Re = issue of the Report with an additional Letter 
 
 ight Honourable Sir Wilfrid Laurier, K.C.B., the 
 
 !Tui Premier, dated 31st May, 1898, beginning on 
 
 pa.2:e 32. 
 
 CWfliiecto marine 
 transport Railioap Co., Ctl 
 
 ^ff'4^4^4lP^I^SPJifJ^JIf'^,tPJiP^IPJlf^^J^JlfJg'Jf 
 
 REP0RT 
 
 BY 
 
 A. D. PROVAND, M.P., 
 
 Relating to tbe Redotiatlons loltl) tl)e Canadian 6ouerninent tor 
 tl)c Reinstatement of tbe Companp or for Papmenf 
 
 or Compensation* 
 
 Presented at a Meeting of the Share and Debenture Holders 
 
 held 19th May, 1898. 
 
CHIGNECTO MARINE 
 TRANSPORT RAILWAY CO., LTD. 
 
 REPORT 
 
 BY 
 
 A. D. PROVAND, M.P., 
 
 Relating to the Negotiations with the Canadian Government for 
 the Reinstatement of the Company or for Payment 
 
 of Compensation. 
 
 ■ , ■ > • 
 
 Presented at a Meeting of the Share and Debenture Holders 
 
 held 19th May, 1898. 
 
• • • • • 
 
 • • 
 
C /tSyvO 
 
 CHIGNECTO MARINE TRANSPORT RAILWAY 
 COMPANY, LIMITED. 
 
 To the Dehznlure and Shareholders of the Ohignecto Marine Transport 
 
 , Railway Company, Limited. 
 
 Gentlemen, 
 
 From time to time during the past four years we have held meetings, 
 besides the Statutory Annual meetings, to consider the negotiations which have 
 been proceeding with the Canadian Government, for the legislative reinstatement 
 of the Company and re-enactment of the Subsidy, in order that we might proceed 
 with the Railway and complete it. 
 
 It was in 1891 that the Contractors stopped the work of construction, and in 
 1892 I went to Canada for the first time to lay our case before the Government, 
 to ascertain what assistance they would give, and to endeavour to make such 
 arrangements with the Government as would enable the new Contractors to 
 recommence construction and complete the work. 
 
 Since then I have been seven times to Ottawa — making eight visits altogether 
 — to see the Canadian Government about the Company's atiairs. We have 
 had several interviews with Lord Strathcona and the Right Hon. Sir Charles Tupper, 
 Bart., who have held the office of High Commis.sioner for Canada during the time 
 the negotiations have been pending. We have also had interviews in London with 
 the Eight Hon. Sir John Thompson and the Hon. Mr. Foster, Premier and Finance 
 Minister in the last Government, and with the Right Hon. Sir Wilfrid Laurier, 
 Premier in the present Government. The Directors and a few of the largest 
 investors were present at most of the interviews. 
 
 Stated briefly, the relief we have asked from the Canadian Government is, to 
 re-enact the original Acts of Parliament reinstating the Company in possession of its 
 charter and subsidy, and to grant us sufficient time to complete the Railway. We 
 have further represented to the Government that if for any reason they decided 
 not to reinstate the Company, in such case we should be entitled to compensation, 
 and we have said that we should be agreeable to consider with them what amount 
 
 55634 
 
would be jeasouable, and if there was a failure to agree upon the terms of a settle- 
 ment, that the question of the amount of compensation should be referred to 
 arbitration. 
 
 In March last a reply was received from the Government to our request for 
 reinstatement. This came in the form of a Report to the Privy Council of a 
 Sub-Committee of the Council to whom the question had been referred, and was 
 to the effect that they did not consider that the scheme could be regarded as one 
 of such public utility as would warrant an application to be made to Parliament 
 for a renewal of the lapsed subsidy. The Reply sent to this Report and 
 correspondence connected therewith commences on page 22. For reasons stated 
 in the Reply we asked that the Report should be referred back to the Sub- 
 committee for reconsideration. Sir Wilfrid Laurier wrote to me that this would 
 be done, but no communication has been received as to the result. 
 
