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y^^aEAND TRUNK RAILWAY 
 '^ OF CANADA. 
 
 DRAFT 
 
 OP 
 
 '^x^m\ S|Mra! 
 
 TO THE 
 
 DUKE OF NEWCASTLE, K.G, 
 
 ONE OF HER MAJESTY'S PRINCIPAL SECRETARIES 
 OP STATE. 
 
 [FOR PRIVATE CIRCULATION.] 
 
BIBLIOTHEQUE DE LA 
 VILLE DE MONTREAL 
 
 COLLECTION 
 GAGNON 
 
 5v$z 
 
 300 
 
 2q 
 
 i-- 
 
 * * 
 * 
 
 Copies may he obtained bi/ any Preference Bondholder, 
 on applying to Messrs. Ashurst, Son, & Morris, 6, Old Jewry, 
 London, E.G., where the Memorial lies for signature. 
 
[DEAFT OF PROPOSED MEMORIAL.] 
 
 , wQ:8*26-30074 
 
 TO HIS GRACE 
 
 THE DUKE OF NEWCASTLE, K.G. 
 
 ONE OF HER MAJESTY'S PRINCIPAL 8ECRETARIES 
 OF STATE. 
 
 m^t I^Umtle iWemorial of the undersigned First 
 and Second Preference Bondholders of the Grand 
 Trunk Railway Company of Canada. 
 
 
 SHEWETH, 
 
 That your Memorialists claim to be entitled, 
 
 under several Statutes of the Legislature of Canada, to a first 
 charge oa the Railway and Property of the Grand Trunk 
 Railway of Canada, and on the net income thereof, after 
 deducting working expenses, by way of security for the First 
 and Second Preference Bonds of the said Company, amounting 
 together to £3,111,500, together with interest thereon at 6 per 
 
 cent, per annum. 
 
 That an Act was passed in the recent Session of the 
 Canadian Legislatu)-e, entitled "An Act to explain and 
 
amend the Railway Clauses Consolidation Act," the 8th section 
 of which is as follows : — 
 
 VIII. The interest of the purchase money or rent oi* any 
 real property acquired Or leased by any railway com- 
 pany, and necessary to the efficient working of such 
 railway, and the price or purchase money of any real 
 property or thing without which the railway could 
 not be efficiently woi-ked, shall be considered to be 
 part of the expenses of working such railway, and 
 shall be paid as such out of the earnings ol the 
 railway. 
 
 That the provisions of the said section seriously impair the 
 right of your Memorialists, and they pmy to have the said 
 Act disallowed by Her Majesty ; and your Memoiialists refer, 
 in support of tlxat prayer, to the petition of 
 
 and to 
 
 Her Majesty in Council, a copy whereof accompanies this 
 Memorial. 
 
 That the claim of your Memorialists to a first charge on the 
 railway and property of the Company, under the said Acts, is 
 supported by high legal opinions, both in England and Canada, 
 and also by a recent decision of the Court of Chancery in 
 Upper Canada, in the case of ♦' Herrick v. The Grand Trunk 
 Railway Company," decided 17th June, 1861. 
 
 That independently of the serious objection to applying 
 income to capital, as provided for by the said section 8, there is 
 the still further objection that any Rolling Stock which might 
 be purchased out of income would, in the present financial 
 difficulties of the Company, bo at once subject to seizure for 
 debts or rents, except so far as the Preference Bondholders 
 might succeed in preventing such seizure, by enfoi'cing their 
 said chai'ge over the Rolling Stock of the Company, in which 
 
extent they claim to be entitled to it, and are now taking pro- 
 ceedings, both in Upper and Lower Canada, to establish it, but 
 which charge over the Rolling Stock is disputed, both by the 
 Company and the Creditors who have already obtained judg- 
 ments for their debts. Hence, if the earnings were applied as 
 provided for by the said section 8, it might have the effect of 
 confiscating the income to which the Preference Bondholders 
 are entitled, not for the purpose of adding to their security, 
 but for the benefit of judgment creditors and lessors. 
 
 That although the section in question is introduced into a 
 general Eailway Act, and does not specially refer to the Grand 
 Trunk Railway Company, yet your Memorialists submit from 
 the circumstances set forth out in the said Petition to Her 
 Majesty in Council, that the Act was clearly intended to aflfect, 
 and your Memorialists are advised that it does seriously afiect 
 the rights and interests of your Memorialists. 
 
