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Les cartes, planches, tableaux, etc., peuvent dtre film^s d des taux de reduction diff grants. Lorsque le document est trop grand pour dtre reproduit en un seul cliche, il est film6 d partir de I'angle supirieur gauche, de gauche d droite, et de hau^ en bas, en prenant le nombre d'images nicessaire. Les diagrammes suivants illustrent la m6thode. arrata to pelure, >n A n 32X 1 2 3 1 2 3 4 5 6 CANADA RAILWAY LOAN. ^Ri y'jj -*i II ^1 RETURN to %n Onler of the Honourtble The Houie of Comrooo.. ' ■iM'd *<; March 1867;— /-or, ' COPY " of recent Correspondence between the Colonial Office and the . Tbsasury respecting the proposed Guarantee of the iNTERcOLONiAt ' Railway Loan (^ri7/*A AowA ^mmca)." Treasury Chambers, \ 27 March 1H67. j GEORGE WARD HUNT. — No. I.— Sir F. Rogers to the Secretary to the Treasury. T ^"^nii r .u r J . Downing-street, 13 March 1867. 1 HB Bill for the confederation of the three principal North American Pro- vinces having now passed the two Houses of Parliament, the Duke of Buckingham and Chandos directs me to request that you will call the attention of the Lrds Commissioners of the Treasury to the state of the negotiations which have taken place respectii r the completion of a railway from Halifax to Quebec, and a proposed guarantee by this country of the sum of 3,000,000 /. to be expended upon that object. The history of the transactions relating to this guarantee is given in a printed statement drawn up in this Department, of which I enclose a copy.» It will be seen (pages 10, 1 1, 12), that in 1862 the then Government of this country caused to be embodied in two Treasury Memoranda the terms on which they would consent to propose such a guarantee to Parliament. As far as the Imperial Government was concerned, the leading conditions were 1. That the debt should be paid off at certain fixed periods ranging from 10 to 40 years with adequate provisions (which are specifically set forth), for the maintenance of a sinking fund. 2. That the line and surveys should be approved by Iler Majesty's Government. 3. That Her Majesty's Government should be satisfied first that the line could be constructed without further application for Imperial guarantee, ^ and next, that the Colonial revenues were sufficient to meet the charges intended to be imposed on them. In 1864 it was stated by the Duke of Newcastle, with the concurrence of the 'IVeasury, that Her Majesty's Government considered the above offer as still subsisting, "but would certainly cease to do so unless a d(;finitive arrangement were made, and the necessary Colonial laws passed, within five years of the date of the first Memorandum, i.e., before December 1867." The transactions which have resulted in uniting the three Provinces in one " dominion" have rendered impossible the literal performance of the condition imposed by the Duke of Newcastle, but they furnish additional reasons for pro- ceeding with the completion of the railway, and they greatly facilitate the arrangements for that purpose, as the Government will now only r^'al with one body politic instead of three, and with a body politic which is pledged in the most public way to the speedy construction of the railway by a clause inserted in an Act of Parliament at the urgent desire of its authorised Representatives. The 160. See Enclosure in No. 3. If ;*g i^jj- ii ai ?' m ' J * w mi - h oo^ CORRESPONDENCE RELATIVE TO THE The Duke of BuckinKhom and Cbandos is therefore of opinion that no time •hould be lost in fulfilling; the pledges given by the late, and adopted in spirit as well as letter by the present, Goverument ; and he would submit to the Lords of the Treasury the propriety of introducing into Pariiament u Bill which will enable their Lordships to give the Imperial gturantee to a loan of 3,000,000 /. on performance of the conditions specified in the Treasury Memo* randa of 1862, with such modifications as Parliament may sanction or require. It only remains to observe that their Lordships will obtain the fullest infor- mation relating to the state of the Canadian finances from Mr. (ialt, who is now in tliis country ; and that it will not be practicable to insist on a literal performance of the condition which is numbered 9 in the Treasury Memorandum of 1862. The approval by Her Majesty's Government uf the line of railway, and the proof that such line can be constructed without further application for an Imperial guarantee must, of course, be made a condition precedent uf the guarantee itself, but under present circumstances cannot precede the application to Parliament for power to give that guarantee. I annex a copy of a Memorandum respecting the financial position and trade of British North America, and certain reports, surveys, and maps on the subject of the proposed line. I am, &c. (signed) Frederic Rogers. Enclosure in No. 1. Memobandum respecting the Financial Position and Trade of British North America. RsvENDE and Expenditure for last Financial Year. Bevenue. Canada Mova Scotia New Brunswick EXFENDITUBE. Canada Nova Scotia (about) New Bruntwick - ' ■',':'J..'.yf.'^. ScRPLva N.B. — Militia Expekditube Labt Yeab. Canada - - ' Nova Scotia New firunawick • Ontario and Qnebfc Nova Scotia New Bruniwick • Canada Nova Scotia New Bruniwick After Union will be about DoUan. FcBLic Debt or " Canada " will be^ Chabges on Fvblio Debt Last Yeab. 11,711,320 1,600,000 1,080,047 1,038,808 lfiU,460 1 '33, 1 48 03,500,000 8,000,000 7,0!-0,000 3,602,412 367,680 840,283 Dollars Dollars. IS,4.32,74S 1,666,071 1,S1-.',02I 15,300,840 14,391,367 918,473 1,947,470 77,600,000 4,389,275 4,360,000 1,380,375 1,360,000 i CANADA RAILWAY LOAN. Tkadb and SnippiMO. ^^ '00 V Ouuula -- No*a Scotia New Bruntwick 'Exports. Canada Nov« S irtia ....... New Bioiuwick Dollar*. 48,010,477 14,381,003 7,U86,69A 70,078,734 Great Britain. Aottar*. 98,084,«0» 0.3I»,08S 3,'284.440 37,&8S,030 63,030,780 H,H80,003 6,634,736 13,700,008 704,473 3,594,061 68,306,308 10,136,701 TONNAOE. Entriea Inwards — Tom. 038,946 0>0,930 807,161 Ton*. Nova Scotia New Bruniwick Entrien Outwards— PAliBHa 1,113,380 773,017 724,870 8,076,030 Nova Scotia New Brunswick • 3,040,370 6,310,316 Shipping owned in— Canada Nova Scotia New Brunswick * Exclusive of coin and bullion. . 330,430 403,400 300,606 043,638 — No. 2.— The Secretary to the Treasury to Sir F, Rogert. Sir, Treasury Chamhers, 15 March 186r. I AM directed by the Lords Commissioners of Her Majesty's Treasury to state, for the information of the Duke of Buckingham, that before consenting to propose to the House of Commons a resolution upon which to found a Bill for providing a guarantee of interest upon the comtemplated loan of 3,000,000 /. for the purpose of enabling the North American Confederation to construct a railway from Halifax to Quebec, my Lords would wish to be informed in what way and after what examination the line and surveys have been approved by the Colonial Office, and whether the Secretary of State has satisfied himself that the line could be constructed without further application for Imperial guarantee ; and in that case they would be glad to be furnished with a detailed statement, showing how that conclusion has been arrived at. My Lords would further require that the sufficiency of the Colonial revenues to meet the charges to be imposed upon them in respect of tliis loan should bo made out to their satisfaction, after a searching investigation ; and they are prepared to enter into this inquiry as soon as the delegates from the three I^o- vinces concerned shall furnish them with the requisite materials, together with all necessary explanation for enabling them to form a judgment in this matter. I am, &c. (signed) Georgt Ward Hunt, l6o. A 3 '«? ■:f:-;SSB^: .