 If they decide not to reinstate the Company we consider we are entitled to 
 compensation, and this was represented to Lord Strathcona, the High Commissioner, 
 and Sir Wilfrid Laurier last summer, and by letters to both since then, but no 
 communication has been received from Ottawa in regard to this. 
 
 Having now reached this position we feel it to be our duly to place before you 
 a statement as to what has occurred not only since you subscribed for the Shares 
 and Debentures, but also as to what took place previous to that in connection with the 
 enterprise. The account which we have to lay before you is necessarily of 
 considerable length, but we beg that you will carefully road and consider it. 
 
 The investing classes of this country have carried out innumerable public 
 enterprises in all parts of the world, both in foreign countries and in the Colonies, 
 but the treatment which we have experienced from the Canadian Government in 
 connection with this undertaking has neither precedent nor parallel within the 
 field of former experience. 
 
 For convenience I divide into four parts the statement of the proceedings 
 and events : — (1) previous to the issues of the Company's Shares and 
 Debentures ; (2) from the date of these issues until the Contractors stopped 
 the construction of the Railway ; (3) from the stoppage of construction to the 
 present time ; and (4) what is said in Canada about the Railway, and a brief 
 conclusion. 
 
PROCEEDINGS OF THE CANADIAN GOVERNMENT AND PARLIA- 
 MENT BEFORE THE COMPANY WAS BROUGHT OUT IN LONDON. 
 
 The accompanying map of Nova Scotia, on which the position of the railway 
 is marked, shows that the object in view in constructing it was to shorten the 
 journey from ports on the Gulf of St. Lawrence to ports in the Bay ot Fundy and 
 also further south, by transporting vessels by the railway across the Isthmus 
 of Chignecto, thus avoidii^g the necessity of going out into the Atlantic and 
 round Nova Scotia, and effecting a saving of several hundred miles. From the time 
 when the prnvitices of Canada were federated and became the Dominion of Canada 
 in 1866, an increasing interest was taken in opening a route across the Isthmus 
 of Chignecto in order to effect this purpose. The idea took practical shape in 
 November, 1870, when a lloyal Commission specially reported upon the feasibility 
 of a Ship Canal across the Isthmus, and strongly recommended its being carried 
 out. The Report, said that the creation of a trade channel across the Isthmus 
 would justify its construction at almost any cost. 
 
 The Government intended to carry out the work with public money, and in 
 1872 and 1878 the Conservative Government then in office voted money to 
 commence construction. The Liberal Govermnent, which ca'iie into office in 1874, 
 continued this policy and also voted money for construction. The work was first 
 estimated to cost $5,817,000. Subsequent .surveys, however, placed the cost at 
 a much higher tigiu'e. indeed some of the estimates were as high as nine or ten 
 million dollars, and these increased estimates led to a postponement of the 
 scheme. Meantime Mr. Ketchum, a Canadian civil engineer, placed proposals 
 before the Government for a Ship Railway instead of a Canal. These were sub- 
 mitted to Mr, Collingwood Schreiber, C.M.G., Chief Engineer to the Canadian 
 Government, and his Report is quoted in an Order in Council, approved April 10th 
 1882. As the subsequent Acts of the Canadian Parliament were passed on the 
 recommendations contained in this Order, it is set out on page 49. 
 
 The Order in Council shows that before Parliament was asked to grant a 
 subsidy, the Government were entirely satisfied as to the advantageous character 
 of the Ship Railway proposals. It states in brief: — 
 
 1. That for many years great importance had been attached to obtaining 
 means to shorten the water distance between the St. Lawrence and the Bay 
 ol Fundy. 
 
 2. That with this object the scheme of a Ship Canal had been kept in 
 view .since 1825. 
 
6 
 
 3. That the Royal Commission appointed in 1871, after an exhaustive 
 examination, reported entirely in favour of it, and added that — 
 
 " The advantages are clearly pointed out by the Boards of Trade of all the leading 
 cities of Canada and men interested in the development of our commercial interests, 
 not simply merchants of St. John and other places in the locality, but merchants 
 of Hamilton, Toronto, Ottawa, Montreal, and Quebec, &c." 
 
