IMAGE EVALUATION TEST TARGET (MT-3) // //A ^ 1.0 1.1 11.25 lis ittlii |Z2 ^ ti& 12.0 \U il.6 '^. »' NORTH SHORE RAILWAY. THE CHIEF ENGINEEB AGAINST THE FBESIDENT; AND VICE VERSA. I.v The Chief Engineer charges the President with having publicly circulated reports, to the effect, that he, the Chief Engineer, was in collusion w^ith the members of the Chi- cago Contracting Company, in the original contract for the construction and equipment of the North Shore Rail- way ; and with having an understanding and agreement ■with that Company, or some of its members, by which he, the Chief Engineer, had, or was to have an interest of five per-cent in the net proceeds of that contract. Also that he, the Chief Engineer, has used his position upon the road to force the present Contractor, and assignee of the original contract, to either recognize that interest, or pay to him the sum of Fifty thousand dollars. The Chief Engineer unequivocally denies these charges and allegations ; and has given notice to the President and Board of Directors, by letter addressed to the Secre- tary, on the 14th April, 1875, that he shall commence legal proceedings against the President, for defamation of character, &c. 2 NORTH SHORE RAILWAY. Upon receiving the above notice, the President ordered that a special meeting of the Board be called : " on Wed- nesday next, the 21st inst., at 10 o'clock A. M., to take into consideration the difficulties between the President and the Chief Engineer of the Company. '* ' '^ No notice was given to the Chief Engineer of the calling of this meeting. The Board met at the time appointed ; and, after hear- ing only the President's side of the question, adopted the following Resolution : " Resolved. — That inasmuch as the President of this Company has made certain charges against the Chief Engineer thereof, and addressed certain letters in support, which seem to this Board to require investigation, that the whole matter in dispute be by this Board referred to a Committee of five, to examine into all such charges of the President, with instructions to examine into all docu- ments and witnesses as they may consider necessaryi said Committee also to enquire into all statements made by the Chief Engineer respecting the President, which the latter requests should be inquired into, and report to the Board on these points as soon as possible ; said Com- mittee to consist of the Mayor of Quebec, Honorable's Robertson and Garneau, and Messrs Thomson and J. G. Ross." The special Committee met on the evening of the same day, and after appointing a Chairman, allowed the Presi- dent to make a verbal statement of his charges, and refer- ence to such proofs as he relied upon to sustain them. After which the Committee adjourned until Monday, the 26th April, with the understanding that the President would then present his entire case in writing. CHIEF ENOINEER VEBSUS PRESIDENT. W Having, after considerable delay, been favored by the Committee, with the papers in the case^ the Chiei' Engi- neer, in endeavoring to defend himself against the charges and allegations of the President, desires first to thank the Board of Directors for having so promptly referred the matter to a special Committee for investigation ; and also to thank the Committee for haWng placed in his hands the written statement of the President containing these charges ; together with the documents upon which he relies to establish their truth ; and thus affording him the first opportunity which he has ever had, to openly refute them, at least, so far as it can now be done before an extra-Judicial Tribunal. It-^ \f^ EEVIEW OF THE PEESIDENT'S STATEMENT. From the written statement of the President, it appears that he re-iterates his charges of complicity in the contract, to the fullest extent ; and that he relies upon letters and statements, received from the different members of the late Chicago Contracting Company, and th^r former Cashier, who is also the Cashier of the present Contractor ; and also upon the corroborative evidence furnished in connection with the original negotiation of the contract ; and its sub- sequent administration by the Chief Engineer ; and his re- lations and intercourse, both in respect of the original Contractors, and the present Contractor, as affording evidence sufficient to substantiate his charges to the satis- faction of the Special Committee, and the Board of Direc- tors. Referring to the President's statement concerning " the great intimacy and apiiarent friendship, which existed between myself and the Chicago Contracting Firm ; " I will remark, that this intimacy and friendship commenced with Messrs. Smith and Dunlap, many years before the date of the contract ; and I vrill freely admit that they continued in a manner every way consistent with our subsequent re- lations under the contract, until the secret sale and trans- fer of this contract, on January 12, 1874. Mil CHIEF SNOINEEB YEBSUS PRESIDENT. n> »-, As to the effect of this former friendship upon the Com- pany's interests, during the negotiation of the contract, it is proper to remark, that Col. Hhodes was a prominent and active member of the Committee of Directors, which had this matter in charge ; and that while the balance of the Committee and myself, were using our utmost endeavors to keep the contract price within the present sum of seven million dollars. Col. Rhodes persisted in advocating a much larger sum ; until finding that neither a. majority of the Committee nor myself, would yield the point, he wrote an indignant letter to the President of the Company, and threatened to leave New York the next morning, unless the Committee yielded to his views. With reference to the effect of this intimacy and friend- ship upon the Company's interests, while the contract re- mained in the hands of the Chicago Contracting Company ; I beg leave to refer to the well known facts, that it had been almost solely thiough my representations that they had undertaken the contract ; and therefore I felt, in honor and good faith, bound to afford them all the assistance in my power, consistent with my position as Chief Engineer of the Company, to enable them to carry it out success- fully, particularly so long as they kept faith with the Com- pany by complying with the conditions of tbe contract ; and also with the negotiating Committee and myself, with reference to the amount of their own means which they would invest in the Enterprise. Upon their hesitating to do this ; and believing that the interests of the Railway Company required it, I even went to Europe at their request, and without any extra compensation, in order to aid them in their premature efforts to place the Bonds. I e NORTH SHORE RAILWAY. then returned here, and procured from the Railway Com* pany a large concession of stock, in order to place it with the Bonds ; and thus, as waft supposed at the time, place their financial arrangements beyond the reach of any possible contingency. All this was done openly, and with the knowledge and approval of the Railway Company. The efforts to place the Bonds having failed ; and finding that the parties still seemed inclined to await the course of future events before proceeding with the work, I addres. sed a letter to the Chicago Contracting Company, on the 29th July, 1873, which will be found appended hereto ;; and to which I beg leave to refer as showing the viewer which I then entertained respecting their obligations to keep faith with all parties, by proceeding promptly with the work. This appeal however had no effect, except to obtain- from them an assurance that they would immediately assess themselves to the extent of a half million dollars, and go on with the work ; but the season wore away, and nothing was done. In December 1873, Smith and Dunlap, came to Quebec; and assured me that their financial arrangements, were so far completed as to secure their success, provided the •' Quebec Railway Aid Act," which was then in contem- plation by the Grovernment, became a law. Their frequent and somewhat mysterious conferences with the Attorney Groneral, s:»emed to confirm this impres- sion ; and my confidence in their good faith, and in the final success of the enterprise, had never been greater than it was up to the evening of the 14th January 1874, when I f' CHIBF SNaiMSEB VEBSUS PBESIDENT. i WiB told, under an injunction of secrecy, that the contract had actually been sold and transferred to the Hon. Thomas McGreeyy, on the 12th January, for a consideration of 4225,000 ; and that Smith and Dunlap had come to Quebec ibr that especial purpose. , This most extraordinary and unjustifiable duplicity finally culminated in Dunlap's letter to me from Montreal, dated the 16th January, a copy of which is appended hereto ; and the fact of my " not even acknowledging or replying to " it promptly, and in a business way, is now referred to by the President, as an additional evidence of my guilt. The Chief Engineer therefore respectfully submits, that, in view of all the circumstances preceding, attending, and following this transfer of the contract, some of which will be more fully referred to hereafter, he was fully justified