^ ^ -*^ CORRESPONDENCE RELATIVE TO THE '•■-^ -*•--' . . ■- —No. 3. — • Sir F. Rogera to the Secretary to the Treasury. Sir, Downing-strect, 15 March 1867. In answer to your letter of this day's date relative to the proposed Imperial guarantee for the construction of the intercolonial railway in British North America, I am directed by the Duke of Buckingham and Chandos to request that you will acquaint the Lords Commissioners of the Treasury that he will lay before their liordships the information which he lias received with respect to the estimates of the cost of the proposed railway, together with tlie reasons on which those estimates are based, and which induce him to believe that the completion of the line will be secured without further charge on the Imperial Government. His Grace further desires me to request that their Lordships will depute some member of the Treasury to attend at this office to-morrow morning at half-past 10 o'clock to examine the detwls cf the finances of the three principal North American Provinces, in conjunction with his Grace and the Under- Secretary of State, in order to prepare a statement of the security on the futh of which Parliament may be asked to authorise the guarantee. I am, &c. (signed) Frederic Rogers. ^/ — No. 4.— Trbasuby Minute, dated 15 March 1867- In compliance with the request of the Secretary of State, my Lords are pleased to direct Mr. Foster and Mr. Buckland, of this office, to be in attend- ance at the Colonial Office at half-past 10 to-morrow morning. . .. '. . . — No. 5.— Sir F. Rogers to the Secretary to the Treasury. Sir, Downing-street, 23 March 1867. I AM durected by the Duko of Buckingham and Chandos to bring under the consideration of the Lords of the Treasury a proposal that Parliament should authorise their Lordships to guarantee the interest of a loan of 3,000,000 /. to be raised by Canada for completing a railway which will connect Quebec and Halifax. This subject has been more or less under discussion since 184R, and in 1863 gave occasion for two Treasury Memoranda, by which Her Majesty's Government oflered'to recommend to Parliament the proposedguarantee on terms which are therejet forth. These Memoranda will be found in pages 10, 11, and 12, of the inclosed printed paper, which has been drawn up in this Office. The Confederation now on the point of being effected between Canada and the maritime Provinces of British North America renders it possible materially to simplify the terms of that ofTer. In the first plact the whole loan being con- tracted by the Con£e4e]^ation, it is no longer necessary to distjoguish between the interests and obligations of the three several Provinces, or, consequently, to ascertain that the separate revenue of each will be adequate to the charge imposed upon it. In the next place it is no longer necessary to contemplate the possibility that, In the face of unexpected expeuses, any one Province might abandon the undertaking in an unfinished state. The whole undcirtaking will now be in the hands of a single body politic, deeply interested in completing a line of communication essential to its political unity, its commercial progress, and its military defence. Lastly, it will be seen by an annexed paper proceeding from the Representatives of the Confederation now in this country, that those gentlemen are at liberty to make a proposal to which the Delegates of 1862 were not 57. [lerial 4ortli quest ; will !Apect ttsons it the iperial lepote ing »t napal Jnder- e futh ■jtrs. rds are attend- 1867. ler the should loo/, to )ec and CANADA RAILWAY LOAN. V. not prepared to assent, viz-, that the Colonial contrihution co the nnking fund i^ shxU commence as soon as the loan is raiseil, instead of 10 years later, at the '^ JC»tfiLerial and one by the Colonial Government. On the 7th and 8th Clauses of the Memorandum no observation appears to be required. The 9th Article remains for consideration. It stipulates that Parliament shall not be asked for this guarantee till the line and surveys shall have been I submitted to and approved by Her Majesty's Government, nor until it shall be ' shown to the satisfaction of Her Majesty's Government that the line can be i constructed without further a])plication for an Imperial guarantee. * On this article the Duke of Buckingham and Chandos directs me to observe that the circumstances under which the Confederate of the British North American Provinces has been effected render it highly expedient that the ques- tion of this guarantee should be decided at once. But as no line has been yet decided upon, or can be decided upon till the Confederate Parllsment meets, none can be approved by Her Majesty's Government till aft' ■ the proposed application is made to the Imperial Parliament. It does not, hu* ;ver, appear to his Grace that this non-compliance with the letter of the Treasury Memo- randum is material, if it be distinctly provided by the Act of Parliament that until the line is thus approved their Lordships shall not be at Ubertyto guarantee the loan. It is, however, possible and proper that before applying to Parliament, Her Majesty's Government should be satisfied that the Colonial revenuu will be equal to the charges which are to be imposed upon it, and that the railway will, in fact, be constructed without application to the British Government for any further guarantee. There are before his Grace two separate Reports of engineers, containing different estimates of the cost of constructing the Hue ; one of these, which is framed by an engineer of great experience in constructing railways in Now Brunswick and also in Maine and other parts of North America, places the cost of the central line at some 3,300,000 /., and that of the longer, or Bsy of Chaleur, line at about 4,000,000 /. The other is the Report of a gentleman appointed to report on the various suggested lines in sulistantial accordance with the 7th Article of the Treasury Memorandum. This Report may be said to estimate the expense of constructing the central or longer lines equally at somewhat above 4,000,000/. Taking 4,000,000/. as the probable cost, the annual charges wiU be some- what as follows : — /col Intorest, 4 per cent on 3,000,000 /. - - Sinking Fund, 1 per cent - - - - Interest, 6 per cent, on 1,000,000/. Total Charge - £. £. 120,000 30,000 60,000 210,000 besides any sinking fund which the Canadian Government may thhik prudent i6o. *3 ^*'"* 'I ii 1 <•■ %. i CORRESPONDENCE RELATIVE TO THE (but in which the Imperial Government are in no way concerned) on the sub* ' sidiary loan of l,000,U()0 /. lliere is no doubt that a mere statement of the reTPnue and expenditure of the tiiree Provinces for tlie last few years would not, if talcen alone, justify the expectation that this annual charge would be certainly luet. The natural in- disposition of the Canadians (and it is the Canadian revenue on which this question really turns) to raise more money than is absolutely required, and their large expenditure on public works, very generally of a reproductive character, have caused a frequent excess of ex))enditure over receipts. But it appears from a Memorandum which is annexed to this letter, that notwithstanding unusually large expenses in connection with the defence of the Colony, the revenues' of the united Provinces exceeded their expenditure in 1866 by 918,473 dollars, or about 190,000/.; while the accompanying statistics, com- filled from official returns, show a growth in production, in commerce, in popu- ation, and, what is not less important, in productive and commercial activity relatively to the population, which, as it appears to his Grace, leaves no] doubt that either by the natural increase of the revenue, or, if necessary, by the im- position of fresh taxation, the Confederation will tind no difficulty in paying the cost of a public work in the completion of which, as distinct from its partial construction, it has so vital an interest, The statistics furnished in these Tables relate chiefly to the period between 1851 and 1864 inclusive, and although not sufficiently uniform to be susceptible of any simple mode of comparison, they exhibit among others the following amounts of increase : — Population ------- Ex|)ort8 . . - - - dollars Tonnage of vemels entered and cleared Customs ----- dollars Produce of wheat - - - bushels Other grain - . - - „ ■Letters ------- 1851 1850 1851 