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A LETTER FROM THE mimm eidiieek, id the mumi ACCOMPAINED BV * , SOME REASONS WHY IHK RAILWAY COMPANY HAS BEEN' L'NAULE I'O COMPLETE THE ROAD, UNDER EXISTIN(i ARRAN'A(iEMENlS. iSrOVJEMOEH 1-J, IMT.',. <• I •/ ' . i :'^. /i: ■i -^-^n-. I- tiOOll t^^-' -.' \'<: » , •i r .* M: NORTH SHORE RAILWAY. i I Office of the Consulting Engineet?, Quebec, Nov. 12, 1875. ^f Mr. Secret AEY, Inasmuch as you have, at the request of the Provincial Government, been ordered to call a Meeting of the Share- holders of the Company, '' on Monday, the 22nd inst., at noon, " to take into consideration the Resolution adopted by the Board of Directors on the 11th August last, in which, for the reasons therein stated, the Board declare that the [company is " unable to construct the road under existing arrangements ; " and also that " the company are therefore ready to allow the Government to deal with the question in any way they may, in the public interests think proper, making such arrangements with the Contractor a may be found necessary. " 1 therefore beg to place in your bands, for submission to the Shareholders at the comino- Meeting, the following paper which I have hastily pre- pared, in which seme reasons are given, which, I regret to see, are not stated in the resolution of the Board, why so little progress has been made thus far in the construc- tion of the Railway; and also why the Company has found itself " unable to construct the road ftnder existing- arrange- ments " If the views of the case which I have presented, are at 1-? €. NORTH SHORE RAILWAY. all correct ; and sustained by the facts and fij^ures which I have compiled from the documents on file in the oflices of the Company, I shall be somewhat surprised if the Shareholders find that the only cause for the slow and unsatisfactory progress of the Work under the existing Contract, is to be found, as stated in the Ilesolution, in " the present position of the Money Market in Cano'ta, and the strong though unfounded opposition manifested in certain quarters in England to the investment of Money in Canadian Railway Securities, preventing the sale of the bonds of this Raih.vay Company,''^ &c., &c , with all which, the Railway Company, as is very well known, has nothing whatever to do ; for the reason that the existing Contract leaves all these matters entirely in the hands of the Contrcwtor ; a] id allows him a fair, if not a liberal margin, for the risks and losses which he may be called upon to sustain in the nego- tiation of these securities. If I had been consulted by the Board, before it took final action upon the Resolution, I had it in my power to furnish the most indisputablu u\iut;iice vi iis ability , ' to construct the road under the then existing arrangements.'^ provided these arrangements were carried out, in good faith, by all parties. After the Resolution had been passed, however, I did everything in my power to facilitate the negotiations between the Grovernment and the Contractor ; and to bring then together, upon a fair and equitable cash basis, at the earliest possible day, in order that at least a portion of the then existing working season might be made available in the prosecution of the work ; for which I had the most positive assurances from the leading members of the Government, as well as from the Contractor. . CONSULTING KNGlNlilEIl XO HIE iU£CllETAJiy. 5 The terms and conditions of the Contract were fully understood and agreed upon by the parties, on Thursday, the 19th ol August, 1875 ; but instead of promptly closing the Contract, paying up the arrearages for work already done, and ordering the Contractor to proceed vigorously jn the execution of new work, as was well understood by all parties, would be done, the Government at once left the City. The signing of the new Contract for the construction of this road, was thus deferred until the 24th of the following September. And every one supposed that the Govern- ment was then, at least, fully prepared to entire upon its new departure, by cutting the chords with which it had pre- viously held the Contractor firmly bound. But Alas ! No such result was realized. Tho President of the Railway Company urged repeatedly upon the Government the importance of providing iit least for the payment of the salaries of such of its employees as had been discharged from its service ; but he was an- swered by the Honorable Premier, that it was impossible. Upon being reminded that there was a large balance due by the Government to the Eailway Company, under the former Contract, the Premier answered, that however this might be, no further payment w^ould be made by the Government until the new Contract w^as ratified by Par- liament. It will be remembered that during all this time, the Government had, or could have had, the full control of the balance due the Company from the city of Quebec, which at that time, as is shown