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Les diagrainmas suivants illustrent la mAthoda. 1 2 3 — 1 4 5 6 32X u GRAND TRUNK RAILWAY COMPANY OF CANADA. ■aai —'■'■-'■-'■'■'—'■'■'■'■'■-■ VERBATIM REPORT OF THE PRESIDENTS SPEECH AT THE ORDINARY GENERAL HALF-YEARLY MEETING OF THE COMPANY, HF.l.U AT THE CITY TERMINUS HOTEL, CANNON STREET, LONDON, E.G., On Tuesday, April 26th, 1887, IX rURSl/ANCK OF THE FOLLOIIV.W ADFERTISliMENT:- Notice is hereby given, that the Ordinary General Half- Yearly Meeting of the Grand Trunk Railway Company of Canada will be held at the City Terminus Hotel, Cannon Street, London, E.C., on Tuesday, the 26th day of April, 1887, at Four o'clock p-m. precisely, for the purpose of receiving a Report from the Directors, for the election of Directors and Auditors, and for the transaction of other business of the Company. And notice is also given that the Transfer Books of the Company will be Closed from Friday, the ist, to Tuesday, the 26th day of April, both days inclusive. By order. H. W. TYLER, President J. B. RENTON, Secretarf. Dashwood House, 9, New Broad Street, London, E.C., March 25, 1887. 1 /02, jy ■; GRAND TRUNK RAILWAY OF CANADA. ! VERBATIM REPORT OF THE PRESIDENT'S SPEECH AT THK Ordinary General Half -Yearly Meeting of the Company, HELD Al' THE CITY TERMINUS HOTEL, CANNON ST., LONDON. On 'I'ltt'sJay, 26th April, iSS-j. The Secretarv (Mr. J. B. Renton) rend the notice convening the meetii.g, and the report and statement of accounts were taken as read. The Chairman, who was received with cheers, said : For the first time, ladies and gentlemen, since the spring meeting of 1884— that is, for the first time in three years — we may, I think, allow ourselves the pleasure of exchanging mutual con- gratulations on the improved position and prospects of our great system of railways. The report which we sent round to you some ten days ago, and which we are now met to discuss, I suppose we may take as read. It affords a full view of our progress and work- ing, not only for the last half-year, and for the last year but for the last four years, comparing the last half- year and the last year with the three preceding half- years and years. In 1883 you will remember we 4 The Grand I'niiik Raihcay of Canada had exceeded what had [)revi')U.sly been our most sanguine anticipations. In 1884 and 1885 we fell woefully behind-hand, in consequence, rnainl)', of the reckless comi)etition of the American railways, and certainly from no fault vvhate\cr of our own. In the last half-year of 1885 we wero, from that cause, at our worst. IVom March, 1886 — and not until March, 1886 — we began io improve, and now, in the latter half- year of 1886, which we arc now met to consider, we have so far recovered oiu* position that the report which we now have the hon(nu- to lay before )ou ma\' be considered altogether satisfactory, except in one respect, and that is as regards the remuneration we receive for the work which we perform. It is satis- actory to find that the numbers of i)assengers ar.d of tons of goods carried are greater than in pre\ ious half-years ; that the percentage of working expenses is less than in any previous years ; that our controlled ;and subsidiary lines are all improving ; and that the physical condition of our property is constantly being improved ; and all this in spite of that one great drawback to which I have referred — viz., the constantly diminishing rates and fares which compel us always to be doing more work for less proportionate remuneration. We have borne up bravely against increasing competition. We have done well in spite of the severe climate to which we }iave been constantly subjected ; but all our effoits at in- creased economy have so far been partially nertralised, because it has been impossible to obtain what we think jind know to be a reasonable 1 cmuncration for the work I in our most 15 u'c fell nriinl)', of rall\va)-s, own. In t cause, at itil March, latter half- nsider, wc the report c )ou ina\' ■pt in one nuiieratioii It is satis- crs ar.d of 1 previous \ expenses • controlled \ that the constantly c of that srrcd — viz., ires which ore work liave borne We have which we iffoitsatin- nertralised, at we think or the work I I Report of the President's Speech, April 26, 1887 5 which we have pcrforiued. That is the tendency of competition. We are working for half the rates which we received a few years back. Now, I have before mc a table of the ton-mileage carried and of the rates received jn seven leading and representative railways of the United .States for every year for twenty years — from 1.S65 to 1885. The quantity of tons moved one mile in 1865 was more than 1,600,000,000, and the avcra^^c rate received was about ij^d. per ton. Coming to the next decade, 1 875, the quantity of tons moved one mile on the .same railways was between 5,000,000,000 and 6,000,000,000, and the average rate was five-eighths of ai)enny — rather more than a halfpenny per mile per ton. In 1885 the quantity moved was more than 11,000,000,000 of ton miles, and the rate received for it was only one-third of a penny; so that they and we also received about a quarter of the rate for the work done which they and we received in 1865, and about half of what they and wc received in 1875. I suppose we may consider now, however, that wc have pretty nearly reached ^the bottom as regards these rates, and that as we go on constantly increasing the busi- ness, as we have always been doing, so we may hope that the average rates may not materially decrease in future. However, gentlemen, having regard to this con- tinual decrease of rates and increase of work, it is a subject of great satisfaction, I think, to find that we have earned (as shown on the first page of the