1859 1851 1851 1852 1,842,265 1867 12,943,795 1865 1,230,702 1864 4,555,326 1866 15,756,493 1860 29,920,408 1860 3,700,000 1865 3,090,936 40,793,960 2,088,778 7,.328,146 27,274,779 61,215,786 12,000,000 Exports >» 15 Tonnage >j 13 Customs (without change in the rates of duty) it 7 Wheat - 9, 9 Grain - - - 9t 9 Letters - » 13 Which result in the following Table ; — The population - was increased in 16 years to the extent of 67 per cent. ~ '" ,,215 69 „ 60 i» 73 „ 104 „ 224 „ .Whether, therefore, we look to the production as shown in the grain crops and exports, or to -the consumption as shown in the Customs, or to the trade as shown in the exports, or to the commercial activity as shown in the increase of correspondence, we tind that the wealth and effective labour has increased twice or three times as fast as the number of the population, which itself has increased 67 per cent, in 16 years. Such being the prospects of the countiy in point of material progress, his Grace desires me to add that he has received from the delegates now in this country an explicit engagement (so far as they are capable of giving it) that the proposed railway shall be prosecuted to a conclusion ; that the Canadian Parliament may, in his opinion, properly be required to adopt that engagement as a preliminary to any guarantee, and that no difficulty can well be anticipated in procuring that adoption, as a clause has, at the instance of the whole body of delegates, been inserted in the recent Act of Parliament binding them to make immediate provision for commencing the work. It m^y not be out of place here to remind their Loidshipa..thaL„ia 1.^42, when tb^ Canadian revenue was but 300^000 /. per annum» the Imperial Govern- ment guaranteed a loan of 1,500,000 /., and that this loan was actually paid off in ijRjiggigOr nine; years before it was dup*. PQt from the proceeds of a fresh loan butJEomjTeceiuie. The loan flow prSQosed is but double that contracted in 1842, and so early repaid, while the .revjenuc of the three Provipces (swollen no doubt by the interest of a considerable debt) has risen tojvipwards of 3,000,000?. "■""'"•'", 'His crops trade m2, 3vem- ' laid off ih loan :ted in woUen rds of His CANADA HAIIAVAY LOAN. His (jiracf liojK's lliat this st.iUiiient will .iiti»f> tluir l.orii»l»iph thni there i* fvery rcacon to be assured that Ciinntia btHh can' and will ixrforni her part in this matter. He conceives that Purliainent may now properly l)e aak<.d to authorise their Lirdships to give tlic proiKwed Ruarantee, Huhjetl to such c«»n- ditions of detail ns th«'ir Lonlsi.ips may consider n-iiuisite and sufficient for the security of Imi)erial intert^tx, and generally to the condition precedent that the Confederate Parliament shall, uithin two years after the union, |m»s an Act providing for the construction of the railway upon a line appn)ved by Her Mujesty's Government, and charging the Canadian revenue, next after its existing liabilties, first with the piin(i|.al nnd interest of the loan ; next, with an annual payment tif ao.OUO /. towards the sinking fund ; and thirdly, with such sums iw may be required over and above the loan of M.OOO.dOO /. lor the completion of the railway. I am, &e. (signed) FirtUric I'o^frt. ,<^ /OO^ Enclosure 1, in No. .'>. Memorandum on the Intrrcolonial Railway. LJ^ The previous history of the negociation for an intercolonial railway between Halifax and Quebec has been summed up in various memoranda which have been drawn up from time ta time by delegates who have been sent to this country from the North American Provinces to arrange with Her Majesty's Government for aid in its construction. The subjoined extract fr«)m a memoran- dum by Messrs. MacUonald and Rose, from Canada, IH5r, gives a clear sum- mary up to that date : — *' In 1838 and 1839, when Canada was invaded by organized parties of rarlirnnrattrv marauders from the neijrhbouring country with the avowed intention of con- >|"i'«r, Hon.* of quest, troops wrere transportetl by that route in winter, when the St. Lawrence ''^'"l""*"*' ''l» "' was closed, with much iliHiculty, at an enormous expense, and with great snf- ' '"** ferinjr to the soldiery ; and the imposibility of carrying military stones in suffi- cient quantities was then also fully proved. " Several explorations were consequently made by the military authorities, with a view to the construction of a military road as part «)f the system of defence of the British North American Colonies. It was then suggested that a railway, besides being of more utility for this jjurjiose than an ordinary road, would be of great commercial benefit to tho*e i'rovinces, and, at the same time, confer the political advantajje of connecting them move intimately with the mother country and with each other. " As this scheme would cost much more than the road originally intended, and as the Colonies would be so much more benefited thereby, it was thought right that they should contribute to the expense of construction. "A survey was accordmgly made in the year 1848 by Major Robini^on and other officers selected by the Imperial Government, but at the expense of the Colonies. " Several lines were explored by Major Robinson, but ho reported the eastern or coast line as preferable, although the longest and most costly, lor several ' , reasons, principally of a military character, given by him. " This route was considered by the Colonies, and especially by New Bruns- wick, as being comparatively of little value except in a military point of view. It was long and circuitous ; it passed through a country but little settled, and could not be expected to make any pecuniary return on the cost of construction for years. " The interest, therefore, of any monies borrowed by the Province to budd the railway would fall entirely on their general revenues, a burden which they were little able to bear. These considerations being strongly pressed on Earl Grey, then Secretary of State for the Colonies, he acknowledged their justice, and in aDespatch, dated 14th March 1851, agreed that the British Government would guarantee the payment of the interest on monies borrowed by the Pro- . vinces for the purpose of making the road, on the condition that it should pass exclusively through British territorj', but he stated that it need not of necessity i6o. ' A4 l>e ■ TiUlilii I CORRESPONDENCE RELATIVE TO THE be b«iilt on Major Robinion'B linr. Any deviation from that line was, howerer, "^' to b«! iubject to the approval of Her Mnienty's Government. " Misapprehension aroite lietwcen Earl Grey and Mr. Howe, of Nova Scotia, then conducting the negotiation, as to whether, in case Major Robinson's line were adopted, the Im|M>rial guarantee wouhl not also l)c extended to a lateral railway running from the main line through New Brunswick westward to the frontier of the United States. " This side line, if constructed, would hare mu<'h im|iroved the commercial character of Major Robinson's line, nd it would have formed a valuable feeder, and connected it with the general railway system of the United States. Acting, therefore, under the belief that the guarantee was to be so extended, the three Provinces of Canada, New Brunswick, and Nova Scotia, made an agreement to construct the railway from Halifax to Quebec in equal proportions, and proceeded to legislate u|H)n it with a view to the immediate execution of the work. " On its being ascertained that it had not been intended by the British Government to grant the guarantee to the local line above referred to, all the objections to Mainr Robinson's route revived, and the arrangements between the Provinces ftll to the ground. *' Anxiously desiring the construction of the railway, the Provinces, although much disappointed at the frustration of their expectations, entered into a new arrangement. " They agreed that if the railway was built along the valley of the River St. John, Nova Scotia would advance three-twelfths, Canada four-twelfths, and New Brunswick five-twelfths of the cost of tiie construction. "This line promised great commercial advantages