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TO TWE SllAUKllOLDKKS OF THE MONTREAL ANO NEW YOKK liAILUDAD CdMl'ANV, 
 
 6«NTLKMKN,— The Uei>ort cf the Diructors of 
 the Chnmplaiu nnd St. Liiwrence Uailrnml Ooni- 
 fiany, submitted to its Slmreliolilcrs at the minimi 
 meetinu on the 'JUt iilt., besiilea ounlniimig 
 many unfounded statcmantj relntivi' to tliis (,'oni- 
 pany, and iicrverting several iinporKiiii ficl? 
 having reference to matters in ilisputc liptweei. 
 the two Coriiorationi, has also liriui^ilil siiudi 
 grave charges against your Directors, lli.it ihey 
 feel themselves cuinpellid to antiiiiMile liv ii few 
 days sjme remiirlcs which tlpy otlicrwi^i' would 
 have jireferred laying before you, utyour annual 
 UH'eling. 
 
 It is true, the report alluded to h:\s ii»t been 
 adopted by (he Coinpiiny to wliicli it wns iid- 
 dresjed, but it has been extensividy pulili-ilied 
 and thus, tliu refutation i/f t!ie iniusluliiaeiits it 
 contains, is not the less culled for. 
 
 The principal subject of e.inipluint ia (lie non- 
 completion of the project of anmleamatioii whieli 
 is erroneously .stated to li«veorit»inatiM'. with the 
 K.ink of Montreal, and its adoption in the hrsi, 
 instance to have been owing to tlie inliuence of 
 that institution. In order to arrive at a correct 
 view of this matter it is necessary to recall to 
 mind the position of the Companies iit the period 
 in question. 
 
 No sooner was the Caughnimaga ition of 
 the Montreal iinc' 'ew York Road opened, than 
 a fierce oppositio.i of ilie most ruinous descrip- 
 tion and disastrous to the interests of hotli roads 
 was commencfd and carried on by the (Jiuiin- 
 plain and St. Lawrence Company. At tlie close 
 of the year it was found that both CoiNpaiiies 
 had sii'll'ered severely, and that a longer e iiiinii- 
 aiice of this warfare would result in theilestruc- 
 lioii of one or other of them, and po.-^ilily of 
 both, without materially benefitting any inter, st 
 v/halever. It is now apparent however that the 
 Chamjilain nnd St. Lawrence Road was in a 
 very much worse predicament than your Com- 
 pany was, nnil that it continues solothi.i present 
 day, as ii easily seen by glancing at the lieancial 
 position of the two Compani's at the end of the 
 year 1854. At that period the Clianiphiui Com- 
 pany hadi'many, and rather clamorous creditors, 
 whose demands it could barely satisfy hy having 
 recourse Ij every available c.\;iedient, and it was 
 with the ulniostdilliculty that its Directors could 
 raise money eiiougli to ilefray the current run- 
 ning e.xpences of the road. 
 
 Its debts then ;iniouuted to .il'iO.'i,^',?) i) 0, or 
 eipuil to ahoui Xii,400 per mile on the whole 
 leugtli of iis road ! 
 
 At the same period the Montreal irr.d New 
 York C'ompany had no bonds due till the year 
 iaiyi, and only one other creditor of .iny nnigni- 
 lude, and tliat creditor willing to grant a nasoii- 
 Htde c.x tension ^.t' terms of payment, if s'llislied its 
 dth' was secure. 
 
 ■flie Montreal ,uid -Ni'w York Company's whole 
 debt was .iCKtl.OOo, or eipiil to al>out £3,270 
 per mile on the whole length of its road. 
 
 IlKl.-.MMiri.AriON. 
 
 Lengtii of Champhiin Si St. Lawrence 
 
 Uoad -i;! miles. 
 
 liCnglh of Montreal ui.d Neiv York 
 
 Uoad 11 do. 
 
 Debt on Cliamplain ('onipany's Uoad. i27."i,OL;Li, 
 
 or £il,4iiO pel' mile. 
 Debt OD Montreal and New York Uoad Il.l+.OOO, 
 
 or £:i,i;70 per mile. 
 These ligiires indicst« pieity nearly the posi- 
 'ion of tile roads at the ]iresent ibiy, iird it there- 
 fore ap]iears tliiil being of nearly eqinil lengh, 
 the Cliamplain Uoad owes twice asniiieh money 
 as the .Montreal ami New Yoik Ivuiid, and as the 
 latter is the most eeoiioniical to work, its posi- 
 tion is in every respect better. I'lider these cir- 
 ciimslaiiees it may be asked ; — 'I'o u liicli road 
 was ainalgaiiu.tion and ii cessation of liostililies 
 most necessary '.' There can only be one answer 
 to the question. 
 
