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w
THE
NOVA SCOTIA
Pwailway Syndicate,
(PLUXKETT, IIOLMKS Si CO.)
El^C^jynilSrEU J^1<T1D E2d^OSEID
i;v
JOHN SMITH.
HALIFAX. N. S.
1882,
£0<.A^
m
THE NOVA SGOTIA BatlWAY SYKDICATE
Examined and Exposed.
ThF. serious and thonghtful attention cif tlio pooplo of Nova
Scotia is directed to the following observations in connection witi\
the scheme of railway consolidation and extension ahout to lie
submitted to the Provincial Legislature. It is no exaggeration to
say that no more momentous (question has arisen since Confeder-
ation. So fraught is the pi-oject with future disastrous results to
the Province that its terms liave been scrupulously concealed by
Mr. Holmes and his associates, with the intention of spiinging it
suddenly upon the country and rushing it so rapidly through the
Legislature as to prevent any full examination or discussion, far
less clear understanding, of its details and their consequences.
Fortunately this purpose was defeated in some degree by the
(premature ?) publication of the agreement in one of the Halifax
jiapers, and by the discussion which has since taken place in the
press on the subject.
To a large extent this discussion has been influenced by party
considerations, — to some extent by a failure on the part of the
writers to grasp the full scope and consequent results of the
measure, — and to some extent by what seems to be a deliberate
desire to evade and obscure the important issues involved. These
observations are, therefore, submitted with a view to place before
the public a clear, temperate, and accurate statement of the effect
and practical consequences of the proposed legislation. They are
written with no political or personal bias, and with no object
other than a sincere desire to I'onse the Legislature and the pui)lic
to the serious results that vrill inevitably follow if the scheme is
permitted to become law. If, accordingly, individual names are
introduced in the course of the review, it is the persons them-
selves, — their projects, practices and abilitj', — that ai-e criticised,
and not the political party with which they may be allied.
A few brief sentences are necessary to lead u}> to the point of
which the contract to be considered is the outcome. When Mr.
Holmes was in opposition he enunciated and advocated the
policy of acquiring and completing the several Provincial Piail-
ways by the Government, and operating them by and for the be-
hoof of the Province. He came into power backed by a majority
(2)
\^cnt t he lound of tlie papers m to sonic cornpreliensive railvvav
pol cy hat mi.ht bo expecto.l. Nothing resulted, however bS
at the clu.se of last session Mr. Holmes procured the pas' in- /of a
Resolution, which a,nthorised the Government to ne.Xate foi the
f^alo of the Provincial interests in the local raihvavs nn 1 f ,. f
conipletiou and construction of additioSll^^i^y^ anv c ^.^^
to be so entered into to be subject to the anniovnl f 1
Legislature It is stated the Goven^n.ent rec ve^jCp" als fr
one ot ^^Jlch was accepted. It is more than doubtful if the
tnrjhe h" '""^'?" ^'^ '''r i^^'^P-^^'^ P- the infl ri t-
tion oi tlie House : and it is asserted on good authority tint mo
,. ^entlenmn examined tJio properties, at thcTrequestS. SSw
■ ;V "^ r ^f tTr ^ ^""^^i^^crable time after the aca'ee- ent
i^ it wilf i^''' ^;f' ??^'" tr^^y '"^^^-^ ^"^1 executed F on
this It ^Mll be seen that Mr. Holmes in office deliberatelv -ibind
oiied the pohcy he advocated oat of o/afand now to Submit
the Logislaure,-it_ would be mockeiy to say to^llcoun rv~
a scheme or the creation of-for Nova Scotia-a huoe nWolv
o^f I'll ^'^1^ tlK.usand times more independent of fto Si
control than the existing co)npanies are.
. 1. Ihe Syndicate or Convpa,iy.—ln a matter of simb ^U.i
importance the iirst question that i^aturaHy Ws i -Who at
the symlieate ? and are they sufficiently responsible t^ carrv out
""r::^'^th'th^'?^' projects they v'oiJ iolLl^TP it
conoact ^Mth the Canadian Paciiic Syndicate war. signed bv a
fs s^ ^'ed bv E Tv'pi^ Tt 'n?/^«^^^ Scotia Railway Syndicat
■'as och e " ami );.""• ^^'T f ^f^^^ '''^''^'^^^ "^^J^ to
associates, and to a '-company to be hereafter incorporated"
mt the general tenor of the agreement shows that Mr. Ckett
supposes tiiat iii. Plunkett personally can dispose of the millions
coSs e ' wW T.tw ^ f ^■^^^"J^'^tice to the Province not to
consKiei, Mhat light his antecedent experiences throw on the
measure of success that is likely to atteAd his propose! pLent
,
^
(8) ,
^
1
undcrtak'mfT. In ISTO, in cnnjunction witli " 2is.sncini:p",," ho
procured an Act of the Legislature incorporating a C,'oni[!finy to
construct the Ilidifax and Cape JJreton Railway, which proved
abortive. In lH7o, in conjunction with anotlier, he contracted to
couipleto tlie Western Counties Railway by 1st May, 1>>77. In
February, l;s77, however, all work was suspended on tliat lino,
after he had, as Mr. Holmes states in a memorial to .Sir Charles
Tapper, dated .'Ust December, LS7'S, "emptied the Treii:<ti)-/j of
Nova Scotia of alt l/te monies ajijiertainii);/ to the iwrk." Since
ttiat time he has been incessantly engaged in fruitless efforts to
raise money to complete the line, and year after year special
legislation has been passed, (nominally in the interests of the
company but really in his,) with this object, all of which have
failed with one significant excepti(;n, viz., that under v.in'ch the
Government guaranteed the intere.- 1 on £.').'),000 to complete the
Digly-Yarmouth section of the line. It is almost needless to say
that the Government have had to pay the interest on this
guarantee. The experience the Province has had so far ^ Mr,
Plunkett and his schemes has been bf)th mortifying and exjunisivo,
and such as is certainly no recoraniondation for entrusting him
with new enterprises which pi'omise to be far more disastrous
than his old ones. It is clear that it is of the utmost iiriportance
to him to got the Western Counties Railway completed, so that
his personal interests and obligations may be relieved. Having,
hitherto failed, after repeated endeavors both here and in London,
and although backed by liberal engagements on the part of both
the Dominion and Local Governments in aid, he now expects to
succeed by the present scheme. Mr. Hohnes slaould recollect that
he has had neither the training nor experience, leav' r other
qualifications out of view, to cope with scheming raii.i'.y con-
tractors and astute financiers, and it is not unlikelv that Mr.
Plunkett's success in his first guarantee transaction with Mr.
Holmes emboldened him to launch this enormously wider and moi'e
daring scheme. Writing in December, 1878, Mr. Holmes said :
" The causes of the unsatisfactory f^undition of tliese woi-ks are, first,
■' the w^ant of capital by those who undertook their construction.
" With regard to the first point I would remark that none of the
" original parties who undertook these works appear to h.ive had
•■' any capital or means a<lequatc to justify them in umlcrtaking
" them. The Western Counties Company, the original contractors,
" after exhausting all their means and the subsidies they could
" draw, handed over the contract to Messrs. Shanly and Plunkett,
" who were believed to be eminenf; railway contractors. Messrs.
" Shanly and Plunkett emptied the Treasury of Nova Scotia of
" all the monies appertaining to tl.o Avork two voars n<vo and liavo
since boon en.leavoring in tl.o money nuarket^ of Eun.nc t mis'
further fun.ls to proceed with the work." It ,nay bj nor inen
for the people of Nova Scotia to enquire, in the circu ustances
what change has come o'er the spirit of Mr Hohn.s' 1 ' 'nUm '
in order to foist off npon the Province a scheme ca Ic. ate 1 t .'
involve some SlO.OOO.OOO, h, has now entered into ac iv cm e
cracy with the very indivi.lual who for the past five years has
pX T mis ? ^^- -T^y --1-ts of £u-ope to'mis' ' :
paltry Sl.OOO.OOO to complete the Western Cmmtie.s Line '
Com in en t seems unnecessary.
II. What the Sf/ndlcatc propose to <hi.-~Viit in tlic mo^f
concise form the Syndicate undertake to do the folLvin. i
. , /" P^^' tlio (Government the sum of ai,:J5()000 for th<<
interests of the Province in the local railways
S.^Pailin^ agreement with the Companies, to indemnifv th>.