 That even if, in the present difficulties of the Grand Trunk 
 Railway Company, such a measure were justifiable as a 
 temporary provision, it ought to be accompanied with ample 
 provisions to protect the property purchased out of income from 
 being seized for debts or rents. 
 
 That the Preference Bonds of the said Company are held 
 almost exclusively by residents in Great Britain and Ireland ; 
 and your Memorialists know of only one Pref^^ence Bond- 
 holder resident in Canada— namely, the Hon. John Hildyard 
 Cameron— one of the defendants in Herrick's suit, hereinbefore 
 referred, to ; and it is believed that it was in consequence of Ms 
 being the only Preference Bondholder who could be found in 
 Canada, that he was made a Defendant in Herrick's suit, to 
 represent the interests of the Preference Bondholders as a body, 
 although he acts as Counsel for the Grand Trunk Railway Com- 
 pany in the suit instituted in the Courts of Upper Cajiada by a 
 large Preference Bondholder, on behalf of himself and the other 
 Preference Bondholders, to have their rights settled and deter- 
 
 1 
 
6 
 
 mined as hereinbefore referred to ; and if, therefore, any other 
 Preference Bondholder could have been found in the province, 
 some more fitting Representative of the class would no doubt 
 have been selected than the Counsel who in the other and 
 principal suit is retained to oppose the claims of the Preference 
 Bondholders. 
 
 That the said Preference Bonds were subscribed for on the 
 faith of the provisions contained in the several statutes under 
 which they were issued, and that to alter such provisions with- 
 out the consent of the Preference Bondholders, would not only 
 be to interfere with vested rights by ea post facto legislation in 
 this particular case, but it would also tend to weaken the 
 confidence of capitalists in colonial investments generally. 
 
 That your Memorialists are advised that their rights are as 
 much vested rights, and entitled to protection, as the rights of 
 any ordinary mortgagee of property in the Colony. 
 
 That under the Provincial Act of 19 and 20 Vic, cap. 111., 
 in ptirsuance of which the first Preference Bonds were issued, 
 the proceeds thereof were, as directed by that Act, paid not to 
 the Company direct, but into the hands of the Government of 
 Canada, by which the same were from time to time released to 
 the Company upon the certificates of the Receiver-General, 
 upon proof to the satisfaction of the Governor in Council of the 
 progress of the several works in the Act mentioned. 
 
 That the said last-mentioned Act was a Government 
 measure, and your Memorialists submit that it was both in 
 form and substance a compact between the Province, the 
 Company, and the Preference Bondholders, under which the 
 money subscribed by the last-named passed through the hands 
 of the Government, and was applied under its direction 
 in the several works specified in the said Act, which works 
 were deemed of public and general importance for the interest 
 of the Province. The people of Canada have, therefore, 
 had, and still enjoy, the benefit of the Preference Bond- 
 
holders' m^ney in these work/!. Your Memorialists submit, 
 therefore, that the Government and people of Canada not only 
 cannot dispute, but are bound to support the Preference 
 Bondholders' claims. 
 
 That Messrs. Baring, Brothers, |and Co., and Messrs. Glyn, 
 Mills, and Co. were, in 1856, and still are, the Financial 
 Agents for Canada in London, and, in that character, the 
 proceeds of the said First Preferential Bonds were received by 
 them as representing the Government of Canada, and the 
 proceeds of the Second Preferential Bonds, issued in April, 
 18G0, were, it is believed, received by them direct, in exchange 
 for the Bonds which were at the time hypothecated either with 
 them or with other creditors of the Company. 
 
 That Mr. Thomas Baring, M.P., one of the partners in the 
 said firm of Baring, Brothers, and Co., is the Chairman, and 
 Mr. G. C. Glyn, M.P., one of the partners in the said firm of 
 Glyn, Mills, and Co., is one of the Directors of the said 
 Company ; and that both of them have been Directors of the 
 said Company from the year 1853, when the concern was first 
 introduced in London, to the present time, they having been at 
 first nominated as such Directors on behalf of the Government 
 
 of Canada. 
 