in withdrawing his friendship and confidence from these Parties ; and in openly denouncing them to the President and Board of Directors, and to the whole world, as men who had forfeited all claims to the confidence of the Railway Company, the public, and himself. The first public expression of his feelings respecting the transfer of the Contract, was embodied by the Chief Engineer, in his " Report upon the Quebec Railway Aid Act of 1874." under date of Feb. 5, 1874 ; an extract from which is appended hereto, to which particular reference is invited, in connection with this case, as expressive of the views which he then entertained respecting both the original and present Contractors. With reference to the remark made by the President that, while in England " he took no part in any business « * NORTH SHORK RAILWAY. i') of the Railway ; " I beg to append hereto, copies of some letters add extracts, which I received from him during hi* absence, as showing his unabated interest in matters which Were going on here, as well as in the final success of the Enterprise. With reference to the allusion made by the President to the " course of conduct " pursued by the Chief Engineer " towards Mr. Prince, one of the American party " ; and the subsequent and secret Championship by the President of the cause of the injured Cashier of the Contractors, as against the Engineer in Chief of the Railway Company, it is not proposed to make any reference, or remark, in this place. . . With reference to the official insp action of the line by the President and Directors ; and the subsequent personal inspection on font and alone, by the President, in order, as he stated to me afterwards, to satisfy himself of the fact of my cOiHijlicity in the original Contract ; together with the correspondence resulting therefrom, I beg leavpi to refer the Committee to the accompanying printed pamphlet, en- titled : " Remarks of the Chief Engineer upon charges made by the President." Dated December 1st, 1874. These " Remarks " were placed in the hands of the Chairman of the Executive Committee, to whom the matter had been referred by the Board of Directors, on Dec. 9th, 1874. If the pamphlet was delayed in reaching the Board, until the 10th of the following April, as stated by the President, I presume that the Chairman will be able to make very satis- factory explanations to the Committee, and also to the Board. I am quite certain, howover.that ho will do me the justice to say that I never showed the least hesitation in having, but CHIEF ENGINKfiB VERSUS PRESIDENT. rather an anxiety to have the whole suhject brdught to the notice of the Board, at any time when, in his opinion, the interests of the Company would be promoted thereby. I desire to remark however, in passing, that the theory upon which that defense of the Engineering organization was based, has since been confirmed to a remarkable degree. "With reference to the allusion made in the President's statement, to A 1 II i 1 1 1 i ; 1 t 1 the low grades upon Section 6, which he thought were more favorable to the Chicago Contracting Company, than the grades, as arranged upon other parts of the line, were for Mr. McGreevy. Upon my asking him whether he had discovered any change, either in the profiles or gradei^, since the contract had been in Mr. McGrecvy's hands except such as would save unnecessary expense to the Contractor, he replied to the effect : " that he did not understand the ups and doivns of my profiles at all ; and that he could only judge of the matter by whai he saw upon the line." I took occasion, during that conversation, which is the only one I ever had with him upon this subject, except in the presence of the Board, to make the mobt unqualified denial of Keith's charge ; and he left me, as I then sup- posed, with a firm conviction that it had no foundation in fact. . ■. -r^ ^i/iJ" It seems however, from his present statement, that his mind has never been quite at ease upon the subject, from the fact that he " has never been able to understand why it was necessary to obtain the consent of the Chief Engi- neer of the North Shore Tlailway, to an action in the United States to receive Commissions on any Contracts made by this Company ", &c. This remark refers to the closing paragraph in a letter (which the President appends to his Statement,) which I had addressed to Mr. Dunlap in Jan- uary last, asking him to contradict the Statement made by Keith ; and is as follows : " My cousin, M. T. Seymour, thinks he has a just claim against your party for services as- Agent, in procuring the Contract. I did not consent that he should commence legal proceedings in the matter, / 1 12 NORTH SHORE RAILWAY. ^'^>' > until after I was informed of Mr. Keith's Statement above referred to ; but I have since told him to do as he pleased. " Desiring that there may be no further misapprehension respecting this matter, I will state, as I have stated before on all proper occasions, that my Cousin was the sole Agent through whom I was put in communication with these parties ; and that they, as he claims, having failed to comply with an agreement with him, by which he w^as to be benefitted by the Contract ; and having sold the Con- tract for a large bonus, without having tendered him any satisfaction, he proposed to take legal proceedings against them. Inasmuch as I w^ould necessarily be the main witness in the case ; and not desiring to become embarrassed with frequent attendance as a witness, in the United-States, during my official connection with the road, I prevailed upon him to postpone it for the time being. But w'hen I heard of the foul slan- der promulgated by Keith, I at once wrote to my Cousin, that I would withdraw my objection, and that he could take his own course in the matter. And, as is my custom in all such matters, I frankly stated the fact to Dunlap, so that he could be governed accordingly. It seems, however, that even this slight circumstance has, in the mind of the President, become magnified into the most conclusive evidence of my guilt. And also, that this fact, in connection with the letters w^hich he, together with with his friend, the Cashier of the Contractor, have recent- ly received from Dunlap and Keith, " All tend to show that the loose screw is to he looked for in the Engineering Department." > { 9 CHIEF ENGINEER VERSUS PRESIDENT. II I I It is quite true, as stated so eloquently in the closing peroration of the President, that ot^er, and I think much more important issues, as affecting the true interests of the Company, have intervened, to divert the attention of the Board to such an extent, that this one great idea of the President's mind, seems to have been lost sight of by every one but himself, until within a few weeks past. But I deny emphatically, that these side-issues have been raised by the Chief Engineer, as the President states, '* to envelope the whole subject with mystery, and so gain time, and cause delay." . ...^ On the contrary, I claim that these " side-issues " were thrust upon the Company, and upon the Chief Engineer, entirely though the agency of the President himself, by his improper interference with matters upon the line which did not pertain to his office ; and by his promptings to the Grovernment Engineer, as well as his Reports to the Board, respecting the character and details of the work, of all which he could not, from the nature of things, be a competent judge. The labor of defending my Department, as well as the integrity of the original contract, from these attacks, was therefore very justly and necessarily thrown upon my own shoulders ; and as to the degree of success with which this duty to the Company, as well as to myself, has been performed, almost single handed and alone, (the full results of which can only be determined hereafter) I am not ashamed to refer to the " Volumes which have been written,'^ and which are so sneeringly alluded to in the statement of the President. It will also be remembered that, while laboring day and night, in the performance of this, as it now seems, 14 NORTH SHORE RAILWAY. ui\» thankless dnty to the Oompany, I did not lose sight of that other duty to myself, of vindicating my character, at least before the Board of Directors, from the slanderous insinuations of the President ; and that I therefore demajfi- ded of him, in the presence of the Board, that, in case he had mentioned this slander to Mr. Fleming, I should claim the right to be heard in the matter by Mr. Fleming, before his report upon the existing differences should be submitted to the company. - »> It seems, however, that the President, during all these side issues, has never lost scent of his real game ; and that at this late day, after having informed the Board, " that he did not regard Keith's statement as of sufficient importance- to call their attention to it." And after having stated publicly, " that all differences had been amicably adjusted " And after having, within a few weeks, approved of the adoption of a resolution, by the Board, /«//// endorsing the Chief Engineer, he has at last arrived at the conclusion as stated by him : *• that Colonel Rhodes and General Set/mjur, cannot hold their relative Offices and toork together.'