and a fair pecuniary re- turn, and at the same time satisfied the condition imposed by the Imperial Government, that it should pass exclusively through British territory. The agreement thus altered was submitted to the Imperial Government for ap- proval, but Sir John Pakington, then Colonial Secretary, in a Despatch dated 20th May 1852, intimated his disapproval of the proposed deviation from the eastern line, and that he, therefore, did not feel warranted in recommending the guarantee to Parliament. He, however, at the same time stated that the Imperial Government was by no means insensible to the .;reat national object involved in the construction of the line, and that the most favourable attention would be given to any modification of the proposals then before him. The negotiations thus fell a second time to the ground." Delegates of 1857, The plan proposed in 1857 by the delegates from Canada and Nova Scotia PropoMta of. ^as as follows : HouieofCoininoni, 910 of 1862, PHra 14. In 1841 Canada had obtained from the Imperial Government a guarantee of interest on a loan of 1,500,000/. for the construction of public works. The delegates of 1857 sugcested that "the amount of this loan, including the sinking fund, should be granted by the Imperial Government in aid of the con- struction of the railway," and also that the Imperial Government should give a guarantee of the bonds of the Provinces of Nova Scotia and New Brunswick to the extent of their respective contributions. This proposal was answered in a Despatch to the Governor of Canada, dated 15th of May 1858, in the following terms : " Although participating with the members of the several local Governments, and with their own predecessors in office, in a strong sense of the importance of this object, Her Majesty's advisers cannot feel themselves justified in applying to Parliament for the required guarantee. Their reasons for declining to take this step are solely of a financial description. They feel that the heavy ex- penditure to which this country has been subjected of late years, and the calls upon the resources of the empire for pressing emergencies, do not leave them at liberty, for the present at least, to pledge its revenue to so considerable an extent for the purpose of assisting in the construction of public works of this character, however in themselves desirable." Ptlegttionofi868. The question was agun brought under the notice of Her Majesty's Govern- ment in 1858, by delegates from Canada, Nova Scotia, and New Brunswick. They Aniwer to Dele- gation of 1807. HoMe'ofCommoni, 310 of 1868, page 3. Scotia L, dated avy ex- he calls I them ble an of this CANADA RAILWAY LOAN. sw fCll They estimated th«t 3,50n,0(N) /. weh required for the completion of the railway How* ofCoMMM. and Btfttetl tliat "if the I.500.(Hm>/. which Canaila owet to, and propo.w to' «i««fi«««i ' raise and pay off at on«e to the Iniptrinl Goremment be approprhOcd there •*«• "* remain but 2,(>00,n()0 /. more to b«' prr»vi«l<'d." To meet the interest on this sum, each of the thne Pioviutrs pr()|x)MMl to cDntrihute to the extent of 20,000 /. sterling in inch year. To these proiKwnls. the S(vr«'tiir>- of State replii-d in a des|»atch dated the 24th of December I85H, of which the following is nn extract : - " However important may he the foregoing advantages, it has been found Aw^cr to that objects of interest to Great Britain yet more urgent must yielil to the l>»i»i{«uoo of necessity of not unduly increasing at tlit- present moment th«' public burthens. "**■ For this reason I can only express my deep regret that, while doing full justice to the ability of the arguments advanced by the gentlenten who visited this country as delegates upon the subject, and while far from under\'aluing the benefits of an intercolonial communication by railway, Her Majesty's Govern- ment have not found themselves at lilM-rty to accede to the proposal of granting Imperial aid towards the completion of the line between HaUfax and Quebec." In the autumn of 1861 tlelegates from the three Provinces were again com- DtleirtiioBof missioned to treat with Her Majesty's Government for the construction of the isoi. railway. The terms then pro|iused were as follows : — " To sum up, the proposal made to the Dritish Government is to join the HouMofCommoaa, three Provinces, in a gunrantee of 4 yter cent, upon ;i,()()0,000 /. sterling, the *"» "t issa, assumed cost of the proposed works, less the cost of the right of way, which the f^' *• Provinces will provide. The Provinces are ready to pass Uills of supply for 60,000 1. a year, if the Imperial Government will rlo the same ; and as no doubt this Imperial route will gradually work on with ihcreiising returns, the sum of the risk will gradually diminish, until at kst, and perhai>s before many years are over, the liability may cease altogether. The Canadian llailway CJompanies are open to treat for the working of the new line, so as to avoid anv liability l)eyond the gross amount of the joint guarantee. The selection of the route of the line is left solely to the Dritish Government. " Should the British Government prefer to raise the capital for building the road, their outside responsibility under such arrangements would be 3} per cent, on 3,000,000 /., or about 9",500 /. a year, and the Provinces would still be responsible for one-half, leaving a net liability to the British Government of only 48,7oOl. a year; but if they are not disposed thus to increase their nominal and decrease their real responsibility, the sum required for the esti- mated length of 350 miles of railway, namely, 3,00U,U00 /., can be raised on the terms named; viz., by the mutual guarantee of 120,000/. a year, or 60,000/. a year from the provinces and 60,000/. a year from the British Government, which guarantee will enable the issue at par of 3,000,000 /. of 4 per cent, stock." v- These proposals of the delegates were answered by the late Duke of New- castle, on the I2th of April 1862, as follows : — " I much regret to inform you that, after giving the subject their best con- Aniwer to Dele- sideration, Her Majesty's Government have not lelt themselves at liberty to gation of >8«i. concur in this mode of assistance. Anxious, however, to promote as far as HouMofCommoM they can the important object of completing the great line of railway communi- pi^e^jj^"*' cation on British ground, between the Atlantic and the westernmost parts of ( anada, and to assist the Provinces in a scheme which would so materially pro- mote their interests. Her Majesty's Government are willing to offer to the Provincial Governments an Imperial guarantee of interest, towards enabling them to raise by public loan, if they should desire it, at a moderate rate, the requisite funds for constructing the railway. This was the mode of action contemplated by Earl Grey in the year 1 85 1 , and is the same method which was adopted by Parliament in the Act of 1842, in order to afford to Canada the benefit of British credit in raising the money with which she has completed her great system of internal water communications. The nature and extent of the guarantee which Her Majesty's Government could undertake to recom- i6o. B mend JU*rf ' Itt CORKESPONDENCE RF.LATIVE TO THE D^leuBtion of 1803. KeiKilutioni of Dtlegates at Uuebeo. o30 of 1801, mend to Parliament must be determined by the particulars of any scheme which the Provincial Governments may be disposed to found on the present proposal, and on the kind of security which they would offer. " I fear that this course will not be so acceptable to the Provincial Governments as that which the delegates were authorised to propose for consideration. It is, however, the only one in which Her Majesty's Government, after anxious deliberation, feel that they would be at liberty to participate. I trust that the proposal will at all < /ents be received as a proof of their earnest wish to find some method in which they can co-operate with the Provinces in their laudable desire to complete a perfect intercolonial communication over British