Government for al costs and liabilities that may be nc red in
couipulsorily ac(iniring ^ j<^ iucuireu in
The Windsor and Annapolis Railway-.
The Western Counties Railway,
The Halifax and Cape Breton Railway, and
Ihe Nictaux and Atlantic Railway
Railway.'' ''"'^'''^' ^''' Annapolis-Digby gap of Western Counties
4. To construct and equip the following new lines, provided
wSm,Sat^r:^ii!:f"^^^^^^
B. Branch to Louisburg, for subsidy of 2000 acres
of land per mile, and a lease of 25 square^niles of nin a
ands. H Government wish this line built the Syndica e
to be notified by 1st March, 1882 ^ "uiuiie
and'^iding^" '^""" ^-nch.-SufRcient rails to lay line
D. Dartmouth Branch.-The undertaking of town of
^ Dartmouth to pay «4000 per annum for 20 years
0. lo pay to the Government out of the earnincrs of ihr^
railways the sum of $225,000 per annum in perpStu y] or mti^
the samje shall hare been redeemed.
A J' -f ^''•K7''/! *° *^^ Government out of the earnino-,s or to
deposit with the Government the capitalized value of, .SoGOOOper
annum for 41 years^ or say $1 ,000,000. ^ >o,wuu per
7. To deposit with tlie fJovurnmont witliin two inoiitlis of
tlif (lato of tlie iiiakiiirj of tlio contract tlio .sum of i'.')L',()(M) as
st'ciiriry for the dna fulHliiinit of tlie aliovo <jl)liyatiuns. It is
uiidcrj^tood tliat this aiuouut whs 'July deposited.
III.
117/'// (lie Government propose to do, —
To .jiv." to tlie Svndicato t'or.Sl.^.jO.OOO,
(d) The rictou Braru'li, which cost about S2,:)00,()00
(h) Tlie Windsor Branch, " _ 1,:>()0,000
(cj The interest of tlie Province, if any, in
Windsor & Annapolis Ry., subsidized in cash 1,070,000
Western Counties Kailwav, " " 700,000
Halifax and C. R Kailway, " " (;!-{),000
Nictaux and Atlantic Rv., " " 05,000
Actual cash expenditure by Province, $G,.)0'>,000
2. To ,n'ive, provided the Government decide to pi'oceod
with the eon'-'t ruction of the new lines, the subsidies already
cnuuieratod, for lines A, B, (' and 1).
.1. To ac([uire, under their assumed powers, and hand (ner to
the Syndicate, if so reciuired.
The Windsor and Annapolis Railway.
The Western Counties "
Tiie Halifax and C. B.
The Nictaux and Atlantic "
4, To ])ay the sum of S22"),000 annually, in perpetuity, on
the securities of the Syndicate, less such amount as may be
redt'Omefl by the operation of a contemplateil sinking fund.
'). To pi'ocure fr(jni the Domiidon Government, on behalf of
the Syndicate, running )• v/ers over the Intercolonial ikailway
from Truro to Halifax, an 1 to indenniify that Goverinnent aicainst
any damages for which they mny l>e found liable imiler the pend-
ing litigation in connection with the Windsor Branch.
Divested of legal phrases and technicalities, the above represent
the main features of the pro])osed scheme, which, as provided in
the contract, must be ratljied in-its entiretij. It must be admitted
there is little lacking in tlie way of comprehensiveness ; and, if it
were possible to carry out completely and etFectively its several
conditions, it is assumed that not much objection would be taken.
Whatever benefits the public would dcive from consolidation,
and the conip!etif)n of the system would be secured, a sv.tn of
$1,350,000 would find its way into the depleted coffers of the
TroTisnry, .-irKl tlio prompt and re,ori.!ar pavnicnt l-v llio Svn.lioato
of tl.o a.iMual intcivst cl,ai-.« a.„l sinldn;,. fu„.l -.VouM ontail no
o .ligation, otlK.r than a numinal on,-, upon the I'ruvincv. That
all this IS pi-o,Mi,sc(l l,y tho scheme, and that it will he assumed as
cortamh' M^oured hy ,ts prom<;ters, Messrs. Hohnes, riunkett and
associates, ,.s very true. Wiiether the promi.es will l.e f ulfdled,
or^^hetller there is other than the most sliadowy and drlusive
;oc.U',ty for tlK.r fulfdment, it is the purpose of tlds investigation
to ascertain. The en-piiry so far has certain! v not l,..en
encoura.i^in^r; and in tlie lij,dit of the experience and expense that
the duet man.pnlntor of tho project has alrea-iy occasioned the
irovince, it ,s of _the_ utmost importance tliat thJ contract should
be rigiilly scrutinized.
IV. The uh;nf>j of the Sfpvln'dfr fo curry ouf the Contrarf
_ln a matter of sudi importance nno:her qi'e -i m that n; t ra'llv
arises IS one as to tl;e ahility of the Syndicate, un-ler the crmditions
and limitations applicable to the case, to raise sufiicient funds to
accomplish the ()l.,ccts in view. The caiutal .vf the "Company
to he incurporaf,ed is to be 8I0,()()0,0()(), of wldch the " usual
proportion shall be pai.l up. In the present case it is open to
Uueshon whether Me " usual proportion " to be paid up will not
consist of paid-up shares of one of the Companies to be purchased
out—say, for instance, tlie Western Counties Railway Company —
being exchan-ed for p.iid-up shares of the new (Company, and
therefore really representing no casl, a.sscts whatever, althou.di
nominally complying Avitli the contract. Leaving tins out of view
altogether, however, an examination of the agreement .shows that
i.>>- nn'?""'''"^ ''^ ^':'^'''^ ^'''^''' ^'^^ ^^^ KH^^rantee the payment of
^220,(0.) per annum, in perpetuity, to the Syndicate, in" .security
tor wliicb they are to receive a first mortgage on the whole
i.cilways and equipment. Therefore, under these limitations if they
are rigid y adnered to, the onb, actual, money that will came to the
byndicate unl he the procechofthisfjuavantee. It is possible
that an annua perpetual subventi-^i of the Province of Nova Scotia
may sell in London to yield about 4 per cent, at par, in ^vhic}l
case the guarantee of $225,000 per annum woul.l <dve sav
^55,500,000. More than this, if indcld so much, would ifot be S'
A larger noniinal amount of stock nugbt indeed be Ik.ated a't a
lower rate of interest, but it would not yield any more in actual
cash becau.se the discount at which it woul<rbe sold would
equfdise the net proceeds. Any capital in addition to this that
the Syndicate may purport or promise to raise must of ne"c-sHy
be nominal, and on paper only, fur this reason ;— that powers \are
(7)
resorvcil to the Government to foreclose nnd s;'ll all the raiUvnyn
in the event of the 822.'),()00 ])t'r nnniiiu i^'iiaranti'i'd not bcin;,'
<lnly paid to th(;in hy tlie Syndieatf. It is t;iivions that
no .vane investor will r.inlc monies in lailways in Nova
Scotia on a second inort;,'ai,'e nntil it is first estahlished, be-
yond pcradventure, that tlie railways can earn the inti.'rest
on the jirst iMortj,'a;;e. The experience of investors in Nova
Scotian railways heretofore has lieen too iuscoura<;inf.', (Jov-
ernnient countenance and aid notv.dthstanding, to warrant
any hope that this enterprise shall he more successful with hona,
^/io'e capitalists, than those the same |.arties have heen endeavorin;jj
to lloat for the past five years. It is admitted some additional
capital may he eventually raised on the lamls ;^n-anted to the
(-'oini)auies and Syndicate. — which are not included in the first
niort;,'a„'e, — hut the puhlic of Nova Scotia know too wtdl that the
un'.;'ranted Crov/n Lands h'tnn which the selections arc tf) he made,
nnd which aie now open for sale to the puhlic at 44 ci-nts an acre,
are of so barren a character that this need not be taken into cal-
culation.
