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Id D 32X 1 2 3 1 2 3 4 5 6 j?-*i-tiL:;— •■-■-- ■ ■r--«*Mf ^ ''"f*^'^^' '"m. -,J '■ '^''-■' '■'■'=*'- ? i I C O » 3 a B 3 5" 3 C 3 IT as s j.;-*->»i.-sw<4«»»*ai'-r*' :.,^:aifea mr«w wi »*f »>> .*» ! » «» « » » »'; - SS-'i*-''^- tt^^ -'W^ ^i w io *"^ """* ''' f^' n M i ?^»*ilw>f4f>4iMK*«w4liMtfiHv* 1 ['■1 ■ -. . \^ : ■•, ANALYSIS Of the Gniiid Trmik A irialgaination agreement with the Buffalo and Lake Huron Company eonverted by IJill into an Act if Piirliuiucnl, sliewirijf its injurious results under ilie following He.idings. Isit. The iin'!etion (unauthorized under the agreement) deprives the seven Canadian Mnnioipalities (as Stockholders) of representation at such meetings, owmgto the distance, time re'iuired and expence necessarily incurred in iravellingto England, and leaves the Board of Directors and nominees of the two Companies at the control of the Grand Trunk Company. This fonrlli section if even authorized iiy the Mgreemeni is defective in this, that no provision is made in il whereby Canadian Municipalities as Share- holders, may be represented or vote by proxy al such meetings, which should be regarded by the Legislature as im unansweiable objection to the section, and is inconsistent wiih the terms of the agreement as therein expressed. The 5th and 6th Sections of the Act are also wholly unauthorized by and inconsis- tent with the agreement. 'I'hey repeal the sections of the Buffalo and Lake Huron Company's Act which empower meetings of JJirectors and Shareholders to be held in Canada only. And, The 6th section of the bill empowers the reduction of the number of the Bufialo and Lake Huron Company's IHrtdors to 3 individuals, and is not only imauthorized by the agreement but objectionable and inconsistent with the proper exercise of the privilege con- tained in the 6th clause of the agreement, by which clause the Board of BuHalo and Lake Huron Company's Directi rs, v, htm reduced to three persons, imist nominate two of themselves as a CommiUc(^ to conduct the joint undertaking with the Grand Trunk Company. The substance of those 5th and 6th sections of bill is not embraced in the ageement between the Companies, effects a total change in the future constitution of the Board of Directors and the rights and powers of the Stockholders, and far exceeds the petition and preamble of the Bill, which specially defines its object to be the Parliamentary confirma- tion of the agreement between the two Companies. Tlic (irsi sc^iiiMi of llic Hill cniu'Is lliiit every clause ofllic Offiremcnl sliall liiive ilip same loree and elleel as ifsaiil clause was eiiibiidied in llie Act. 'riie iirsi c-laiise of llie aiiiccini'lil in llie Seliediile, l ,luly, IHIM, and is illi'i;al and piejiidicial to ihu inteii'sis of the lioiidlioldeis and Ci'<'dilias ul the iwo Coiiipmies, who have tin? first claim on siieli ni'l reeei|jis, and whose coiiseiit to such division of ree<'ipts has not heen proved III Parliament to JiistilV leifislation, injuriously aHeeliny; tlic'r jieciiniarv inlerests. The I'iVuids pcniiiltcl if iiiil cniitcmpln'iMl liy this Acl. The .'!rd <'hin~e or Knaetment : deslroys the li'i,'al and e(iuilahle ri^ht^: i>f tin; liundliiilder of Ihi- MnHalo a' d l/il\e 1 1 iiron Company for the heiielil of the (iraiid Trunk (^'ompaiiy, and liial loo v. ithoiil Ins eon-eiit or tjivini,' him any security that t he C.'uiiipniiii'x ltd I'lCri/jla, a;^ainsl v.iiich he has the first claim, will ever he paid to the lioiid-liolder. Il deslroys the lei,';\| proleelioli which the Acl iiK-orporalini,' the (.;iimpiiiy and indiiCMiiL,' him to ailvaiicf- his money to them alforded hiiii niitil it is aholislied liy this ennctinenl. It renders the iioiidh.ihleis of I lie Hiillahi road Company iitlerly lielple>s against that C(ai.paMy, wlio-i:- exisleiiiv is virtually destroyed and whose powers hy ;his Act aru vested in Iwo nominees for every purpose ol the miderlakin!,'. Il convert-^ llie I'lOiidiioUler ililo llie iii-;eeme po>ilinn ol a Sliarelicilder, willioiil the repie,>eiitalive or voting power of the lalter. Il supercedes i.nd places in ahevanci" the MondliDlder's -ecnrily on the road, while the first clause enahh-s ihi' ('oinpany to raise 53()t,()():> on ii, and the llli clause al/sorhs the road's proportion of net recei|)ts iis securiiy for furl her advances lo the two companies jointly. Il renders the Legislature ridiiailous in the eyes of the I'rovinee and of Kngdand hy the passage of an Ac! sidiversivc in ell'ect of all Acts passed l,>y tlieiii incorporating com- panies for company piii poses. Il makes ihe'tiovernmenl the pLM-pctrators of a fraud hy advancing the inlercsis of two companies to the prein('ice of the first legal and ei|iiilahli' claimants on the com- panies properly, and willioiit giving the creditor any future security for jjaymenl of his claim. The nil Clause or iMiaclnieiil. — This clause completely deslroys the prohahility or possihilily of the Buli'alo and Lake Huron Di'hcniure holders ever heing paid (•ilher interesl oV principal of their duht for ■2\ years, in as much as it authorizes a coiiimitlce of the Uvoci)inpanies, composed oftwonomiiu es IVoiii each Hoard, lo raise unlimited capilal on the security of the ni'lt receipts of ihe two railways and thai privilege extends during 21 years. Il enahles the commiltec of f(air immediately after the passage of this .