Mtatioii iljioiiihIs, liuiMiii^s, woikshii|is, yards ami other 
 a|i|iuiteiiaiices ii'i|uisite for the I'tlieient construction ami woikiiij^ 
 of such hranchi's in so far as such lamls ali' vested in the (loverii- 
 iiient. 
 
 l.'i. The (.'i)iii|)aiiy shall he authorized hy their Act of iiicoi)M)- 
 ration to i.s.sue honds, secuied ii|ioii the land granted an i to he 
 granted to the Coiniiaiiy, contiiiiiinj;' |irosisioiis for the u.sc of such 
 honds ill the aciiuisitioii of lands, and such other eoi, litionsas the 
 C'oni|iaiir. shall sec tit; such issue to he for ,*'2.'),0()().(>()(). And should 
 the (' iii|)Hny make such issue of hind j.aaiit hoiids, then they shall 
 dejiosit them in the hands of the (ioxcrnnieiit : and the (lox em- 
 inent shall letain and hold oiie-tifth of such honds as security for 
 the due jpertoriiiance of the jircseiit contract in respect of the iiiain- 
 tenaiice and continuous workinj;' of the railway liy the (_'onii)any, 
 as herein U'entioiied, for ten years after the conipletioii thereof, 
 and the reniainini; !*2().()()(),()()()" of such honds .shal'l he (K'alt with 
 us hereinafter |irovided. Ami as to the .said one-lifth of the said 
 honds, so loiijf as no default shall occur in the maintenance and 
 workine- of the said Canadian Pacilic Itailway, the (<overnnient 
 shall not present or demand )iaynii'iit of the coupons of such honds, 
 nor ri'i|uire paymi'iit of any interest thereon. And if any of such 
 honds so to he retained i y the Ciovernmcnt shall he ]iaid off in the 
 manlier to he provided for the extinction of the whole issue thereof, 
 the (io\criiment shall hold the aniouiit recei\ed in ]iaynient thereof 
 as .security for the same puipo.scs as the honds .so jiaid off", payin;^ 
 interest thereon at iour per cent, per annum .so loii<; as default is 
 not iiinde hy the ('oni]iany in the performance of tlie conditions 
 hereof. And at the end of the .said period of ten years from the 
 coaiplutioii of the .said railway, if no di^fault shall then have 
 occurred in such maintenance and workiiij;' thereof, the .saiil honds, 
 or if any of tlu'iii shall then have heen paid off', the remainder of 
 said honds and the money received for those paid ott', with accrued 
 interest, shall he delivered hack hy the ( Jovernment to the Com- 
 pany with all the coupons attacheil to .such honds. But if such 
 default .sh(nilil occur, the (lovernmeiit may thereafter require pay- 
 ment of interest on the honds so held, and shall not he ohliged to 
 j'ontinue to jmy inti vest on tl.'. money representing honds paid off'; 
 and wlule the Government shall retain the right to hold the said 
 portion of the .said land grhiit honds, other securities satisfactoiy 
 to tlie (iovernment may he suhstituted for them by the Company 
 hy agreement witli the Government. 
 
 16. If the Company shall find it necessary or expeilient to sell 
 the remaining §20,000,000 of the land gi-ant honds, or a larger 
 jioi'tion thereof than in the proportion of one dollar foi- each acre 
 of land then earned l>}' the Company, they .shall he allowed to do 
 so, hut the proceed.s thereof, over anil above the amount to which 
 the Company shall be entitled a.s herein prf)vided, .shall be depo,sited 
 with the Government. And the (joverninent shall pay interest 
 upon such deposit half-yearly, at the i-ate of four per cent, per 
 annum, and .sliall pay over the amount of such deposit to the Coin- 
 
(J 
 
 jiany from time to time as tlie work proceeds, in the same propor- 
 tions and at the same times and upim tlie same conditions as tlie 
 land grant — that is to say: tlie C.'ompany shall he entitled to re- 
 ceive from the Uovennnent out of the pi-oceeds of the said land 
 <,'rant bonds, the same nuniher of dollai's as the iiumher of acres 
 of the land snhsidy which sliall then have been earned by them, 
 less one-tifth thereof, that is to say, if the I winds are sold at par, 
 liut if they aie sold at less than |)ai', then a deduction shall be made 
 therefrom correspondiiifj; to the discount at which such l)onds arc 
 sold. And such land grant shall be conveyeil to them by tin; 
 ( iovernment, subject to the ilmrge ci'eated as security for the said 
 land giant bonds, and shall icmain subject to such charge till re- 
 lieved thereof in such maimer as shall be jjrovided for at the time 
 of the issue of such liomls. 
 
 17. The Company shall pay any expenses which sliall be incur- 
 red by the (jovernmeiit in carrying out the provisions of the two 
 last preceding clauses of this contract. 
 