Witli this available cash th.'n of, say, S.'),r)Or>,()00, which is an
outside estimate, aju? '«(;/( /(.'/'. I';/// hare been r(Use'7 vhnlh/ on the
Procivcidl g)'anmtce,tho Syndicate, by the contract, are bound to :
Pay the Provincial Uovernnu'nt ^^ .Sr.U.OOO
Purchase tlie Windsor and Aimapolis Railway, saj-. .. . l,r)0(),()0O
n Western Counties Railway and retire
lK)nds, say 1,708,000
M Haliiax and Cane Bret(m Railway, say. . 900,000
M Nictaux and Atlantic Railv.-ay, ^^ . . 250,000
Complete Western Counties Ry.and buy rolling stock . . S.'O.OOO
Repair Pictuu Branch Ry. and buy rolling stock n . . 300,000
Amount required for existing Railways ?6,91S,000
Complete Nictaux and Atlantic Railway, say S00,000
Construct Louisburg Bi'anch, say 1,000,000
„ Pictou Town Branch, say 300,000
M Dartmouth Branch (>?iOOO per ann.given) say 100,000
Total to pay Gov. and purchase and complete Rys.. 80,71 8,000
Add cai)italized value of $50,000 per annum for forty-
one years 1,000,000
Expenses of promotin^jf and floating Co. commissions, kc. 250,000
Total capita necessary to be rai.sed 81 0,908,000
(8)
rof?Sn ^'"''' 'I'"''' 'V '^';^"^?^ '^"'^^ oxponditure vvliich tlie SyivU-
as r V 1 TV"'- ^';/"''^'' 1^ ^''^'^'r'-^T '^"ttho entire proo-nmuno,
as piovuedlorinthe contract. With one notablo exception to
be hereafter roferre.1 to, they will boar tl)e closest scrut lu and
VI 1 be round by con.petent and experienced railway a Sritie
titht ^ sZr'" " ^'"'f'''''' T'^''''^ ""'1 ^'I'^'P' "^ accordance
the scheme I h s being so, as ,s here broadly asserted without
SVnd'lT r. /''" \T^' competent authority, it is evident the
^VKieate cannot possibly carry out the undertakin.-. With a
?] e vhl In" / fr ''n'''''"^ V^ ^^ «'^'^" to the Government, over
t at s noslil "f ^■"'^.^^•'^y%/^^f J-^S-e.st amount of actual cash
tiiat It i.s po.ssible to raise is that represented by the value of the
^b,UUO,0()() rius amount will bo found, by reference to the
toregoms figures, to }>e inadequate to acquire. con,plete and equip
til. exis(.ing railways, and pay to ihe Province $1 8o()000 for its
■supposed interests. Nothing whatever will remain for tL con-
about SnloOo'S/'r^"'''^ ''7 ^"^''' '' ^"' '-'^ ^'^"^^^^"' ^J'T-^^it of
aboutbl.OOOOOO, tosecure the payment of 8.50,000 annually on
account of the Mo-fa?/«/ sinkinc.- fund. ^
A careful and candid examination of even this part of the
^''^'^'^'f^^S^^tepJnrU.^^in the scrutiny, leads inevi!
tablj to the conclusion that It is only the intention of the Syndi-
cate-w uch means really Mr. Plunkett and " his associates "-to
acquire tlie existing railways with the sole object of givin'^'value
to their ^vortide.ss investments in the Western CountLs E^ilwlv
it would not, or course, do to allow this to be suspected, hence the
elaborate and complicated railway consolidation scheme Any!
thing more utterly dehisive in the nature of a purchase of the
Government railway interests it is dii!icult to imagine, since it
^'v^iiooo w?- r';^""p"''- ^''^''. ^'''''''''' Sl,:3.5b,000, out of
.S-),oOO,000, which the Province is itself to raise bv means of its
guarantee-and making a gift of some JtH,000,000 od.l dollars to
trii .V'^''^'"^'^' ^"^^ ^'"^ Syndicate. A brilliant financial success,
F.-m; L!ahi.l!t7j of the Pror/ncc.-Far transcendincr iji i,n.
portance the question of tlie ability of the Syndicate to raise
r.uftcient tumls to complete the scheme mapped out is the ques-
tion as to the security of the Province again.st liability undel its
perpetual guarantee of .^225,000 per annum. Numerous state!
nients, many of them more ingenious than true, have been
(9)
published witli tlie vicAV of making tlic Provincial lial)ility fipjX'ar
Jiuniinal, or at most, trii'ihig. Credit, for instance, is taken for an
annual reduction of tlie amount <i,uaranlee(l by S<)7,o{)0, being
interest on Sl.S.'O.OOO t(j 1)0 paid to the Government. This would
bo fair enou<^di if it were secured that the stnn would remain
intact on deposit at 5 per cent, during the continuance of. the
Syndicate rruarantee. But has tliis in any way been ])r(n'ided
for ? On the contrary, does n(;t the contract seem to provide that
some 8'Ur),()00 of the amomit will liavo to be paid out in respect
of the Nictaux and Atlantic Railway subsidy, if that road is to
he hu'tlt. Further, is it to be supposed that the exigt-ncies of
Nova Scotia Governments will permit the remaining !^ 1,000,000
to lie at interest for any considerable length of time ? Will it not
be a fund to bo used, in the same way as the Ottav/a Debt
Account has already been used and aljsorbed, as a convenient
medium for raisiiiij temnorary ' ns, v.diich loans have an irresist-
ible tendency to become permanent; and eventually, when a crisis
arrives or a new Go\ernm(M)t comes into power, thes(; loans are
wiped off, and thus the i?l, 000,000 and the interest th.oreon will
disappear i
Again, a great deal has been made of the sinking fund of
i-5.")(),000 per annum Avhich the Syndicate are to provide, and which
it is agreed may be^.pplied, if necessary, in reduction of the Pro-
vincial liability. If the Syndicate were to deposit ?1, 000,000, and
the Government were to realize 5 per cent, thereon, this would
undoubtedly form a fund which would admit of an aimual pay-
ment of So(),000 for 41 years. But, and this /s to be 'particxdavly
noted, this capitalized sum of 81,000,000 was not to lu; deposited
unless Mr. E. W. Plunkett received notice from the Government
vjithln three laonfhsi from the date of the Agreement, or liy (Jth
December last, calling upon him to do so. It may be pertinent
to ask if this notice has I>een given ?
But, even assuming the notice to have been given, it is quite
obvious from the figures and statements submitteil under head
IV al)Ove, that the Synilicate cannot by any species of linancial
legerdemain, having regard to the conditions by Mdiich they are
bornid, find sufficient money to carry out the scheme in its
entirety, far loss find 81,000,000 in addition to help to pay the
interest on its bonds.
The exact direct annual liability of the Province there-
_ fore is to be $225,000
Less interest on 81,000,000, so long as the same remains
imact at Ottawa to the credit of the Province— it
(10)
boing assumed tliat the Nictniiv R-.n
built -^ictaux Kailway will be
oO.OOO
Nefct annual liability in perpetr
iiau:u.ir;r^';,,^"-"^-tionti.tthe^
It is of
nder the Win<l.sor and An
ptT anninn for tw
i^y-...SJ7.-,0()0
•ovinco is already
guarantee for $ I;} 000
enty years—and under "tl
napoh.s -Miarantee iuv :,M
le Western C
h.?^''^^^^:^l2ZrZ''t^z^:!:''i>i'; "-? «- ii-a^H
5,0(»()
'ountie.-
liability shon'ld theref'
all
ant^c line is incurred, thouk
':ilf^Z3''''' P-— n, ^ndl
not
:iat tl
ty t
paid, viz:
;o
allowajice fur all tln\ fi / r Y- . "^ tnese
le Provincial
"?;,"'^:,!^;l!-''l^,"'--o.l."li;i
knii
■ovnice would still
Pr
xrntiu
VI. E
■ovincial lia!.i!ifcy/th7;Ui
f ^(/^'^ ^'^/^'«^',y^.~Pfavin</ tl
Ills fixed tl
le exnct
coiic^idorod •-:\Vi']'%]"" ^^l^-^'"P«^tau
enable thV ^dic^^ t"' ::;rX%^'^^^ '^'^^ ^^ ^
Th?f '"' *'"'''^^^ ^""'^^ ' ^'>vernrnent the sun.s of
the raSi^s! mSM^rn";!!;^!'!;^!"^ "f. '^^ S^'''^^^ "^arnin^s of
that can be procured,!!! "^ authentic data and information
'^j'^^ Railways in operation are —
Windsor and Annano'iv: T?,r tja ' -i
Western OountieX:'^' 'o?"'""' ^'5;'?^^ P-^^ ^-t Report.
Halifax and 0. Breton Ry " ' sO " --tl ''*''^- ^^''^'" ^^^'^^^"^
Pictou Branch . "^ " -!> .< '''^'^'^0
__f l*>0,Oao Estimate.
The Raihvay. to be const^^dt "^^^^
Western Count es T?x7- io ., '
Roto,, T„,v„ Branch Z. i ll „ *;;■ "
Dartmotitli Branch Vn .. ''""'
Louisbur,. Branch... :::::: ,4" „ ]2.wo ..