report) ;^640,ooo of net revenue in the De- cember half-year of 1886, against ^427,000 in the 6 The Grand Trunk Railivay oj Canada corrcspondinghalf-} carof i (S85, leaving an increase of no less than ;^2 1 3,000, or about 41 i)cr cent, of net revenue for that one half year. That is a tremendous fluctua- tion — an increase of profit of ;^2i 3,000 in one half-year. Looking at it from another point of view, taking the increases of gross receipts under their several heads, there was an increase of passenger receipts of ;^ 77,000, and of freight receipts of £206,00^), and of sundry other special and miscellaneous receipts of ;^ 1 9,000, making a total of /,'302,ooo. Deducting the increase of working expenses — namely, ^'»^9,ooo — which is snail compared with the increase of receipts — that gives us also the increase of net revenue amounting to ^,'2 13,000. From our ^640,000 of total revenue we have, of course, to deduct the fixed charges of ;^4 18,000, which leaves ^222,000 as the balance of net re\cnue. Well, gentlemen, if that balance of net revenue had been free for division, then we should have been able to pay for the half-year our First Preference dividend in full, and half of our Second Preference divi- dend, with ;^8,ooo to the good. (Cheers.) Unfortunately, we had arrears to meet to the extent of ;^i 16,000, which we have cleared off, as stated in paragraph 3 of the report. It is, of course, necessary to pay our debts and the liabilities of the past before we distribute anything to the shareholders, but it is satisfactory to remember, nevertheless, that the past half-year has honestly earned, taken by itself, a First Preference dividend in full, and the half of a Second Preference dividend, and ;^8,ooo over. (Cheers.) Now, as regards our passenger trafc, it is not tachi icrcascof no f net revenue luus fluctua- ne hcilf-year. \ , taking" the veral heads, receipts of 6,000, and of I receii)ts of Deducting y, ^«9.ooo— se of receipts net revenue ^640,000 of uct the fixed 2,000 as the net revenue Id have been at Preference efercnce divi- ^nfortunately, of ;^ 1 16,000, aragraph 3 of pay our debts we distribute atisfactory to lalf-year has st Preference d Preference 'c, it is not Report of tlw PrcsidenCs Speech, A/^rii 36, 188; 7 quite on all fours with (.ur goods traffic for the half- year. The passenger traffic of 18S.7 and 1S83 was very good. VVc carried, in thi> December h-df-year, no less than .?,700,ocx) passengers in 18S2, and ;,.ooo,ooo passengers in 18S;, ; the numbers fell off in iSS4and 1885 ; but in iSSt) we carried ^ 125.000 passengers; but liere, again, the receipts f<-Il off. and were not so good, the amount being $2,9oo,oa) in 1886 against $3,600,000 in 1S83, for tlie reason that the average fares were lower. In iS8j we received 4s. 8^d. per passenger: in 18S5, 3s. 10 '^.d. per passenger; and in 1886, 3s. i 1 i/d. The numbers of passengers carried in the past half-)'ear were larger than in any half-year since the union, but the average fares were lower. However, it is hardly fair, perhaps, to com- pare 1 886 with 1885, because, as we all know, the small-po\- was prevalent in Montreal at th.at time and did a great deal of damage to our passenger traffic. At the same time, our excursion traffic has recently been more full)' developed than ever before, and we are making every exertion to increase our passenger business. Passenger traffic is improving generall}- in .-Xmcrica, and we may hope for better things from this source. We must, however, share it with our competitors. There is no doubt that in this, as in other respects, we have a strong com- petitor in the Canadian Pacific, and we must look that matter in the face. We cannot, unfortunately! reduce our train service as passenger traffic falls off. We are obliged to incur the same expense and perhaps even more expense, in competing with 8 The Grand Trunk Naii'iVay of C anndcs ons, and no in passenger Dpc we shall iture. The Y much for > rather in- believc from ; would be a No doubt it t, but the America. :inent, south erve, and to nts ; and in a r. Seargeant ory in that opean passen- ently arrived at points west of ntario, and 197 and the lower Report of the Presidents Speech, April 26, i8«; <» So that ill this competitio'i, which \vi- have been led so much to dread, the latest fact is that out of 1,1X3 imnii^'rant passengers in two ships wc had <>Ji, ,\m\ the Canadian i'acific had 2O3. N of the St. I Collingwood, Linst 5,-45,000 T885, against ;ay that trafific ause there are Report oj the Prcsidenfs Speech, Apt il 26, 1 887 i i — according' to the latest accounts some 23.000,000 bushels of grain of all sorts in the elevators at Chicago at the present time, as against i7,oo<3,ooo bushels this time last )ear. (Cheers.; We are, therefore, taking measures for increasing our elevator accommodation at varicnis i)oints — for instance, at Blackrock, near Buffalo, where an elevator has been completed, at Detroit, and Tort Huron, on the St. Clair River ; and we shall proceed v.Mth a new eleva- tor at Pcint lulward, which was comuienced some years ago, but which the contractors then failed to complete, j\s regards our revenue ex))enditure, you will remember that the wages of all the employes of the company were paid in full from the 1st July, 1886, so that during the whole? of the six months under review we have been working at an increased rate of salaries and wages as compared with the 5 per cent, and 10 per cent, reductions which were in fo»-ce in the corresponding half-year. This forms the larger pro- l)ortion of our increase of ^89,000 in working ex- penses, but, as we have told you in the report, we spent on the road and rolling-stock ;i^44,ooo more than in the corresponding half-year. There is ncNcrtheless a very satisfactory result to be observed on pages 50 and 51 of the report, where you will notice the details of the expenditure on revenue account for the various departments of the service — abstracts A to F ; A is for main- tenance and renewal of wa)', &c. ; B, locomotive department ; C, car department; D, traffic department; E, general charges ; and 1\ miscellaneous expenses. 