by the following statement, amounted to 1 145,014 04; and also that the Government I !!! r fdfti i| I 1 .1 II ^1 i '! I i, G NORTH SHORE RAILWAY. itself was ill arr^^ars to the extent of $60,538 80. Making an ftggregate of #211,547 93; which was justly due from the Government and City, for past expenditures upon the road. Notwithstanding all thivS, however, I have no doubt that the Shareholders, at their coming meeting, will arrive at the same conclusions as the Directors have done, (although perhaps for different reasons,) with reference " /o the inability of the Railway Company to Cnnstrvct the Road, tinder existin;^ ammfj^ements. " . • They will of course be informed by the Government, as the President has already been, that the new Contract pro- vides for the payment ol' all the debts and liabilities of the Railway CouiY>iiny,including the amounts paid into the Treas- ury by the Shareholders ; and also that it provides for the Construction of the Main Line of the North Short* Eailwav, and also the Piles Branch. But they will probably not be itiformed, as to when, or by whom the debts and liabilities of the Company, includ- ing the amounts due to the Shareholders, will })e paid ; nor as to when the Tvailway is to be completed. Neither will the Shareholders, and the creditors of the Kailway Com- X^any and the Contractor, probably be informed, that no further payments w ill be made by the Government, either to the Railway Company, or to the Contractor, until the ■work already done can be re-measured by a new^ staff of Engineers, which can only be done after the snow leaves the ground next season ; and then the quantities computed at the new schedule rates attached to the Government Contract. ■- -^' ^- ■- -- - - - ■- —'*-' •'-- - '-"— ^^^^^^-hs-.^-*- ^-^Sii;#^ "4^3^^rrr'*^:^-' ■- Nor will they be informed as to what additional security ;l CONSULTING ENGINEER TO THE SECRETARY. 7 or guarantee the Government has furnished or entered into, by virtue of which it will be at all likely to meet its engagements with more promptitude and alarrity, now that it has assumed the supreme control of the work, than it did while forming only one party to a compact whit.i w^as solemnly pledged, both to each of the other parties, and to the public, to do and perform certain important and vital agreements, the due performance of which by all the parties, as is clearly shown in the accompanying paper, ivould have secured, beyond the reach of any ordinary cou- Ungency, the early construction of the Road under the Orii>'inal and Supplemental Contracts. The following condensed memorandum, deduced from the accompanying paper, will be found to contain the entire case in a WM/-«^e//. s CONDENSED MEMORANDUM. i-;i The Provisional Contract was signed by tht> (Joveru- ment, September 24, 1875. Under arrangements which were then existing between the Provincial Grovernment, the City of Quebec, the Rail- way Company, and the Contractor ; the Government and the City were each bound in good faith to pay one third of the cash values of the Monthly Estimates. The total amount of cash values due, as per Monthlv Estimates, up to Sept. 1, 1875, w^as ^^86 4,042 13 One third payable by Govt, would be i$288,014 04 Amount paid by Government was i3»221,480 15 Amount of Government deficiency........ ....if 60,533 89 11/ t 4 V |i I r, il HI 8 NORTH SHORE RAILWAY. • One third payable by the City would be $288,014 04 Amount paid by the City was 1143,000 00 Amount of City deficiency $145,014 04 Total deficiency of Government and City 1211,547 98 The Monthly E^stimateup toSept. 1, 1875, was 1830,844 70 Amonnt paid by the Clovt. and City was $364,480 15 • Amount furnished by the Contractor $502,364 55. Which expenditure by the Contractor, under the then existing; arrangements, should. haA'e drawn a like amount each from the (lovernment and the City. If this had been realized, the total expenditure up to Sept. 1 , 1 875, would have been, in round numj^ers $1,500,000, Which would undoubtedly have secured the opening of the Road from Quebec to Three Rivers during the present year; and the completion of the entire Main-Line, in 1870. -J;- By reducing the case to the form of a mathematical pro- position, it would therefore seem to stand as follows : If the Government of the Province, and the City of Quebec require two years to expend only $304,480 in the construction of the North 8hore Railway, under existing arrangements, and out of a total liability of $2,248,634, (thereby causing an almost total suspension of the work,) what length of time will be required by the same parties undiQX ih.Q jrroposed arrangements, to complete the construc- tion of the entire road, at a cost of say $4,000,000 over and ab v'€ past exi^enditures ? Answei'. Ahout twexty-two years ! ! I CONSULTIXa KNOINEER TO TIlS SECRETARV 9 In view of the Tacts above presented, it certainly jippear-s, Mr. Secretary, that the Shareholders of th«' Company, at Iheir coming meeting, will not re-> . *■*- -Mr-''*.:*- -^jEi-i^-- 'II tl w I ■m-i m m ' s Si.i. M i*' <^-}' fW a- ^•.