Total... -01 , -i ~~ "^
For the purnos;; 'of Vl I f'' :^-'^'^-^^00
t.-affic_ (Sioioo ofthe ZZSti^'T/'' f'^^' ^''^ --^
Countie. Railway may bo 3 lu^^^'^. «^ .^'^^ Western
and the figures would then s^an!]'^'' ^^^"^ ^"^"^ ^" operation,
J^xisting Railways Vj."? -i
p-joctSi Rail j;;: ; ; : ; ; ',ti ""}."'■ ''J^?;;;»» -™;"i-
531 miles. 8543,500
(11)
still
The Syndicrvte are also to Le perniittod to exercise ruiDiing
powers oyer tljo Interculonial Railway from Truro to Halifax, bu't
tile benefits to be derived from this concession are of more ajtpar-
cnt than real money value, because it is stipulateil by the
Dominion that the terms are to be such as will yield the same
percenta<^-e of revenue to the Intercolonial 'Railway as it would
receive if it carried the traffic itself under ordinary tralnc arran;^e-
ments. It is also fair to accede that some, but bv no means a
accession of traflic may arise from the consolidation and
lai
continuous v/orkiiig of the lincis. An average of 5 per cent, may
betaken as an cit.side estimate under both of these heads, and
this would bring the gross earnings of the completed Syndicate
system up to ^•:)7(),00() per annum.
Tiiat these estimates are not only fair, but that th.cy are in
excess of wliafc v^'ill be netted by tlie system for years to come is
asserted with confidence. Any persoii v/ho has had practical ex-
perience of the mork'nuj of these railways, as distinguished from the
mere huildivg of them, and Avho has any knowledge of the nature
and capacities of the country tl^^y traverse, the tratlic tliey carry,
and the termini they reach, w'iil uidiesitatingly confirm this
assertion.
The working expenses of a railway vary according to circum-
stances, dependent on its location, gradients, ferries, traflic, &zq.
A new railway with new equipment arul rolling stock can fyr a
few years be worked apparently much cheaper than an older line,
by means of tlie postponement of renewal charges until renewals
have been actually executed. There are no satisfactory data,
except that furnished by the Last published Report of the Windsor
and Annapolis Company, on which to proceed in j-egard to
the working exjienses of these railways; but there are^certain
considerations and facts well known to railway men which will
enable an approximately fair and just estimate to be niade.
Every one, whether a raihvay man (jr not, must know that there
are certain fixed expenses incid(!nt to the operation of a railway,
which must be met if the railway is to be worked at all, and
which are entirely independent of the amount of traflic that may
be carried. It will be enough merely to instance maintenance
of way, running expenses, and charges for management, agents,
clerks and employes. There is a minimum below which these
cannot l)e reduced, and it is the uinver.^al experience that the
tendency is to increase rather than otherwise.
By reference to the Railway Statistics for TS80 laid before the
Dominion Parliament it will be found that the average annual
charges for the working expenses of all the Canadian railways was
(12)
1 to
Rp
per uille. It is adinitto.l )
apply to railways lior(
no loss than from S:,()00 o ^sl^^^^^^
whoso knowled-o will ,10^ if • ' ''V^*"- '^"^ ^'^"^'-^^'^ Supper
Winist,y of R.n;.:;; ^:\,^ ST^'; ""'• ^^'^" accoptocffi
recently nm<le tin ' authotath-oal """'"'' ^^^ rotrenclunent.
ra.hvays in this part of t e co 'trv n '"?i"'"t ^" I^"'^''^ ^ha
'V'-^'ntained at a Ls cost Ian ' kZ ""^- "' ^''^'^^""t'y run and
nonce on the Intercolon a Railwa f ^''' ''''''■ ?'^' '-^^^'^^^^ ^'-^Pe-
^ follows thafc it wouhlci;;t ^7% obt""'"^^^^
Syndicate line as a^^ainst a nr n 1 ^ ^"""^'i *^^ ^^P^rate the
'Jo/^cieney of what .^houh L^^t^T^P '^ ^^^0,000, or a
ess tlian $220,500 p.r annum '' ^x^ "'^^e worknio- expenses of no
inasmuch as the In ercol " R 1 """-^ ^' granted, however, that
tl.at connnands, a w I Xav co n'^'' '] " ^'"^'"^ ^'^^^'^'^^ ^'""'e
r-^-^ than the Sy'ndicato In ^ 'it ^-n '":"''' ^ n'^^^'>' ^'^''^'^^^ l>"«i-
to opornto it. It may, therXe vi . '^T''^^'^^ '""^''^ P^^'' '"ile
calculation to take the -ictun 1' 7»«'^^^'rod a fairer hasis of
the Wi,>dsor & A,ma olt^^^^^ ^^'^ Report of
p/^cfc that con.p^;'oFsn =^in f;:;;?;/";;'^ ^T^^^^y "'^ -^ -^u^'-
Their exp.mse.s fJr the on " '" 'V'^'',^''"'^ '^'^ possihly Jielp )
Ijetwe.. Halifax ami i..";jn!:^:^^-^j^^ty n iles o^ratS
Applymo- these h'<ruros wlii •] 1 V^i '^ t '?^ ''' '^^^^^ '^^ '^'^1^.
m practice will be foum 00 oTco ! , t^^ ^. "'" -T^^'' ''^"-^ ^^''^i^^
oi service as the iruhlic have a H, ' '""^ TH^ '^^'^'^ '^•^"^'"cy
lH:ahatthcvrorkil.-expo OS of ti f^'''^' ^^J*-^' '''''^^ ^^'•^'^I'l
or a deficiency of Sl4,oSo p^^ ^nmlm ' ^'''"" """^^^ ^'^ ^-^^'1^0.
no^" leeH:?; t:!;;;:;j;!^;"e'f ^ ""^^- f ^^ ^-^^^ ^ ^^ it
get over the .liiKculty fS Is fH :""'"' '^"' ^y^'^^<^^to to
construct the lines, who tl e s^te 1 f ''""^ T^^ ^' ^''''^^^^ ^"'^
^t will not earn fo n a v vean " ' ^'^"'^^^'^f' /-^"'l consolidated
relieve the Province <SZ ^Hr M •, hin ""7^,^^^' '^^ ''^^''^""o to
iar less leave anything owa X M o f ^n°V^^^^'^^^^ P^^'' '-^""^n^.
In the face of fact;\nd S ',,. r, '"?f"''^ "'"'^'"-^ ^"'^'1 ^
Jy -'.nutted as Cr^l ^S^tes'rSf"' Jl'"' T'*' '''''''^^-'-
worse than absurrl to hear it < 1 " *^^'^" '^t^'erwise, it is
other n,orning in ll^ /Ai, If ri^^.^^^r"'''"'' "^' "^^'^ '^"^^*-^ ^'^^
the i-oads would earn n , / " ^''^ '''^""■'^•-' "^ ^ few years
r^\' 1-3- aUyu^^^s'^d^'^d^e': f.- "^'y '' >--^-' -''i^f^
besides. *= ' ^^"" o'^e a fair return on the capital
^l>
(13) ,
dicato fail by private ai
rangeiiiont to purcliase the oxistino- C
yii*
0111-
panics, the Government biiids itself to acquire the lines and hand
them over to the Syndicate v.-ithin throe UKjnths after the ratiH
tion of the contract, thelatter as^uniinp- th
oa-
th
ns incurred hy the Government, and m\
In anoti
itself
jpayinentof any liabilities
in^' security for the same.
i.s a
ler part of the contract it is found that the i:52,000 (which
" portion if the!i<l,8rj(),0(m to be paid to the Province,) is
' ''"'"' "'" ' " '' "' ernmont in ca.se of the
it occur, as is
tobetlio security to indemnify the Gov. „,,^ ,
Syndicate's failure to retire such liabilities. Should
indeed more than probable ju.loiiig from the otl
1 . , ,, ^ i, - ., - ■0---0 -'.^ WU..UI estimates on
whieli the contract is based, tliat the auHjunt re(iuired to purchase
and extinguish the property and rights of existing Companies
shou d largely exceed the estimates, and that in consequence of
this the SyiKucate would be unable to carry through the transac-
tion, the Government would find itself in the position of havino-
to procure the money to pay for the roads with only £r>2 000 in
hand to help towards the completion or operation of them ' Most
people would think but lightly of such security.