 4. That the Ship Canal estimates proved to be higher than they were 
 expected to be, and that the Government were to spend their own money in 
 construction. The Railway scheme was then proposed and its suitability and 
 great commercial value to the country were recognised. 
 
 5. That the Government referred the plans and estimates to their Chief 
 Engineer, Mr. Collingvvood Schreiber, C.M.G., by whom they were approved. 
 
 6. That the Ship Railway was adopted in place of a Ship Canal because it 
 was — 
 
 (a) practicable of execution ; 
 (h) a good substitute for the Ship Canal ; 
 
 (c) and had great advantage in respect to cost as compared with 
 the proposed Canal. 
 
 In Mr. Schreiber's Report on the Ship Railway scheme, dated February 4th, 
 1882, he quotes the following opinion of the Royal Commissioners as contained on 
 page 79 of their Report : — 
 
 "The evidence submitted points out with remarkable force and unanimity the 
 necessity of opening a higliway for commerce between the Gulf of St. Lawrence and 
 the head waters of the Bay of Fundy through the Isthmus of Chignecto dividing 
 them." 
 
 The last paragraph in the Report of Mr. Schreiber is as follows : — 
 
 "Assuming that the importance of a Shij) Railway over the Isthmus was, at tlie 
 time of the Commissioners' Report, so great as is therein stated, it must be much 
 greater now, considering the large increase since that date in tlie trade of the country 
 affected by the proposed work." 
 
 On the recommendation of the Government, contained in the Order 
 in Council already referred to. Parliament then took up the business. In 1882 
 two Acts were passed, one incorporating the Chignecto Marine Transport Railway 
 Company, Limited, and the other providing a subsidy of $150,000. a year for 
 25 years. The names of the Incorporators (21 in number) are given in the Act of 
 Incorporation. They were all Canadians with the exception of Mr. Edwin Clark, 
 who, as the inventor of hydraulic machinery used in lifting docks, was for that 
 reason included. 
 
In all Acts of the Canadian Parliament authorising and subsidising any public 
 work it is necessary to make the statement contained in Clause 16 of the Act of 
 Incorporation, which is as follows : — 
 
 "lb is liereby declared that the construction of the said railway is of general 
 importance and a work for the general advantage of Canada." 
 
 But the Canadian Parliament did not limit itself to stating in the Acts what 
 was merely legal and necessary. In the preamble of the Act conferring the subsidy 
 it says that this is given — 
 
 "In consideration of the great advantages which would accrue to the Maritime 
 Provinces and the Inter-colonial trade of Canada generally from the construction of a 
 Ship Railway across the Isthmus "f Chigiiecto, &c., &c." 
 
 and in the preamble of the Act incorporating the Company it states that the 
 Petition of the Incorporators is granted because the construction of the Railway 
 would be — 
 
 ' ' especially conducive to the development of the commercial interests and 
 coasting trade of the Maritime Provinces of the Dominion." 
 
 When Parliament, on the recommendation of the Government, voted the 
 subsidy to the Railway, it gave the most complete proof in its power that it was 
 satisfied as to the merits and commercial value of the undertaking. And it went 
 beyond this, as the foregoing shows that the Canadian Parliament were so anxious 
 to see the Railway carried out, that it recommendetl it to British investors in the 
 emphatic language quoted above from the two original Acts. In 1883 a further 
 Act was passed amending the Incorporation Act of the previous year, and settling 
 the amount of the Capital Stock and Mortgage Bonds. 
 
 The opinion of Parliament was summed up by Sir John Macdonald, then 
 Premier of Canada, who, when the first Bill was before the House on the 11th 
 May, 1882, spoke of the great advantage to Canada of the financial proposals 
 in regard to the Ship Railway, and said — 
 
 "Tiie amount we are called upon to expend is comparatively small, and we are 
 not called upon to expend that until we have assurance of its success. I think the 
 Governuiont is to be congratulated <m taking up the matter in the way it has." 
 
