IMAGE EVALUATION TEST TARGEr (MT-3) 1.0 1.1 lii]21 125 ■tt f&i 122 2.0 14.0 11-25 i 1.4 U4 HiotograiJiic Sdences CorpcB^atiQn ^^' 4^^ \ ■^ >. 4sS^^ ^ 23 WKT MAM STRUT WIBfm,N.Y. i4sao (7U)S73-4S03 '^ CIHM/ICMH Microfiche Series. CIHIVI/iCIVIH Collection de microfiches. Canadtain Inatltuta for Historical MIcruraproductlona / InatHut Canadian da microraproductlona hiitoriquas r<^ Technical and Bibliographic Notaa/Notaa tachnii|uaa at bibliographiquaa Tha Instituta haa attamptad to obtain tha baat original copy avaiiabia for filming. Faaturaa of thia copy which may ba bibliographicaily uniqua, which may altar any of tha imagaa in tha raproduction, or which may aignificantly changa tha uauai mathod of filming, ara chackad balow. D D D D D Coiourad covera/ Couvartura da coulaur I I Covara damagad/ Couvartura andommagte Covara raatorad and/or iaminatad/ Couvartura raataurte at/ou pallicuite Covar titia miaaing/ La titra da couvartura manqua Coiourad mapa/ Cartaa gAographiquaa an coulaur □ Coiourad inic (i.a. othar than biua or blaclr)/ Encra da coulaur (i.a. autra qua blaua ou noira) r I Coiourad plataa and/or iiluatratlona/ Planchaa at/ou iiluatratlona an coulaur Bound with othar matarial/ RalM avac d'autraa documanta Tight binding may cauaa ahadowa or diatortion along Intarior margin/ La re llura aarrte paut cauaar da i'ombra ou da la diatortion la long da la marga intiriaura Bianic iaavaa addad during raatoration may appaar within tha taxt. Whanavar potaibia, thaaa hava baan omittad from filming/ II aa paut qua cartalnaa pagaa blanchaa ajoutAaa iora d'una .^aatauration apparaiasant dana la taxta, mala, iorsqua cala 4talt poaalbia, caa pagaa n'ont paa 4t« filmiaa. Additional commanta:/ Commantalrs.^ aupplAmantairaa: L'Inatitut a microfilm* la malila»r axamplaira qu'll iui a 4tA poaalbia da aa procurer. Laa ditaila da cat axamplaira qui aont paut-Atra uniquaa du point da vua bibllographiqua. qui pauvant modifie. una imaga raprodulta. ou qui pauvent axigar una modification dana la mAthoda normala da f iimaga aont indiqute cl-daaaoua. □ Coiourad pagaa/ Pagaa D Pagaa da coulaur Pagaa damagad/ Pagaa andommagAaa Pagaa raatorad and/oi Pagaa raataurAaa at/ou paiiiculiaa Pagaa diacolourad, atalnad or foxai Pagaa dAcolortea, tachctiaa ou piqutea Pagaa datachad/ Pagaa d4tach4«i Showthrough> Tranaparanca Quality of prir Qualit* inAgala da i'impraaaion includaa aupplamantary matarii Comprand du material auppMmantaIra Only aditlon avallabia/ Saula idltlon diaponibia I — I Pagaa damagad/ pn Pagaa raatorad and/or iaminatad/ r~1 Pagaa diacolourad, atalnad or foxad/ r~n Pagaa datachad/ rri Showthrough/ rn Quality of print variaa/ I I includaa aupplamantary material/ r~| Only aditlon available/ Pagaa wholly or partially obacured by errata aiipa, tiaauae, etc., have been refiimed to enaure the beat poaaible image/ Lea pagaa totalement ou partialiement obacurclea par un feulllet d'errata, una paiure, etc., ont 4ti fiimiea A nouveau da fapon A obtenir la mellleure imaga poaaible. 1 t C b t a Q f 8 O T T : b« ril r« m Thia item la filmed at the reduction ratio checked below/ Ce document eat fllm 1858. '^ ■y^f if WH« ' iPPiPI ^i '\ r '' i I M ,^ ■? / n j :Wf'.. i »> #i9-*J.* ■*•* »!.'•*,•*■.■.»«■ ..^'ll|.^Ct--t« 1 '■ 1 • '■■ k \ i' I . I ..j^irfMj;-? fij!e''H!r/ii; *■ ,w; ,'? " i ov ^^ > '-nHi (1 A /, i^'0'r#/.j .1.1 H w ,»iv2f til5<^ iv-i;i.' Jtsil :^'if^j i^ir^yiu,'^ arrr ta y:,5fm,ri ■wi.i ,^fHi -^' It ■ ■ ■p CANADA NOETH-WEST RAILWAY. Toronto, 26th December, 1857. To the Wardens of the Counties of Wellington ^ Bruce. Gentlemen, Yoii have always looked upon the establishment of the projected North West Railway of Canada as a thing much to be de- sired by the Counties you represent, and you have always been inclined to entertain any reasonable suggestions which may have in view its early initiation. The following remarks are offered in all candour, and with due respect. Circumstan- ces hereafter explained appear in my mind to call for them ; and I trust, as they are in ref- erence to a subject of so much importance to the localities named, they may not be consi- dered unworthy of your attention. It may seem madness on my part to even dream of the commencement of a work re- quiring an outlay of many hundred thousand Pounds, at this period of extreme and world- wide financial depression ; but inasmuch as ^Pl^ our Charter requires that before many months elapse, the work must be commejiced, I have no hesitation in submitting- tJie followirg ob- servations and suc^gostions to your considera- tion ; and I do so with strong? hopes that, al- though they may possibly be viewed by some people as untimely, as well as chimerical, they will have the elfoct of inducing such ac- tion as may keep the charter valid, and ulti- mately lead to the realization of the work in question. It would be the height of folly to place in the money market, at the present moment, any project, however hopeful of good results