 That although a scheme of arrangement has been proposed 
 by a Committee of the Share and Bondholders of the Grand 
 Trunk Railway Company, and is intended to be submitted to 
 the Government of Canada, yet that such scheme, if adopted, 
 would still leave the claim of the Preference Bondholders for 
 interest dependent upon the net Revenue of the Line, which 
 is liable to be seriously affected by the operation of the said 
 Section No. 8. In fact, under the said section, if it remains, the 
 whole net Revenue of the Line may, instead of being applied 
 in payment of Interest or Dividends on the Capital, be used 
 exclusively for local pm-poses ; that is, not merely (1) in payment 
 of "the interest of the purchase money or rent of any real 
 
It ■ 
 
 6 
 
 "U 
 
 property acquired, or loased," in the acquiring or leasing of 
 which the Preference Bondhf)l(lor8 have no voice ; but (2) in 
 payroent of the price or purchase money itself " of any real 
 property or thing." With such a licence there can bo no limit 
 to the time when a Line of Kailway, extending over 1,000 miles 
 in length, will cease to require some real property or thing ; 
 the latter word comprising Rolling Stock, and in fact whatever 
 the Line may require of the nature of personal property, as 
 distinguished from the preceding term " real property " ; so 
 that the words "real property or thing" includo together 
 evei'j^hing which the Railway may or can require of every 
 kind, or that local interests, the influence of which no honesty 
 or vigilance in the Directors of so vast a concern, particularly 
 when for a large part resident at 3,000 miles' distance, can 
 exclude, may represent the Railway as requiring. 
 
 That petitions to her Majesty for and agains,' i' e confirmation 
 of colonial statutes or ordinances have been on several occasions 
 referred to Committees of the Privy Council, to report their 
 opinion thereon, and that the petitioners have accordingly been 
 heard by counsel before such committees. Your memorialists 
 would refer, among others, to two instances relating to the 
 island of Jersey, which occurred respectively in the years 18o3 
 and 1858, and the proceedings on which are reported respec- 
 tively in the 9th volume of Moore's Privy Council Reports, 
 page 185, and the 11th volume of the same work, page 320, 
 in each of which cases the Committee was a mixed one, 
 composed of some members of the Judicial Committee, 
 together with some membei-s of Her Majesty's Government : 
 also to the case of the Canada Church Synod Act, which was, 
 as your Memorialists have been informed, referi'ed to, and 
 argued by counsel before, a Committee of the Piivy Council, 
 abovt March, 1857. 
 
9 
 
 Tluit the following is an extract from a letter dated 19th 
 June, 18G1, from Mr. VVagataff, the English Solicitor of the 
 Grand Trunk Railway Company, in reply to letters from the 
 Solicitor of several large First Preference Bondholders, calling 
 the attention of the London Directors of that Company to the 
 clause in question : — 
 
 " I have submitted to the London Directors of the Grand 
 Tnmk Railway Company our correspondence of the 12th, 
 13th, 15th, and 18th instant, and am authorised by them 
 to disavow entirely all knowledge or authorship of the 
 clause to which the correspondence refers, and to intimate 
 that they were as much surprised at it as yourself. In 
 the absence, however, of all communication from the 
 Canadian Directors as to the clause in question, I am sure 
 you will not think me unreasonable in declining to recom- 
 mend the Directors to take any action upon it." 
 
 That the following is a copy of a letter from the Secretary 
 of the Great Western Railway of Canada, relating to the Act 
 in question : — 
 
 " Great Western Railway of Canada. 
 " Gresham House, Old Broad Street, 
 "London, E.C. June 28th, 1861. 
 
 «' Dea. Sir,— 1 have laid your note of 20th inst. before my 
 Board. With reference to the Act of the Canadian 
 Legislature giving power to the Directors of any Railway 
 in the Province to appropriate Revenue to Capital pur- 
 poses without the concurrence of tneir Shareholders, my 
 Board thinks this so vicious in principle, and so destructive 
 of confidence in luactice, that, when the proper time 
 
10 
 
 arrives, they will be happy to oppose it in concert^ with 
 you. 
 
 " I am, Dear Sir, 
 
 " Yours truly, 
 "BRACKSTONE BAKER. 
 
 "J. Morris, Esq., 6, Old Jewry." 
 