territory. And it will be a source of sincere pleasure to me if, adverting to all the different bearings of the subject, and to the condition of their respective finances, the Provincial Governments should end by finding it in their power to make use of the present offer, and to propound some practicable scheme for applying it to \ the attainment of the desired object." In consequence of this counter proposal of the Secretary of State, a meeting of delegates was held at Quebec in September 1862, where the following reso- lutions were passed : — " The undersigned, representing the three Governments of Canada, Nova Scotia, and New Brunswick, convened to consider the despatch of his Grace the Duke of Newcastle, of the 12th April 1862, with rei'erence to the colonial Hou»eofCoinmon», railway, having given the very important matters contained in that despatch their attentive consideration, are agreed : " I. That, whilst they have learned with very great regret that Her Majesty's Imperial Government has finally declined to sanction the proposals made on behalf of these Provinces in December 1861, and at previous periods, they at the same time acknowleds^e the consideration exhibited in substituting the pro- posal of ' an Imperial guarantee of interest towards enabling them to raise, by public loan, if they should desire it, at a moderate rate, the requisite funds for constructing the railway.' "II. That, with an anxious desire to bind the Provinces more closely together, to strengthen their connection with the mother country, to promote their common commercial interests, and to provide facilities essential to the public defences of these Provinces as integral parts of the Empire, the undersigned are prepared to assume, under the Imperial guarantee, the liability for the ex« penditure necessary to construct this great work. " III. That tlie three Governments arc agreed that the proportions of liability for the necessary expenditure shall be apportioned as follows, viz., five-twelfths for Canada and seven-twelfths to be equally divided between the Provinces of New Brunswick and Nova Scotia. " IV- Hut it is understood that the liability for principal and interest shall be borne by each Province, to the extent only of the proportion hereby agreed upon. " That in arriving at this conclusion, the undersigned have been greatly influenced by the conviction that the construction of the road between Halifax and Quebec must supply an essential link in the chain of an unbroken highway extending through British territory from the Atlantic to the Pacific, in the completion of which every Imperial interest in North America is most deeply involved. And the undersigned are agreed, that to present properly this part of the subject to the Imperial authorities, the th/ee Provinces will unite at an early day in a joint representation on the immense political and commercial importance of the western extension of the projected work." " Memorandum agreed at the Conference of the Delegates of Nova Scotia and New Brunswick and the Government of Canada. HouMofCoT.rnons, 330 of 1604, )IHg« 10. " 1 . If it should be concluded that the work shall be constructed and managed by a joint Commission of the three Provinces, it shall be constituted in the proportion of two appointed by the Government of Canada, and one each by the Governments of Nova Scotia aiid New Brunswick — the four to select a fifth before entering upon the discharge of their duties. •• 2. That "*!!? jheme resent iments >n. It nxious [lat the to find ludable nritory. ifferent ces, the e use of ng it to meeting ng reso- la, Nova is Grace colonial despatch Vlajesty's made on ley at the the pro- raise, by funds for together, ote their |he public ersigned the ex. l)f liability -twelfths Ivinces of ^est shall [)y agreed greatly In Halifax 1 highway Ic, in the ])st deeply this part kite at an Immercial Lrt Scotia I managed bd in the each by ect a fifth I" 2. That CANADA HAILWAY LOAN. ^J (0/3 II " 2. That a joint delegation proceed, with as little lora of time as possible, tn England, to arrange with the Imperial Government the terms of the loans, the nature of the securities required, the amounts to be paid for the transport of troops and mails, and, if possiible, to obtain a moditication of the terms proposed to the extent of the interest accruing during the construction of the work. " 3. Tliat no surveys be authorized until the laws contemplated shall have been passed, and the Joint Commissioners appointed. " 4. That any profit or loss, after paying working expenses, shall l»e divided in proportion to the contributions of the several Provinces. " 5. That such portions of the railways now owned by the Governments of Nova Scotia and New i3runswick which may be required to form part of the Intercolonial Road shall be worked under such joint authority as may be ap- pointed by the three Provinces. That the rates collected shall be uniform over each respective portion of the road. That all net gain or loss resulting from the working and keeping in repair of any portion of the road constructed by Nova Scotia or New Brunswick, and to be used as a part of the Intercolonial Railway, shall be received and borne by the said Provinces respectively ; and the surplus (if any) after the payment of interest, shall go in abatement of interest on the Crown lands recjuired for the line or for stations, shall be pro- vided by each Province {sic). (signed) " Thos. D. M'Gee, " Joseph Houe. " if L. TiUe^f." President of Council. In accordance with these Resolutions, Delegates were forthwith sent to this country, and, after conferences with Her Majesty's (government, the subjoined Memorandum was prepared at the Treasury, explanatory of the terms on which Her Majesty's Government could concur, subject to the sanction of Parliament, in the proposed plan of assistance to the contruction of the I iitercolonial Rail- way : — "Treasury Memorandum. " It is proposed : — 1. That Bills shall be immediately submitted to the Legislatures of ( anodn, '''rm. offered ty to 630 of lse4, P«ge M. Nova Scotia, and New Urunswick, authorizing the respective Governments to Govemnifui .„ borrow 3,000,000 /., under the guarantee of the British Government, in the DeltguUiH of Tsflj following proportions :—.'i-twelfths, Canada; 3J-twclfths, Nova Scotia; 3.J- HouiteofCunimomt, twelfths. New Brunswick. " 2. But no such loan to be contracted on behalf of any one Colony until corresponding powers have been given to the CJovernmcnts of the other two Colonies concerned, nor unless the Imperial Government shall guarantee pay- ment of interest on such loan until repaid. '• 3. The money to be applied to the completion of a railway connecting Halifax with Quebec, on a line to be approved by the Impenal Government. «'4. The interest to be a first charge on the Consolidated Revenue Funds of the different Provinces, after the Civil List and the interest of existing debts ; and as regards Canada, after the rest of the six charges enumerated in the 6 & 6 Vict. cap. 1 18, and 3 & 4 Vict. cap. 35, (Act of Union). " 5. The debentures to be in series as follows, viz. : 250,000/. to be payable 1 years after contracting loan. 500,000/. „ 20 years „ 1,000,000/. „ 30 years « 1,250,000/. „ 40 years » In the event of these debentures, or any of them, not being redeemed by the Colonies at the period when they fall due, the amount unpaid shall become a charge on their respective revenues, next after the loan, untd paid. Ihe prin- cipal to be repaid as follows : . . j 4- ^* 4i,„ "First decade (say 1863 to 1872 inclusive), 250,000/. in redemption of the first series, at or before the close of the first decade from the contracting of the loan. i6o. »8 S Second ,C)t^ 12 CORRESPONDENCE RELATIVE TO THE "Second decade (say 1873 to 1882 inclusive), a sinking fund of 40,0i)0 /. to be remitted annually, being an amount adequate, if invested at 5 per cent, com- pound interest, to provide 600,000 /. at the end of the decade ; the sum to be remitted annually to be invested, in the names of trustees, in colonial securities of any