It is further provided that the Syndicate are to give security
for che construction and completion of the new lines, and on
reference to the contract it will be seen that this same amount of
£o2,000 is made to do duty in this respect also. Now as the Syn-
dicate are to pay the Government g!l,3r)0,000 for the interests of
r4 a!?^"^. V' ^^'"^ ^^i«^i"g line's it is perfectly obvious that the
ioJ.OOi), winch IS part of this payment, is no security whatever
tor the construction of new lines, and they mav be abandoned at
any moment, either by the Syndicate or the Government, and no
securities whatever be forfeited.
It is therefore clear that the contract as it now stands, which
is all
secur
that the public know and can deal with, provides really no
ities for the indemnification of the Government for liabilities
that njay be incurred in acquiring existing railways, or for for-
feiture in the event of the Syndicate declining or failing to con-
struct the new lines. It is true there are some vague phrases in
the contract as to the Syndicate furnishing " such other security
as the Governor-in-Council may require "' for the fulfilment of
their obligations, and tne continuous operation of the roads A
little more information as to what these "other securities "really
mean would enable the public to better judge as to the bona fides
ot both the Syndicate and the Govtrnment in this connection
Past experience as to the value of "other securities" has not
been very satisfactory. Certain securities were professed to have
been taken for the due completion of the Western Counties Rail-
(U)
^vay, but M)o country lias vc'f fn 1 n ., .
lion on that raihvay, and ^al^ T, i , ''^ rciuirod to take a first
^"ay be roquire<rbv ho Oa^^^i;^^^ ^n'-^I'or security^
p><uvanteeot\sosnmllas n.ari-7'o'" '''•"^'^' *'^ I'^'^^'^^t a
bu aIt].ou.h thi.s an,ount ].ns beonfu t^-: T^u ."'' '^^ '"^"<'« ^
^fc c loe. not appear that an^ thin- In : ." r^''"^ .^"^' ^'"'^ ^ears
other securities " or on the ib^^ ] ^, '''' ''^'^^'^^' ^^^''^^- ^^^^ these
■i or the inJeinnilieation of th,. n V
respect of such lines as ] ' t^^^^^^
.should be ofll-red or accepted^St of ^ ^^ ''^^•I'^^'H »<> ■^^'cuVitv
mated amount that it vilj cos? to V T''^ '^'^'''^^^ "^' ^'^« ^^■'^ti-
way, and in that way onlv ' Uj l tl T'^"'^^ <^'^'''"- ^^ that
«t'cured, ni the event of i s W. f' ^:?'i^!'";'f;'t ^^ sufficiently
purchase nil] largely cxceerl f ? S. r ^''^^ ^'^^ ''^^^"'-^1 ^"st of
^f .ly probable. ^And t)^ "^ot d b? ! ::f ^^ ?^/i'"^^-. ^vhich is
cato, as they would only be mv f . '''''" f''"!^ ^" ^Jie Syn,]].
mont took action, instep 1 of ^hf^d 7^^ ^"'^'^"^^^ ^''-'^'^^
tmie the acquisition of the linos nn" ll''' T'^^ '^>' ^^''"^J^
courje benig allowed by the G^^muu^/^n'J^'^t^''^'"'"^'^^'^ <>^
, Ihen, as to the comtvunf^.^l ^ li ^ tbe deposit.
the desire and intentbn ^ftT; °r f^^ now lines/if it be really
proceed with them, whiod. lool n. a iTr"' TK'^y''^^^'^'^^ ^^
more han doubtfu],why is not some s.) if • "/' ^^ ^^'' ^^"^ract is
and why is not the same Z^l^t^^f'^^TT'^'^^^^'^^
\ahd and negotiable securities lea??n.ni,f '^ ^^' 'Agreement?
tothe^ estimated cost of each of thp n "^^^ P^'oportionate ratio
on. Judpng by what the vilu of « ch^ .T '^'^""^'^ '•^' ^"'^^^^ed
been ni the past, every precaut on i. i , ""^''^^^ '"-'curities " has
real, binding and em^SCZt^J"' If^'^'' '? ''^^^^^ ^<^^
tbeguarantee of $22.5,000 has been an k- /^"''^"^'' '-^PP^^ar that
basis of distribution of the esSm. te can .^' • '' f""" ^^'-"""'^'^
the scheme, because it is prov £d thn / n'^'^r'^'".^^ *^ ^«^'^T o«t
I.S abandoned the guarantle s t] W rfl 'i^'^^-'^'^^^'^'^^^^nch
annum. x\ow it is not ,a..re tlnn i. i"'"'^ ^^^ Si80,000 per
means of the Governnient .n a an e" tl 'si TT^'^' '■'''' ^^ V
raise a certain sum of nu^ney a piL We /'' n'!^ "i'' '^'^^'^^^ to
portions applicable to tlie sever- /r ' """ *^'"^ '^"'''^. the pro-
withthe Government and ^Mir'nir? "^^'^ ^- 'deposited
only. According to the contract thov^l r' ^^''^' construction
•^ee. If the Loui.^^urg Branch is ntnf'^"'^">'" th(^ guaran-
estimating the amounts tcfre \ Js.d ,'n '"!f ^^'"^' ^ ^^a«is for
-^- In- The amount is 311^;^^^;^;;^^,^^^^^^^^ ^;each
'i 1)0011
a first
loui.hnrg Branch. 80 miles $1)00,000
A^^ extern Counties 18 " ...^^^OO
Dartmouth Branch ($4000 per annu'in).' * '. '. .'.'.' '" '''
$^,100,000
\\ hat, therefore the Government, or fiuHno- the Oovornmcnt the
^..,. <) ),()00 J rais-od on the Provincial guarantee, viz , ift!3 KK) 00()
...11 he depos.tedand held strictly in trust for het n,;;;. -"of
ho new me., and shall not be dissipated fbr the ac<pH h of
existing hues, or other purposes. Unless some such iust and
proper precaution i. taken the people and counties inter ted "n
these_,K.Mv hncH will find themselves victinnzed and iheir , . os of
.ecunn. radway extension indefinitely postponed. This is Ima
p- of such nnportanco that it should not bo loft moreh for the
Government to deal with, but ought to have been specified /the
contract, and should be stringently stipulated for in Lv let thi?
may bo passed on the subject. If monies are raised on a I^o4cial
be held by the Provmce in trust for the purpose, and paid out nro
porionately only when and as the objects al^e bdng i otp L ed"
(bee clause 16 of contract.) p^i^ntu.
VIIl Provincial Lien on JRailways. —The contract nrovId^,>
that upon the han.ling over of the railvvays anTthe lov"^^^^^^^^
gnai-antoe to the Syndicate they will execute a first mort-t" thh
power of sale, in name of trustees to be appointed joir^ ? by the
Government and the Syndicate, for the pm-pose of-^sccirin/^nd
cnforcmg the annual payments of .9225,000 and $50 000 to the
Government. There is a touching simplicity about a phras'e tw cc
ocournn-^m the clause dealing with this matter. It s stipuirted
tha the Government shall pay those respective amounts ori Tccount
of the interest and sinking fund - when the same shall come to 2
ands of the Government," the inference being of course that if
Iio amounts do not come to tleir hands they wilf not be cal ed In
^iH; ' 'T' ?^''^^^^ '^"'^ ''' ''''^y^ 'f «">'' persons who
ull be imposed on by so transparent a ruse! The' Province i to
give an absolute guarantee of §225,000, and whether the money
'comes to the hands of the Government" or not. it will hTe t^
be paid to the holders of the Syndicate bonds and sVcui^tt Th t
it will
de
IlK
Ofi)
not come to their hands from the Svncl
will
1
•n^tratio,, Accordingly, when defitui
ve to lall back on thoir fir.t He
ines thoinsel
vos, or sell them.