* Under ordinary circumstances, an intimation of this kind,, from the Chairman of the Board of Directors, whose Ser- vant I am, should be regarded as a sufficient intimation, to place my resignation at his disposal; but unfortunately in this case, the President has placed it out of my power to do so, without its being regarded as a full confession of my guilt ; and I am therefore reluctantly compelled, in justice to my own character and reputation, to join issue with him before his own Board ; and also before the Courts, in order to purge my character from the foul stain which he has deliberateiy cast upon it. 1»: >■ {] CHIEF ENGINEER YEBSUS PRESIDENT 15 ^ Leaving now the further consideration of the President's statement, I will proceed more directly with my own defense against the charges therein contained, of collusion or complicity with the members of the Chicago Contracting Company, to defraud the Railway Company. In doing this, I will first call attention to the character of the Parties upon whose written and verbal statements he relies to substantiate his charges ; and then submit such further points and considerations, to the Committee, as may appear to have a direct bearing upon the case. ^ t" : i„^ ■ ■• V 1-- : . >.»* 4-;: r '-:,>, j;V.«-i ^•-:-'!:?/:-;s -J^jfjif:'! STATEMENT OF THE CHIEF ENGINEER I II < Respecting the parties upon whose letters and statements the President relies to substantiate his charges res- pecting the complicity of the Chief Engineer in the Contract. -i Perry H. Smith and George L. Dunlap. With reference to Smith and Dunlap, it is veiy well known that they accumulated large fortunes each, while joint managers of the Chicago and North Western Rail- way, of which, during a long period. Smith was first Vice President and principal Executive officer, and Dunlap General Manager. The Chief Engineer therefore felt quite willing that they should invest a portion of their surplus earnings in the promotion of the construction of the North Shore Railway. They and their associates were fully and honorably pledged to iuA'est at least one million dollars in work upon the road, before placing the securities of the Company upon the market ; instead of which, both Smith and Dunlap left for Europe within three months after sign- ing the contract, and before commencing the work of con- struction to any extent ; and spent a year in hawking the Company's bonds through the money markets of Europe CHIEF ENGINEER VERSUS PRESIDENT. 17 then, failing to sell the bonds, they returned to this country and sold the contract to Hon. Thos. McGreevy for a large bonus, without the consent of the Railway Company, or the knowledge of the Chief Engineer ; and left the country with the plunder in their pockets, and a lie in their mouths, as evidenced by the letter written from Montreal by Dunlap to the Chief Engineer, four days after the transfer. ,i-> ^'if\ Samuel L. Keith. -J '* i. With reference to Keith, it is proposed to show, that W'hen he was first introduced to the ('hief Engineer, by M. T. Seymour in Chicago, he represented that he was a retired Contractor with a large fortune ; and abundantly able, in connection with his proposed associates, to furnish all the means required to secure the immediate construc- tion of the road ; whereas, it was afterwards fou'id that he was substantially a bankrupt at the time, and expected to recuperate his fortune out of this contract. Also that he borrowed some money from a Chicago bank, to keep up his interest, which he afterwards refused to pay ; and the President or Cashier was obliged to come to Quebec and make the best settlement he could, by taking " cats and dogs " for a portion of the debt ; while Keith was holding Mr. McGreevy's paper, or its proceeds, in his packet, for his share of the investment and bonus. Also that Smith and Dunlap, in December, 1873, represented to the Chief Engineer that Keith had deceived them grossly as to his means ; that they had been obliged to advance money for him continually ; that they had already reduced his ini9« 3 ' '?'""■' 18 NORTH SHORE RAILWAY. rest ; and that unless he gave good security for the future, they should throw him over-board entirely. r • ^ » It will be shown further, that a few weeks after the transfer of the contract, Keith called upon the Chief Engineer, for the purpose of exonerating himself from any blame in the matter, upon the ground that the thing had been closed, by Smith and Dunlap, without his knowledge and consent ; and that they had compelled him to sign the transfer with them. He also stated that they had not divided with him fairly ; they keeping nearly all the bonus to themselves, and only paying him back his ad- vances ; but if he ever should meet them in Chicago, he would get even loith them. The Chief Engineer told him that he felt disgraced and humiliated before the Railway Com- pany, and the people of Canada, for ever having brought the parties into Canada, and endorsing them as men of character and integrity ; and that he hoped this would be the last he would ever see or hear of any of the party ; upon which Keith left abruptly, swearing that he would also get even with the Chief Engineer, befora he left Canada ; which threat was afterwards repeated to several other persons in Quebec. It will also be shown, that Keith afterwards sold at auction and private sale, and pocketed the proceeds of a large amount of property and plant, which had been pur- chased for Railway purposes ; all of which, really and in good faith, were transferred with the contract. It will also be shown that Keith, during his stay in Quebec, after the transfer of the contract, and his efforts to t)ick the bones of the decaying carcase of the Chicago Contracting Company, spent most of his time in obtaining ) ii I r 1 . CHIEF ENGINEER VERSUS PRESIDENT. 19 , 1 [1 information from the Contractor's office, respecting the sub-letting of the work ; and in forming combinations to obtain an interest in some of the sub-contracts ; and also in magnifying the difficulty and expense of doing the work, to parties who were not in his ring ; until, failing in these efforts, as he supposed and alleged, through the agency of the Chief Engineer ; and learning also that the Chief Engineer had denounced him openly for selling property that did not belong to him, he finally left Quebec in disgust, on the 12th October, 1874, without having yet got " even with the Chief Engineer. " Fortunately, how- ever, he happened to meet the President and Vice-Presi- dent of the TJailway Company, on the boat to Montreal . and therefore, feeling quite sure that he could place the boundary line of the Province, if not of the Dominion, between the Chief Engineer and himself, before the vile slander would reach his ears, he embraced the last oppor- tunity to inflict a most cowardly, but as he undoubtedly supposed 9. fatal stab at the heart of the Chief Engineer, by concocting the story, which it seems to have been the main object of the President's subsequent official acts, respecting the Chief Engineer, to substantiate and render effectual lor accomplishing his ruin. John T. Prince, Junior, Cashier. 'UK With reference to Prince, I hardly know what to sav that will do him full justice. He seems to have been the prime mover, and Chief Con- spiritor in the affair, for the purpose, as he openly alleges, of " retaliating^'' against the Chief Engineer for some sup- posed wrong, or under-handed injury ; which he admits 20 NORTH SHORE RAILWAY. -'•'>^' has resulted to his advantage, so far as his present em- ployer is concerned. But nevertheless, to use the exceed- ingly happy expression, so often used by his friend Keith, he is determined " to get even with the Chief Engineer " by "retaliation" ,. . . I had often heard of the " Cashier's " playful threats " to drive all the Seymour's out of Quebec " ; and 1 have once or twice had occasion to refer to him in my official commu- nications with the Company and the Contractor ; but I utterly disclaim ever having done so underhaadedly.j or for the purpose of doing him unmerited injury. In fact, the first of these communications was addressed directly to himself, calling his attention to a slight discre- pancy, (only $1,322.61), in two certified statements which he had returned to me, of the expenditures of the Chicago Contracting Company, during the month of November 1873. The next of these communications was also official, but I think with himself verbally,when I merely remarked, that I thought he did very wrong to allow Keith to sell, without protest, the horses, buck-board, and other property, which he had returned to me over his own signature, as expendi. tures upon the road ; and which he knew had been em" braced iu my monthly estimates, and therefore belonged to his present employer ; to all of which he bliandly replied " that the vouchers had all been sent to Chicago, and therefore it was quite impossible for him to tell anything about it" . . The next of these communications was also o^cm/, and addressed openly to the Contractor, to the effect : *' that the imperious and overbearing style adopted by the T' m •**/ I .; CHIEF ENQINEEB VEBSUS PRESIDENT. 