to those who dispose of money as merchan- dize ; but I am sanguine in the belief that the time is not very remote when financial affairs will gradually be restored to their usual con- dition ; and if tlie enterprise is not to be total- ly abandoned, which I am quite sure neither yourselves nor the communities it is destined to benefit and seiTe for all time to come, are willing to consent to, it is necessary as already stated to comply with the requiiements of the Statute. This is doubtless, too, a proper sea- son, when the frenzy of speculation is entire- ly subsided, to view calmly the project in all its aspects, to carefully digest any likely finan- cial scheme which may offer, and if one be found feasible, to complete all arrangements required to be made in Canada in order that we maybe ready to take advantage of the earliest and best opportunity of negociating capital elsewhere. It may be taken for granted that the great- est utility of a Railway to the County of Brace would be in giving it an easy outlet to market ■^HH^^sn , at all seasons. There arc without doubt many other benefits to be looked for as inseparable fjom the establishment of one of these modern highways throuj^h the Countiy, but that which I have named may, I think, be considered as meeting tlie leadin«j^ want of a County purely Agricultural, and separated from all outside markets and all linos of traffic by distance and roads of the worst description. I respectfully submit, then, that the comple- tion of the Railway through to the waters of Lake Huron, although, no doubt, exceedingly desirable, is not so much needed at the present time as simply a Railway connection between the cbuntry referred to and existing lines of traffic to the South. I propose, therefore, in the following re- marks, to consider only the construction of that section of the whole line lying between some point within the County, let us say in the central To wash ip of Greenock, and the Southern extremity at Guelph, postponing the farther extension to Lake Huron until a more opportune season. In the first place then, we should ascertain the gross amount of Capital likely to be want- ed for the undertaking, and in doing so it would neither be prudent nor honest to have estimates presented under-rating the probable cost, as has been too often done in the natural anxiety to secure the construction of similar, works. Railways cannot be made on a small scale and by degrees enlarged to suit circum- stances : in the earliest stages of ordinary roads a bridle path through the woods may suffice — in the infancy of water transportation ' 6 If ^ a skiH'or a battcanx may answer every pur- pose — but the essential and most costly parts of Hallways have to be of fail and perfect di- mensions from the begiiniing, and at mini- mum ccst they require a very lar<»;e expendi- ture. Under estimates only kvid at an early day to financial embarrassments, when temporary relief is sought by a resort to forced loans at a large discount, or some other financial opera- tion, which only defers the trouble to a period when it returns with a doubk^load. Another fruitful source of e^'il which may here be men- tioned arises from the makintr of Contracts payable in Stock or Bonds ; these must either be hypothecated or disposed of by the Con- tractors at a ruinous discount ; and as the Contracts are always taken at increased prices, in order to leave an ample margin for the dis- counts, these heavy losses in reality fill upon the Company ; and in other respects the Com- pany suffers from this cause, as its securities generally are depreciated in value. The only true way to avoid these misfor- tunes, is to estimate the Capital required by the actual cost of similar undertakings, and guided by the experience of the past, to pro- vide ample means for making every payment in Cash, as the work goes on ; without which provision, and a certain prospect of a fair re- turn to the proprietors, the enterprise becomes a burden to the unfortunate individuals who have been induced to embark their Capital on. too flattering representations. I have before me a voluminous Report, by the Railroad Commissioners of the State of Now York, with claborale tabulations, and de- ductions from the Reports of all the Railroad Corporations of that State ; the information it contains has been collected from every au- thentic source, with jE^reat industry and care, and I find as a result of the deductions, that the avera«j^e cost of thirty-four different Rail- roads, costing? in the aggregate, $132,753,160, is ascertained to be $50,792, 88c. per mile. Several Canadian Railways have cost more per mile than that sum ; and most of them arc so much embarrassed from the evils above referred to, and other causes, that scarcely one will ultimately be at all under that average, although *hey were originally estimated at a low rate. Such being the case, I do not think it would be safe to estimate the