\Hfb NORTH SHORE RAH.WAY. I 1 -. ,^. : : SOME REASONS WHY THK COXSTRUClfOX OF I'HE NORTH SHORE RAHAVAN'^ HAS MADE SO T.frri^E PROGRESS UNDER THE ORI- GINAL CONTRACr DAI'ED APRIL 5TH ^872; AND THE SirpPLEMENiAf, CONTRACT DATED FEr.RCAR\' 21M if '^fj0-ii^-*i^*.^ — ■:^i At the risk of appearing officious ; and of iiiterferiiiu with matters which may not be regarded as properly appertaining to my ofHce as the Consulting Engineer of the North Shore Itaihvay Company, I feel impelled, as a matter of duty to the Railway Company, which seems des- tined to pass, at an early day, into the history of the past ; as well as a duty to myself, after having spent the past five years in an earnest endeavor to bring the Enterprise up to its proper standard of importance before the Government and the country, to place upon record such facts as may appear, from my stand point, to have an important bearing, both upon the past history of the North Shore Railway, and upon the present concMtion of its affairs. In doing this, at the present time, I shall endeavor to confine myself mainly to such facts and statements as will 2 NOIITII SHORE RAILWAY. not be likely to come 1)elbre either tha Shareholders, the Provincial Parliament, or the Public, i'rom any other source ; •which facts, in my own opinion at least, should be well understood and authenticated, before any inteUigent action can be taken in the matter. The main i)oints to be considered are, the causes which have produced the present state of things ; and the parties upon whom the responsibility should rest, for the failure of the Company, thus far, to carry on the work success- fully under the existing Contracts. THE ORKJINAL CONTRACT OF 1872. This contract provided for a nominal consideration of seven million dollars for the Construction and Equipment of the Kailway ; one million of which was payable in Quebec city bonds ; and six millions in the bonds of the Kailway Company, which were a first mortgage, or lien upon the Road and franchises of the Company ; and also upon the Company's land grant of two million acres. The parties, who took this Contract, werd known as the Chicago Contrading Compaiiy ; and they were fully pledged to invest at least one million dollars of their own means in the work, before endeavouring to place the R*^dlway bonds upon the market; instead of which, they started, almost immediately after signing the Contract, for Europe with the bonds ; and spent more than a year iu endeavouring to place them upon the European money markets, without success. One cause of this failure may be attributed to the constant opposition and misrepresentations of the Grand Trunk Railway interest. But the chief cause was undoubt- SOME r.EAriONS WHY, t&C. S edly the fact, that comparatively nothing- luwe been done towards the construction of the Koad. * The amount expended by these parties during the years 1872 and 1878, as represented by the Engineers, Estimates, was $160,970.30, of which amount, only i$15.. 487.28 was for actual construction ; and the balance, 5^154,483 02,was for ^Engineering, Expenses of Railway Oom- l-)any, and Contingencies ; none of which latter Expen. ditures, although they were all entirely legitimate and unaA'oidable, could be regarded by Capitalists as furnish- ing any tangible security for the Railway bonds. Haying thus losi txo full working seasons, in the vain vAid very foolish endeavor to sell the Railway bond??, in advance of any material expenditure upon the work these parties determined to fall back upon their original plan ; and to assess themselves to the extent of at least $1,000,000, of working capital ; or if necessary, a sufficient amount to open the road for business, between Quebec and Three Rivers, during the season of 1874. - - ■ If this had been done, there can be no doubt that H\e remainder of the main line would either have been fully completed during the present year, or so far advanced as : to render its early completion under the Original Contract, a matter of certainty. ^ . THE SUrPLEMENTAL CONTRACT OF 1874. In December 1873, negotiations were opened between the Original Contractors and the Honorable Thomas McGreevy, a wealthy citizen of Quebec, for a ?ale of the Contract, which resulted in a transfer of the Original Contract to Mr. McGreevy, on the 12th January 1874. 