21 «M>( Cashier, in his intercourse and correspondence with mem- bers of the Engineering Staff, has become exceedingly offensive; and if persisted in, I shall feel compelled, for the proper protection of my sub-ordinates, to issue an order prohibiting any member of the Staff from holding further official intercourse or correspondence with him, upon matters connected with the Road." . :i > ,!. The next communication was also official, and addressed to the Contractor, in which his attention was called to a little discrepancy, (only $21,014.07), between a certified statement of expenditures which had been furnished to me by his Cashier, upon which to base my progress esti- mates, and the footings of the vouchers which were after- wards furnished to me, for the i ame purpose, from the Contractor's office ; upon which occasion I merely remarked that : *' A result of this kind, as a matter of course, has a tendency to destroy all confidence in any statement of this nature which may hereafter emanate from that source." ' ' '? Upon being furnished, subsequently, with a copy of a complaining letter which the cashier had addressed to the Contractor upon the subject, from which the following is an extract : " he (the Chief Engineer) appears to be unsa- tisfied still, as I am informed he has lately brought the matte^' to the notice of the Board of Directors (referring to the letter from which the above extract is taken, a copy of which had been filed with the Secretary) and complains to them that I am still in the employ of the Contractor, " I hastened to embody the following certificate, in a com- munication which I had the honor of addressing to the Board of Directors, on the 13th Feb., 1875, which I trust, .' I 22 NORTH SHOBE RAILWAY. i) when the facts come to the Cashier's knowledge, will fully satisfy his sensitive mind upon that subject : *' I desire also to put the mind of the Cashier at rest, at once and forev^er, respecting all apprehensions he may entertain in relation to my personal " unsatisfaction," or " complaints to the Company," so far as his relations with either myself or the Railway Company are concerned, by certifying most unequivorally that I regard him as most peculiarly fitted, in every respect, for the performance of the very arduous and responsible duties which have been assigned to him, in the Construction and Financial Departments of the Road. " The above recommendation, when taken in connection with the important fact, as stated in his letter to the President of the 31st March, 1875, as follows : " but finding that the statements made by Gen. Seymour were having if anything a contrary effect on Mr. McGreevy from what he intended, I withheld the information, not wishing to injure him," should certainly induce the Cashier to refrain from any further " retaliation^'' unless he has become satis- fied that the course which he has taken in this matter, will raise him still higher in the estimation of his present Employer. i M ■• .' J 1 » .«. .. ^ a.: * i, I I POINTS SUBMITTED BY THE CHIEF ENGINEER. Ju?r the consideration of the Special Committee, in answer to the charges respectifig his complicity in the contract. 1st. That inasmuch as the President first received information respecting the supposed complicity of the Chief Engineer in the contract, on the 12th October, 1874, directly from Samuel L. Keith, whom he knew to be a member of the Ohicaco Contracting Company, it was his duty, if he believed in the truth of the information, to cal the immediate attention of the Chief Engineer to the fact » and, if he did not exculpate himself fully, to suspend him at once, and report the case to the Board of Directors. 2nd. That inasmuch as the President did not do this ; but on the contrary, has continued his official relations and intercourse with the Chief Engineer, upon the same terms as he had done before receiving this information ; and that, some months afterwards, he informed the Chief Engineer in the presence of the Board, substantially: "that he did not regard the matter as of sufficient importance to justify him in bringing it to the notice of the Board ; and that it probably never would have been brought to the notice of the Board, if he, the Chief Engineer had not then openly called attention to it; " and subsequently, on the 17th March last, the President having made a public decla- 24 NORTH SHORE BAILWAY. ration, before nearly two hundred people, to the effect : *' that all difficulties had been satisfactorily arranged, and that we were now on the eve of a new departure," &C' And still later, on the 8th of April, 1875, having given his full and open concurrence to a Resolution adopted by the Board of Directors, in which the long and faithful devotion of the Chief Engineer to the interests of the Company is fullv endorsed ; and the confidence of the Board in his future faithfulness to the interests of the Road, fully declared. And inasmuch as the Chief Engineer is not charged by the President, in his present statement, with having committed any act, since the date of the above mentioned acts and declarations of the President, which can justly be regarded as forfeiting his claim upon the Company for its continued confidence, it is submitted that neither the Committee, nor the Board, have any just grounds for taking further proceedings in the matter. 3rd. That inasmuch as the original verbal statement made by Keith, is quite as direct and reliable as any written statements which he or his associates have since made, the President has no more grounds for believing in the truth of these statements now, than he had on the 12th October last ; and therefore, having condoned or dis- regarded the original statement, he has now no right, either in justice or equity, to ask the Board to take any action in the matter. 4th. That there is nothing, either in the President's state* ment, or in his correspondence with Keith, to show that his late efforts to establish the truth of his charges, have been conducted in his olpcial capacity as the President of the Company. On the contrary, Keith's letter of March . "^'j ■\[ \ •MPKi 0- CHIEF ENGINEER VERSUS PRESIDENT. 25 i, iW .1 26th, 1875, in which reference is made to : " your letter enclosed in one from Mr. Prince," is addressed to : " Col. Wm. Rhodes, Quebec, Mt/ dear Co/one/,'' from which the inference is conclusive that it was a privde corre.ywnden. e. Otherwise the letter which Keith had received from " Col. Wm. Rhodes," and Keith's reply thereto, should have passed through the hands of the Secretary, and become matters of record in the Company's Office. The same remark will apply to the letters from Prince to the President ; and the copies of letters received by Prince from Dunlap, which were en- closed to the President for his private information and guidance ; all of which should have been deposited with the Secretary, and thus rendered accessible to the Direc- tors at least, if not to the Chief Engineer, whose proper standing with the Company was so much endangered by them. It is therefore submitted that these facts place the Pre- sident outside of the Company's interference and protection; and that they shoiild be regarded as sufficient to justify the Board in refusing " parlidpnlion in the rexpotisibi/ities the President has assumed " in his statement. ftth. That a careful analysis of the President's statement and the letters submitted by him in support of his case, will show that each of the parties has a special raolive for pressing and confirming these charges against the Chief Engineer at the present time, as for instance ; Prince, openly avows his motive to be " retaliation " for pre- vious supposed or real injuries. Keith, shows very clearly that he also has a grievance to redress, and that he is still determined '* to get even with the Chief Engineer. ^^ ,,- m NORTH SHORE RAILWAY, vv.'v Dunlap, is willing that his brother-in-laio Prime, shall make Keith's letter and charges public, if he finds it neces- sary to do so for his oivn protection againH the Chief En- gineer. Smith, *' might wish to use it in the suit which Mark Sey- mour has brought against him in New York,'' as statod in Keith's letter ; and, • - Col. Rhodes, is threatened by^the Chief Engineer with a suit in the Coxxris for defamation of character ; and it is there- fore of the last importance to him, that he should convince if possible, in advance,the Board of Directors of the truth of his charges, and thus induce them to assume " participa- tion in the responsibility the President has assumed." It is therefore submitted, that these motives and con- siderations should have very great weight with the Com- mittee, in the investigation of the case at the present tine. 6th. That the foregoing statement of the Chief Engi- neer, respecting the parties upon whose letters and state- ments, the President depends to substantiate his ehargi»s, is sufficient to show, that no reliance whatever should be placed upon either their verbal or written statements ; and that, when taken in connection with the fact, above stated, of their direct interest in the result ; and also in view of the course which they have already taken in this matter, the conclusion would seem to be quite justifiable, that at least a very large margin should be allowed for any statement which some of them might make under oath, in this particular case. 7th. That the laws under which we live, and upon which we must rely in the last entreme, for protection against unjustifiable conspiracies, and slanderous assaults CHIEF ENGINEER VERSUS PRESIDENT. 