12 The Grand Trunk Raikvay of Canada You will find by the perccntaj^es which are set out at the foot of each of those abstracts that the percentage of working expenses to gross receipts in 1886 was less in every instance than in 1885, in spite of the severe weather which \ve experienced in November and December. I come now to the question of the future expendi- ture of capital. You are aware that for the last two or three years, while wc have been going through a period of depression, wc ha\ e kept down the capital expenditure to a very low point indeed. We thought, and you agreed with us, that it was not desirable during those times to spend any more money than we could possibly help, so long as we main- tained the road and the rolling-stock in perfectly efficient order. But now the time has arrived when the question of doubling the line between Montreal and Toronto should come under consideration. (H3ar, hear.) We propose, and we have been corresponding with Mr. Hicksonon the subject, that during the present year we .shall spend ;^ 100,000 on that work. Of course, we might ask you for a very large sum of money to enable us to proceed more rapidly in doubling the line, and we might let the work out by contract and so get it done in the course of the next two or three years. But I do'not think that would be a wise course. Wc should be spending a very large amount of money without security as to getting immediately a sufficient return for it, and it might upset to some extent our financial arrangements. I rather think, and I hope you will agree with me, that the wiser course to Canada h are set out at acts that the j^ross receipts ance than in thcr which \ve jcr. "iiturc expendi- thc last two or ing through a AH the capital I. We thought, s not desirable more money ig as we main- ck in perfectly ,s arrived when tween Montreal deration. (Hsar, 'respondingwith the present year )rk. Of course, m of money to in doubling the ut by contract lext two or three be a wise course, mount of money ately a sufficient ome extent our nk, and I hope wiser course to Report oj the rirsuit-iit's Speech, ApiH 26, 1887 1 3 ik^ pursue will be to go sleadil)- on by degrees, spcndin< a moderate sum every year, as we ma>' find to be ex- [K'dient, and in this way you really will not feel any undue burden from the expenditure. Now, there are many reasons why we should do this work. Iji the first place, the traffic is ver)- heavy, and we should save delays which are now experienced in working it, and some pecuniar)- advantage may be derived, no tloubt, from that source - 1 mean, by saving delays to trains. It will, moreover, enable freight trains to be run at higher speed, thereby doing more work with fewer engines and cars. We have had estimates made from the different departments to show what such a saving would amount to. and we find it would be considerable, though, of course, not sufficient to pa\- interest on the whole of the money required for doubling the line, which would amount to considerabl}' more than the mere cost of the per- manent wa\', which might at first sight be supposed to be the extent of the outlay required. It is not merely a question of laying down extra rails or making an extra bank by the side of the old one, but you have to widen bridges, to ease curves, to make all .sorts of impro\ ements, including station accommodation, which it is very desirable to carry out at the same time ; and, taking all these matters into consideration, I do not think we shall get off ultimately with much less than ^1,500,000 for doubling the whole line between Toronto and Mon- treal. Therefore, as I said, it is not wise to undertake such an expenditure all at once, and to put ourselves to inconvenience in doing it ; but it would be better H The Grand Trunk Raiiivay of Canada to do it gradually, and in such a way that we shall not feel the effects of it. (Hear, hear.) Then, a<^ain, we are bound, having a great railway in that country, to carry on our business in a thoroughly satisfactory manner ; and we, therefore, entered into an engage- ment with the Canadian (lovernment that of the extra capital which we are empowered to raise under the Act of i8(S4 one million is to be considered as ear-niarkcd for that particular purpose. No time has been specified in which the work is to be carried out, but that money is to be devoted (whenever the work may be done) to the purpose of doubling the line. We propose, therefore, to spend ^100,000 in the present year, in doubling part of the line in the neigh- bourhood of Montreal, a small portion in the neigh- bourhood of Toronto ; and a further portion in the cen- tral part of the line between Montreal and Toronto ; and we shall go on with that work, doubling those parts which are most required, and which can be done in the cheapest way, and so get the greatest benefit from the money which we spend as rapidly as possible. (Cheers.) Well, then, there are other matters for which money is required. We want more wagons for our coal supply. When vvG depend upon other companies' wagons we cannot get our coal supply so regularly as if we had a sufficient number of coal wagons of our own. The coal traffic is in a great measure new, inasmuch as we are now burning coal almost entirely over our system in place of wood ; and it would, further, be wise, for the sake of obtain- ing more traffic, to supply flat cars for lumber and Canada Report of the President's Speech^ April 26, i' spend, with your permission, something like ^200,000 in the present year upon works such as those I have re- ferred to. You may ask me, How are you going to raise this money ? (Hear, hear. ) Well, fortunately, in our present position there is no difficulty about raising .