of the hree Provinces prior to or forming part of the loan to be raised, or in such other colonial securities as Her Majesty's Government shall direct, and the then Colonial Governments approve. "Third decade (say 1883 to 1892 inclusive), a sinking fund of 80,000/. to be remitted annually, being an amount adequate, if invested at 5 per cent, compound interest, to provide 1,000,000/. nt the end of the decade; the amount when remitted to be invested, as in the case of the sinking fund for the preceding decade. " Fourth decade (say 1893 to 1902 inclusivo), a sinking fund of 100,000 /. to be remitted annually, being an amount adequate, if invested at 5 per cent, compound interest, to provide 1,2.50,000 /., beinj^ the balance of the loan at the end of the decade. This amount, when remitted, to be invested as in the pre- ceding decade. " Should the sinking fund of any decade produce a surplus, it will go to the credit of the next decade ; and in the last decade the sinking fund will be remitted or reduced accordingly. " It is of course understood that the assent of the Treasury to these arrange- ments presupposes adequate proof of the sufficiency of the Colonial revenues to meet the charges intended to be imposed upon them. " 6. The construction of the railway to be conducted by five Commissioners, two to be appointed by Canada, one by Nova Scutia, and one by New Bruns- wick ; these four to choose the remaining Commissioner. " 7. The preliminary surveys to be effected, at the expense of the colonists, by three engineers and other officers nominated, two by the Commissioners and one by the Home Government. , • '■■,- . i " 8. Fitting provision to be made for carriage of troops, &c. " 9. Parliament not to be asked for this guarantee until the line and surveys shall hfive been submitted to and approved of by Her Majesty's Government, and until it shall have been shown to the satisfaction of Her Majesty's Govern- ment that the line can be constructed without further application for an Impe- rial guarantee." This memorandum was communicated to the delegates, and with a subse- quent explanation from the 'i'reasury* on two points raised by the Delegate from House of CommoM, New Brunswick (Mr. Tilley), was accepted by the Governments of Nova Scotia page 33. Ibid., page 27. Ibid., page 16. and New Brunswick, and Acts were duly passed by the Legislatures for carry- ing out the scheme. The Canadian Delegates (Messrs. Sicotte & Ilowland), however, objected to various conditions in the proposals of Her Majesty's Government,! that relating to the sinking fund, and others ; and in a Minute of House of Commaiii * ^''l* reference to the two questions raised by Mr. Tillpy upon the i^lipulations embodied in the Memo- fi30 of 1864 randum relating to the proposed loan for the construction of an Intercolonial Railway, the Treasury con- n*cr>9a ' siden that an answer should be sent to the following eftnct: — page 26. Ibid., page 24. I. Her Majesty's Government never contemplated acquiring n precedence over existing engagements of the Colonial Governments, whether for interest or principal ; but the assent of the Treasury to tlie arrange- raeat, as stated in Article R, presupposes adequate proof of the sufficiency of the Colonial revenues to meet the charges imposed upon them, wliich charges would comprise not only the Civil List, and the accruing interest of any existing debt standing in priority to the proposed railway loan, but also any payment of principal standing in the same priority, which may fall due within the period at the expiration of which the railway loan is required to be fully liquidated, as well us the current interest aud the decennial accumu- lation for extinction of principal, of the proposed railway loan. No statement of reronue or liabilities which would atford this evidence has as yet been exhibited to Her Majesty's Government. 2. In the event of the proposed arrangement being carried Into effect, the Treasury will not object to ■ issue the debentures, upon the precedent of the Canada Guaranteed Loan of 1843, under the lund of the Lords Commissioners, and to authorise one of their officers to act as trustee, together with a nominee of the Colony, for the investment in their joint names of the instalments remitted from time to time ou aocouat of sinking fund, provided such a course shall be deemed advisable by the Colonial Gk>vemments. f Inclosed in the above letter from Messrs. Sicotte Sc Howlsnd was a copy of the Treasury Msmonuidum and Schedule, but with the addition of the following note liy themselves : — It if proposed by the Delegates — 1. That tlie loon shall be for 3,s and one id surveys [vernment, Govera- an Impe- a subse- gate from Dva Scotia for carry- owland), Majesty's a Minute of in the Memo- Treasury con- igagemenU of I the arrange- enues to meet the accruing y payment of ion of which inial accumu- libited to Her not object to ■ e liand of the ominee of the ne ou account jti. I Memorandum CANADA RAILWAY LOAN. ^/- lbi%' 1 I >S of the Executive rt-ancil, dated 29th September 1 863, the views of the Canadian ibid., par., as. Government relative to the result of the nrgotiations are thus expressed : "The negotiations founded upon the understanding entered into by the Convention of September 1862 were regarded as terminated with the return of the delegates to this Province, and it was hoped that the Report of this Council of 25th of Feb- ruary last would have sufficed to prevent misconception as to the necessary abandonment of the basis upon which the negotiations up to that time had been founded, and to show that any further action by the Government of this Pro- vince must be the subject of subsequent consideration." The result is, that the Legislature of Canada did not feel itself called upon to pass the contemplated Act. In the meantime, the Acts of Nova Scotia and New Brunswick have ceased to exist. They were limited to a duration of two years. Her Majesty's Government, however, as appears from a letter to Mr. Watkin, *"'•• •*«• *•• dated the I9th of March 1864, at that date considered their offer as still exist- ing, but, it is stated, would certainly cease to do so unless a definitive arrange- ment were made, and the necessary colonial laws passed, within five years from the date of the first Memorandum, <. e., before December 1867. Since the foregoing correspondence, &c. took place, Canada has, at the pro- vincial expense, caused an exploratory survey of the proposed line to be made ; and the result of this survey, embodied in a Report by Mr. Sandford Fleming, was forwarded to the Secretary of State by the Governor in August last. The question of the Intercolonial Railway has now merged in that of the Union of tlie British North American Provinces, and a resolution for the construction of the railway forms one of those adopted at the Conference on Union which was held at Quebec in October 1864 ; and the Government of Canada have given an assurance that they regard the construction of the Intercolonial Railway as a necessary accompaniment and condition of Con- federation, and that not a day will be unnecessarily lost after the accomplish- q^^i,^^ agi? or ment of Confederation in commencing the work and prosecuting it to com- isu. ' pletion. In the meantime, however, it appears that the Governments of Nova Scotia luaiway between and New Brunswick contemplate co-operating together to construct a link of Tnwo and the railway to connect the two Provinces. This line would be carried from Truro, ^" pimiog'e in Nova Scotia, to a place called the Bend, in New Brunswick ; the distance Repot, p^i*^- between these places is about 1 1 5 miles. From the Bend on to Rivi^re-du- Loup, the present terminus of the railway in Canada, is a distance of about 260 miles. In 2. That the liability of each Colony ihall be apportioned ai foUowt :— l,2fiO,000/. for Canada. 875,0001. ...-..-.. for New Braoiwick. 87fi,0(<0{. for Nora Scotia. 3. That the debenturee iMoed shall bear interest at the rate of 3) per cent. 4. That the interest shall be paid hair-yearly, in London, on the 1st of May and the lat of November. 