27 er of this nature, declare to the effect ; " that every person should be regarded as innorent, until he is proved to he gullbj'^ It was upon the justice of this principle that the Chief Engineer relied, when he determined to afford the President an opportunity to prove the truth of his public cha-ges and allegations in a Court of Justice : and also when he wrote to the Secretary on the ISth April, 1875 ; " That unless the parties upon whom the President relies to substantiate his charges, are prepared to add the crime of th3 grossest per/ur// to that of the niosf unwarmntable cjnspirac//, in order to accomplish my ruin iu this life, I shaU hope for a fall vindication of my chiracter at an early day." It is th.^refore subm'tted, that the special Committee and the Board of Directors, should bo guided by the same ju-st principle, in any further action that may be taken in this matter. • 8th. That the President having determined, that before })ei ig called upon to respond to his charges in a court of Justice, vvh^re statements can be made only under the solemnitf/ of an oath, he will first have an investigation by the Board of Directors, where oaths are iiiadnussil>le ; and where the probable facts can be determined only by means oi the verbal or written statements of interested and irres- ponsible parties, together with such concurrent circum- sta'ifes as may appear to have a direct or remote bearing upon the case ; it is therefore submitted, that th-^ counter statements and denials of the Chief Engineer, together with such attendant circumstances and probabilities as may appear to have an equally direct or remote bearing upon the cate, should be regarded as having, at least, equal 28 NORTH SHORE RAILWAY. weight and importance with the Committee, and the Board of Directors. , ; 0.. , » i . ,;,...> 9th. That the following propositions are therefore res- pectfully submitted by the Chief Engineer, as showing that all the attendant circumstances, and probabilities in the case, are decidedly against the truth of the charges of the President. It is not alleged in any of the letters produced by the •President, that the Chief Engineer had ever spoken to Keith, directly upon this subject ; bui the toliolc case seems to depend upon ivhat Keith says that Smith and Dunlap • ither haiie said, or promise to sat/ hereafter, upon the subject. Having made it a rule of my life, never to have any complications of this nature with Contractors, is it at all probable that I would depart from this rule in the present case, for the paltry, and even contingent consideration of fifty thnifsand do/tars, a portion of which, as Smith is sup- posed to be prepared to state, was to be expended in a house, and the remainder was to support myself and family for life ; particularly when a kind i^rovidence had already secured to my family a house and home that is worth at least half the amount that it is alleged was to be my share of the profits in the Contract ? Having a salary lixed at six thousand dollars per year, as Consultinff Enirineer of the road, at the date of the con- tract, is it at all probable that the Contractors would have then consented to my receiving ten thousand dollars per year as Chief Engineer, after that date, (more than double the salary then being received by any Engineer in Canada) if it had been previously understood and agreed that I was to have a direct, or even a contingent interest in the finan- cial result of the contract ? 7 1 f f>S CHIEF ENGINEER VERSUS PRESIDENT. 29 t 'y 1- ♦ 1 Dunlap having, in London, during the month of May 1873, while referring to the extra risk and expense at- tending my then and probable future visits to Europe, for the sole benefit of the Contractors, informed me that himself and Smith had always intended that I would make as much out of the contract as either of them ; and upon my declining to entertain such an idea, saying further, th"t from the positions which I had held, it was my own ft-.Jt that I was not rich enough to buy out both himself and Smith, and that I deserved to remain poor so long as I entertained such ridiculous notions ; and then afterwards repeating to a mutual friend, the substance of his conver- sation with me, is it at all probable that he would have made these statements, if the agreement with which I am now charged had existed? * - • < . ; •. Having requested Dunlap to purchase for me a watch in Europe, which he did, and sent to me in the Fall of 1872, is it at all likely, that, upon his return from Europe, in 1873, he would have directed his Cashier to charge me, and credit himself with the amount, which he did, and I cheerfully paid, if he had then understood that I was a partner with him in the contract ? Having upon the sale of the contract, represented to the present Contractor the arrangement which had been made with me as to salary ; and obtaining his assurance that the arrangement would be carried out in good faith on his part ; is it' at all likely that Smith and Dunlap would have neglected to mention the more important arrrangement as to my pecuniary interest in the contract ; or that, if they had done so, the present Contractor would have failed to xsall my attention to the latter understanding, when he did 30 NORTH SHORE RAILWAY. :nti/' to the first, if it had previously been understood that I had such an interest ? • . : . . ' . Having secretly sold the contract for a bonus of from seventy-five thousand to one hundred thousand dollars, without my knowledge and consent ; and having left the Country with the proceeds in their pockets, without even then or thereafter offering to share the plunder with me, is it at all probable ihat Just and honorable men would have treated even a silent partner in this manner ; and then, worse than all, come back upon him and attempt to ruin his character and professional reputation, by charging hinL with the very act, which, if committed, they must admit, and others must infer, was the sole means of securing to them the contract, and the bonus which they received for it ? They having done all this ; is it at all probable, that if the charge were true, I would proceed at once to incur the hatred and displeasure of their Cashier, Dunlap's- brother-in-law, who must have been in their secrets ; or that I woald embrace the first opportunity to denounce their partner Keith, (who happened to be the only one within my reacU,) for the perfidy of himself and partners,, who had deceivel both the public, the Railway Company a id myself with reference to their real intentions to construct Ihe Road; and also for his own dishonesty in selling property that belonged to the present Contractor ; and, all this, if he held me at his mercy, and had the power at any time to expose me; and is it not quite un.. accountable that he did not threaten me with this exposure on the spot, and thus prevent me from denouncing him further; and also from intercepting his future plans con- cerning Ihe Road ? ., ^ t 1 ^9 !; •(« r CHIEF ENGINEER VERSUS PRESIDENT. SI J Or is it at all probable, that, upon my first hearing of the verbal statement made upon the Boat, by Keith to the President, I would have alluded to the matter in my defense against the President's charges, under date of December 1st, 1874 : *' with a view to a most rigid and thorough investi- gation" ; or that I would have had the assurance to write to Dunlap, on the 18th January, 1875, asking him to contradict the statement made by Keith ; or that a month later, thinking that the President might have mentioned the matter to Mr. Fleming, I would have had the audacity to call his attention to the subject before the Board ; or that, after having been, as I then supposed, reliably informed of the contents of Dunlap's letters to Prince, which had found their way into the hands of the Pres- ident, who was busily publishing their contents to the world, I would have written Dunlap a threatening letter, on the 3rd April, 1875, to the effect : " that, unless you undo this foul wrong at once, by retracting your false and malicious statements, if time, health, and means are gra- ciously spared to me, and so sure as there is a G-od above, I will follow you to your deathbed if necessary, in order to obtain justice, and foul reparation" ; or that, even since all this, I would have openly charged the President with the wrongs which he was inflicting upon me ; and declared to the Company which I was serving, my determination to commence legal proceedings against its President, unless he retracted his false charges, and made me every repara- tion in his power ? Does all this look like the work of a Traitor and Hypocrite ? Does it not rather convey to the mind the idea of an innocent and injured