4 NOllTH SHORE RAILWAY. -' . •• Before this transfer of the Contract had either been made public, or submitted to the Board of Directors for itst approval, the Provincial Parliament, by a somewhat remark- able coincidence, passed the " Quebec Kailvvay Aid Act of 1874," which act \i'as approved by the Lieutenaxit Governor on the 28th January, 1874. By the terms of this act the Government withdrew 859,125 acres of the poorest portion of the Company's land grant ; and substituted in its place, a loan of Government debentures, or their proceeds, amounting to |1,248,634 being at the rate of about $1.45 per acre for the lands. The Board of Directors was first notified of. the transfer of the Contract to Hon. Thomas McGreevy, at its monthly meeting, held on the 12th of February 1874. And the subject was referred to a Special Committee, with instruc- tions to confer with Mr. McGreevy, in relation to such changes as it might be necessary or expedient to make in the Contract, in order to adapt it to the conditions of the new act. The committee reported to the Board on the l7th of February, recommending certain modifications in the existing Contract which had been assented to by the Con- tractor. The Board adopted tlie report of the committee at once ; and authorized the President to recognize Mr. McGreevy as the Contractor ; and also to make a Supi)le- mentary Contract with him, in accordance with the report of the Committee, which Contract was duly executed on the 21st of February 18V4.- - By the terms of the Sui^plemental Contract, the consider- ation for constructing and equipping the Railway, includ- ing' several important items of exj)enditure which were SOME EEASOKS WHY, &C. ^ not embraced in the original Contract, is kept at ^7,(00,000, payabl 3 PS follows :— - - ■■■ ' i - ' Quebec City Debentures sjil, 000,000 t; Government " ...................... ...11,248,034 > Railway 1st in-elerenco Bonds !|4,75I,366 1 i Total $7,000,000* Immediately after signing the Contract, the Contractor made arrangements for a vigorous prosecution of the work at the opening of the coming season ; and then left for Europe for the purpose of perfecting Lis financial arrange- ments. He returned from Europe early in the following- May, and on the 11th of June he addressed a communica- tion to the President and Directors of the Railway Com- pany, informing them that he had made complete financial arrangements to complete his Contract, upon the condition that the sum of 1750,000 should ])e expended upon the Road before any advances weit called for from the English bankers; and therefore requesting the Railway Company, to apply to the CJovornment, and the City of Quebec for the payment of the cash values of the monthly Estimates, in the ratio of one third by each, during the earlier stages of the work, or until the advances thus made by each party should amount to i$500,000. * The application was immediately made by Ihe Railway Company ; and the Government acceded to the request by an order in council dated June 27, 1874. The Citv Council of Quebec also acceded to the request, by resolu- tion dated July 21, 1874. The Contractor had, in the mean time, commenced the work along nearly the entire portion of the line between I i u". [ill !!■ r I 6. NORTH SHORE RAILWAY. Quebec and Three I^ivers ; and, after (he action of the Governmont, and the City, above referred to, there seemed to be no further impediment in the way of the rapid pro- secution of the v.ork, and the early completion of the North Shore Kail way. ~ . . . r It should also be mentioned, in this place, that the Con- tractor, in the communication above referred to, made the further request, that the debentures of the Government and City be deposited in some banking- house, in order that they might be paid over to him promptly, upon his Monthly Estimates, when duly certified and approved, which request, however, was not granted either by the Government or the City. If the entire, and very reasonable application of the Contractor had been granted ; and if all the conditions had been promptly complied with on the part of the Government and the City, the result, as affecting the progress and present condition of the work, must neces- sarily and always remain a matter of conjecture. The following statement of the dates, and the amoun.t of cash values, due upon the respective Monthly Estimates lor the main line, up to September 1st, 1875, will show the amounts to which the Contractor was justly entitled, at these dates, from the Provincial Government, and the City of Quebec respectively : * m some reasons wiiv, &c. Statement of Monthly Estimates, V.l' TO \V1IAT DATK. TOTAL AMOUNTS DtJK l.\ CASH VAl.UKS. AMCl NTS DIE I'hO.M llIK GoVEUNMliNT. AMOtNTS iu;|.; IHOM llIK (. Y Nov. 1, 1873 $133,267 03 S44,4. ^ 34 $44,422 34 Jan 1, 1874 ,. 22,475 54 7,491 85 7,491 85 Totals to date 155,742 57 51,914 19 51,914 19 Oct. 1, 1874 198,307 57 66,122 52 60,122 52 Nov. 1, 1874 64,930 34 21,643 45 21,043 45 Dec. 1, 1874 31,982 00 10,000 67 10,060 67 Totals to date 451,022 48 150,340 83 150,340 83 Jan. 1, 1875 12,337 08 4,112 56 4,112 56 March 1, 1S75.... 54,242 G^ 18,080 88 18,080 88 April 1, 1875 25,750 11 >>,oiio 37 8,585 37 Mav 1, 1875 11,569 83 3,856 61 3,850 61 Totals to date 554,928 73 184.970 24 184,5»70 24 July 1,1875 251,108 ol 83,722 77 83,722 77 Aug. 1, 1875 44,21»1 65 14,703 88 14,703 88 Sept. 1, 1875 13,653 44 4,^.51 15 4,551 15 Totals to date 804,042 13 288,014 04 28.