cost of the present undertaking, at less than jC 10,000 per mile, but I am confident in the belief, that if the money was raised in accordance with the financial scheme I am about to propose, and the expenditure made with proper watchful- ness, a Capital based on the rate of £10,000, per mile, would be a sufficient provision for all outlays, and to start the Road in profitable operation. , Assuming the length of the line to be 70 miles, the capital to be found then, is £700,- 000 ; and I apprehend that a lesser provision would not in the end lead to very satisfactory results. It is quite evident that we must look to England, the great centre of wealth, for the means to accomplish this undertaking, as the locality could not of itself furnish but a fraction of the amount ; and before we need apply for ; S the money with any reasonable liojx* of suc- cess, we must be prepared to show what re- turn can be depended on, or what security you can offer for its use. This leads us to consid- er what prospects there are of revenue from the road itself when in operation. From my own knowledge of the Country to be served by the Railroad, and the rate of pro- gress it is making towards becoming a rich Agricultural district, I cannot help being con- vinced that in the space of five yejirs from the present time it will yield a traffic not inferior to that at present given to the Northern Rail- way which runs from Toronto to the County of Simcoe. With that County I am quite fa- miliar. It embraces wide areas of land unoc- cupied and unfitted for cultivation ; while in Brace the soil is of very superior quality, and land unfit for cultivation is not generally met with. From these circumstances, and the energy and the number of the settlers, I have no doubt the cultivated area in Bruce will, in less than five years, greatly exceed that now found in the County of Simcoe. When we consider the additional impetus which would be given to that section of the Country by the construction of the intended Railway, it would be quite fair, I think, to es- timate the local earnings five years hence from the North West Line as not inferior to the lo- cal earnings of the Northern Line during the past year, which, let it be remembered, has been one of unusual depression for all Rail- ways on the Continent. I havr obtained the Traffic returns of the Northern Railway for the ten months ending i) on the first of Novoriibcr last, and I find that the jrross earnin«i[s nvcrnjife .1*6,420 per month during that period, and wholly from local bu- siness ; at this rate the earnings for twelve months will be J;77,010, and from this sum the expenses of operatinjif the road, mainten- ance of road, repairs of all kinds and manage- ment have to be deducted: these are shown to amount to a total sum of jt'46,000, which, I find, is slisjfhtly in excess of the average per centage which the total expenses bear to the total earnings of all the Railways in the State of New York ; a net revenue is thus left of jt'3 1,000, which represents the interest on a capital of .£517,000 at six per cent per annum, and only c£ 11,000 less than the interest on the gross capital required for the contemplated line under discussion. The law which governs the utility of public undertakings of this kind is, that the benefits accming therefrom must equal or exceed the interest on the capital expended. The benefits resulting from any particular work mav cither be direct, indirect, or a mixture of both. By direct benefits is understood the ac- tual net revenue which the undertaking will yield when in operation ; and indirect bene- fits are those which form no portion of the i .- venue, such as the enhancement in value of all the property within the influence of the work, the facility of transport which it affords, and the general incitement which it is instru- mental in giving to all kinds of productive in- dustry and social advancement. It is of very common occurrence for Rail- ways, however judiciously established, not to yield at first a revenue sufficient to meet the mm 10 I whole interest on their cost, and yet few would have the hardiliood to declare them as useless, and their constmction in all these cases a blunder ; experience has shown that if the di- rect benefits for a tinio fall short, the indirect ones are so many, and so manifest, as to g^reatly counterbalance any deficiency in the Revenue. > In the establishment of a Railway in this Couixtry, there are always two distinct parties interested. 1st. The inhabitants of the local- ity who desire it for its uses and advantages. 