 18. If tlie Company slumld not issue siu'li Iniul grant bonds, 
 then the (loveiimient shall retain from out of each grant tube 
 made from time to time, every fifth section of the lands lieieby 
 agreed to be grantt'd, such lands to be so retained as security for 
 the purposes, and for the length of time, mentioned in section 
 eighteen hereof. And such lands m.ay be sold in such manner 
 and at such prices as shall lie .agreed upon between the Covern- 
 inent and the Company, and in tliat case the price thereof shall 
 lie paid to and held by the (iovernment for the same periijd, and 
 for the same puipo.ses as the land itself, the (iovernment paying 
 four per cent, pel- annum interest thereon. And other securities 
 satisfactory to the (iovermiieiit may be sulistituted for such lands 
 or money by agreement with the (jovernment. 
 
 19. The Company al.so hereby uU'ers, in the event of the Gov- 
 eriiiiieiit de '■.'iug to witluliaw from the proposed coiistriicti(jn of 
 the Eastern Section of tiie said Ifailway, tiiat tlie Company shall 
 reduce the said subsidy in nioiiey and land l)y the amount appor- 
 tioned to the said Eastern Section of liie Railway under the '.ttji 
 paia>;ia))li of tiiis proposal, that is to say by :SlU,l>0(l,00l) and 
 (),".:JiJtl,<'IHJ acres of land, and this proposal shall stand in all other 
 respects, and in .so far as the same shall "ot exclusively apply to 
 the construction, equipment, or operating of the Eastern Section. 
 
 20. Ill the event of the (iovernment desiring to withdraw the 
 said Eastern Section from construction iiereunder, the Com] any 
 hereby oilers to construct within three years, and e(juip, own and 
 operate; as a part of the (janadiau I'acitic Kailway, a liranch line 
 rr(;in South-East Hay, Lake Nipissing, to Sault Ste. Marie and 
 (ioulais I>ay, Lake .Superior, estimated at 2'J-t miles, at and Itn' a 
 sum of !#.S,.")00,000 ; and in all other respects the provisions of liiis 
 l)roposaI shall apply to the said liranch Line so far as applicable 
 thereto. 
 
 21. In the event of the (iovernment desiring to .pone or 
 withJraw from construction the Western Section of iu>. said Kail- 
 way, extt;iidi:<g from Kamloops to Port Moody, they shall be at 
 liberty to do so, and in that event tlie Govermneiit shall not be 
 bound to 'omplete and hand over to the Company the said Western 
 Section under the (itii and 7th clauses hereof ; Imt except so far as 
 it relates and is applicable to the construction of the said Western 
 Section by the (iovernment, this proposal shall stand good and be 
 binding upon the Company. 
 
 22. Ill the event of tlie Government desiring to postpone or 
 withdraw from construction by the Company hereunder the westerly 
 portion of the Central Section ol said railway, being the westerly 
 45(1 miles thereof, as mentioned in the Dtli clause of this proposal, 
 the Company offers to reduce the subsidy in money and land by 
 the amount apportioned to the said westerly 450 miles of the 
 Central Section under the said 9th clause hereof-— that is to say, 
 5|io,4()0,000 and 0,750,000 acres of land ; and in the event of such 
 l>ostpoiiement or withdrawal by the Government of the saiil westerly 
 4511 imles of the Central Section, then this proposal shall stand in 
 all other respects, and in so far as the same shall not exclusively 
 
relate 
 miles. 
 
 to 
 
 p const nifl ill'.', eiiuipment, or operating' ol' said 4r)(l 
 
 li:!. At luiy liuic mIiit llie coiiii>lctiuii of tliu (Januiliau Paoitic 
 li'ailway, or of the paits tliereof tliat are to be c'.oiii|jlet(Ml liere- 
 iiucler, tlu! (loveniiiieiit sliall he entitled to aeiinire the same and 
 all the |pro|ierty and assets of the Company, i)ayin,i,' tlierelor such 
 (■omi)ensatioii as may be a,i,'reed upon; or in ease of disaqreemeut, 
 such ('oni))ensation shall be settled by the decision of the majority 
 of three arbitrators, one to be chosen by the (lovernment, one by 
 the Company, and the third by the two so .appointed. 
 
 'li. The Company to lie incorporated, with surticieiit powers to 
 enable tjieni to carry ont the t'oree;oinj;' offer, and this propo.sal 
 shall only be bindinj^ in the event of an Act of incorporation 
 liein^' •granted to tlw ('onipany, snb.stantially asset imtiti Scheilu'e 
 A, hereto. 
 
 2.'). 'I'lie llailway Act of IS7!(, in .so fai' as the j)ii)visio.>is of the 
 same are applicable to the nndei'takinj; referred to in this ])roposal, 
 and in so fai' as they are not inconsistent herewith or inconsistent 
 with or contrary to the piovisions of the Act of incorj)oration to 
 be i^oanted ct) the Company, shall ap})ly lu the Canadian Pacit'c 
 J-!ail\vay.