^,014 04 ,'^' ';'■ .";■■ J ■'.'■- ■ .} ft 8 NOUTII SIIOIIE RAILWAY. ■:■:» 1: , N TIk'! a})Ove " total amount due in cash values, " docs not include rotuinod percentages, nor the sum oi'.*i> 1 1,7-^0.40, as per estimate of casli values, upon the Pih^s Branch, uj) to Nov. Isfc 187-3. The foregoing eslimates, up to May 1st, 1S7'), amounting to ^554,028.73, were prepared under my own i:)ersonaJ supervision, and certilied by me as correct, while acting as Chief l^iigineer of the Koad ; such items, and quantities as could be determined by actual measurement, were com- i:)uted at schedule rates, which had been approved by the Board of Directors, and also by the Provincial and City Grovernments, through their respective Engineers. All other items of expenditure, which came within the pro- visions of the Contract, were based upon properly authen- ticated vouchers. The estimates were also unanimously approv«'d by the Board of Directors, ^vhich is composed of six members representing the Provincial Government, and four members representing the City (rovernment, thus jointly consti- tuting a majority of two in the full Board, of eighteen members. The h]stimate= from May 1st to Sept. 1st 1875, amounting to S!?309,118.40, were prepared and certified by the present Acting Chief Engineer, and they have also been approved by the same Board of Directors, by whom he was also appointed , ' ' The only error in these later estimates, to which I have felt it my duty to repeatedly call the attention of the Board, through the Secretary, is one of arithmetical simple addition, amounting to $1,285.53 in cash values, and $1,928.30 in relativ*^ contract values, in favor of the Railway SOME REASONS WHY, &C. Company, upon any settlement that has been or may hereafter be based upon these Estimates. . The following statement will show the date of eacli payment, to the liailway Compnny, by the Provincial Government, and the city of Quebec ; together with the amount paid by each at the respective dates. Statement of payments made by the C1ovei;\me.\t, AND iiiE City of Queijec. D,\TK OK Pavmk.nj Paid iiy ftovKMN- MKNT. A'\g. 15. 1874 Dec. 12, " .... March 24, 1875.. April 12, " .. April 21 " .. April 2S>, " .. -t $80,000 00 80,000 00 14,034 00 20,687 00 Totals to date 144,721 00 June 5, 1875. June 8, " . Julv, 22, " . Totals to date 6,585 19 40,000 00 30,173 96 221,480 15 Paid hy City. 112,000 00 31,000 00 143,000 00 Ai: (HUT. ATI-; [•ay- si K NTS. $80,000 00 102,000 00 222,000 00 236,034 00 256,721 00 287,721 00 287,721 00 294,306 19 334,306 19 364,480 -[o 143.000 00 I 364,480 15 A careful examination of the foregoing tabular state- ments of Mojithly Estimates, earned by the Contractor ; and of payments made to the Railway Company, on ac- 10 NORTH S7.I0RE RAIT.WAV count of thofte Ksliiiiates by the Provincial Government and the Ciiy of Quebec, will nhow, quite clearly just how the linancial account stood, at diflerent important periods, between the respective parties to the quadrilateral com- pact, consisting of the Provincial (lovernment; the City Council of Que})ec; the Kaihvay Company; and the Con- tractor, each of which parties was bound in honor and c^ood faith, not only to the others, but to the public, to do everythino" in its power to facilitate the construction of the North Shore Railway under the Original and Supple- mental Contracts. It appears from these statements, that upon the assump- tion of the Contract, by the present Contractor on January 12, 1874, he must have assumed a past expenditure of at least 51^100,970.30, without taking into account any bonus he may have paid to the original Contractors. It also appears that, on the 15th August 1874, or about six months after the "Quebec Railway Aid Act of 1874," became a law ; and about one half of the following work- ing season had become exhausted, the Provincial Crovern- ment, after having solemnly pledged itself to pay ono third of the cash values of the Monthly Estimates, paid only the sum of ii^80,000 upon a total probable expenditure by the Contractor of at least ii^325,000. (No estimate having been made at that time, it is impossible to give the exact figures.) It also appears that, on the 12th December 1874, being- just eleven months after the present Contractor had under- taken the work ; and after he had devoted one entire working season to its construction ; and had earned, in cash values, based upon Monthly Estimates, the sum of $451,022.18, the City Council of Quebec, after havings SOAIii liEAJiUNS WIIV, &;C. If »'N solemnly pledged itsi-lftD pay one third ol' the cash valu of the Monthly Kstimates, paid only the sum ol' !