 In jiistilication of those shareholders of this 
 Compnuy who once supported, but now opi ose 
 the amalgiiiuatiou .scheme, it should be mention- 
 ed that the true position <d' the Cliamplain and 
 St. Lawrence Company, as regards its enurmoiis 
 liabilitl s, was not tlien known, otherivise the 
 jiroposal woulil never have been Ii tened to at 
 all, and they must be held fully w irranted in 
 witliilrawing before it was too late tioni an ar- 
 rangement made in igniirance of file s wliidi 
 would affect their interests most injuriously. A 
 dividend of 10 per cent in stock had just been 
 made by the Cliamplain Coinpfluy, and its affairs 
 then looked better than they afterwards proved 
 to be. 
 
 The proposal of amalgamation, therefore, was 
 first made by individual Shareholders of the 
 Cliamplain Company, and became matterof dis- 
 cussion amongsv the Stockholders of both roads, 
 who were naturally glaii to catch at any tiling 
 which aiipeared likely to save their property. 
 The jsiilt was an application to the chief 
 creditor of this (.'oinpany for its consent and as- 
 sistance in carrying the scheme into ellect which 
 was granted, nnd liberal terms of puyment ac- 
 corded on the Bssumption of the debt by the 
 joint Company when amalgamated. 
 
 It was weUknown, however, that no amalga- 
 mation could be complete or h gaily opia'ative 
 without a ;-peei;il aci d'llie l.i'gi datiir'', and ihij 
 
 was forthwith applied for by the two eonipanies 
 cumbi ed, thus coiilirmliig the good t^iith with 
 which tbia company has all along sought to I'lil- 
 fill its cngageinents. The sclieinu was not 
 sanctioned by the Legislature, and soon afier, 
 lit lite sjieridl iiishincH of the Director' (if Ific 
 Chamtiliiirt iiiul SI. I.iiirniirc Aim/mHi/. a resolu- 
 tion was passed by bo li companies, withdrawing 
 the applic.ttion to the Legis'atiire, and thus |iut- 
 an entire stop to the scheme of ania'gumation. 
 
 iia"ing now slieivn with wlioni t'»tf proposal 
 originated, and by whom its progress was arrest- 
 ed, it may be well to advert mi some cirruni- 
 stances arising out (d' the |iroiiositioii, still 
 further to manifest the good f'ail'i with .vhic'i 
 the largest stockholders of this company endea- 
 vored to carry it into effect. 
 
 Immediately after the agreement was signed, 
 no less than I'iMi shares of ihe stock of lliia 
 company were tiansferod, and registered in the 
 name of the then President of the Chaniplaiii & 
 St. Lawrence Company in trust, for the purpose 
 of being ejitinguished so goon as the amalgama- 
 tion was legally sanctioned ; and i.ot only was 
 this stock traiiijferred, but tho owners of it 
 subserihed also in the Cliamplain Company a 
 proportionate amount of new stock, on wh ch 
 they forthwith paid a large amount m cash, the 
 lirst installment of ten per cent on which, was a*. 
 once applied by the Cliani|ilain & St. Lawrence 
 Company to meet some of its own most pressing 
 debts, and whs no doubt a very welcome ass'st- 
 ance at the time. The stock in the Cliamplain 
 Company issued to these gentlemen in e.tchange 
 for their Montreal & New York stock in the one 
 case, and for their money in the other, ia set 
 dow.i ill the report at a par value of X80,0l)C, 
 but there is little doubt they would gladly be 
 replaced in the former position they occmiied as 
 shareholders in this company bv a re-transfer of 
 their shares, it that could he ell'ected. 
 