icate 19 clcnr to
t IS made the Government
II, and cither oj)erate iho
operate the railn-nys they can onl
^ow, if the Gov
o sell them they will only benefit fo the
f'O 80 at a loss, and if th
tl
ernment is to
ov arc
le sum for which tl
lev I
would they sell f h will h
extent of the interest upo
. c disposed of. And )•,„• wl
II
that tl
fy cannot do more than if
five been demonstrated hovond
and who would then buy the
> it as much as, eai
iiat amount
question
tl
the P,
n working cx]K'iise.-
•oralis and rolling stock if sold would b
ic Provinc a I.^iMl.-f.. k... :. -.^ , "
-■>"atanyfigm-e? It has been stated il
incial liability, but it is t\
3ring enough monevt
lilt
o cancel
once built thev cannot 'be t"onr/nVr'"°'^'"\ '?''' T'^'" riuhyays arc
but must be operated in ti:;:ii'i;t:r:;t Tl'""'' "" ^''^ ^^■">''
refers to some conditions to be mu e so .. t . "T^' ''^'''^y
tinuous operation of the line. T • ^"""^'^ ^"'" ^^'"^ ^«"-
be left to be disposed V in ihisL^ ' /"'"" ^'"^ ^^'""''' ""^
securities should be taken fbr fb^ ^ '' '"'""''''• Substantial
should appear in the ctt^a t „ tAT'^lCD "'^ ''"?' ""' '^''^
nre to retain a sum of $5 000 (mo Z*^^ 7'"''"'«" Government
Canadian Pacific Railway oaecue^ '"'' >"""' ^"°^^ "^" "^^'
ten years. Why i, tS noi be operation of that line for
for the operation ;; L Nov ""ri ";^^.'^"""V-l^'^'^ --rity taken
the mntL nf .uJ 111?''' ^'""J''' ^'"es? In this matter, as in
^e natter of the aecuH;;;: t^r.^r by Uif S "r ^' "^ ^"
^5^ generally vaunts the ability and ac^.^^.'^^I^'^^f'^^^
^^mWgenerally vaunts he abil!f;^''T ^^ ''^' Syndicate, the
General.^ind enquired lofy utitf ^cua.en of the Attorney
not be safely and^onfiden / ] ft n 'brh f ''^J'^-^'^-^^ '--
given to the ability of Mr aV/ A '^"'^'- ^^'^'T credit is
this connection Vayiwel77 ""'■■'' Thompson, but in
«erve t^oo masters J-S. iLnln i'T'"^"" '''•'^"° '"^^^ ^'^^^^
jAree, as he is AttorneyVeitiTfo. th' P '"'•'''' ?'^"^ *'^ ««'-^-^"
Western Counties Slwav r '^'^ ^'^ovmce, Counsel for the
Syndicate. ''^ Company, and Solicitor for the
«uc^tr::Llr::;r:Lu;^ir:t^ 'r "°^^^^" ^-'^-^' -^^
necessary to elucid te nd "Ze iL' t"" '''''f''^ "^ ^^^'^^^
comments are made in an enSe v di.nl •''' ""^ '"'""'"»' ^'^'^
calculations, e. i.«r/.V« a/a"^^,; "^^ ^"'''^ '"'!"-'•, and the
structtncf the ruihonus «v Z % ^ acquiring and con-
working exp.ns7slTLZ,l ^T- mmen.^., and as to the
theniaif. sisirrtLglre^tt '^ unchallengable in
o ai e me results, and so pregnant with evil to the
(17) . :
people and the Province, that the term " bo-us " which has been
apphcd to this Syndicate is not halt pordnent or illustrative.
Conspiracy would be a more fitting term, and nearer the truth It
^vlll, therefore, not be inappropriate to enquire as to the motives
nnd agency by which this remarkable, and, if consummated, disas-
trous policy was originated. The answer is simple ;— it originated
HI the necessities of Mr. Plunkett, and the vanity of .Air Holmes
and has been elaborated, as to certain of its details, by more subtle
brains than either possesses.
Mr. Holmes came into power avowedly, among other thinas
to place the railways on a sound footing. Some dine nfterwaids
he boldly announced and defended the questionable policy of tak-
ing advantage of the necessities of the Comnanios in order to force
onerous terms upon them. Following up this policy he eventually
succeeded m imposing terms as to purchase and as to the reversion
of the 1 ictou Branch on the Halifax and Cape Breton Railway,— in
securing a first lien on the Western Counties Railwav,-in puttino- a
stop to all progress on the Xictaux and Atlantic Railway because
tlie persons interested in it would not accede to his conditions,— and
in passing an Act which has been petitioned against by the Windsor
and Annapolis Company purporting to give the Government
power to take possession of that line upon 28 days notice. Having
thus got matters so far ripe he was only too ready to fall in with
any scheme that would enable him to pose before "the country as a
great statesman and financier. Mr. Plunkett, fertile of 'expedients —
all of them heretofore abortive, however,— propounded a scheme
which would enable Mr. Holmes and the Government to go to the
constituencies and boast that they had consolidated the railway
system, had secured the payment of a large sum to the Province
which would cancel its debt and relieve its necessities, and had
provided for the construction of new railways in all directions, thus
satisfying everybody all around.
Mr. Plunkett's necessities are no secret. The Western Counties
Kadvvay virtually belongs to him. For vears he has been project-
ing schemes which would enable him to complete that line, and
realize his interests therein. The present one may be.taken as the
gambler s last desperate throw. It does not seem to be too much
to assert that the scheme has been concocted wholly in the interests
of the Western Counties Company, and, as bearing on this view,
reference is made to the sum estim:ited to be paid for that railway
under head IV hereof. In this connection special importance
attaches to the provisos of the contract which permits, and indeed
(IS)
flifcctlyauthorisos, ^fi- PUinhnn „ i<,..
•fe,to .naI<o a„; a a J t^^^^^^
the existing Kaihvavs ^d" " \ ?7 l"" ^"'' ^'" l--'^-o of
'"^'"ts cannot he nm.lc w ,h thf^ '"^\^"'"l'""ies a« nrrani^^e-
possessionofbytho Government nn/h*; '," " ^"'"P"'^"'-ily taken
l^earing thin i„ vicMv, and S.: in v ' " T'''/" ^''^' '^^"^'^••''^«-
n^ay be said to reallv own /e^vLV ' n '" ^^'^'^^ ^^J^'- i''""kett
following figures, whiel, nvJrcld^r T^n ^^''^''^y' ^''^
therefore, he considered /.^v ?■, , ,, T '° f^^'""^^' ""^' ""'»^''
advocate of the .chen.e, are c^f '^ So n "' ""' ^*'^'^''" ^^ ^''-'
throw a peculiar light on Lc\n^'''^t^'"''T' and help to
promoters : " clia.auer and the calculations of its
" To purchase the riohf thu i •
Kailwav. .! . f . '. '^" '"'' '"^^''^^^ °^ the W. C.
•' To pay off mortgage' with ProVinVV'.i' ^ •'iOO.OOO
I iovmcial guarantee, say. . 1,2G8.0(J0
''^•""'^"t required to finish the \V C t?,;i $l.'(i8,()()0
'* iiolhng stock additional ' ^^"'""''y '^•'^O.OOO
100,000
The Western Countip. H.n • , $2,(518,000
Syndicate to nc^^'S ^^y ^^^^l^ostimatod to cost the
the money of the Provlce t thl\ '.'V;''^*''"" ^° "hich
«unk in it, brinoino. i,n t h e 1 L ,""' ''^ ^700,000 has boen
of $3,300,000. °In%lt"r^:' ?} Tl "'/^r^^ ^« "P^-d"
now in default of interest on thVr ^'""''"" V^^''"''^>''-^^hich is
of $268.000.-which ru ; "l ouSrr'""'/"^ T"^'^'^ '">-'
ductive country ima-nnable rV o , '""'^ '^^''^' ^"^^ ""Pro-
possibly for many a^ ea to come "' "'-^^-f"' ."'"'^'^^ -"'-'
expenses, is to be foiled off n • ? ' '^' J'^^^'timate vvorkin-.