2nd. The Capitalist who looks for a profitable investment, and who residing out of the Countiy, cannot partake of the indirect bene- fits under the system hitherto adopted ; the latter has in many cases been disappointed, and will consequently be exceedingly chaiy in future investments, while the former has universally been the fortunate party, as the ocal advantages are certain to be realized, aad cannot under any circumstances be taken away. The great problem is to show how the interests of the Capitalist can be protected, and how the burdens may be shared, during the infancy of the undertaking, with the party who is certain to be benefitted ; and until the earnings of the work are sufficient to afford relief. I have already endeavored to show that there is every reasonable hope of the traf- fic on the North West Railway, yielding in'five or six years from now, about six per cent, on the capital, but this is no inducement to sink £700,000 to be unproductive during that period by the party who looks for no benefit whatever, beyond good interest for the money invested. iHii !.V lU' <(' i: J4 ■'f t \;'- ■ 11 Undoubted security must be offered to the capitalist that he will always receive fair in- terest for his money, without which, I am cer- tain, the necessary means cannot be obtained. With these remarks, I may now submit for your approval, the following Scheme : — 1st. It is proposed, that instead of the Muni- cipalities attempting to provide any portion of the Capital, they agree to make good a few years, the interest only. 2nd. The Company to be formed of English Capitalists, who will build, complete, and equip the Railway, equal to the averaga char- acter of similar lines, in Canada, or those of the state of New York, from some point on the Durham Road, within the County of Bmce, West of the River Saugeen, to the Town of Guelph, passing if practicable between the Villages of Fergus and Elora. 3rd. The Capital to be fixed at £700,000. 4th. The Interest on c£700,000, at the rate of six per cent, per annum, to be made up an- nually to the Company, by the Municipalities, until the net revenue of the Road, equals the interest on that sum. 5th. In order to give confidence and un- doubted security to Capitalists embarking in the enterprise, the various Municipalities in- terested, to pass By-Laws, authorizing the is- sue of tA^'^enty-years Debentures, sufficient to provide the interest on the above capital for five years. 6th. The Debentures to be placed in the hands of Trustees, and one fifth of the whole only to be negociated each year, during the five, or as many of them as may be required. ! W •(•JJWII^ imp mmmmm'^-J^-i-u.*i~ji,lfriVVUBi - 12 7tli. No interest, or any money whatever, to be paid the Company, until one year after the works have been fully commenced ; at the expiration of that time the Company to receive the first Instalment of Interest, and annually thereafter, for five years, the remaining in- stalments are to be paid. 8th. The Raihvay to be in operation within three years, and a fair proportion of the work to be executed during each of the first, second and third years. 9th. The first Instalment of Interest not re- quiring to be paid until the end of the first year, the fifth would not in consequence be due until the sixth year, by which time it is expected the road would pay itself; but if the net earnings do not quite come up to the in- terest on capital, when that period has expir- ed, the Municipalities are to make good the deficiency pro rata. 10th. AH net earnings of the Railway, dar- ing the five years, are to be the property of the Municipalities, a moiety of which to be reserved as a fund to make up any possible deficiency in the Revenue, (mentioned in No. 9) after the fifth year, and the balance may be taken to reduce pro rata the proportion of the instalments payable by the several Muni- cipalities, or it may be devoted to the purpose of making gravel roads, leading to the Rail- way, and the reserve fund above mentioned, or such portion of it as may not be required for the purpose for which it is to be reserved can likewise be used in the construction of gravel roads,if the several Municipalities see fit. 11th. In order that the Municipalities may have a thorough knowledge of all the moneys l:J received from operating;: the Rnihvay, as well as to check all payments, they may from the time that the Road is opened, until the net revenue Is equal to the interest on capital, ap- l)oint a Receiver, through whom all earnings will pass to the Treasurer of the Company, and who will keep a cash account of revenue and expenditure, ibr the use and sa.isfaction of the Municipalities. 12th. The amount of interest to be secured to the Compiiny annuallv, bcj^inning one year after the works arc commenced, is £42,000, and this is proposed to be furnished for five years, by the Municipalities, in the following proportions : — Countv of Bruce, - - £16,000 County of Wellington, - 16,000 Township of Howick, ) f, ^^^ Normanby, and others, ^ ' ' TownofGuelph, - - 5,000 £42,000 13th. The punctual payment of these sums by each of the Municipalities, to be secured by the issue of Debentures having twenty years to run, the Debentures not to be nego- ciatedj until wanted, and a moiety of the earnings, as mentioned in No. 10, may be tak- en, if the Municipalities see fit to reduce the number of Debentures used. The following Table will show the amounts required to be raised in each year by each Municipality, less the proportionate deductions, from each sum, after the third year, which the earning of the Road would yield. The figures given in the i»* 14 Table would be sufficient to pay interest, and principal, on the Debentures within Twenty- Years. Name of Amount of Debentures to be isNued each year for five years. Total ol Deb'nt'rs tu be Issued T.ixes to \)e raised to jmy iiitercst on Debentures and sinking fund. Municipality. 