6. That the loan shall be repaid in four instalments : 2SO,000 /. - - - - - in ten years. fiOO,000{. .....-...-in twenty years. 1,000,0001. -- -• in thirty years. 1,260,000/. in forty years. 6. That the net profits of the road shall be applied towards the extinction of the loan. * 7. That the loan shall be the first charge upon the revenues of each Colony, after the ezistink' •^•bU and charges. 8. That the Imperial Government shall have the right to select one of the engineers appointed k^ make the surveys for the location of the line. 9. That the selection of the line shall rest with the Imperial Government 10. If it is concluded that the work is to be constructed by ajoint Commission, it shall be constituted ia the following proportions :— Canada shall appoint two of the Commiaaioneis, New Bninswkk and Nova Scotia, each, one. These four shall nitme a fifth before entering upon the discharge of their duties. 11. Such portions of the railways now owned by the Governments of Nova Scotia and New Bnmswick which may be required to form part of the Intercolonial Road will be worked under the above CommiasioD. 12. All net gain or loss resulting from the working and keeping in repair of any portion of the roads constructed by Nova Scotia or New Brunswick, and to be used as a part of the Intercolonial Road,_sball be received and borne by these Provinces resoectively, and the surplus, if any, after the payment of intvrett, shall go in abatement of ictcreat, on the whole line between Halifiiz and Riviire-du-Loup. . 13. That the rate* shall be uniform over each respective portion of the road. 14. That Crown lands required for the railway or atatloos shall be provided by each Prorine*. . '.; i6o. B3 i' i ■:*■ '^ m -IT \ < ■ % ,.^^ '•. I' ■ i •i ■i '( 14 CORRESPONDENCE RELATIVE TO THE In the event of the two Provinces constructing the portion of the line above referred to, and of its eventually becoming part of the whole Intercolonial Railway, Her Majesty's Government, so far as they are concerned, will con- sider it to form part of the scheme to which the proposed Imperial guarantee would bo extended. This decision is conveyed in the annexed letter to Mr. Watkin, which was communicated to the Governors of the British North American Provinces in March 1864: — "Sir, "Downing-Btreet, 19 March 1864. " The Duke of Newcastle desires me to inform you that he has received from the Lords of the Treasury a copy of your letter of the 1 5th of February, con- templating the construction, by New Brunswick and Nova Scotia, of the first link of the Intercolonial Railway between Truro and the Bend, and suggesting that the Une so constructed should be held to be part of the larger scheme contemplated in the laws recently passed by those two Provinces, and by the Memoranda of December 1862 and January 1864, recited in those laws. " I am directed by his Grace to inform you in reply that if the Lower Provinces shall, at their own expense, commence the construction of a railway on a line approved by Her Majesty's Government between Truro and the Bend, and if subsequently the proposed loan of 3,000,000 1, shall be raised under the Imperial guarantee in virtue of the offer contained in the above Memoranda, the railway between Truro and the Bend, and the works constructed thereupon by the Lower Provinces, shall (as far as Her Majesty's Government is con- cerned) be considered to form part of the railway on which the loan of 3,000,000 /. is to be expended, and that his Grace sees no reason for requiring any change in that part of the Memoranda which declares that 5-12ths of the loan shall be chargeable against Canada, 3 i-l2ths against Nova Scotia, and 3i-12th8 against New Brunswick. "The further question, what part of that sum of 3,000,000 /. should be paid over to New Brunswick and Nova Scotia, in consequence of the works affected by them without the concurrence oF Canada, will be mainly a question for the Ftovincial Governments, in which it must be understood that Her Majesty's Government is not to be involved. But the Imperial Government, before being party to any such payment in respect of this section of the railway, must have sufficient security that the whole scheme will be prosecuted with effect. " It is scarcely necessary to observe that this assurance is given merely for the purpose of providing (as far as Iler Majesty's Government is concerned) that New Brunswick and Nova Scotia shall not be prejudiced by commencing the railway in anticipation of a final arrangement (if such arrangement should ever lake effect), and is not to be construed as in any way varying or keeping alive, or extending that arrangement, or as imposing on the Imperial Govern- ment any liabiUty to assist in the construction of the shorter line now contemplated, whether by way of guarantee or otherwise, except in pursu- ance of the offer of December 1862 and January 1863. Therefore no claim whatever is to be made on the Imperial Government, unless the whole project is carried into execution ; and if the offer of 1862-63 should fall to the ground, this assurance will of course fall with it. " It must also be understood that the present correspordence is not to affect the right of the Home Government to determine for itself at what period the offerof 1862-63 shall be held to be cancelled by the failure of tin Canadian Government to fulfil the first of the proposed conditions — viz., that of submit- ting immediately tu the Colonial Legislatures the Bills required for carrying that offer into effect. '' I am to add, however, that Her Majesty's Government consider that offer as still subsisting, but would certainly cease to do so unless a definitive arrangement were made, and the necessary Colonial laws pas'^ed, within five years of the date of the first Memorandum — i. e., before December 1867. E. W. Watkin, Esq. I am, &c. (signed) " Frederic Rogers" The printed Report of Mr. Fleming's survey gives a full account of the various routes proposed for the railway- December 1865. E.B.P. ; abore colonial ill con- larantee ich was rinces in 1864. red front iry, con- the first iggesting • scheme d by the s. le Lower a railway the Bend, under the >moranda, thereupon it is con- ! loan of requiring ths of the Botia, and id be ptud s affected in for the r Majesty's fore being must have !t. merely for loncemed) imencin^ nt should ir keeping Govern- line now lin pursu- no claim project is e ground, to affect Iperiod the 1 Canadian )f submit- carrying I that offer 1 definitive irithin five 1867. CANADA RAILWAY LOAN. Enclosure 2, in No. 5. Statkment respecting the Kbvenub and Capabilities of Canada. ;o«7 (1.) RsvEfNUE and Expenuiturb from 1852 to 1858 inclusive. It would be impossible without much labour to e;ivp a statement of the total receipts and expenditure for the earlier years on a similar plan to that in which they are given from 1859, because it was only in 1858 that the present method of exhibiting the accounts was adopted, and a large portion of the receipts and <:xpenditure could only be obtained by extracting it from many subsidiary statements. But for the purpose of comparison with the next following state- ment, the leading items of revenue and the net funded debt are exhibited as follows : — 1852. Cuitomi - E«Ci68 Territorial - Poat Office Pmblle Work* Fended Debt Sinking Fund Net Debt - Dolt. c. S,0S7,078 56 103,043 10 S05,S07 26 1853. Dolt. c. 4,110,131 (M 1U0,(K!3 68 37.'>,080 84 455,682 52 22,355,413 40 1,472,299 18 403,009 32 29,88-2,756 03 1,817,736 82 1854. Doll. c. 4,900,708 47 78,741 22 409,597 S8 434,108 02 1855. Dolt. c 3,A27,00« 05 70,080 19 501,380 02 18,06. 