^200,000 or any other sum that wc may require (Hear, hear.) Our finances are in such a condition that we have, as I have often told you, securities representing more than ^1,000,000, which I have previously referred to as our financial reserve. Wc could either sell debenture stock, or we could raise the required amount in other ways. We do not, how- ever, want to raise it at this moment, but only gradually, as we may require to expend it. (Cheers.) Now, as regards the Chicago and Grand Trunk Railway, that railway has been doing much better of late ; but, as regards the last half-year of ib86, we carried rather less tonnage upon it than we did in the I6 Tkc Grand Trunk I\.aiiivay oj Canada corresponding half-year of 1885, because the rates were so very low in 1885 that the traffic was thereby n;uch stimulated. However, the most satisfactory feature about the Chicago and Grand Trunk is that whatever the amount of traffic carried from 1881, when it was opened, the proportion of receipts derived by the Grand Trunk from traffic interchanged with that railway has continuously increased. It has in- creased from $5 19,000 In the December half-year of 1881 to $i,coo,ooo in 1884, cJid $1,206,000 in 1886 ; and this means an enormous advantage tc the Grand Trunk Railway from the Chicago and Grand Trunk system. We have had, even in the past half-year, to provide for arrears incurred in the preceding half-year by the Chicago and Grand Trunk. We have given you the figures in the report, from which \-ou will see that, although nor.iinally the Chicago and (jrand Trunk has been a loss to us in 1886, yet in reality, taking into account the net profit we have received on the parent system from the traffic exchanged with the Chicago and Grand Trunk, it has been a great g vin to us. I only hope that the increased receipts which we have been receiving during the past few weeks will continue, as we shall certainly then have no more of even nominal debt to pay back to the Chicago and Grand Trunk Railway. (Cheers.) Our ally, the Vermont Central Railway, has been doing very much better of late. The interest on the bonds which we hold in that line and on a small amount of notes has been paid regularly, ind the results of operating that system were satisfactory in t^ii uia Report of the President's Speech, April 26, 1887 17 : the rates as thereby atisfactory IVunk is from 1 88 1, :)ts derived iged with It has in- ilf-year of 06,000 in intajre to icago and en in ihe red in the nd Trunk, om which icago and in reah't}', ceived on d with the at g lin to which we /eeks will ) more of cago and has been St on the a small ind the ictory in ■J ■■I I 1886. The reorganisation of its affairs has been nearly completed. It has been many years on hand, but, for- tunately, it is now nearly completed, and it will very soon be practicable to have all its accounts set out in clear and concise statements. I would now say one or two words about the St. Clair Tunnel. You will remember that I mentioned to you at the last meeting that we were about to commence a tunnel to connect the Great Western Sarnia Branch on the east with the Chicago and Grand Trunk Railway on the west. The line con- necting these two railways will pass under the St. Clair River, and will be altogether about two and three- (juarter miles in length. The actual tunnel under the river will be about 770 yards long, and, including the underground portion of the approaches on each .side, about one mile long, with a gradient on each approach of one in fifty. We have sunk two shafts, one on each side of the river, these shafts being each about 80 ft. deep and 16 ft. by 8 ft. in dimensions ; and from those shafts we have been making a driftway, to connect them, 6 ft. in diameter. The shafts have been sunk with the most perfect success, in clay all the way. One of the shalts was found to be a little wet near the top as it was being sunk, but timber was put in and measures taken to keep the surface water out, and the work to the bottom of the shaft was completed in the most perfect manner. We then began to bore the drift- way through from ©ne shaft to the other. On the Port Huron side, that is the west side, we had not l8 The Grand Trunk Railway of Canada ^ot very far before we found soft clay oozing out, and that stopped theworkforthetime. On the Canadian side we had j^one about 70 yards with the driftway, and were hoping to do well, when we came across some soft clay on thatside also ; and,althoup^h the reports by post have been favourable, we have heard by telegraph that unfortunately the gas from below has been tapped. At the point where the gas escaped some water and soft clay also came into the shaft, and there is now water 12 ft. deep in the bottom of the shaft. However, there is this satisfactory feature about it, that the water does not appear to be con- nected with the river, because it remains at the same level, although it is 27 ft. below the level of the water in the river. Therefore, instead of proceeding, as we hoped to do, safe from the gas below and from the water above, through hard clay all the way, having reached this soft clay, the contractor will be obliged to adopt the system of employing an iron head in front of the work, and pushing it through until he finds solid clay again, and this, no doubt, will add to the expense. Well, the contractor has undertaken, under penalty, to do the work for ;^ 12,000, and