1st vear 2nd 3rd 4th l.5lh year year yearjyear 6th and future yrs C'ty ot Uruce C'ty Wel'ngtn T'nship not in Wei. or Bruc* Town Guclph £16,000 16,000 5,000 5,000 S0,00() 80,000 25,000 25,000 1760 !760 550 .550 3i;20 3520 1100 1100 62>S0 52S0 1650 WtQ 7010 7040 2200 2200 NhOO S800 2750 2750 i In explanation of the above Table it may be observed, that although the Debentures would have to be made of a total amount equal to Five Years Interest on iI700,000, yet only one- fifth of the whole number would be wanted annually ; hence the comparatively small amount to be raised by the Municipalities du- ring the first years. I conceive this to be a very good feature of the scheme, as little or no- thing would be required to be raised by Tax- ation until some time after the settlers realized the first beneficial effects of the work. Take, for example, either of the Counties of Bruce or Wellington : during the first year of the pro- gress of the work, nothing would have to be raised, and only j£l760 by each County before the end of the second year. The yearly pay- ments would gradually increase until five were made ; but during the last year of the five, the sums mentioned in the table might be consid- erably reduced, as the earnings of the Road may be taken for that purpose. (See No. 9.) The net earnings of the Road according to the da- ta already furnished may be estimated as fol- lows : f ! f r V 15 For the fourth year, .£23,000 fifth year, 32,000 « £55,000. Producing in all a sum of about ^£55,000, wholly the property of the Municipalities, one half of whicJi may be paid either in reducing the Taxes of each Municipality pro rata, or the constmction of Gravel Roads, the other half being a reserve fund to make up any pos- sible deficiency in the revenue of the Railway, after the fifth year, (as mentioned in No. 10.) In conclusion, I may add, that if the Munici- palities see fit to favor the above scheme, and take such action therein as may seem to be ne- cessary, I do not anticipate much difficulty in inducing capitalists in England to provide the means, and before long set energetically to work. I have weighed the matter very care- fully for some time back, and communicated with men of wealth and sound judgment, whose material aid I hope to secure in due time. As the result of my enquiries and reflections, I am led to the conclusion that there is no better way in which the undertaking can be accomplished so as to give general satisfaction in the end, with less risk to any party in the beginning. The capitalist is certain of six per cent per annum, for the use of his money, with the prospect of more when the revenue from the work increas- es over £42,000 per anwum ; while the Muni- cipalities will secure the establishment of the Railway with all its benefits, and have its con- struction far advanced before they are required to aid the company a single sbilHng. "F^ ?'i . 16 I think the North West Railway may be looked upon as an actual necessity to the fer- tile yet isolated Townships in the interior, in or- der that they may be in a position to cope with other localities better favored with natural out- lets. Its building, in my opinion, is simply a mat- ter of time ; and it would be a cause of regret if the present inhabitants, who have struggled with difficulties as all pioneers have to do, could not, by the means of a good comprehensive policy, bring some of the comforts and conveni- ences of the future within their reach. Their children would lose nothing thereby ; on the other hand I am greatly mistaken if the latter would not be left a much better inheritance, and would have good reason to respect their parents the more, for sound judgment and fore- sight. Believing that these will be found the senti- ments of the intelligent portions of your couniies, I am convinced that they will be rejoiced to learn that no retrograde step will be allowed, and that they will readily sanction any well devised measure your Councils may see fit to adopt, which may have in view the purpose of this communication. I have to request, therefore, that you will bring the matter before your several Municipal councils and induce them to take such fayorame action as its importance may seem to warrant. / have the honor to be, Gimtlemen, ^ Your obedient Servant, SANDFORD FLEMING. hi - .'«^!«| ! I i