 That the following is a copy of a letter from the Secretary 
 of the Buflfalo and Lake Huron Railway Company, relating to 
 the said Act : — 
 
 
 " Buffalo and Lake Huron Railway Company. 
 " 80, Lombard Street, London, E.C. 
 
 "July 10th, 1861. 
 
 " Dear Sir, — I am favoured with your communication of this 
 morning in reference to an Act recently passed in Canada, 
 to amend the Railway Glauses Act, more particularly with 
 regard to the 8th Section. In reply, I have to state that 
 my Board will be happy to co-operate with you in your 
 endeavours to rescind the clause in question, which was 
 viewed by them with grave surprise at the time it was 
 
 enacted. 
 
 " I am, dear Sir, 
 
 " Yours very tnily, 
 
 "THOMAS SHORT, 
 «J. Mon-is, Esq., 6, Old Jewry, E.C. ''Secretary." 
 
 That the said Great Western of Canada and the Buffalo 
 and Lake Huron Railway Companies are, besides the said 
 Grand Tnxuk Railway Company, the principal railway com- 
 panies in Canada. 
 
11 
 
 That the following is an extract from the joint opinion of 
 Counsel (Sir Hugh M. Cairns and Mr. Westlake) relating to 
 this Act : — 
 
 " 2. The Colonial Act passed in the late Session, to amend the 
 Railway Clauses Consolidation Act, does not affect the lien 
 of the Preference Bondholders, but it materially affects the 
 order of appropriation of the Company's earnings enacted 
 in 1858, by placing among the working expenses, subject 
 only to the vague condition of their being necessary to the 
 efficient working of the Railway, whole classes of charges 
 which, as being incurred for the improvement and 
 augmentatioij, and not for the maintenance of the Com- 
 pany's property, would not, without the new Act, be 
 chargeable against revenue under any condition whatever. 
 This we say with full consideration of the case of Corry v. 
 Londonderry and Enniskillen Railway Company, 9 W. 
 R. 301, 7 Jur. N. S. 508, which, as having arisen between 
 Shareholders of different classes, and not as between 
 Shareholders on the one hand, and Creditors protected by 
 a statutory appropriation of earnings on the other, does 
 not, in our opinion, bear upon the construction to be put 
 on working expenses in the Act of 1 858. 
 
 "3. We are of opinion that a very strong case exists for 
 appealing to the Crown to disallow the Act of the late 
 Session referred to, and we recommend that a petition to 
 that effect be presented to Her Majesty, and, at the same 
 time, a memorial mentioning the petition be laid before 
 the Colonial Secretary, in which he should be prayed to 
 advise Her Majesty to disallow the Act in question, or at 
 least to advise that the petition be referred to a Committee 
 of the Privy Council, before which the petitioners might 
 be heard in support of its prayer." 
 
12 
 
 PRAYER 
 
 Your Memorialists therefore respectfully represent to your 
 Grace : 
 
 1. That the said Act of the Canadian Legislature 
 
 ought to be disallowed by Her Majesty ; 
 and 
 
 2. That, if your Grace should not otherwise 
 
 be able to satisfy yourself of the propriety 
 of advising such disallowance, then that, 
 considering the importance of the 
 interests at stake, and the gravity of 
 the allegations herein and therein 
 contained, it would be proper to refer 
 the said petition to Her Majesty to the 
 consideration of a Committee of the Privy 
 Council, before which counsel might be 
 heard on behalf of the prayer of your 
 Memorialists. 
 
 For which purposes your Memorialists refer themselves with 
 confidence to your Grace's wisdom and justice. 
 
 I 
 
[DRAFT PETITION.] 
 
 TO THE 
 
 QUEEN^S MOST EXCELLENT MAJESrf . 
 
 5rf)e l^UmUt '^ttition ofk. B. (a First Preference 
 Bondholder of the Grand Trunk Railway of 
 Canada) 
 
 and C. D. (a Secmd Preference Bondholder). 
 
 SHEWETH as follows :— 
 
 1, Prior to the year 1856, the province of Canada had 
 advanced to the Grand Trunk Railway Company of Canada 
 £3,111,500 sterling, for which it had, by several Provincial 
 Acts, a first lien or charge on the railway and property of the 
 
 Company. 
 