man, who, after struggling for weary months Ih NORTH SHORE RAILWAY. P'^ \l against the insidious attacks of a revengeful foe ; and feeling conscious that the ground upon which he stands is daily crumbling from under his feet, by reason of the secret undermining and machinations, carrit d on under the eye, and with the approval of the President of the Company, whose duty, in his high position, would appear to be to defend and protect, rather than to crush and ruin him, strikes boldly and fearlessly, although perhaps unwisely, out at his cowardly adversary, at the first moment when he can sieze anything real or tangible at which to aim his blows ; and who, in the consciousness of his own innocence and integrity, openly demands that his calum- niators shall meet him, upon equal terms, in a Court of Justice, where something more than secret whisperings and insinuations ; or even gratuitous and open verbal and written statements are required, before a man's private character and professional reputation shall become a sacri- fice to their envy, hatred or revenge ? It is therefore submitted, in conclusion, that the entire case presents iho appearance of a most/o/// Compiracy, in which Prince, Dunlap, and Smith while endeavoring to avoid all personal responsibility, are making rats-pawa of Col. Rhodes and Keith, merely for the purpose of promoting their own selfish purposes ; and that Col. Rhodes, upon finding himself caught in the snare, suddenly desires to assume the character of President, and thus throw the entire re- sponsibility of his acts upon the Railway Company. 4l . f I' THE CHIEF ENOINEEB SUBMITS THE CASE. 4 Referring to the present Contractor, for any information he may give, respecting the efforts of the Chief Engineer to obtain his check for Fifti/ thousand dollars, or any other sum. Referring also, to his letters upon this subject, to the Secre- tary, of the 14th and 15th April, and to the Board of Directors, of the 20th April, 1 875, which are now in the hands of the Committee, the Chief Engineer is prepared, with the foregoing remarks, to leave the case in the hands of the Special Committee, and the Board of Directors, so far as this investigation is concerned. In doing this, he is fully conscious of the claims which the President has upon the Board of which he is Chair- man, for its protection and support, as against a surbordi- nate Officer of the Company. But nevertheless, the feeling of entire consciousness in his own past and present integrity to the Company, and all its interests ; and the further conviction that " thrice armed is he whose cause isj'ust,^^ impel him to place the utmost con- fidence in the result, so far as it can be affected by the calm and deliberate judgment of the Board of Directors, after the most strict and impartial investigation. All of which is most respectfully submitted, SILAS SEYMOUR, Chief Engineer. To THE Special Committee, AND THE Board of Directors of the , North Shore Railway Company. Quebec, 30th April, 1875. * APPENDICES TO THE CHIEF ENGINEER'S REPLY TO THE CHAROE8 MADE BY THE PRESIDENT. - 1 I. Letter from the Chief Engineer to the Chicago Contracting Company, dated July 29, 1878.... II. Letter from Geo. L. Dunlap to the Chief Engineer dated Montreal, June 16, l874 III. Extract from " Report of the Chief Engineer, upon the Quebec Railway Aid Act of 1874," dated Feb. 6, 1874 lY. Letters from the President while in Europe, to the Chief Engineer V. Letter from the Chief Engineer to the Secretary, transmitting " Historical Review of the Gov- ernment Standard," dated April 12, 1875 * 1 ■' \ V •■'1^ VHI^V !• i 7 I I ,, I y 't^ -Ih APPENDIX N03 1. Letter from the Chief Ens;;meer, to the Chicago Contracting Company. NORTH SHORE RAILWAY. OFFICE OF THE ENGINEER IN CHIEF, Quebec, July 29th 1873. Gentlemen ; I am informed by your Mr. Perry H. Smith and Greorge L. Dunlap, who have recently returned from London, England, that owing to their failure in procuring the necessary means with which to prosecute the work, by a negotiation of the Bonds in London, it will be necessary to allow the present working season to pass over, without doing any thing in the way of construction. Before fully and irrevocably determining upon such a course, I desire to call your very serious attention to certain facts and considerations, which in my opinion should have a controlling influence upon the decision of the question as to your future policy. By the terms of the supplemental contract recently executed, you have undertaken : 1st. To complete and equip the Main Line, so far as to permit of its being opened for business, by the running of one or more daily trains between the Cities of Quebec and Montreal, within the year 1874. 2nd. To fully complete and equip the afosesaid Main 2 APPENDIX No. 1. Line, in accordance with the terms and conditions of the original contract, on or before September 1st 1875, and, 8rd. To fully complete and equip the Main Line, on or before December 1st 1875; and the Piles Branch, on or before May 1st 1877. Having had, as you are aware, a somewhat large and varied experience in driving work of this kind to com- pletion, agaiml lime, as it were, I deem I my duty to point out certain reasons, which to my mind are perfectly con- cliTsive, as showing the physical impracticability of accom- plishing the tirst, and in all probability the second of these undt'rtakings, within any reasonable limits as to cost, without the expenditure of a considerable amount of money during the present year. 1. The right of way should be so far secured, as to prevent any delay in taking possession of any portion of the line, on or beforo the commencement of the working season of 1874, otherwise th'> work will be liable to serious detentions from litigations, &:c. 2. The work of graduation is comparatively light for most of the distance, and can be completed within from two to four months from the time of its commencement, with an adequate force of men and teams; but there are, in all, some eight or ten mili's of grading, which should be got well under way during the present working season, in order to secure its completion in time to lay the track over it during the Ftdl of 1874. 3. The timber and stone required in piling and crib- bing for the deep water bridge foundations, should be all delivered upon the ground before the close of navigation this year ; and these foundations should all be put in and well s 'cured, before the ice leaves the streams next Spring; otherwise it will be very dillicult and expensive, if not impossible to get them ready for the masonry in time to secure its completion as soon as it will be required for raising the superstructure of the bridges. 4. The stone quarries should all to be opened durinjf the present season, and a good supply of stone delivered upon the ground at each locality where masonry is required, in time to commence laying as early as practicable next year ; otherwise the masonry cannot be completed in time for the raising of the superstructure of the larg& bridges, as soon as the track should be laid over them. .1- APPENDIX No. 1. 8 .. 5. The timber required for all bridges, should be con- tracted for early during the present season, in order that it may be manufactured, and delivered upon the ground as early as possible, or whenever it may be wanted, during the next season ; otherwise it will be very difficult, if not impossible to procure it. 6. The cross ties should all be contracted for early during the coming Fall ; otherwise it will be very diffi- cult, as well as expensive, to secure their delivery upon the line as soon as wanted. Without entering into a close calculation, I would estimate that about five hundred thousand dollars should be expended in the manner above indicated, between this date, and the first of May next, in order to ensure success. If you can raise the necessary means to enable you to comply substantially with the foregoing conditions, I should feel great confidence in your getting the track laid in good working order, between Quebec and Mon- treal, during the working season of 1874 ; and also in the full completion of the Main Line, according to contract, on or before the 1st September, 1875, provided always, that you can command the requisite amount of skilled and common labor, to accomplish the work. On the other hand, unless you can accomplish as much as this, during the present year, I do not see the way clear for your completing the work within the time or times specified in your contract. And even with the expenditure above indicated, if compelled to be made late during the present season ; and the balance of the work required to be driven under every conceiveable disadvan- tage, during the working season of 1 874, I conceive that the work and materials will cost a very large per-centage over and above what they would have cost, if the work could have been prosecuted in the ordinary way, during the present year. When I left London, on the 1 4th of M ay last, for the pur- pose of presenting to the Railway Company, a statement of your difficulties, and applying in your behalf for a further concession of Three Million dollars of Capital Stock, to