 The audacious attempt lately made by the 
 Directors of the t'hamplair. Company to sell out 
 agiinihe stock thus transferred to their Presi- 
 dent in trust for extinguishment, and thereby to 
 obtain the control of this Company, b'ingunder- 
 siood to be contrary to law, has been and will 
 be resisted to the utmost. Any fair proposal for 
 a friendly manageineiit of the two roads would 
 meet with every consideration, but the Directors 
 could never consent to such a ^ :'cidal measure 
 as to |ilaci your road at the i;, i ^ of the Cham- 
 jilain k St. Lawrence Compaiiy. Their deter- 
 mination to have taken up the rails as soon as 
 tlifv liiul it ill their power is no secret, nnd that 
 individual Directors made statements to that ef 
 f ct can he provrd by many witnesses. The deci- 
 sion lately given in one of the courts of the United 
 Sta' '3, has recently been pressed into their 
 service to confirm their assertion that they never 
 could liave contemplated such an act because it 
 was illegal ; hut, in using this argument, they 
 forgot that they hsd aetually taken up and 
 renio"ed the rails from the old Laprairie line, 
 thus shewing that leg il obligations, if they ever 
 thought of them lli^n, (which is more than 
 doubtful,) had ve.-;' little weight in guidinf their 
 proceedings. 
 
 Another instance of the good faith with which 
 the Directors of the Montieal & New York Com- 
 jiany acted in this matter may he given. Soon 
 after the preliminary agreement for amalgama- 
 tion was signed, the Cliamplain k .St. Lawrence 
 (/'ompany, on the plea of ]iressing necessity, 
 horroweii from your company two locomotive 
 engines and eighteen freight cars of the value of 
 at least £8000, which were IbithwitI, removed to 
 their road; they were promised to lie reUiraed 
 when wanted, but every eH'url to get them back 
 has provi'd totally unavailing, and the want of 
 them has been greatly felt liy this coiiipauy. 
 They have, in fact, had to refuse much freight 
 that was oll'ered to them, not being able to 
 transport itior the wuntof tliesj very locomotives 
 and cars. 
 
 The assertinn made in Mr. Delisle's letter to 
 Mr. Davidson, that the (.'liamplain Co. have piid 
 ,ei.'i,nooof the debt of this '.' iiipanyis in the 
 highest degree dising-'iiiious. '. he truth is, that 
 the whole amount paid dees not exceed £12, n.")!', 
 and, after having piiil it, the ("hamplaiu Coiii- 
 |iany is still iiidelr d to this CoiU|iaiiy. It is 
 very eas\ to p:iy 1 1 J.oOO of a party's debts, if that 
 parly provides £17,000 with which to pay them; 
 and sucii is the case in this instance, taking into 
 acco!inl th-i stalmeiits on new stock paid by 
 shareholders of this Company to the Champhiin 
 
 1 CoiupHny amount to i '.tfi'M 
 
 and the two locomotivt's and 18 freight 
 cars, most unjustly deliiined, of ihc 
 value of '. 8,000 
 
 make logellier CI 7,0'iO 
 
 A very gross misstatemeiit oeciirs in tlie lie- 
 port of the Directors of the ('liamphiiii Com- 
 pany in accounting for the diiniiiished receipts 
 of their road during the past year. They assert 
 tliat this Company carried freight at one-'hird 
 less than the rates mutually agreed on, and that 
 their road theieliy lust £j,ooo id' net gain on 
 through freight alone lioth of these Bssertioiis 
 are incorrect. The whole gross amiiiinl ol 
 through Ireight enrni'd by Ihi.^ I'oiiipany lowing 
 
 ehil lly lo the ». lilt of l.ir.imotiv.M :iii,'! ||vl;;hl 
 
 cars) d d not reach oiie-tentli of that sum. anil 
 how £ri,00ii of net profit can be made out • f less 
 than £S00 gross receipts, must be lift to the 
 Din'Clors of the t'hamplain road to explain, 
 'rbey niii-t, therefore, look to Koinn other cause 
 for ilie decline of ilieir business 
 
 The freight charged by this C'imp»ny from 
 Plitlsbiirgh to .Montreal was fixed at the same 
 rate as from Uouse's Point lo .Montreal, under n 
 special agreement made by two Directors of this 
 (hiiiipiiny, who were a'so at the same lime 
 Direelors id' the Cliamplain Co'iipiiiy, and In 
 pre.Jenee of the legal i"piesenlaii> e of that ('om- 
 |iaiiy. In thes" circiimslanees the liardiho.id of 
 the assertion, that it was done without the con- 
 sent or concurrence of jie Cliamplain (.'ompany, 
 is worthy of remaik. It is true they avoid say- 
 ing that it was done without their knowledge, 
 and if lliey knew it and did not object to it, they 
 must bo regarded as consenting to it. Kut, in 
 fact, they had no reasonable ground of objection. 
 The freight on goods (roai .Vew York and all 
 Southern plac'.'S is exactly the same lo I'lattg- 
 hurc;li as to Uouse's Point, and the rates from 
 these places to .Montreal being also the same, no 
 advantage in point of pric' was had either way . 
 The best proof of tliis is the small amount of 
 freight pissed over your road— for, if 'he Direc- 
 tors had been able to olf^r any adiantago t'l 
 shippeis in point of rates, there is no doubt iliat, 
 nolwithstandingall disadvaiitageaof the want of 
 Southern urrangeinetits and deliiieney of means 
 of transport, a much larger (loriion of through 
 freight would have found its wsy ove ■ jour 
 road than was the case. The truth is, that the 
 freight on goods from all pla;es South of Platts- 
 burgh to Montrenl was precisely the same by 
 cither road. 
 