 2. In 1856 the Company, being unable to raise the farther 
 Capital required to proceed with the works, applied to the 
 Government of Canada for aid ; and, as the result of 
 negotiation between the Company and the Government, thv^ 
 Provincial Act of the 19th and 20th years of your Majesty's 
 reign, c. Ill, was passed, which provides as follows :— 
 
 « For the purpose of enabling the Grand Trunk Railway 
 Company of Canada to complete their undertaking, the 
 Governor in Council shall be and is hereby authorised to 
 
14 
 
 carry into effect the arrangement provisionally entered 
 into between the Government of Canada and the said 
 Company, based upon the following terms — viz. :— 
 
 " * The said Company shall be authorised to issue Pre- 
 ferential Bonds to the extent of £2,000,000 sterling. 
 The Holders of such Bonds to have priority of claim 
 therefor over the present first lien of the Province.' " 
 
 3. Shortly after the passing of this Act, subscriptions were 
 solicited towards the Preferential Bonds thereby authorised, in 
 a circular signed by the Secretary of the Company, and dated 
 the 9th day of December, 1856, in which it was stated that 
 « the holders of such bonds are to have priority of claim over 
 the present first lien of the Province." In the same circular, 
 the Act of ' 856 was described as a concessit i by the Govern- 
 menc of "the first charge on the undertaking, amounting to 
 upwards of three millions sterling." The last paragraph of the 
 circular is in these words : — 
 
 "It has been before mentioned thai these debentures are to 
 have priority of claim cv tr tLa present first lien of the 
 Province, and there cannot, therefore, be any doubt as to 
 their security and value as an investment." 
 
 4. Under the said Act, Preferential Bonds, which (through 
 the second i8su3, presently to be mentioned,) have acquired the 
 name of First Preferential Bonds, were issued by the Company 
 to the whole authorised amount of £2,000,000 sterling, and 
 were in consequence of the representations contained in the 
 said circular, taken up almost exclusively by subjects of Your 
 Majesty, resident in the United Kingdom of Great Britain and 
 
 Ireland. 
 
 5. In 1858 a further Provincial Act was passed, that of the 
 twenty-second year of Your Majesty's reign, c. 52, by which 
 the Company was authorised to increa^se itn .capital, and whereby 
 
15 
 
 lly entered 
 d the said 
 
 < issue Pre- 
 00 sterling. 
 ty of claim 
 'rovince.' " 
 
 ptions were 
 ithorised, in 
 , and dated 
 stated that 
 ' claim over 
 me circular, 
 the Govern- 
 Qounting to 
 jraph of the 
 
 tures are to 
 lien of the 
 doubt as to 
 
 ich (through 
 acquired the 
 he Company 
 iterling, and 
 uned in the 
 ects of Your 
 ; Britain and 
 
 1, that of the 
 12, by which 
 and whereby 
 
 it was enacted that the further capital so authorised might be 
 raised by Preferential Bonds, which should be deemed to be 
 Preferential Bonds within the meaning of the said Act of the 19th 
 and 20th years of Your Majesty's reign, c. Ill, and that such 
 bonds, together with the Preferential Bonds already issued 
 under the authority of the said Act, should be entitled to the 
 privileges conferred on Preferential Bonds by the said Act ; or 
 that such increase of capital might be effected by bonds not 
 preferential, or by mortgage, or by the issue of new shaves ; 
 and It was thereby farther enacted that, subject to the rights 
 and powers of the Atlantic and St. Lawrence Railroad Com- 
 pany under a certain W, as to the portion of the undertaking 
 thereby demised, the earnings of the Grand Trunk Railway 
 Company of Canada, after deduction of working expenses, 
 should in each half year be appropriated and applied as 
 follows —First, in and towards the payment of the interest 
 upon the amount which for the time being should have been 
 rled by the issue of Preferential Bonds as therein and herein- 
 before mentioned; Secondly, in and towards payment of the 
 interest upon the loan capital of the Company, for the time 
 being msed and subsisting upon and in respect oi the several 
 classes of its bonds and debentures other than the saad Pre- 
 ferential Bonds; and Thirdly, in and towards payment of a 
 dividend at the rate of 6 per cent, per annum on tlie stock and 
 shares of the Company; and afterpayment of such dividend, 
 then in or towards the payment of the interest on the Provin- 
 cial Debentures, issued in aid of the Company from time 
 to time the extent of £3,111,500 sterling in all ; and after pay- 
 nxent of such interest, the surplus, if any, should be applied m 
 payment of a fui-ther dividend upon the stock and shares of 
 the Company. 
 