 Meantime, Mr. Ketchum came to London, placed the scheme and the Acts of 
 Parliament before Sir Benjamin Baker, K.C.B., and other en»inent Engineers and 
 Railway Contractors. The Engineers in London who were consulted approved of 
 the Railway as mechanically suitable for the purpose of carrying ships over the 
 Isthmus, but Mr. Ketchum could not obtain the capital to carry it out on the terms 
 offered by the (ioverim>ent. During the three years following 1882, Mr. Ketchum 
 
came from Canada to London several times in connection with the business, and 
 in 1886, in order to furnish an additional inducement to British investors the 
 Government passed another Act changing the Subsidy of $150,000 a year for 
 25 years to $170,602 for 20 years. The contract to construct the Railway which 
 was to be completed by the 1st July, 1 889, forms the schedule to this Act. 
 
 Sir Benjamin Baker went twice to Canada in connection with the scheme, 
 and as the Railway was novel and unique in character, careful and detailed 
 surveys beyond what are usually necessary had to be made, and this work could 
 only be carried out during about seven months in the year, as for about five 
 months the ground is covered with snow. 
 
 Therefore the preparation of surveys and plans — as is frequently the case in 
 such undertakings — occupied more time than the Engineers expected. These, 
 therefore, were not completed until 188S. Sir Benjamin Baker took them with 
 him to Canada, and they were approved by His Excellency the Governor General 
 on the 28rd May, 1888. In a Report of a Committee of the Honorable the Privy 
 Council recording their approval of the plans and specifications, there is the 
 following passage : — 
 
 " The Minister recommends that approval be given thereto as representing the 
 standard and specification ; completion of the said works in accordance witli wiiich will 
 be regarded by the Government as entitling the Company to the subsidy contemplated 
 by the Act aforesaid." 
 
 On account of the time necessary to prepare and complete the plans and 
 obtain the. approval of the Canadian Government, the Incorporators had to apply 
 to Parliament in 1888 for an extension of time, and another A.ct was passed in 
 that year granting an extension of twelve months, that was, until the 1st July, 
 1890, and also a further extension of two years, that was, until the 1st July, 
 1892, under a penalty of $5,000 a month for each month during which the 
 Railway remained uncompleted. The Finance Clauses of the previous Acts were 
 also amended by this Act and the Capital increased. 
 
 All that took place down to this time was done by the Canadian Parliament 
 for the 21 Incorporators whose names are given in the original Act. There was no 
 promotion of the enterprise by your Directors or anyone else in England. The 
 incorporators who joined together and formed what I may call a pvofornid 
 company to see the scheme carried into execution were not promoters in the 
 ordinary sense. They never had any financial interest in the Company either 
 before the capital was found in London or since then. They made no profit in any 
 way out of the business ; indeed, some of them who incurred expenses were never 
 repaid. With the exception of Mr. Edwin Clark the^ were all Canadians, many 
 
9 
 
 of them were well known public men, and it was from motives of public spirit 
 that they acted a& incorporators and formed the Company, the object being to 
 obtain the capital in London. The gentlemen who so acted were merely part of 
 the necessary machinery to create a company with whom the Government might 
 make a contract and to whom they might give a subsidv, both of which were 
 to be afterwards transferred to the British investors who found the capital. Of 
 these incorporators, Mr. Ketchum alone was afterwards connected with the enter- 
 prise, because the railway was originally projected by him. 
 
 Everything was done openly in Parliament, which had full knowledge of the 
 actual position and intentions of the Incorporators, and it was perfectly well 
 known that they were coming to London to find the capital. This was stated in 
 the House by the Hon. Alexander Mackenzie, who was then leader of the Liberal 
 Opposition (the Party now in pov/er), on ♦^he 1 1th May, 1882, when the (irst Act 
 was introduced into the House. He then said that — 
 
 " he (Mr. Ketchum) will no doubt obtniu the money in the English market with 
 the guarantee of the Canfidian (government." 
 
 The same language was held during all the time from the passing of the first 
 Act in 1882 to the last Act in 1888, on which occasion Sir Charles Tuppcr, who 
 was then Finance Minister, said: — 
 
 "The Government is not asked to pay any money, but simply to enable English 
 capitalists to furnish all the money re(juired to ij;ivu us the work at half the cost we 
 could obtain these advantages in any other way." 
 