$112,000 : which with the sum priniously received iVom tlie Ciovehw ment, amounted to an ngoregate payment of sj^l 02,000, upon Estimates, two thirds of which would have been $300,081, on, thus leaving a deficiency of $108,081.60 up to December 12, 1874. Nothing further was puid, either by the Governm.ent or the City, until the spring of 1875, It also appears that, on the 1st May l87r>, the amount of cash values, based upon the Monthly Estimates, was i§554,928.73, one third of which being payable by the Go- vernment, and one third by the City, or iii^l 84,976.24 by each, making an aggregate of i$369,952.48. .,* i Whereas, at that date, and even up to the oth of .hun- following, the Government had paid only 1144,721, thus leaving a deliciency of s^40,255.24. And the city, at that date, and even up to the present time, bar paid only $143,000, thus leaving a deliciency of $41,970.24. Which shows an aggregate deficiency on the part of the (Jovern- ment and the City up to May 1, 1875, of $82,231.48. - ;# It also appears that, on the 1st Sept, 1875, being just twenty-four days pre 'ious to the signing of th(» preseiit provisional contract by the Government, the amount of cash values, based upon the Monthly Estimates, was $864,042.13, one third (»f which being payable by the Government, and one third by the city or $288,014.04 by each ; making an aggregate of $576,028.08. Whereas at that date, and even up to the present time the Government has paid only $221,480.15, thus leaving a deficiency of $66,533.89. And the City has paid up to the present time only $143,000, thus leaving a deficiency of $145,014.04, i ti NORTH SIIOIIE RAILWAY, \\ Inch sIjows nn ngiiTei>ate (li'IiciciKV on 0,5()l !>8, or in round numbv^rs say a hall' million dollars, over and above Ihe amounts rcH-eived from tho l*rovin('ial (Jovernment and the City of Que])ee ; not incbiding retained per-centages, or any bonus which h(» may have paid to the ()riL»inal Contractors, nor any amount which he may have paid for plant, and other contingent and necessary exi)cnses, which, under the provisions of the Contract, cannot l)c included in the Monthly Kstimates. It has already l)een stated, that, if the (Jovernment and the City had carried out fully the requests nuuh' by the Contractor, " the result as affecting the progress and present condition of he work, must necessarily and always remain a matter of conjecture.'' The foregoing statements and figures show, mc^st con* . clusively, that the resj-onsibility for the present state of affairs, rests entirely with the Government and the City, neither of which has, either in h'tter or spirit, carried out even that portion of the request which they solemnly i; guaranteed to do. If this had been done promptly and in good faith, at least one important result would have followed, about which there can he no conjecture^ to wit : the Contractor having e::pended a half million thllu'S of his own means in the work, up to Sept. 1, 1875, would have expended during the progress of the work, a similar amount, or a half million dollars each, from the Government and the City. SO.MK inCASUNS WHY, «S:c. n And thus the t )tal ox;)iMiditiir(% up to Sept. 1, 1875, would unquestionably have Won ro])rcsonted by )!> 1,500,0(10 iusttnid of by Ji?i64,042.1:3. (or a littlo more tlum 0:10 hall' of that iimount) as is now shown by the Monthly ]"'sti:uidos. To deal a luomiMit in conJcrlKrc, liowever, i( w<»uld nrx he at al! unr('asoiui})le to assume, that if th^^ (iovernmeut and the Cily nad promptly ])aid their Jus! proportion of the Monthly Estimates ; nnd thus streugtlu'iUMl the hands, and preserved the eredit of the Contractor, he would have experienced no dilliculty in inakiui^- his own expenditures equal to si?T50,000, \vhich, with double the amount from the (Jovernmrnt and the City, would have male the expendilures on the rond up to Sei)t. ], 1875. ^2,'2')0,000, or al least one half of its estimated etisli* value. AVliich exix'u- dilure would not only have secured the (Completion of the first half of the Main Liiu^ extending from Quebec to Three Rivers, during the ])resent working season ; but it would also have secured the expc^nditure of a sullicicnt amount upon the balance of the line, to ensure its com- pletion during the early part of the next season. Neither is it considered at all unreasonable to assume, that, upon the attainment of the above result, tln' honor,, credit, and resources of both the Government and th»! City, would have remained unimpairi'd ; and also that the early completion of the North Shore Rail way, hij (he Raihraif Company^ and under the oriij^inid and StipidemenUii Contrarls, would have been reduced to a moral rerlninf//. The facts above stated also show, in a m-.st strikinon properly authenticated Monthly Estimates. - '-'■■ If this very reasonable and proper request had been granted, there can be no doubt, iroin the above showing, that a very different state of things would have existed in the condition of the work at the })resent time. And I trust therefore that this important point has been duly provided,' for in the existing Provisional Contract. If it is not thus provided for, or covered in some other manner that will