 The assertion in (he Cliamplain Company's 
 Report, that the Hank of .Montreal, while en- 
 forcing payment of the debt of £45,000 due to it 
 by that Company, was at the same lime lending 
 £!,iO,ooo to its rival, " with no other guarantee 
 than tl at of a Company whose whole capitil at 
 the lime fell short of £'iO,000," c>nnot bu passed 
 unnoticed. The following statement will shou 
 how far it varies fom the truth; 
 Cost of Uoad from M nilreal to Lachine.£10(;, IH8 
 Deduct the Secured I, iabilllies 50,000 
 
 £5i;,i:w 
 Add cost of Cauglinawaga Section .... 135,4'27 
 
 £101,5(35 
 
 Money borrowed from the Bank £ 84,000 
 
 It thus appears that to secure the sum of 
 £84,000 the Dank has ihe first mortgage on pro- 
 lierty which has cost £101,000, ami thus is con- 
 siderably less than ten sliillings in the pound. 
 A» this Company's road was' the cheapest ever 
 copslriicted in Canada, the security was con- 
 that the Hank's claim on your road is butter 
 sidered perfectly good, and it miy yet he found 
 secured than the .me it has on the (jlia m plain Co. 's 
 
 Hut it never was intended that the loan from 
 the Hank should be aiiylhing but merely tempo- 
 rary. 
 
 In order to enable it to realise this debt, 
 siTling debentures to the amount of £100,00(1 
 slif., carrying a first iiiortgage on the (Jaiighna- 
 waga section, were transferred lo it and sent to 
 Loiiilon for sale, ami liiit for the occurrence of 
 untoward circumstances woui.l have been dis- 
 posed of; but the Directois of this Comeany feel 
 no liesilatioii in as.serting that the amount of its 
 paid-no slock greatly exceeds that cf the Cnatn- 
 phiiu rompiiny. 
 
 '■'he dillicuities in completing (he amalgama- 
 tion appearing iiistiperalde, the Directors of this 
 road deteriiiiued on re-opening it for Iratlic, 
 under an ex|iress engagement with tlie Chiiiii- 
 plain Company that the through rates hy both 
 roads should be the same; this condition has 
 been :'..itlifully adhered lo lui ihe part of your 
 Coinpany. Soon after tfie road was re-opened, 
 the municipalities along its line feeling the great 
 advantages it oll'ered <■) llieiii, and manifesting 
 as they have always done a lively interest ill its 
 success, came forward and pr.iposed to take 
 advantage of the law passed during the las', 
 session of the Legislature, which enabled them 
 to grant their bonds in ail of the undertaking. 
 
 The advant'ige to your (Miiiipany of this pro- 
 ceeding was abundantly maiiilest, and Kiih the 
 concurrence of the principal creditor of the road, 
 steps were at once takeii to carry it into ttl'ect, 
 which it is hoped will be snceesst'iil, notwith- 
 slandiug the opposition i f some membei'S of the 
 Ohaniplain (Joinpany's Hoard. 
 
 This opposition, which can lie dictated only 
 by malevolont motives, will it is confidently be- 
 lieved prove unavailing, as the iiiiinici|ialilies 
 are no doubt aware that l.y siippoiiiiig your 
 road their own interests are materially advanced ; 
 wliih on the contrary, if it fell under the power 
 of the (Jhamplain Company, (he consequences 
 could hardly fail to be in a high degree detri- 
 meiidtl (o them. 
 
 He nrib'r of (lie Direc(ors. 
 
 TIRiS. I!. JMIINSON, 
 Seen'larv. 
 M ntn al, Isih Cebruiiry, 18.-,';,