 Therefore, between 1882 and 1888, the Government passed two original Acts, and 
 amended them by subsequent Acts passed in 1888, 18<S6, and 1888, for the p?'o 
 forma Canadian Company composed of the 21 Incorporators, with the sole object 
 of making the enterprise sufficiently satisfactory to investors on this side, to 
 induce them to find the capital. 
 
 The foregoing is a brief account of the Parliamentary history of the enter 
 piise before it was brought out in this country and the capital offered for sub- 
 scription. Before it was introduced to Parliament at all, it had obtained the 
 sanction and approval of the Canadian Government. The scheme stood the test 
 of a 'ong and complete examination in Canada by Engineers, including the Chief 
 Engineer to the Government, by the Ministers, by Parliament, and by leading 
 commercial authorities. The detailed plans were all submitted to, and obtained 
 the sanction of, the Government. Leading Boards of Trade in important cities 
 and other public bodies passed resolutions cordially supporting the enterprise, in 
 account of the commercial advantages which would follow its construction. The 
 resolution to this tfiect by the Board of Trade of St. John, New Brunswick, will 
 
10 
 
 be found on page 50. The local authorities in the district through which the 
 Railway passed purchased and gave to the Company all the laud required for the 
 undertaking. The advantages as compared with the Ship Canal were repeatedly 
 dwelt upon. The latter would have been constructed at Government expense, 
 and the Ship Railway was deliberately adopted not only because it would save the 
 Government from incurring this outlay, and also from its superiority over a Ship 
 Canal for the purpose of supplying the needed trade route across the Peninsula, 
 but likewise from the fact alluded to by the Premier, Sir John Macdonald, in his 
 speech quoted on page 7, that unless the Railway was completed to the satisfac- 
 tion of the Government, they would not be liable to pay any subsidy, and that 
 afterwards the subsidy would b(! payable only while the Railway was satisfactorily 
 operated. 
 
 It would be difficult to name any enterprise of the kind ever brought to 
 London to be financed that was more completely fortified than this was by all 
 the evidence and guarantees that our Engineers and Financiers could look for befon; 
 bringing it under the notice of investors. For many years before the Ship Railway 
 was proposed, the Ship Canal was warmly advocated by all parties, and the Ship 
 Railway scheme when brought forward, presenting as it did so many advantages 
 over a Canal, was eagerly adopted and promoted in every way by the Canadian 
 Government and Parliament. Every statement went to prove that it was desired 
 by the Canadian Government and Parliament as a necessary public w.^rk, and we 
 had every assurance that it would be successful both as an engineering scheme and 
 also as a commercial venture. 
 
ll 
 
 RAISING THE CAPITAL IN LONDON AND COMMENCING 
 CONSTRUCTION OF THE RAILWAY. 
 
 When the Act of 1888 was passed extending the time to complete the 
 Railway and finally fixing the amount of capital to be issued, the Canadian 
 Parliament had completed all that was necessary to enable the Company to be 
 brought out in London and for the Shares and Debentures to be offered to the 
 public for subscription. 
 
 Your directors were then invited to become Members of the Board in London. 
 None of them had any previous connection with the enterprise or with the 
 Canadian incorporators who first formed the Company. 
 
 The capital required to meet the contract for construction was £700,000 in 
 Debenture Bonds and £300,000 in Preference Shares. 
 
 When everything was ready to make the capital issues, it was found that in 
 the previous year the Canadian Parliament had passed a General Railway Act 
 which regulated the formation of all railway companies in Canada except in so far 
 as they were governed by special Acts. Section 93 of this General Railway Act 
 deals with the issue of Bonds, and, after setting out certain particulars relating to 
 them, it sa3's in sub-section 4 : — 
 
 " but no Bonds or Debeuturea shall be is.suud until 20 peiccntum of tho cost has 
 been actually expended on the work." 
 
 The above sub-section, therefore, prev«3nted the Directors from issuing any 
 Debentures then, and consequently they could only otfer the £800,000 Preference 
 Shares. The Pros^pectus otfering these was issued on the 20th March, 1889, and 
 the whole amount was in^imediately subscribed for at par. 
 