effectuaily protect the Contractor from such contingencies as he has met with almost constantly since he undertook the work, I do not sec any reason to hope for a more early completion of thc^ road under this Provisional Coiilracl, than would have beeiv realized under the Original and Supplemeuial Contracts, Every intellig* nt ])ers(>n iiiust be aware, ..nd the expe- rience upon this road has already shown most conclu- sively, that a Contractor cannot proceed with his work, either econuji.ically or suc':essfuliy, even when labor and materials are at their minimum value, unless he can relv with, the utmost certainty upon the prompt payment of his Monthly Estimates, as they become due under the provi- sions of his Contract. ./ '"i- ':■:'. To return a moment, 1 owv^ver, and in conclusion, to the mere recent history of the relations which have existed, »and which still exist between the parties to the compact above referred to, it will b;' suliicient to mention that, on July 20th 1875, the Provincial Government addressed a letter to the President of the Kailway Company, from which the following is an extract : " To avoid any misap- SOME REASONS WHY, &C. 15 r---^} ])reh('iisic)ii as to the intentions of the Government res- pecting- the amount of money to be paid the North Shore Itaihvay Company from time to time. I am directed to inform you that, in deciding as to such amount, the Lieu- tenant Governor in Council will be guided solely by the provisions of sections 16 and 2i, cap. 2 of 87 Victoria. " This is a notice from one party of the compact, ta another, that it will no longer feel ])ound to jiay one third of thv' cash values of the Monthly Estimates, as per order in council dated June 27th 1874. On July 31, 1875, the Executive Committee of the North ' ' Shore Railway Company, 8ir N. F. Belleau, Chairman, having had the above communication from the Govern- ment under consideration, reported a resolution to the Board of Directors which, after a most able and exhaustive review of the whole subject, closes with the following extract : - " Under these circumstances, the North Sliore liailway ' . Company desire to formally make known to the Government of this Province, that they do not give their sanction, or their consent to their decision, as indicated in and by their letter or 2Gth July, 1875. But on the contrary, that they refuse to sanction or accept in any manner, any deviation and modification to the agreement, or order of the Executive Council of 27th June, 1874, interpreted, accepted, and agreed upon in good faith between them and the Government of this Province." " Nevertheless the Company is desirous of knowing and discussing all new propositions or plans which the Govern- irent might propose to them, if they judge it proper in the interest of the Company." jG TS'OKTIT SlIOKE RAILWAY. The above report was transmitted to the Government but was afterwards returned as being disrespectful and unsatisfactory. At the same time an intimation was given as to the form of a resolution that would be satisfactory to the Government. ^ - ; , On August 11th 1875, the Board of Directors, having no other apparent alternative left to them, and not wishing to stand in the way of the Government, accordingly passed another Resolution, of which the ibilowing is a copy : * Resolved — " That the present position of the money liiarket in Canada, and the strong, though unfounded, opposition manifested in certain quarters in Enj^land, to the investment of money in Canadian K^iilway Securities, preventing the sale of the bonds of this Railway Company, require that the Government of the Province of Quebec shoulvd be informed ol the position in which the Company find themselves situated. The Company^ declare they are unable to construct the road under existing- Jcrran^ements and they desire to urge upon the Government the im-. perative necessity, under the circumstances, of r)rompt Government actioL The Company 'ire therefore ready to allow the Government to deal with the question in any , way they may, in the public interests, think proper, making such arrangements Avith the Contractor as may be found neces^sary." On August 20th 1875, the Council of the City of Quebec passed unanimously a Resolution, of which the following is a copy : " That this Corporation by its subscription of a million dollars to the capital stock of the North Shore Railway Company, has given indisjiutablc evidence of the deep SOME REASONS WHY, &C. 17 i!itere,«<» it has taken in tlie construeiioii of the North Shore Eailway. " That in view of the said company haviiig dechired its inabilii'y to continue the construction of said Road under existi.ij arrangements, no further payments be made to it by this Corporation, but in lieu lliereof, the rrovincial Government be respectfully informed that should they take sleps to insure the early completion of said road, this Coune 1 will pay to them the balance unpaid of its