I think you will say we were wise in not trying to do it ourselves, but in letting it to a contractor to do it. This is a very important work, and whatever happens we .shall leave no stone un- turned — well, there are no stones in it ; but we shall leave no clay unturned — (laughter) — to push it through and make it a success. (Cheers.) Another question about which I have no doubt Report of the Ptestdeiifs Speech, Apn/ 26, 1887 19 you will wish to hear is tliat of the Ontario and Sault Stc. Marie Railway. Wc had a charter for that rail- way, as I explained to you, and that charter expired on the 4th March last. Wc made an application to the (3ntario Parliament for its extension, and I under- stand that it has been extended for six years more. Well, the Canadian Pacific Railway have been ex- tending their branch frcMn Algoma Mills to the Sault, and, no doubt unintentionally, they had begun to take parts of and to cross our track in different direc- tions, and so to lay out their line as to make it difficult, if not impossible, for us to con- struct our line hereafter. However, we went to the Courts, and obtained an injunction ; and at length the matter was referred to Mr. Shanley, an eminent engineer in Canada ; and, under his arbitra- tion, an agreement has been made between the two companies, whereby the lines are to go on indepen- dently, and without interfering with one another. This line to the Sault Ste. Marie will, no doubt, some day be a very important one and, therefore, it is necessary for us to preserve the charter, and to be ready to make it when the proper time arrives. I do not think the time has yet come for actually considering the question of how we shall make the railway, although we shall not lose sight of it, but shall prepare for doing it ; but, meanwhile, railways are being constructed to connect the Northern Pacific with the Sault, and to connect the Cities of St. Paul and Minneapolis with the Sault; and the bridge, also, is to be constructed at the Sault within 30 The Grand Trunk Railway of Canada the next two or three years, if not before. Now, I think we have in all fairness a very strong claim upon the (iovcrnment of Canada for assistance by way ot subsidy in reachinjr the Sault, and .ilso for assistance in 'enabling us to use a joint line with the Canadian Pacific for that section of the railway which may becommontoboth companies. (Hear.hear.) You will remember that the Government obliged us to sell the North Shore Rail way to the Canadian Pacific. They have granted subsidies to the Canadian Pacific, in every direction, more or less competing with us, and I do not think it would be asking too much from the Government to give us substantial assistance in reach- ing the Sault. It would be for the benefit of Canada, and especially of Ontario, and you will understand that negotiations of that sort and of other descriptions have to be engaged in before we can seriously con- sider the question of prosecuting the actual con- struction of this railway. As regards the Sault Bridge, it is not to our advantage to expend money on its con- struction whilst our railway is something like 380 miles from it ; but our partners, so to speak — those gentlemen who had charge of the American charter for the bridge — were anxious to proceed with it, and they entered into negotiation with us to ascertain whether we would join them in proceeding with it. If we had found half the money to make the bridge we should have had no advantage in doing so, further than to provide the bridge for the benefit equally of all who could use it. Now, our main interest in regard to the bridge is that when we construct a railway to it we * •, '^i : before. Y strong ssistancc i also for with the ay which ) You will -) sell the heyhave in every nd I do rom the in reach- Canada, dcrstand criptions sly Gon- ial con- ; Bridge, n its con- like 380 Ic — those larter for md they whether f we had ; should than to f all who rd to the to it we Report of the Presidents Speee/i, April 26, 1887 21 may be able to use it. Therefore, we have made an agreement with the i^cntlemcn holding the American charter to the effect that they should pay us ^4,000 — which they have paid to us — that they should en- sure to us the right to use the bridge [on the most favourable terms, and under the most favourable con- ditions of any company using it, aiid that if it is not constructed within two years that our right to the shares we have sold to them shall revert to us. There- fore, we have a little profit, and everything we could want with regard to that bridge. (Applause.) There is one other matter I ought to mention to you, in regard to which I have heard exaggerated rumours. The Atchison Topeka and Santa I'e Railway is seek- ing an entrance into Chicago. This important rail- way system is connected with the Pacific in two direc- tions, and is making a connection from Kansas City to Chicago, under the name of .another road — the Chicago, Santa Fe and California Railroad. Well, the gentlemen who are connected with the Atchison Topeka and Santa Fe Railway have com- municated with Mr. Hickson as to the terms on which they could be admitted to Chicago, and negotiations have been proceeding. Thc)- wish to run over part of our Chicago and Grand Trunk, to buy some of our State Street property in Chicago, and to make connections with us and with the Chicago and Western Indiana Railway, of which we are part owners. The negotia- tions are somewhat complicated, but joint action will, we anticipate, result to our mutual advantage. It will be a great advantage for the Grand Trunk to be directly 32 The (rtami Trunk Raihua}' of Canada connected with a very extensive system lunninj^ all the way to tlie Pacific. I cannot tell you the