 The work of construction was proceeded with as rapidly as possible, but 
 £220,000 had to be expended on the Railway before the Company was legally 
 entitled to issue any of the £700,000 Debentures, and this amount was not 
 expended until the end of the following November. Meantime a change had come 
 over the money market in conse(|uence of threatened financial difficulties in the 
 Argentine Republic and other countries. On this account your Directors could 
 only obtain subscriptions for £250,000 of the Debentures out of the total amount 
 of £700,000 authorised. The Prospectus for the £2o0,()00 in Debentures was 
 issued late in 1889, and they were subscribed for at £108 10s. per £100 Bond. 
 
 Early in 1889, when the Preference Shares were subscribed for, the £700,000 
 of Debentures could also have been issued and fhe whole capital required 
 to complete the Railway been procured. No subsequent financial difficulties 
 
12 
 
 could then have interfered with its completion. But the compulsory postpone- 
 ment until the end of 1859 was fatal, ami it was the sole cause of the Debentures 
 not being subscribed for when a sufficient amount had been expended on the work 
 to legally entitle us to issue them. 
 
 In the proppectuses offering the Preference Shares and Debentures for 
 subscription to the publ.o, the Subsidy Clause in the Act of Parliament was set 
 out, so that every invcooor knew the terms aiid conditions on which it became 
 payable. This clause is reprinted on page 50. 
 
 When the proceeds of the Debentures which were sold had been expended on 
 the work, it then became impossible to issue any more on account of the increas- 
 ing feeling of distrust in the public mind as to the financial outlook of affairs in 
 the Argentine Republic. Therefore, as the work proceeded, the Contractor was 
 paid in the Debentures themselves against the Engineers* Certificates for work 
 done. The total amount of Debentures issued by the Company was £404,900 
 leaving an un-issued balance of £295,100 making £700,000 altogether. 
 
 Many difficulties were encountered in carrying out the work. Tliere was an 
 unprecedented rainfall which kept the ground Hooded and stopped work for a 
 considerable part of a whole season. It was also found n< cessary to make extra 
 excavations in the docks, the foundations for which had to be carried twenty-four 
 feet deeper than originally intended, in order to obtain solid foundations for the 
 masonry. The supply of labour was also limited, on account of large works being 
 then carried on in the neighbourhood, which prevented the sub- con tractors from 
 being able to obtain as many men as they would otherwise have employed. A 
 very serious difficulty was met with at one part of the line where the ground was 
 found to be so boggy that immense excavations, far beyond what were originally 
 estimated, were found to be necessary to prevent possible subsidence afterwards. 
 For these reasons the Contractors found that they would require a further year's 
 time to complete the Railvvay, that is to say to 1st Jidy, 1898. 
 
 Application was therefore made to the Canadian Government in the beginning 
 of 1891 for an extension of time for one year, and to have the Clause repealed in 
 the Act of 1888 involving the liability to pay $5,000 per month for each month 
 the works were in an unfinished state after the 1st July, 1890. I have been 
 unable to ascertain why this penalty was put in the Act of 1888. It was done by 
 the Canadian Incorporators the year before we were connected with the enterprise. 
 So far as I know the Canadian (Jovernment did not ask for it, and they made no 
 objection to its being repealed in 1891. 
 
 Besides constructing the Chignecto Railway the Contractors were at the time 
 carrying out exto-^isive railway contracts in the Argenti Republic, for which 
 
13 
 
 they were unable to obtain payment, and as they could not sell any of the 
 Company's Debentures beyond the £250,000 originally issued to the public they 
 shortly afterwards foiuKJ that they had exhausted their means and were therefore 
 compelled to suspend the construction of the Railway. When operations were 
 suspended nearly three-quarters of the total work on the Railway had been done, 
 and but for the insurmountable difficulties which the Contractors had to contend 
 with, the Railway would most likely have been completed and ready for being 
 opened in 1892, or early in 1893. 
 