pructicanyontheProViL ,fb ''""'''-^' "\*'^« Syndicate, bu'^
flone in this way. AvSg Itdf'^o'fT 'T ^"'^"^ '' ^' ^° ^«
contract to negotiate with ^.e CW panics Af'^Pr T""'"^ '" ^'^^^
associates » of the Syndicate will w4 unn'nl t'^?'' ^'"^ " ^'^^
dissociates " 6f the Western CaZ' 7 ? ^''' ^ ^""^^tt and - his
fnondlysale and transfer f^'^^enf'^^r"'^ ^^ '^
shares of the Western Pnnn.- Z^^^' -^^e ordmary paid-un
mo,m worth TzS::';it:7sZr'i ,^ "^f '«j '^
(If))
capital will thereby appear to have been eocuroLl. Tiiis is a
simple and harmless operation, however, because the ordinary
eharee of the Syndicate will in all probal)i!ity be quite as worthless
ae the ordinary shares of the Western Counties Company. lint it
will be seen that the bonded debt of that Company, to the extent
$l,2(i8,000, is to be acquired by the Syndicate. Of this amount
$3(;8,000 represent the monies secured by the Provincial guarantee
the interest on which is in default by the Companv,' and the
remaining $1,000,000 represent the valueless bonds 'at present
held by Mr. Plunkett and "his associates" of the Western
Counties Railway. Now, by exchanginnr this $1,000,00 of mere
waste paper securities for $1,000,000 of rr„aranteed Svndicate
bonds, the actual cash required to be raised by the Syndicate is
reduced by that amount nominally,— the valueless bonds of the
Western Counties Company become valuable and negotiable
securities endorsed by the Province of Xova Scotia,— and the
Province will have thus virtually given to the promoters and
speculators, who have been vainly endeavoring tor the past twelve
years to build 85 miles of railway, no less a sum than $2,818,000,
made up as follows :
Provincial subsidy already paid $ 700 000
Proceeds ol Provincial guarantee of interest on £55,000 2G8,'oOO
Value of Provincial guarantee on bonds, as above 1,000,000
Value of Provincial guarantee on bonds to be issued in
order to complete the line 850,000
Total cost to the Province of W. C. Ry when completed . $2,818,000
It can thus be seen how the money raised on the Provincial
guarantee anc\ left in the hands of the Syndicate (Mr. Plunkett) is
to be spent, and the Province has no protection against this being
done ; nor any security that the whole amount ($4,150,000) shafl
not be used in buying up existing Railways, and not a dollar spent
on Branch Lines, although it has been shown that over $2,000,000
of the amount legitimately belongs to them and should be deposited
and held strictly in trust for their construction. Nor is there anv
means by which the Syndicate can be compelled to build any oV
the Branch Lines. Pkving in view that Mr. Holmes is a party
to the scheme by which it is expected to consummate this enormity,
considerable irony attaches to his utterance of three years a-ro
about the •* emptying of the Treasury of Nova Scotia " by Mr.*
Plunkett. ^
miro ,,., .r::t!::!;-cl£ uirU :r'f -ccced then\l.eir
negotiable 8v,. licato bonds with P. !'• l ''""" "'"'^'"'^''^ ^"^^
should not succeed the i:3-> (00 U, I iT "'' f'';'"'?'"^^^. «".! if it
the date of donosit Uit ^''"^ ^"^ repaid with interest from
this head of thHn 'uirj^?" ul^ZlX t"'' 'T'''\ ""'''' "-^"
seherno has been c, ncoc od In o ?^ '°" ^''''""' ''"'^ ^^e whole
0"lj result to the be fit of Mr Pi T''' r^' '^ ^"'^-"^^f"', will
Company ? The que tion for L ' 'f "i't'^° ^^^''^''"•" ^^°""fiea
i^, «/-e /% ..v7/!r r.^ltv //,!;r ' of Nova Scotia, therefore.
-ally wl J a l^-o^.^.dt^ eo'^^l^o.^^^;;--' ^'^^^'''^^ ^'^ '^
the questionable benefit tt be IcXed A ' i« '\ T"' '"'*'*"«•) ^«''
unprofitable raihv: v rDi d,v m A , T ^^^^^'^'^ional miles of
- -tin, the UrSS:;^^ :3^.2t^'-'j;;-''epurpose<>f
Kailvvay into guaranteed Provinir bonds ? '''''" ^'"""'^'^'^
^^eS^tol^t -^litlfroliSSn'l ^-/^^^"'^r 'he
Theae are very plausibl^^^ ^a 70^" Xth""'''"""^"^'
thai ia'^osi; .' iv:r7toTst;"r?f^^"^^^^^ ^^«'" «'"'^-'
benefit ^iH thisdistric er he ^.t thr/.n^^^^^^ '' '' ''^''^ ^^^at
to a rnonopolist corporati^/ Ev n t"h ^ril^'V-'^"^^^^
possible extension to Louisbur- Thp .n« • "'^'^"^ ^""'^ «* «
contrary, a very serious loss °ft is tlf ''•/'' "?^'-but, on the
of these distri^, especia ^ CoLL ef a"d pTo^''''. -^f ^r^''
protected a.] better served by rstrmi/?^ . "' '"'"•>' ''^"^^•
the Intercolonial than bv anv n , • M ° ^^^^^""'^nt railway like
effected of a mere Cor„pa;7« P-f >« consohdation that may!.,
a Company, and alsoT ^the W.l P. ""'" "''J^'''..r^ ^'^^'^
enforce such charges as will be t enS bo ;"?"£ ^''.'^ ' '
a minimum the loss tn h« ,-.,o i 7 , "'®™ ^^ reduce to
ontial oK„se:ml5%0%7Zut:"''' ""' °"""»'°^'^ P'*'"
not too muchr.,, ,K.,! "1°"';!:="™. '"*'W, Syndicate it i.
not too much to .*a
direct rail connecLi-JK
th^ar^toutown by now would" 1;;^;; h^S
Uh Jie Interr.loiual system-uot hy means
I
(«)
of a long diversion of from 20 b-. 20 miles tu West River, but by
a short branch of sonic 6 miles. The Intorculoniul iiuthoritics,
however, felt they would not be justified i'm incurring? this expen-
diture in view of the line from Truro to I'ictou passing from their
control. Pictou, therefore, has so far lost instead of gained.
Further, it is asserted that the Dominion authorities quite sec that
it will lu; a mistake to detach the Pictou Brancli from the Interco-
lonial sy-toiu, because, in the first [dace, it will allow the valuable
rictuii coal fields to piss from thoir control, and in the second
plad' it woidd be the alienation of an important link necosary to
complete a national hi;,'hway, shorter than any other, for travel to
and from Europe. It is an open secret that, but for the untimely
interventior. of Messrs. Plunkett and Holmes with their syndicate
scheme.another step in the contemplated programme would have b jen
taken this voar, and the Halifax and Cape IJreton line would have
been added to the Intercolonial Railway. Further extension, either
to Louisburg or Whitehaven would be simply a question of time,
and then steamers from either of these ports direct, or in connection
with the Ne.vfoundland railway, would complete the short national
highway. The public of the Eastern Counties surely cannot be so
blind to their own interests, present and prospective, not to see
that the Syndicate scheme has put an end to the accomplishment of
these objects for the present, and if successful, will indefinitely
postpone them for the future.
Then as to fares and rates. Pictou and Colchester Counties
have at present train accommodation equal to, and fares and rates
quite as low as, the most favored district on this continent. It is
therefore pointedly asked, in this connection, what benefits are they
to derive from handing the line over to the Syndicate ? No Com-
pany working the local lines, irrespective of other considerations,
can afford to give the facilities, transit and low charges that a great
line Avorked by a Government can.
As^ it is, the resources of the Intercolonial Railway are
sometimes taxed to the utmost to accommodate the coal
traffic from the mines. What could a poor Company's rail-
way do, or be expected to do, in a like emergency. The
word poor is here used advisedly and intentionally, because every
Company's railway in Nova Scotia must of necessity be a poor one
for many years to come ; and, if the railways cannot earn enough
to keep themselves, it is not of the slightest consequence how
wealthy some of the individual proprietors may be, because they
will not, in addition to allowing their original investment to lie
'sqBrrj?:^aa»e??T?5*fft.