exact fi^urey, and the advantage it will be to us in a [)ecuniaiy point of view, because the negotiations are not concluded. Hut, in ortler that you may not liave any exaggerated idctis on the subject, I would just mention that the cash advantage to the (irand Trunk will probably, if an arrangement is carried out, be somewhere between ;^50,ooo and ;^So,ooo. lUit when I say the (irand Trunk, I mean the companies we control in Chicago — the Chicago and (irand Trunk, and the Grand Trunk Junction C'ompany ; and we may ac(|uire an annual payment by way of rental of something between ;^5,ooo and ;^io,ooo a year. I only mention it because I think it is right you should know exactly everything that is going on. I wish to be frank on all points as far as possible. (Applause.) Now, as regards the Canadian Pacific, I have been asked to refer freely, at this meeting, to that railway^ and to tell you exactly how they are |;oing on, and how far they are competing with us, but I do not know a more difficult task. The Canadian Pacific are apparently intending to compete with us wherever they can acquire or construct a line to enable them to do so. They are finishing a bridge crossing the St. Lawrence at Lachine ; they are connecting with certain railways to get towards Boston. They have brought out a prospectus, as you saw a few days, ago, to make what is called " Pope's Line." 1 he Canadian Government have subsidised them for twenty years, to carry this line right across the State .. k Report of the President's Speech, . Iprii 26, 1887 23 of Maine, through the icnilory tjf tin- UiiitLcl States, altlioLi;;!! it was uiulerstootl th.i.t tlic C'anaUian Pacific Railway was to be made with the object of connect- in}4 ("aiiadiaii ports thiougli I'aiiadiaii territory Well, I have said already, ami I * an only repeat, as rcgartlstheCai idian Pacific and other competitors, that haviiu; regard to the position and inllucnce of our own system, what wc have to fear is not so much loss of traffic as reduced fares and rates. Ikit, I do not think the Canadian i'acific ('omi>any will be in a position to reduce rates an)' more than wc shall be. Uj) to the present time rates h;«vc been pretty well maintained b;tween us, and I hope they will be so in the future, and then I. for one, shall not be much afraid of any competition they may bring to bear ui)on us. (Ai)[)lause.) I Now, I must say one or two words about the Inter- state Commerce Law, an Act of Congress which came into force on April 5. I mentioned at a previous meet- ing that legislation of that description was contem- plated. In fact, it has been for years in contemplation. 1 also said that I thought no legislation of the American Congress would ever do us so much harm, or anything like so much harm, as the suicidal competition which has at times prevailed amongst American railways ; and that the American rail- ways were far more dangerous to one another than any law which was likely to be enacted by Congress could be to those railways. Now, I suppose this law must be considered in the light of an Ameri- can Coercion Act. We have heard a great deal ■09! 24 The Grand Trunk Railway of Canada of Coercion Bills lately. ]u)r myself, I am not so much afraid of them as some people are. I believe that the law is a terror to evil-doers and not to those who do well. (Cheers.) And I consider that this Coercion Act is likely to do much good in America. American railways have not in all cases been celebrated for being managed on the very best principles for the interest of their shareholders or of the public. The presidents of those raihva} s have not in every instance sacrificed their private interests for those of the shareholders. (Laughter.) I really rejoice to see that Congress has taken the matter up. I know that the ^Vmericans are a very law-abiding people. When a law comes into force, if there is a difficulty in working it, they are ready to adapt themselves to it. The facility of adaptation is wonderfully strong amongst them, and they will do their best to carry on their operations under the pro- visions of this new law, and any real difficulties that may be found to exist will be remedied by further legislation. I, therefore, look forward to protection in favour of the railway interest rather than injury from this species of legislation. (Applause.) Now, this Act, amongst other things, prohibits pool- ing. Well, I have told you often enough here that we could not profitably manage railways in America without some system of pooling the traffic, and that was undoubtedly the case until the present Act was passed. This Act provides that all Inter- State rates and fares shall be published, and that no undue favour or discrimination shall be exercised in Report of the Presidenfs Speech, April 2O, iScSj 35 the conduct of traffic. The rates and fares may be reduced, it is true, at an hour's notice, but they may not be again raised without ten days' notice — a pro- vision which is calculated to have a deterrent effect. And then, again, there is the question of a clause about which volumes have been written, which is called, in short American expression, "The long and short haul clause," which provides that through or long-distance inter-state traffic shall not be carried at a lower rate than local or short-distance traffic. Now, that clause has given rise to an enormous amount of discussion. Every eminent man in America in the railway world has given his opinion upon it, as well as every eminent railway legal authority ; and having read all these opinions, as far as they have come before me, I am quite unable to understand now what the effect of that clause will be in practice. And hardly anyone else appears to understand it, or hardly any two people to agree about