 6 Your Petitioner, A. B , i» the holder of First Pre- 
 
 fereotUl Bond- of the Grand Tnmk lUilway Company o, 
 
16 
 
 Canada to a large amount, and purchased many of those he 
 now holds since the passing of the last-mentioned Act. 
 
 7. Under the last -mentioned Act, Second Preferential 
 Bonds have been issued for £1,111,500 Bterling, being the 
 residue of the amount of the provincial lien, after deducting 
 that of the First Preferential Bonds ; but such Second 
 Preferential Bonds have not even yet been all taken up, nor 
 has the Company adequately increased its capital in any of the 
 methods prescribed by the last-raentionea Act, but has incurred 
 heavy debts, called floating debts, for the completion and 
 equipment of its railway, and for other purposes which should 
 have been provided for out of capital, and were by no means 
 chargeable against earnings. 
 
 8. In a circular dated the 3rd day of March, 1859, signed 
 by all the London directors of the Company, and soliciting 
 subscriptions for the Second Preferential Bonds, the following 
 statement appears : — "The sum of £3,111,500 has been raised 
 on bonds of the Province of Canada, the interest on which 
 formed the first claim on the railroad." In the same circular 
 the dii'ectors state that "the proposed new issue of £1,111,500 
 Second Preferential Debentures will, with the £2,000,000 of 
 First Preferential already issued, assume the position originally 
 occupied by the Provincial Debentures of £3,111,500." And 
 so late as the month of April, 1860, subscriptions were solicited 
 by the Company for the Second Preferential Bonds, on a repre- 
 sentation that a certain amount of gross traffic would, after 
 deducting working expenses, leave sufficient to pay the interest 
 on the First and Second Preferential Debentures ; but without 
 making any mention of the said floating debts, then already 
 considerable, and which it was most important to mention if 
 they, as well as the working expenses, were to be met out of the 
 earnings of the Company before payment of any interest to the 
 Preferential Bondholders. 
 
17 
 
 9. Your Petitioner, C. D., is the holder of several Second 
 Preferential Bonds of the Company, many of which he sub- 
 scribed for since the foregoing representations were made, and 
 in reliance on them. 
 
 10. Nevertheless, in their report, dated 29th December, 
 1860, the directors stated that they were applying the net 
 earnings, beyond working expenses, in meeting pressing claims 
 for past expenditure in rolling stock and stores, and that the 
 interest to accrue due on the 1st of January upon the First 
 Prefereatial Bonds could not be paid, as in the event it was 
 not, and has not yet been. 
 
 11. Thereupon the solicitor acting on behalf of several 
 large Preferential Bondholders communicated with the solicitor 
 of the Company, and learnt from him that he had taken the 
 opinion of two English counsel of eminence, Sir H. M. Cairns, 
 Q.C., M.P., and Mr. J. H. Lloyd, upon such appropriation of 
 the earnings to past expenditure, and that it had been un- 
 favourable to the course taken by the directors : and in the 
 month of January last the London directors of the Company 
 passed, and communicated to your petitioners through the 
 said solicitors, a resolution calling upon the Canadian board 
 to apply the earnings of the undertaking in conformity with 
 the opinions of Sir. H. M. Cairns and Mr. J. H. Lloyd, and 
 
 to remit the balance to England, towards payment of the 
 
 Preferential Bondhoiacrs. 
 
 12. As the financial difficulties of the Company increased, 
 and several creditors who had obtained judgments in Upper 
 Canada for large floating debts threatened to take the rolling 
 stock in execution, a large Preferential Bondholder, shortly 
 after the default in payment of the interest due upon the 
 First Preferential Bonds on the 1st day of January last, com- 
 
18 
 
 menced proceedings in the courts both of Upper and Lower 
 Canada, on behalf of himself and the said First Preferential 
 Bondholders, to have his and their rights settled and deter- 
 mined, which proceedings are still pendii.g ; and in them the 
 Company, notwithstanding the opinion of counsel already 
 referred to, and the resolution of the London directors thereon, 
 have claimed the right of applying the surplus earnings, after 
 deducting working expenses, in the purchase of additional 
 rolling stock, and for other requirements of the Company. 
 