 I have already explained in the first part of this Report how the Canadian 
 Government and Parliament encouraged and promoted the enterprise. It is 
 therefore of i.nportance to see how this was looked upon by a leader of the 
 Opposition in 1891. When the Bill, asking for the extension of one year, 
 was then before the House, the Hon. Sir Richard Cartwright, now Minister of 
 Trade and Commerce in the present Government, made a short but remarkable 
 statement showing the responsibility of the Canadian Government for the promo- 
 tion of the Railway, and the relation in which they stood towards our Share and 
 Debenture holders. These are his words delivered on the 29th May, 1891 : — 
 
 " The fact of Parliament granting a subsidy of $170,000 a year for twenty 
 years to this railway, will imply to the minds of Eiiglisli capitalists, from whose 
 pockets 1 take it this money is expected, that the Canadian Government has looked 
 into the work, that they believe it to be a valuable work, and that it may fairly be 
 implied that the Government believe it to be reasonably profitable to those people 
 whose money we are practically securing in consequence of our having granted a 
 subsidy." 
 
 Comment cannot add force to the above language, as Sir RichatBd 
 Cartwright states explicitly that our investors by the offer of a subsidy understood 
 that the Canadian Government had looked into the work, that they believed 
 the Railway was a valuable work and that it would be reasonably profitable. 
 
 The sole responsible cause of the Contractor being compelled to stop 
 the construction of the Railway, and of all the Company's subsequent trouble 
 was the enactment by the Canadian Parliament of sub-section 4 of Clause 93 
 of the General Railway Act of 1888. But for the change in the law 
 then made, the Company could have issued all the Debentures early in 1889 — 
 when the Preference Shares wore subscribed for — and secured the entire capital 
 required to complete the Railway, but the sub-section made this course impossible, 
 and when the Company became legally entitled to isi-ue the Debentures, the state 
 of our money market made it no 'onger possible to do so. 
 
 And it is to be noted that it was afterwards discovered that the 
 enactment of this sub-section, witich wrought oar Company so mvbch mischief 
 
14 
 
 was found to be a legislative blunder, and in 1892 Parliament was compelled 
 to repeal it, which they did by Section 4 of the Act, Chap. 27, of that year. 
 
 Our Company was therefore forced Into its difficulties by the unfortunate error 
 of the Canadian Parliament itself in passing into law what they afterwards found 
 CO be a totally unworkable condition, and secondly by the long continued financial 
 disturbance in London during which so many great financial houses suspended 
 payment which made it impossible to repair the legislative mistake. 
 
 Therefore you, the Share and Debenture holders, are sufferers, not from any 
 failure on the part of our Company, but from the default of our Contractors, who 
 when they made the Contract were in a position of undoubted monetary standing 
 and were perfectly competent to undertake such a work. The circumstances are 
 such as to entitle us to the active sympathy of the Canadian Government, and 
 this should be extended to the Contractors, whose default was caused by the Act of 
 the Canadian Parliament itself, the consequences of which they were unable to 
 withstand owing to the long continued monetary depression and to the non- 
 fulfilment of obligations by Governments for whom they were carrying out large 
 contracts in South America. 
 
15 
 
 WHAT OCCURRED AFTER THE CONTRACTORS SUSPENDED 
 
 CONSTRUCTION. 
 
 When construction was suspended on the Railway, the Contractors were of 
 opinion that the difficulties would be only temporary and that work would be 
 resumed in the following year. 
 
 The Board first memorialised the Government for financial assistance. Their 
 communication was replied to by the Hon. Geo. E. Foster, then Minister of 
 Financo, and in stating that the Government ild not give such assistance, he 
 added these words at the end of his letter : — 
 
 " In coming to this conclusion, the Oovernmont desires to recognise the energy 
 and thoroughness with which the Company has carried forward its work, and to 
 express sympathy with it in the unusual and untoward circumstances which have been 
 mainly instrumental in producing what it is hoped will be only a temporary 
 embarrassment." 
 
 Early in 1892, as it was found impossible to issue any Debentures, I 
 proceeded to Canada and asked the Government to grant the Company an Act 
 authorising the issue of £350,000 in First Preference Debenture Bonds, which 
 would be sufficient to complete the Railway, and also to extend the time beyond the 
 1st July, 1898, as it had then become i.npossible to raise the capital and complete 
 the work before that date. 
 