400,834 42 31,851,833 78 2,196,145 40 30,883,114 23 28,065,020 II 45,8^5,^17 35 3,012,0.'i3 77 Dolt. e. 4,510,138 15 104,401 88 445,829 30 1857 459,418 55 Dolt. t. 3,948,021 xo 119,863 57 292,137 43 148,008 05 401,304 45 1858. IM*. c. 9,968,157 70 138,760 32 415,873 68 395,905 70 400,737 15 41,757,619 £5 3,035,572 70 3(l.r>55,688 38 43,243,163 58 45,822,040 86 58,334.911 83 64,892,406 15 3,118,702 42 3,753,843 33 49,016,149 40 51,139,501 93 It will appear from these statements that from 20,883,114 dollars in 1852, the debt has risen to 59,763,849 dollars in 1866, being an increase of 38,880,735 dollars. This large increase may be accounted for as follows : — Expenditure on permanent public works ... Railway debt ... . . . - Municipal loan fund assumed by this Province, ei- pended by the Municipalities mainly on railways and other public works ------- Total dots. Dots. c. 7,848,763 73 31,201,63» 34 9,729,340 38,768,730 Besides upwards of 1,000,000 dollars paid in redemption of seigniorial righte out of current revenue, although debentures were authorised to be issued, and a large nominal addition to this debt by the conversion of 6 per cent, bonds into 5 per cent. I ioffers. \t of the I. B. P. i6u. »#; 10 l^: ^ CORRESPONDENCE RELATIVE TO THE For tcntiAHxlC^- tios<\i ioU^.1 » I -I J H fit -a H P H CO «0 00 1^ It CO <0 00 «e 00 00 o CO 00 0> 00 - mmp wm ^ -^ m» IK SS S 4 eS S 9J tj ■• efef «#^cQ ^ 95 09 3 ^^ e. <8 I SSiSSlS 3:!S SgSSSSg 5^2 is §55.53 51!^ S2S^'33$S$S ||||l.|||tl ef of „- --^"B SS::SS?38SS; r <5 '' t' • r«aoe 8S 8S 3X 1.5 II n « ' of-r §1 2S of of 7S sl ^3 11 ^§ \A tx-,c.i C, ■\.- •7/ [U\ I r ^ — 3. — ..».<.<-'" ^t i fp' C'l^oS- '0^8 J Ml8CBLL.\NROt-8 STATISTICS. Post Oik ice. Dtte. Post OtBew. IS.Vi 1 S55 ItiOO 1865 640 1,203 1,098 2,197 Miles Tr»»elled. 2,930,000 4,550,000 5,712,000 6,350.000 Numl)er of Letters. 3,700,000 0,000,000 0,000,000 12,0011,000 IteTenae. DoU. 2.10.fl.>9 6.'>H,4 5I H34,O07 Riiwndiiurr. Doh. 270,102 51 1,720 n02,<')4H 851,071 MB.— Up to 1862 the Post Office was in the hands of the Imperial BUthorities. Imports, cx<'lu!6 720,890 Other Countries. DoU. 305,210 1,073,009 «(I5,800 3,274,044 Total. DoU. lfl,7^0,7o2 30,080,100 34,412,431 39,801,901 Duties. D,Ji. 2,4fl2,5«3 .1,52V8-* 4,758,405 5,063,378 ExroiiTS. Date. Great Britain. United States. British Colonies. Other Countries. Total. Duties. 1850 - 1856 - 1830 - 1664-65 . DoU. 4,808,309 6,738,441 12,749,691 14,637,158 DoU. 6,933,243 20,002,291« 20,698,348 24,213,682 DoU. 1,817,152 1,027,100 723,534 1,106,370 D<)/.«. 108,281 420,533 370,880 C.'6,850 DoU. 12,043,706 28,188,401 34,542,002 40,703,000 None. n it * The Reciprocity Treaty came into efl^t in 1654, but the goodn being moatly free, the duties were not Riaterially sfiected. Tonnage of Vessels Entebed, &c. DATE. Tonnage of Vessels Entered and Cleared exclusive uf Coasting Trade. DATE. Tonnsfff of Veiscli Kntereil and Cleared eiiclmivo of Ccwting Trade. 1851 .... 1632 .... 1653 .... 1854 .... 1855 .... 1850 .... 1867 .... 1,230,702 1,142,301 1,281,432 1,487,097 670,794 1,124,241 1,479,792 1858 .... 1859 .... 1800 .... 1861 .... 1862 .... 1863 .... 1664 .... 1,246.850 1,282,233 1,653,226 2,140,300 1,R29,286 2,133,204 2,088,778 Population. C«niui of 1861. Census of 1800. Annual Increase. P.obable Popu- lation, January 1867. Upper Canada Lower Canada 062,004 800,261 1,396,091 1,111,666 4-34 per cent. 2-50 „ 1,802,056 1,288,880 Total - - - 1,843,269 2,607,067 3,090,036 i6o. ^to it CORRESPONDENCE RELATIVE TO THE MuNrciPAi. Assessment, IHCS. Number of Rati;- paytn. Number of Acret AMMMd. i»n-i»eii Viiliir of Itciil Eilalr. Upp«r Cinada Lower C»dm1» • 291,477 300,010 18,687,783 18,148,060 DoU. 232,78i,0in in2,407,on.. Total - 403,300 31,786,H6!t 306,180,1171 AOKICULTCRAL PkoDUCE. BuabeU ny CeodiR of 1861. Dy Ccnaufi of ISOo. 27,374,770 Wheat 16,766,403 Other Grains » 20,020,408 61,316,7sn Roots • " »» 12,960,770 47,!95,7M4 Hay . . . Tom 1,440,300 1,6.>1,H2I Butler Lbt. 20,074,668 42,735,213 Wool - >' 4,048,217 6,627,1. 54 HorocH Number 386,200 fl-;n,i!in Cattle It 1,336,111 1 ,8.'13,30U Hheep >» 1,697,633 1,85U,0.'>4 Swine tt 830,21)0 1,062,401 (4.) Taking Customs and Excise as the test of taxation, they have ri'cn from 1 dollar 51 cents per head in 1851, to 2 dollars 2 cents per he.id in 18()() ; and the expenditure of the Consolidated Fund from 1 dollar 66 cents tu 2 dollars 63 cents. The means of the people to pay have increased in a much greater proportion. Thus, taking the produce of wheat and other grains as a test, the produce has risen from 24'8 bushels to 35'6 bushels per head of the population, or, otherwise stated, the taxation in 1851 was equal to 6'7 cents on every bushel grown, and in 1860, it was equal to only 5*6 cents. But even this does not show the whole case, because from the establishment of railways, which have created about half our debt, and the facilities of transport which they have afforded, all farm produce has risen in value, and in many of the remoter districts the farmer's .selling price is more than double what it was in 1851, whilst he has now a market for many articles of produce which were almost unsaleable before. The number of letters passing through the Post Office appears to have been in 1852, about two per head, in 1860 about 37 per head, and in 1865, rather more than four per head, showing a large increase of commercial activity in excess of the increase of the population. No. 6. Treasury Minute, dated 26 March 1867- Write to Sir F. Rogers, for the information of the Duke of Buckingham and Chandos, that my Lords have carefully considered the statements and argu- ments contained in his letter of the 23rd instant, and they have examined the statistics of the present income and expenditure of Canada, with a view to forming a judgment as to the ability of the Confederation to meet the increased charges which would be thrown upon its revenue by the lo-an to be contracted for the construction of the proposed railway. Taking into consideration that the present debt of the United Provinces taken together is only about 5 /. per head of the population, being a lower amount than in any of the principal countries of Europe, with the exception of Prussia and ■^^■-^ lOd Valiip nf tl E(Ut«. Doll. J,7H2,O10 J,4O7,0fi.. S.I 80,1171 CO. ri'en from 18(i(); and to 2 dollars proportion, produce has »r, otherwise grown, and w the whole eated ahout led, all farm he farmer's e has now a before. o have been 18G5, rather il activity in [ingham and ;s and argu> xamined the vv to forming ased charges icted for the tvinces taken iwer amount tn of Prussia and C ANAD.V IIAILNVAY LOAN. •9 yyy and Rus.sia, and that thf revenue now raised ]ht head of the population U in Canada only 17 »•. and in the I nited Provinces oidy about 15 i., sliowinK a ve y easy condition of taxation in comparison, not only with EuiopMin countrK's, but with the United Suites, my Lonls cannot feel a'nv doubt tliat if ilu- natural growth of revenue will not cover tlu- increase of charge whidi the contrartion of the proposed loan would entail, no difficulty would be c\[HTitin;(.d in ihc imposition of fresh taxation in order to complete a work so cf fund is equal to the unpaid portiim of the loan, and to l)e rcnutted half-yearly to this country and investeil in the names of four trustees, two to be appointed by the Imperial and two by the Colonial Goverinnent, and that the Act shall contain provisions to make it obligatory upon the Colony t) complete the line within a reiisonable time, and also to charge the said consolid:ited fund with such further sums as may be required over and above the said sum of .3,()0(),0tHt /. for tlie eomplLtiou of the railway next in priority after the contribution to the said sinking fund. 2. That their Lordships shall be satisfied, not only that the revenue to i)*^ raised under the authority of the Legislature of the Confederation will suffice to meet the charges which will be imposed upon it by the first-named crondition, but also that the Colony will be able to provide for any further charges that may be imposed upon its revenue in respect of any expenditure to be incurred in constructing the railway over and above the amount of loan to be guaranteed as above-mentioned, so that no further guarantee shall be hereafter applied for. 3. That provision be made in the Act of the Canadian Li-gislature for the carriage of imperial troops and munitions of war, &c. i6o. .c^ rr, r ^j o § 5? « t^ ^ S o B H re B 3. ? I 1 f C <^ p ve ►ts < ?«