 I 
 
 iii! 
 
 13. Subsequently to the commencement of snch proceed- 
 ings, a bill was introduced into the Canadian Legislature, during 
 its recent session, entitled " an Act to explain and amend the 
 Railway Clauses Consolidation Act," which is incorporated with 
 the Acts constituting and relating to the Grand Trunk Railway 
 Company. It was submitted to the agent of your petitioners at 
 Quebec, who was specially charged by them to watch, in the 
 interest of the Preferential Bondholders, any legislation which 
 might take place, and found to contain oniy three clauses, none 
 of which in any way affected the Preferential Bondholders. 
 
 14. Shortly after, and without notice to the said agent, a 
 fourth clause was added, which gave a definition to the word 
 " railway," when occurring in any Railway Act, different from 
 that contained in a previous Provincial Statute, on which, 
 among other grounds, the claim of the Preferential Bondholders 
 to a charge on the Company's rolling stock had been rested ; 
 but the said clause was struck out on the objections existing 
 thereto being urged by the said agent of your petitioners. 
 
 15. After the said bill had passed the Legislative Assembly, 
 it was carried up to the Legislative Council, and was there 
 referred to a Select Committee, the majority of whom consisted 
 of directors of the (Irand Trunk Railway Company ; the 
 
19 
 
 Honourable John Rosa, Minister of Agriculture and President 
 of the Legislative CouncU, and also President of the Grand 
 Trunk Railway Company, being Chairman of that Committee. 
 
 16. On the day but one before the prorogation of the 
 Provincial Parliament, the Committee reported the bill to the 
 Council with an additional section, which was in these 
 wotds : — • 
 
 « 8. The interest of the purchase-money or i-ent of any real 
 property acquired or leased by any railway company, and 
 necessary to the efficient working of such railway, ana the 
 price or purchase-money of any real property or thing 
 without which the railway could not be efficiently worked, 
 shall be considered to be part of the expenses of working 
 such railway, and shall be paid as such out of the earnings 
 of the railway." 
 
 17. In the hurry of passing a great number of bills 
 through the two Houses, the eection in question passed 
 unobserved. The bill was read a second and third time in 
 one sitting ; and on the day of the prorogation it received the 
 Governor-General's assent, with a great number of other biUs. 
 
 18 The said section was thus introduced, passed, and 
 assented to, without notice to the said agent of your petitioners, 
 although he had been promised by the said Mr. Ross that he 
 Should have notice of any legislation affecting the Grand Trunk 
 Railway Company ; and it was not until some days after the 
 prorogation that he discovered its existence, and up to that 
 time the section had not even been printed. 
 
 19 Your petitioners are advised that the said 8th 
 section of the said Act materially affects the order of appro- 
 
20 
 
 priation of tlie Company's earnings, enax^ted in 1858, by placing 
 among the working expenses, subject only to the vague con- 
 dition of their being necessary to the efficient working of the 
 railway, whole classes of charges which, as being incurred for 
 the improvement and augmentation, and not for the mainten- 
 ance of the Company's property, would not, without the new 
 Act, be chargeable against revenue under any condition 
 whatever. 
 
 20. Your petitioners submit that they and all other the 
 holders of Preferential Bonds of the Company are aggrieved 
 by such legislation, which impairs the faith of contracts, and 
 deprives them of securities provided by the Provincial Parlia- 
 mer.+. itself, and in reliance on which they have advanced their 
 money. 
 
 PRAYER. 
 
 Your petitioners therefore most humbly pray 
 Your Majesty that Your Majesty would 
 be graciously pleased to disallow, by an 
 Order in Council, the said Act of the 
 Canadian Legislature, entitled "an Act 
 to explain and amend the Railway 
 Clauses Consolidation Act ;" or that Your 
 Majesty would at least be graciously 
 pleased to give your petitioners an oppor- 
 tunity of supporting by evidence the 
 statements herein made, and of showing 
 cause by counsel why it may be proper 
 that the said Act should be disallowed by 
 Your Majesty ; or that your petitioners 
 may havt< such further or other relief in 
 the premises as to your Majesty, in your 
 royal wisdom and justice, may seem meet. 
 And your petitioners will ever pray, &c. 
 
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