it. It is not a long clause, and it may be interesting to you that I should read it. The clause is this : — "Thiit it shall be unlawful for any common carrier, subject to the provisions of this Act, to charge or receive any greater com- pensation in the aggregate for the transportation of passengers or of like kind ol property under substantially similar cir- cumstances and conditions, for a shorter than for a longer dis- tance over the same line, in the same direction, the shorter being included within the longer distance ; but this shall not be con- strued as authorising any common earner within the terms of this Act to charge and receive as great compensation for a shorter is for a longer distance ; provided, however, that upon applica- tion to the Commission appointed under the provisions of this Act, such common carrier may, in special cases, after investi- gation by the Commission, be authorised to charge less for 26 Tlie Grand Trunk Raihuay of Canada longer than for shorter distances for the transportation of passen- gers or property ; and the Commission may from time lo time prescribe the extent to which said designated common carrier may be relieved from the operation of this section of this Act." The President of the United States has, as provided by the Act,appointed the following five Commissioners, viz. : — Judge Thomas M. Cooley, Michigan ; Ex- Congrcssinan W. R. Morrison, Illinois ; Ex- Attorney- General Schoonmaker, New York ; Colonel A. F. Walker, Vermont ; Ex-Raihvay Commissionor W. L. Jiragg, Alabama. They are, I believe, thoroughly able, honest, and trustworthy men. They are to ad- minister this law, and a very lively time they will have of it. As the only means of dealing with this long and short haul clause of the Act they are stated, meanwhile, to have cut the Gordian knot by suspend- ing its operations in certain cases until the}- can see how on earth they are going to deal with it. They have, per- haps, rather strained the provisions of the law in doing so, but 1 believe they have acted very wisely, for it was far better to do this than to disorganise the traffic of the country. I have no doubt they may be trusted to deal with all the matters that may come before them under this Act in a perfectly just and reasonable and sensible manner, and that great good will result to the railways of America from their action. (Hear, hear.) As regards all the opinions and criticisms that have been written aboutthis Act,and particularlyabout this clause, it reminds me very much of the story of the old lady who was presented by a curate with a volume of the " Pil- grim's Progress," with very extensive notes of his own n of passen- m time lo !d common ction of this provided lissioncrs, an ; I£x- /Vttorney- cl A. F. r.or W. L. loroughly re to ad- will have this long e stated, suspend- n see how tiave, per- ^ in doing ly, for it f^he traffic 3e trusted fore them lable and ult to the hear.) As lave been lis clause, lady who the " Pil- f his own Report of the President's Speech, April 26, 1887 27 attached to it. The old lady was very much obliged to him. She said she could understand the " Pilgrim's Progress " pretty well, but she could not so easily understand the notes upon it. (Laughter.) Having regard to the great number of opinions given and in- terpretations put on this clause, it is really more diffi- cult to understand many of them than to understand the clause itself To give 3^011 an idea of how strongly it has been objected to by some American writers, I will just read you a thoroughly characteristic extract from the New York Henild on the subject. The Nezv York Herald sd^y?, : — " It would be easy to fill columns of space with the monstrosi- ties, preposterosities, and ludicrosities of this madhouse bill ; but why particularise further the faults of a thing that is wholly faulty .'' Why continue to point out the individual follies and iniquities of a measure which is but a huge combined iniquity and folly.? It will fail of enforcement because its enforcement is impossible, and the country is to be congratulated on the fact. " It will, sooner or later, damn to a brief immortality of pigmy infamy every caricature on statesmanship who aided in its con- struction or passage, and may seriously interfere with the second term aspirations of the Chief Magistrate." (Laughter and cheers.) Now, I think 1 have fairly given you both siJes of the question. (Hear, hear.) There is yet one other point, and one only, 1 think, on which you will desire some information, and that is the bill that we now have before the Canadian Legislature. That bill has two objects. One object is the conversion of securities of our controlled and sub- sidiary lines into our Four per Cent. Debenture stock — not, as has been stated, a new Four per Cent. Deben- 2S The Grand Trunk Raihvay of Canada turc stock, but our existing Four per Cent. Debenture stock. And the other object is the transfer of l)ropcrty at Sarnia from the trustees, in whom it is nominally vested, to the company. I thoroughly explained it at the last meeting ; but, as there has been some misunderstanding on the subject, perhaps 1 may be allowed to repeat that we only propose to continue the process of converting securities bearing higher rates of interest into the Four per Cent. Debenture stock, which has been going on for a great number of years, and from which we have derived great advantages. Under the bill now prei)ared we shall derive still greater advantages, inasmuch as the saving on the conversions which we shall have power to carry out if this bill passes — as we have no doubt it will pass — will be quite sufficient to pay for the whole of the doubling of our line — i^ millions sterling — between Mon- treal and Toronto. (Loud cheers.) Now, I told you at the last meeting that we had already, before the union, saved — from the conversion of securities bearing a higher rate of interest into debenture stock bearing a lower rate of interest — no less than ;£i^34,ooo a year. This was before the union. We have saved ;^9,ooo a year in a similar manner since the union. We have powers existing for i further esti- mated saving of nearly ^\ 2,000 a year ; and, under the powers to be obtained now, we hope to save an addi- tional ;{^6o,(XX) a year — (applause) — a total accom- plished and to be accomplished of ;^i 15,000 a year. (Cheers.) Well, now, we have effected or are going ■\A.ii.