be placed with the bonds, it was distinctly understood, both by yourself, and by the parties who had agreed to form a syndicate which would supply the money for constructing the Road, that, if the concession was M 4 APPENDIX No. 1. granted by the Company, the work woul4 be resumed im- mediately, and carried forward without interruption to completion ; and I was authorized, by letter from these parties, and by a cable received from your Mr. Dunlap, to give the most positive assurances to the Board of Direc- tors to that effect. Furthermore, I have every reason to believe that with- out this assurance, the concession could not have been ob- tained; and your failure to resume the work, and the failure of the parties in London to provide the necessary means for its prosecution, have therefore placed me in a. very awkward position, not only in my relations to the Railway Company, but also to the Provincial Government, to the City Authorities of Quebec, and to the general public, all of whom placed the most implicit faith in my assurances, and favored your application accordingly. In order to give you ample time to complete the track of the Main Line, 1 extended the time several months longer than the time specified in the form of Supplemental Con- tract prepared in London ; but in doing so, T anticipated that you would require all the working months of this and the coming year, to enable you to do the work economi- cally, and within my estimate of its cost. It you are to lose the present season entirely, and are forced to crowd all Ihe work that should be done in twa seasons into one, you will not only be compelled to add a A'ery large per-centage to my estimate of the cost ; but will, in all probability, fail entirely in carrying out your en- gagements with the llailway Company. This failure on your part, as you must be aware, will not. only prove a great loss and disappointment to the Railway Company, but your own reputation, both as individuals, and as a Cont.-actin<»- Company, besides a very large per- centage in the actual cost of the work, are in my opinion, entirely dejiendent upon your expending a sulRcient amount, during the piesent year, to secure beyond any contingency the completion of your contract within the time, and ajcording to the conditions, therein specified. Indulging the hope that the foregoing view of the case> "when carefully considered, will induce you to leave na means untried to accomplish an object so desirable as the keeping of your faith with the Railway Company and the APPENDIX No. 1. ^ Public at large, by successfully carrying out a great work, the completion of which we all have so much at heart. I have the honor to remain, Gentlemen, Your Obt. Servt., (Signed), SILAS SEYMOUR, Eng. in Chief To THE Chicago Contracting Company. APPENDIX NO 2. Letter fro7u (reo. L. Dtinlap to tJie Chief Engineer. Montreal, January 16, 1874. Dear GrENERAL, "VYe find matters here quite satisfactory indeed, as you have very often remarked, they cannot be in abetter shape. I wanted to advise with you yesterday upon a matter, but felt so perfectly assured in my own mind that the sub- ject would have met with your complete approval, that I omitted to do so. Both Mr. Smith and myself feel much better about the North Shore Enterprise now than ever before, since we think we can plainly see that the plans now about matured will result in the early completion of the road, and the Government deserve commendation for their sagacious concessions. Believing that all things will conspire for good. I am, my dear General, Very truly, (Signed,) GEO. L. DUNLAP Gen. S. Seymour, Chief Engiiieer North Shore Railway, Quebec. ) . APPENDIX N' ut ce ut d. -^ I < Extract from the " Report of the Chief Engineer upon the Quebec Railivay Aid Act of iSy^y' Dated Feb. 5, 18^4. TRANSFER OF THE CONTRACT " It may be some allusion expected that, before closing this report, will be made to the transl'er, w hich it is understood has recently been made of the existing contract to the Hon Thomas McGreevy, of this City ; which contract w^as executed in good faith, by the Railway Com- pany, on the nth April, 1872, with Messrs Perry H. Smith, Samuel L. Keith and G^eorge L. Dunlap, all of Chicago, Illinois, and doing business here in the name of the Chicago Contracting Company. Inasmuch as neither the Railway Company, nor any of its officers, have as yet been favored with a notice of this transfer, or an intimation as to its conditions, I can only assume that when the matter is brought properly before the Board of Directors, it will receive such careful consi* deration and action, as will be calculated to promote the best interests of the Railway Company. Having been chiefly instrumental in bringing about the negotiation of a contract with these parties ; and therefore being very justly held responsible to a certain extent, both by the Railway Company and the Public, for its being carried out in good faith on their part, I may be per- mitted to say, that it is a source of great satisfaction to me personally to know, that, except the general loss of more than a year's time in the completion of the road, the Rail- < I ! I 2" APPENDIX No. 3. way Company has sustained no pecuniary loss by the de- linquency of these Contractors ; and that the result of the contract thus far has been, an expenditure on their part of about $200,000 a portion of which has gone to re-imburse the Company for the most of its former expenditures, and to pay its current expenses ; and the most of the balance has been legitimately expended in paying for right of way, grading and engineering, all of which may be made available in the further prosecution of the work. I may also state further, and with equal frankness, that in my opinion it will be quite fortunate for the Railway Company, if it shall bo found that the contract has fallen into the hands of Mr McG-reevy, whosename, reputation and acknowledged financial ability, will undoubtedly prove to be a source of great additional strength to the Enterprise. The fact that Mr McGreevy, has already assumed the contract, would seem to indicate that he feels entire confi- dence in his ability to carry out, either the present contract, or such a modification thereof as the company may consis- tently sanction ; and therefore, while in the one case you have had American Contractors, whose sympathies, and interests were very naturally quite foreign to those of your own Government and people ; and whose principal object as they have already demonstrated, v'^as to make as much money out of the contract as possible, and take it with them out of the Province ; in the other case, you will have an entirely responsible Canadian Contractor, whose sym- pathies and interests will necessarily be in full accord with your own Grovernment and people ; and whose profits, if he should be so fortunate as to realize any from the con- tract, will but add so much to the wealth of the City and Province of Quebec. It has for a long time been quite apparent, that, not only the Railway Company, but also the Grovernment and people of Canada, were becoming more and more dissa- tisfied with the great want of energy and financial strength manifested by these American Contractors, in the prosecu- tion of the work ; and I would therefore expect that a change of this kind, at the present time, w^ould be regarded with great favor, by all parties interested in a speedy re-, sumption of work, and an early completion of the road. '* .T/ T APPENDIX N° 4. Letters front the President, while in Europe, to the Chief Engineer. % Extract of letter dated, Biriiam Woods, Dunheld, G-ENERAL S. Seymour, Perthshire, Quebec, Scotland, Canada. 26th July, 1874. My dear General, I received a short note some time ag;o from you, report- ing a continuation of the discussion at Quebec, as to the party who were to embark their money, and take chances in the construction of the Railway. From all I can learn of investments in England, there appear to be so many favorable opportunities of placing money any where and every where, and at all rates of interest, that it will be very difficult to engage any Capitalists in our favour, unless we bait very high ; our security is a Railway which will have to be completed hereafter out of its income, and some lands of no real value, except for its timber, which is not yet in our possession. The Railway in the first instance will have to be built out of the funds of our Contractor and his two Allies the Province and the City of Quebec, and if any or all of these interests mistrust each other, then we shall stick. There is of course no object to be gained by Mr. McGreevy exhausting his means, and so losing the advan- tage of being a rich man, as he will only place himself at 1 : 2 APPENDIX No. 4. the mercy of a public who have already shown the estimar tion they place on such services as those of Mr. Russell. This market is full of Canadian securities, I note, the Grand Trunk offer $300,000 permanent five per cent at A Quebec party also want .