\ct lo mort- gage the future joint and iinineumhered net receii)ts of the two roads for 21 years for as many millions as they can ohtain on such security and for their joint or se|)arale pur|)oses. It is to all intents and purposes a most important am;'ndnient to the Crand Trunk and Hull'alo and Lake Mmoii Compinies' Ads of liieorpiralion hy eiiahling them to increase their share cajiilal to an imliniited extent. Hy deiegaling, as it ilo.js, the Coin|):!iiy's powers and llio-^e ol the Directors inlo the hands of two iKaiiinces without consent ol Parliament or of the Company, and hy con- ferring on ihem the horrowing power of the Company to lli(> extent ol millions for their joint railway piirposi's aniT on the securiiy "f the joint nett receipts of the Iwo Com- V T le power conferred hy this clause i; ndiMS the presen t Hondholdi ind Stock holders in Kngland and over lOurope iilte hel|)le 'iiinsl the future moilijagces of ihe nelt the K< i-eipts ol the tw< \h the Hiindlioklcr.- and ihe Mi'ssrs. Harii It's, m 111 this, thill, a^ illion and an half is secured lai the rolling slock, iirity thev ihe Moiidhohlers, unless they so Id hoii .Shareholders of Ihe Iwo (I the Province lo the extent of 12 millions of pounds hter Comp;i It empowers llie Grand Trunk Company, conjoinlly wiili the Hnfliilo and Lake Huron Company, lo raise i nillions o i"ceipr:'. a Iforr f pounds on the security which the joint nett Ii niiikcs ilii' (iovcriiiiicni ol' the day the perpi.'trators of ii fraud ngninsi the Provinco ill lliis, lint liy (•iiipowcriiii; llii' Iwo Coiiipaiiii-s Id rum- iiionry en tlii'ir ni-lt rccMipIs, the hope iiDil pi)s-ill)ilily nf any iiiliMi'sl on llic I'rovinfiiil Lien licini; cvit rt'ceivcd by the Province, is conipielely (h'slroycd. It (hies not N|)ceil'y how the tnoncy is to l)e applied when lioirowed and the power IjeiuL,' once i;rantcd Knablcs I'relerentiiii (,'reditors of the (irand Trnnk Company iiinixers, &i'., to olilain ii por ion of the money raised instead of ils lieini; applied to the work ini,' uf the two roads. It renders amali,Mination of all thi- ro;ids in the Province in tli(! (irand TrMiik Com- pany, perpi'elly easy liy the coniliination of ils irdlucnlial sharnholders and da; precedent alloriled liy this clause and Act of I'arliiimenl. 'J"he (ill) clause (!slalif lies tht^ tact of the ainMiu;amalion ol' die J i;onipanies and their interests since die 1st July, IHGl, in the Grand Tninl; Railway Cj)in|)any, and thai the road is now (;ontroled by a Coimiiillee of I individuals two from each luiard. The alh clause enacts that the (irand 'rruid< Kailway Company may within C years for i;(J0O,0IU) buy up die liulfalo and Lake Huron Kailroad Share cipital of £1,23(),()00 to be paid either in cash or stock of ihe Grand Trunk Railway Company and the pr per cent for workiiiLj expenses, rent i:e., it leaves the nett receipt of the road one million of dollars. By this afjrement and Act the Company by meaiiy of the Comiiiilte of four persons can raise Iwo millions sterling' on till- security of those nelt receipt to the prejudice of lioiindlioldeis slirreholders the Provincial Lin, and the creditors of the two Companies of all kinds. TIk! [KM'iiiiiiu y injury tn tlif Provincial lleviMuie from this Act. The Provincial R<>venue so far as repayments to the Municipal Loan Fund by the nine townships holdins< slock in the Buli'alo road extends, is injuriously alleclcid in this way, that $100,000 yearly is payable to the Fund by the Municipality, and this Act of I'arliainent ratifies an ai,'reenient which destroys the rights, powers, interest and |)ropcrty l.oia i>y iliu Miiiiicl|iidity in ibe Hond 'o the extent of one inillioii of dollurs, and therefore the .Municipality may demand lo l)e released by Government of their debentures for the million l)orrowed from the Loan Fund, and also the future yearly ])ayment to Govern- ment of '$100,000 annually, for interest and Sinking Fund on their" respective loans. As a summary of the injury elfecled by this amalgamation agreemeul and