^.% Repon of the President's Speech^ April 26, 1887 29 to effect this large annual savinj^ in this way. You know there are a number of our securities which carr)- 5 and 6 per cent, interest. They mature at various dates, from 1890 onwards, and as the periods of their maturity approach they naturally fall in price towards par value. Now, when our Perpetual Four per Cent. Debenture Stock reaches par — which I hope will be before long — you may form some idea of the savin,L; that will arise from converting these Five or Six per Cent, securities into the above Four per Cent. Stock. Some gentlemen seem to have run away with the idea that we were going to propose a mode of conversion to be immediately carried out on a grand scale. If we attempted anything of the sort we should fail, and should not make the saving I have indicated. It is only by patient endurance in well-doing in this way that we can make this great saving It is by continual waiting and watching, taking advantage of the oppor- tunities that offer ot acquiring the securities paying higher rates of interest by an exchange of Four per Cent. Debenture Stock, or otherwise, that we shall be enabled to accomplish the result I have indicated And this process will go on for a scries of years before we have completed all the saving contemplated. I hope 1 am clearly understood. Gentlemen must not expect to make their fortunes by buying up these securities and exchanging them on favourable terms, for we intend that the advantages to be derived from such ex- changes shall be devoted to the benefit of the pro- prietors in the company. I do not know whether you would care to have the list of the securities 30 The Grand Trunk Raihvay of Canadn to be so dealt with, and scheduled for that purpose, read to you. Here is the list as attached to the bill. (Cries of " No, no.") The bill itself has not yet been printed. I have only got it in manuscript, in the form in which it has been prepared as the result of corres- pondence between ourselves and our officers and legal advisers in C'anada. If you like I will read the list of securities that have to be dealt with. (Cries of " No, no.") Then I will send them round with a copy of m)- address {vide Appendix), and that will save you time. (Hear, hear.) Well, gentlemen, I think I have now alluded to everything that you would wish me to refer to frankly and perhaps too full)-. (Cries of " No, no.") I am afraid I have wearied you in doing so — ("No, no") --but I have endeavoured to give you a true idea of the conditions and prospects of our undertaking. We must admit, as I said at the beginning, that to pay off arrears and liabilities — the »csult of misfortunes which were no fault of our own — is not the most satisfactory mode of appropriating our surplus income ; but it is some satisfaction, at all events, to have been able honestly to pay our debts and to start clear for the future. (Cheers.) I think I may say now that the company is in the position of a man who, from very small beginnings, and wading through early struggles, has succeeded in getting together a thriving business, and has attained a very good posi- tion as the result of much industry and self- denial — who has then met with overwhelming misfortunes during a couple of years ; but has ■itiM::, Report of the Presidenfs Speech, April 26, 1 887 3 1 successfully surmounted them, and has at leni^th been able to pay- all his debts and past arrears ; and who now starts forth again in full health and vigour to fight the b.ittlc of life, with plenty of money in his pockets, with a good balance at his bankers, with first-rate credit with his business relations, and an excellent prospect, at all events, for the current half-year. (Cheers.) I now beg to move — "That the report and accounts for the half-year ended 3rst December, 1886, this day submitted, be approved and adopted.' (CMieens.) Mr. Robert Gil.M'.spiK : I have very much pleasure in seconding that. After some remarks from Mr. William Abbott and Mr. W. H. Gramshaw, which were replied to by the Chairman, the motion for the adoption of the report was put and agreed to unanimousl\% Sir Henry W.Tyler, M.P., Sir Charles L.Young Bart, James Charles, Esq., and Major Dickson, M. P. were re-elected directors ; and Messrs. Thomas Adams and Thomas Davidson were re-elected auditors. Mr. William Abuott proposed a vote of thanks to the president and directors, which, having been duly .seconded, was put to the meeting, and carried unanimously. The Chairman : We are very much obliged to Mr. Abbott and to you, gentlemen, for this kind vote of thanks you have accorded to us. I take the oppor- 32 Tlw Grand Trunk Raikvay of Canada ' '• tunity of thanking you for kindly re-electing us to the board to-day. I really hope that we have turned the corner now, and that we may show a very much better result this year than we have done in the past. (Cheers.) • -^ ; ; / ; The proceedings then terminated. .. ,. . ; •• •, -■ • I' ••■) ..>, »• . v3H , .::u ■■A'r*t 4 I. I g US to ; turned y much he past. I. v / '■' -ii ^■'T") > . ;.., .»..„. U."i-, ■/f.«-1. .;:•!/