£200,000, ill 00,000 cash to enable them to ship butchers meat to England, which they state can be purchased at a Canadian Port for $0, and shipped for 1 penny per lb. to Liverpool, viz. : 4d. per lb., they wanted me to be a party to this concern, but I de- clined because butchers meat of first quality costs now in Quebec and Montreal $10 the cwt. and I do not know why <£100,0u0 is wanted. jGSOOO worth of meat shipped to Liverpool and sold for cash on its arrival could be all done on ordinary bank credit of sixty days. I mention this scheme as it is one of Mr. Robertson's to benefit the Townships; and illustrates what a parcel of fools Canadians think the English to be, totally forgetting that the English Commissariat know what has been paid for beef to be issued to the troops in Canada for the last, fifty years." Yours faithfully, (Signed,) W. RHODES. 77ie President to the Chief Engineer. Extract of letter dated, Kiswick, Westmoreland, England, 4th August, 1874 My dear General, I have your letter relating to you Engineering difficulty with the Contractor, and I note that an expenditure on his part is still progressing. It ought to be our policy to get as much money as possible out of the private funds of the Contractor, spent on the works, and to involve the Govern- ^.< ai % i* " ■ >» ^in t^s i Wit^ i OTnt. ti w APPENDIX No. 4. J. ment both in the management, as well as in the construc- tion of the road. I am of opinion that by next session, the Grovernmont will have a new Railway policy similar to that of India, viz. : to build our Railways out of funds raised from their own Government sources, and construct first the lines, that oiFer every prospect of paying something considerable towards working expenses. As we are working, our Contractor intends to build an inferior line in the first place, use up our rails in ballasting, and h^ave us to contend with a series of financial difficul- ties, caused by our acceptance of a work, which will require large annual repairs for many years, before it may be considered a first class road, and the construction account closed. If Mr. McGrreevy sells his Bonds well, he will make a road in proportion to his profits, but as I notice such Rail- way securities as Pa. Central are sold here at 46 ($501 and will at that pay eleven per cent interest, I do not think his prospect of selling Railway Bonds good ; and I dont believe he has made any but very moderate financial arrangements in England. Consequently, Mr. McGreevy may contemplate the necessity of passing all kinds of infe- rior work in satisfaction of his contract. I have no letters from Mr. McGrreevy requesting me to call upon the so called London Agents, and as I have no business in London of my own, I do not propose to go to Town. If Mr. McGrreevy can be induced to make a good show of work this Autumn a great point w^ill be gained." .... } Yours faithfully, (Signed,) W. RHODES. APPENDIX Is ' 5. Letter from the Chief EjigiJieer to the Secrettwy, trans- mitting " Historieal Review of the Government Stanelard, " Si NORTH SHORE RAILWAY. OFFICE THE OF ENGINEER IN CHIEF, Quoboc, April 12th, 1875 Mr. Secretary, You will please find herewith, thirty printed copies of of a " Historical Review of the Government Standard " which I have recently prepared for the use of the Com- pany. It was my intention that this document should be placed beiore the IJoard of Directors, at its last monthly meeting held on the 8th instant ; and previous to my letter of the 7th instant, in which I request to be relieved from the further performance of the duties of Acting Chief Engineer ; but the delay in printing prevented this from being done. I would therefore respectfully request that copies of it be sent to the different members of the Board,and also to the Provincial Government, and. the City Council of Quebec, in order that some intelligent and decisive action may be taken upon the subject at the next meeting of the Board. Assuming that the conclusions arrived at in this docu ment are based upon facts, and sound reasoning, as I believe they are, it would seem to be clearly the duty, APPENDIX No. 5. as well as the interest of the Company, to urge upon the Grovernmont the justice and expediency of an imm(»diate abandonment of the most, if not all of the foolish and unreasonable requirements of their Engineer, as embo- died in the present " Standard ;" and that the Company and the Contractor be allowed to prosecute the v.ork in future, very much upon the basis that it has been prose- cuted in the past, or before the advent of this Grovernment Enj2:ineer. If the present Grovernment is realy friendly to the road, as I believe it to be, I do not see how it can consistently persist in heaping additional and unnecessary burdens upon the Company and the Contractor, at this most critical period in the history of the Enterprisi% when, if reports from abroad are true, there seems to be very little if any hope of obtaining money from that quarter, to carry on the work upon any basis whatever ; and when, therefore, by insisting upon the full '' pound of ffesh'' the Government stands in very great danger of losing its entire debt ; or rather of defeating the object which it originally had in view by granting aid to the road Inasmuch as the enclosed document is probably the last communication of any considerable length or impor- tance, that I shall have the honor of placing before the Board of Directors, upon this or any other subject while I .remain the Actitisj^ Chief Erig'ineer of the road, I desire to state, tnat in the future I shall rely with entire confidence upon it, in connection with previous reports v^'hich I have presented to the Board upon this subject, lor a full and complete vindication of my pust administration of the office of Chief Engineer of the road; and also for the pur- pose of demonstrating the entire consistency of my views, as expressed at different times, respecting the require- ments of the contract, and the character or class of road provided for therein, and contem;)lated by all paities con- nected therewith, from the date of its first inception, until the present time. These views will be found expressed : 1st. In a printed " Report to the new Boad of Directors," dated May 28, 187d, in which allusion is made to several newspaper articles derogatory to ihe character of the road, as well as to my character as Chief Engineer of the road, And I claim that, but for these " newspaper articles *' (which, as was afterwards admitted by their instigators, APPENDIX No. 5. 8 ■I- were published merely, to use their own words " the object bring to kill Cauchon and render his election im- possible ") the question with reference to the future cliar- acter of the road, which has given rise to so much contro- versy and trouble ; and which has finally culminated in the present extraordinary " Government Standard, " would never have been raised 2nd. In a pamphlet containing " Opinions of several Engineers respecting the specifications, 1873." 3rd. In a pamphlet containing " Engineers Reports on location," dated Oct. 10, 1872 ; tSept. 11, 1873 ; and Oct. 9, lJi73. 4th. In a printed " Report of the Chief Engineer upon the Quebec Railway aid Act of li74," dated Feb. 5, 1874. 5th. In a pamphlet containing, " Views of the Engineer in Chief respecting his powers, duties and responsibilities," dated July 16, 1874. 6th. In a pamphlet containing " Views of the Chief Engi- neer respecting his powers under the contract to change the line, grades and plans, during construction," dated January 30, 1875. 7th. In a " Report of the Chief Engineer upon the Situ- ation," with seven appendices, dated March 4, 1875. 8th. In a printed " Historical Review of the Grovern- ment Standard, by the Engineer in Chief," (now transmit- ted,) dated April 6, 1875. A reference to the above documents will show, that my own views as to the clearly expressed requirements, of the contract ; and the character or class of road originally con- templated, and now being executed under it, are now and always have been in full accord with the views of Mr. "Walter Shanly, and other practical Railway men, both in this Country, and in the United-States, upon the same sub- jects. While at the same time it is equally manifest that these .views differ in some important particulars, from the views entertained by another class of Engineers, " whose financial experiences^ (^as stated by Mr. Shanly,) have been wholly in iovernment pastures^ It remains therefore for the Railway Company, the Provincial Government, and the City of Quebec, to decide as to which of these theories they will adhere in their future policy respecting this road. To my own mind it is quite clear, that if the theory 4 APPEP^DIX No. 5. which 1 have always advocated had been strictly adhered to, the road would be now in a much more advanced con- dition than it is ; and that the prospects of its speedy com- pletion would be much more promising than they now are. While on the other hand, it is equally clear, that if this theory is not adopted and fully adhered to, it is very questionable whether, under its present organization, the road will ever be built at all. I have the honor to remain, Mr. Secretary, Your obt. servt. (Signed), S. SEYMOUR, Chief Engineer* A. H. Verket, Esq., Secretary N. S. R. Co., Quebec. Il