sub- scription to the Stock of said company as provided by law, on the express condition however that in no case shall this' Corpoiation be called on for the payment of interest on the stock is,^ued and to be issued in virtue of its said sub- scription, before the 'road will have been constructed throughout the whole distance between the cities of Que- bec and Montreal." -,- - It will be remembered that at the date of the passage of the above resolution, the City was in arrears to the Com- -' pany about S 145,000. , Having thus succeeded in reducing to submission two Tery important parties to the Original Compact, the ( Jov- ernment was fully prepared to er.coiniter the third, which was the Contractor. This was found to be a compaiatively easy task, after the other three parties had entirely deserted him ; and he therefore had im other recourse, than to surrender unconditionally. A Trovisional Contract subject to the approval of Tar- liament, was therefore entered into, upon a cash basis between the Government and the Contractor, on September 24th, 1875 ; and His Excellency the Lieutenant Governor was thus enabled, in his speech to rarliament from the 18 NORTH SHORE Ri^LWAY. ihroiio, oil the 5th instant, to make tho following allusion to the su})ject : . ■^ • . .; - " , • " The diihculties experienced by the North Shore, and Uie Montreal, Ottawa and Western Kailway Companies in negotiating iheir bonds, having forced these Companies to give up the several works undertaken by them, I felt that my Government ought to take steps to complete thes«? Enterprises, upon which thi' material progress of our Pro- vince very much depends, and upon which a large amount of money has already been expended. Accordingly, a measure having that end in view will he submitted to you anf"" I hope it will meet your approbation. " It will be remembered, however, that, when His Excel- lency delivered the above speech ; and also when his (lovernment entered into the Provisional Contract, this same Government was in arrears to the Railway Company in the amount of s#66,533 89, under the former compact, which it had repudiated ; and upon Monthly Estimates of cash values, which had been approved by a Board of Directors, consisting of eighteen members, ten of whom were representatives of the Government, and the City of Quebec. And also, that it had utterly refused, and still refuses to advance to the Railway Company a sufficient amount to enable it ^o pay the salaries of its Officers, and Engineering Staif, which are now more than five months in arrears ; thus causing a great, and entiioly unnecessary amount of inconvenience and sufferini?. A meeting of the Shareholders of the North Shore Rail- way has been called for the 22nd Nov. inst., at noon, to ' take into considrration the Resolution adopted by the 3>oa'd of Directors on August 11, 1875. -?.,..-^, ■■(<-■ SOME REASONS WIIV, &0. ' Having thus, upon my own responsibility, mid as brielly as possible, brought the history of the North Shore Railway, and its varied fortunes, or rather misfortunes, down substantially to the present writing, I shall avail myself of the first opiDortunity, after the Railway Policy of the pre- sent Government ; and the Provisional Contracts v>hioh it has already entered into, in advanct' of the sanction of Parliament, have been made public, to place on record such further views upon these subjects, as I may then think consistent with my official position ; and also with my personal and professional reputation. After having discharged this duty to the best of my ability, and in accordance with the dictates of my own judg- ment, I shall await the result with a pleasing consciousness of having at all times, but more particularly during the last hours of its existence, performed my whole duty to the Kailway^ Company, which has always honored me with is confidence ; and also, to the Province, and the City of Quebec, of both which I have been during many years past, and expect to remain for many years to cora'\ an humble and a loyal citizen. If the self sacrificing course, which the peculiar cir- cumstances of the case, as above narrated, have impelled the Railw ay Company and the Contractor to pursue ; and if the Railway policy which the Provincial Government has already entered upon, and which, with the sanction of Parliament, it intends to follow, shall appear under all tht- circumstances and surroundings, to be the best and only policy that vAill secure the speedy Construction of the North Shore Railw^ay, and its connecting line to Ottawa ; together with other i.iiportant lines in tho Province, 20 NOETH SI [ORE RAIFAVAV. thi. policy Will meet with no more hearty support- ami it« results .vill be hailed with no greater pleasure by any one of tlie many persons who may claim to haye been in some deg-ree instrumental in bringing them about, than they will bv myseli'. Quebec, Noyeinber 12, 187:. J^ILAS S1*:YM0[JR. u i- J •