. (22)
at tin-s time, be very care bllv 1 :^* l ^ '' ' P"^"^ "'"'^''^ «h«ukl,
panios interested. gZZ TZ ?^ ^V^'' ''''^'^ ^oal Coml
evident to everyone a 7;I'Al^,f.! ^f'/^'' '^' »'-t be quite
«eau to Halifax-has nothin't^'lr' ^T"''■^ ^^'"'^ ^''^"■
«"d dread, froa. the transfere ce^of thl f '' ^"' '""^'^ *« ^^^^
Syndicate. "sreience of the radways to the proposed
Syndicate-astutei; eoteTved : !^^ '^'' P-P-^'^ -^ this
the construction of a S/Til ^ n ''^^'^'^"^'^-'^ ""^^ f^''
Junction, with the correspond nto^j.^/'-^^^^^h \^ ^^indsor
doning ,t in the proviso that i I''. ? ^?' ^onv^-^niently aban-
the T«.vn of Dartn.ou 'nti I.T s?f T '^ ^^ ^^ ^°"^''^'°-I -^
for 20 years. Since the'rece, "^j ,r ^^'^^ ^?"^ «^ ^^^^^0 a year
town, Dartmouth people hu' Z ,T '^'^''''^ ""'''''^'^ ^^ that
asking themselves if eonnec;on Z.IZ"^^' Tt"^ ^'"-"' ^^"^^ are
as far o/F as Windsor Junction .^ lb ' "ll'^^l'^f '''^'''y «y«te,n
are asked to pay ? Kccen « ' u ''°''*'' *^^ ^^^^^^ a year they
rows at EichmoJld can bTbrX7L.^'r "^S^^^^^ ^^^^^'^^ ^a -"^
njore will lay the rails Lol!.^l?h/'^',«^.«' ^"^ ^^^''^^^
the proper and natural way of ec,Wn- '•. ' '^'^ *^"^ '^
Dartmouth ; and it should fu, then 1? ,'''''?^ connection for
Canada must necessan-ly ffo fslh ff ^ '^^' • ^^'^ Government of
for the accommodation of the W ?'"T''°" '"^^ '-*" early date
Dartmouth would get the be fefit of dftrl '""^^ ^" ^'^'^ -"^
has as regards rates and tra sit on f ri ''^^"^"^'^^'^« Halifax now
a m..h less cost to them th^n i400()';':::r'"""' ""^"'^^' ^"^ ^'
by the adoption of the syndi Scheme^ I'^ .^ ^""''^P'^^'^ *° ^"^^^
Jng-' but probably, and nlmrw . • , ^"^ ^''^ answer is_noth-
dation will no m'oi-e bonefi his TtH f '.^"'-^ '''. ^'''' "^^-^oi
boc^uscas a matter of ^ct tW '"" V^'^" the eastern;
traffic worth takino- into .nn • "''^' ^"^ ^'" ""t be, any
tncts other than ILlt of coTtfT' ^''"^^l *^^^ ^^ d-
on coal are now as low, if not 10^, " f ''''''^ *^^' ^^e rates
the Syndicate. It i f "l,r ' T '^7 ''"'" ^^ ^"ade under
ca«e scheme that traf^c w £ if^w r>^^^'^ o^' ^he Syndl'
direetions, will, under the new 1 3. "f ^''''''"^ "^ ^^ber
Wdl rivers run up hill ? It r^s elA?'"'' '°T? '° ^^*'^^^''^»'^-
''^- -«^o, except at enormou; s:^.;^:!!:;;;]^^:!- i::^^^
(23)
nearer route for a dearer and lonojer one. Produce, the market '
for which is outside of Halifax, say in the United States or elsewhere,
will inevitably find an outlet at the nearest seaport. For the pro-
ductive counties of Kings and Annapolis, the town of Annapolis
lloyal is that natural outlet ; and the projects of the Syndicate, if
accomplished, would mean a serious blow to the commerce ot that
town, the collapse of the patriotic enterprize to establish direct
steam communication with England and the United States, and the
transfer of business, that might be more cheaply and conveniently
done at Annapolis, to Yarmouth.
I^ictaux and Atlantic Rnilway. — It seems to be clear
from the ambiguous wording of the contract, and from other indi-
cations, that it is the intention and desire of both the Government
and Syndicate to abandon this line. It is no secret that if that
Company had received, not to say fair play, but the encouragement
they had a right to expect from the Government, the railway from
Middleton to Lunenburg would have been built and running by to-
day. The Company have over and over again offered to the Gov-
ernment bettor terms than have been heretofore offered for the
building of any line in the Province ; but, because neither threats nor
cajolements would induce them to accede to the arbitrary conditions
sought to be imposed upon them by Mr. Holmes, the Government
have designedly for the past two years and upwards obstructed
and prevented the construction of this railway. Should it become
part of the Syndicate scheme, as is ost€nsil)ly contemplated, it is
asked how are either the Syndicate or the Government to acquire
the rights of the present Company ? It is well known they have
no intention of parting with the property, and there is no honest
or legitimate way in which they can be compelled to do so. Any
attempt in that direction would lead to a litigation that might not
be settled for years. However, this might afford a convenient
pretext to .he Government not to insist upon, and to the Syndicate
to abandon, the construction of this line But, assuming that the
railway could be transferred to the Syndicate, in what way would
the Counties interested benefit by such transfer? The answer
is simple, — instead of benefiting, they would lose ; because it is
part of the present Company's scheme to open and work the
valuable iron ore depo.«its of Nictaux in conjunction with the
railway, a property which the Syndicate could not acquire.
Therefore, it is safely asserted, that, if this district is ever to get a
railway, and to have its capabilities fostered and developed by that
means, it is certainly not throuiih the airency of the proposed
(21)
wish ,„ pay out .hel^l^MlrSoO f «rT"'""' ''" "■"
formal notice h™bee„iLnrrr"'"° """' 1»° """ "■<= "«"»l
Dominion Pu-lil^r i5 I, "PP''<^.»"°" "ould be made to the
that iittie, if;n;'ip::'Set™':s,,:i' o-'tir-But''' n" r^
ally, beetle twouTdtv^te "TTT^ 1° ""^ P™""== eventu-
xrper:« - 1: t™: £,=? ^e;
as to establish rates lower th-xn wil ° ''"^°'''^'' ^'"
per annum profit on t^e c niV" ' ^'f r. ''" P^^ ^'^"*-
some surplus over working expen Ls ' Thl ' L\T\ ' I" '^'''"
everyone; but, what is r,nt\n i\ }^^\^^^^^ be. clear to
that Mr. kunkeu and M,Ln?,n?r^'V'^"''t'^'^y "PI^'-"-^"^' ^^
Nova Scotia eveTy p ssible aid s- h ? ^V ''^'"'''^ ^" ^'' ^'•""^
; "^^cjy possioic aid, subsidy and conrps« nn or,,) u •
secured th.«, intend by other legislation •'•' ^"''"'^
out of ^'ova Scotian Le^isl
to take the rail
(d
igislative control. Will this be
ways
permitted ?
r^
A
(25)
U would be better and safcv tor, tl- P-^- ^^^^ l^rj ^
exist irrailwuys, and build tl-^ I'-^jf^^^ " , ;,u be found unad-
bcen bus conietcd and -n.ohd. U ^ J sh^^^^^ ^.^^ .^..^
visable to retain then, to sell t^^^'" ^^ ,,,t,inly absorb more
!^-rKet;>letionoUUo railway ...e. ^^ ^^^ ^^^
This Syndicate scben.c has now bc^n^ cKarn-- ^^J^ ^
'I and their R^P--^^^^^^^^^ " ^ t^d n upon tben.selvo. and
t Mali become law, and a P^" P«^"'^ ,^; '^^^ain-n emphasis which i
Jtr^^^^^br^:^^^;::'-^ -^--^^^- '-'''''
q'^^tlot ^^,^ I,, ,,i,ed bv the Syndicate except
1. That no actual cisli can o province.
Fund. ^ „ ^.^ ,^^ ,,,pu,, will remain with wlucb to
3. That, tberetorc, no bm\)n^
construct new liue^. , ^^i.en to indemnify the
n™: r.;:« -''-".-■■"-'■^f Xv'r.:, o..,.., ear,,
'■"' • ' Til the ..iUvay^ ca„„o. P"«* y;^;', :",..pe„,«s, and "O
Provincial liability. , ^^,^,,|,i be of little (n- no
7. That consohdatu>n of ^^'^^ ^^^^'^^^i,, ,,,,,u-ary, would be a
will create a monopoly a. to L arc ,
p,ovlncial control. ^ inesistible,-equaUy selt-
These conclusion, are --'if-;^ ^'^^'^,:^^,,, ,, be drawn frotn tlKMr.,-
evident and irresistible ^^^'^^'^'^^^^^^^ to be used and its revenues
1. That the credit ot the liosuKct 500,000, only
im
pled
,ed tor the pnrp
oac
)f Til
$1,350,000 o
f which is to find its way
into the Treasury.
(2G)
'ion and ^■^t.nsiotT.tfttLltlr'' ™"™^ ™-««da.
before the pubiie eye, and '"'P"'"''''' "> carry out, is dangled
retire i„ tlotse^f ."^/^o^^t w,'thT-"'"« "!" "" -^^'d '»
from political considerations °'' "'^"' '"^"'»' a-d apart
i
J
^