Act of Parliament, il may with truth be said that the Municipalities lose one 'nillion and a quarter of dollars, the Provincial Revenue $GO,000 anniiaily from the Municipalities, and 'f(,()0,000 annually payable in England for interest on the Provincial Debentures for Loan Fund purposes. The Province having by Statute waived its claim for interest on the Provincial Lien of three millions and one half sterling, in favor of (irst and second bondholders of the Grand Trunk Company, luitil that road pays six per cent, to the stockholders, by this Act is completely deprived of any claim hereafter for interest on its lien. The future annual loss for interest on the lien is $iO(),OOt), which with tin; arrears of interest amounting to two inillion.s of dollars, is completely losl by ihe power given to raise money on the nett receipts of iIk; two roads. TIip political injury cHcctiMl hy this Act. The Government l;y supporting by their voles die passage of this ,\ct, allow the Muni- cipaliti(^s, whose intcresis as llieir debtors they are specially liound lo protect, to be plundered by the Grand Trunk ('ornpany. They establish as a precedent, that an agreement signed by the Presidents of two Companies, shall sell ihe share capital of ,'rcenu'nl. This Hill, or u>;reemail convirUd into a Bill, insjlend oi being culled a I'rivale Hill, if), in reality, a Pulilie liill. From the iiuigniiude of public and peeiiniaiy intercht!* in- volved by its Icrins, from IIk" spoliaiion of ihose interests and oI Provincial revenue in future which it ensures, and from the precedent its passage all'ords for the amalgamation of all the roads in the Province who are directly indebted to the Government for advances made to them — as in the case of the Great Western — or for advances lo those roads by various Municipalities, who iiave obtained the money from the I'rovincial Municipal Loan Fund. In fact, it is a nioni y Hill, ensuring the non-|)ayment of interest on sixty millions of dollars invested in the Grand Trunk Road by ilu! Province and th<^ English shareholders and bondholders of tlint road conjointly. It makes the Government, as supporters of the Bill, accessory to (if not protnovants of) its evil consequences. It deprives the Bondholders of the two Railways of any equitable relief (for Ihe non-payment of overdue or future interest on their bonds) by the appointment of a receiver over the road thn. ugh the Court of Chancery, because the njorlgngei^ of the nett receipts of the road would take precedence of a receiver so lur iis his claim on netl receipts were affected. It renders utterly useless all future legal or equitable proceedings by the Bond- holders, Shareholders or the Province to enforce payment of their overdue interest from the Companies or either of them. The result of a mortgage of the netl receipts of the roads would be lo force the Preference Bondholders of the two Companies of all clas.ses, to take preference stock for the overdue! interest on their Bonds under their bond security, would render the Bond security a nullity to all intents and purposes, and in fine convert the Bondholder into a Stockholder, as Ihe netl receipts being mortgaged the Bondholder would be utterly helpless to enforce from the Company his overdue interest without first selling Ihe road r. » Iwo n ^i tk e J" .ou rt,4^, 4 J|ltt mit i t>- • ^~», ,.^^ .,. » — ...^^.^^ .,-p~^. - . ..,^0^*^^ > > 1 he fraud on tlie Municipalities and the Bondholders of the Bunalo and Lake Huron Road is manifest in this, thai when the power of raising money on its nett receipts is exercised by the Grand Trunk Company, or the Committee of four Directors as own- ers of the road for. twenty- one years to come, the latter Company have no object in purchasing the Share Capital of the Bufl'alo Company, and therefore the sixth clause gjviiig the privilege of such purchase within six years is nugatory and deceptive, (and OHets no security to Shareholders or Bondholders of the Buffalo Company). It is also clear that unless the nett receipts of that road were hereafter more than suliicient Ui pay ihe uitere.^1) on the fjuur million dollars of liabiim«a of the Buffalo Road (as well iS'tirerlHtefett da the armjatn'ntort^vifad^^y^^-^^trr'-^VM^- f ru ni i U ti iiip a ii ji u r r rt i fc iitit - ^-»-t- receipls of the Buffalo Road, the Grand Trunk Company being in full possession of the Road would be injured by advancing in cash or stock £600,U00f()r the Share Capital ofihe Buffalo Road. ' It is also a manifest fraud on the holders of Debentures on Ihe Buffalo Road, thai the Act,'while' it suspends 'all liabilities on ihat Road, makes no provision for their payment as intended by the 12th Clause of the agreement. V Vi'iif / i