 Parliament thereupon passed an Act authorising the issue of £350,000, and 
 the Government granted an Order in Counci' approved 9th July, 1892 (see page 51), 
 in which, after stating the particulars of the outlay on the works, the amount 
 required to complece them, and the fact that unless the Company had the 
 assurance of the Government of Canada that the time would be extended it would 
 be impossible to make the new Debenture issue, the Order concluded with the 
 two following paragraphs, in the first of which it is stated " that the suspension of 
 the works was owing to unforeseen circumstances." 
 
 " The Minister, under these circumstances, and in view of the large amount of 
 private capital which appears to have been already invested in the works, of the 
 further fact that tlie works appear to be so nearly completed, that the suspension of 
 the works was owing to unforeseen circumstances, and that it would appear necessary 
 in order to obtain tlie further capitiil, and to complete the works, to have the additional 
 time asked for, recommends • — 
 
 " That provided that the works necessary to complete the Railway and appurten- 
 ances are actually in progress, and the Con-.'iany established to the satisfaction of the 
 Governor in Council, that it has secured all ^he capital necessary fully to finish and 
 etjuip the railway, docks, and other works of the Company in all respects according to 
 the requirements of the Contract above mentioned on or before the Ist July, 1894, 
 and that an extension of time to the said date for the completion thereof is necessary, 
 the Government at the next session of Parliament will recommend to Parliament th« 
 
16 
 
 legislation necessary to extend until the 1st July, 1894, the time within which to 
 complete said Railway and appurtenances according to the said contract." 
 
 After receiving the Act authorising the issue of £350,000 First Preference 
 Debentures, the Board could not find any sufficiently substantial Contractor to 
 undertake the work, and therefore, I again went to Canada in September, 1892, to 
 endeavour to find a Canadian Contractor, as this had been suggested to me by the 
 Canadian Government while in Ottawa in the previous May. 
 
 In the above quoted clauses from the Order in Council an extension of time is 
 promised to the Company if they secure the necessary capital on or before the 
 1st July, 1894, and in other communications, and also verbally, the language held 
 to us always implied that when we were ready with our capital to recommence 
 construction, the necessary time would be granted to complete the Railway. 
 
 On the 20th March, 1893, a Deputation of Share and Debenture holders 
 waited on the Right Hon. Sir Charles Tupper, Bart., then High Commissioner for 
 Canada, and by memorial asked for two years' time. In replying to the Deputa- 
 tion, he said : — 
 
 "That whenever at any reasonable time the Company are in a position to sliow 
 they liave obtained the necessary means to carry forward the work and resume it, the 
 spirit of this Order in Council will be carried out and the time will bo extended to such 
 a period as will be fairly necessary to carry out the work." 
 
 In reference to the Government of Canada, he added : — 
 
 " That they will give you whatever extensi(m of time is found necessary to enable 
 this enterprise, involving such a large amount of money which in good faith has been 
 expended, to be carried to successful completion, I entertain no doubt whatever." 
 
 A week after this, namely on the 28th March, 1893, I went to Paris and met 
 the Hon. Sir John Thompson, then Premier of Canada, and Sir Charles Hibbert 
 Tupper. I laid before them the Memorial to the High Commissioner and 
 explained that as the time was then insufficient to complete the Railway before 
 the 1st July, 1894, it was impossible for us to raise the capita) by the Preference 
 Mortgage Debentures. Sir John Thompson admitted the necessity of obtaining 
 two years' time and requested that prints of the Memorial to the High 
 Commissioner and of his reply should be forwarded to the Secretary of State 
 at Ottawa. He explained that no Orders in Council could be issued until he 
 returned to Canada when he promised to place the matter before the Cabinet. 
 They both expressed themselves as in entire agreement with the High 
 Commissioner's statements in reply to our Memorial as to extending the time. 
 
 In October, 1893, 1 again went to Canada to endeavour to obtain the necessary 
 extension of time. I saw Sir John Thompson in Ottawa but was informed that 
 the question could not be considered until the return of the Ministers, who were 
 then absent. 
 
11 
 
 On my return from Canada in Movember, 1893, as the financial depression 
 had become less severe, we succeeded in making a provisional arrangement with 
 Mci-srs. Pearson and Sons, Contractors, of Victoria-street, who agreed to send 
 Engineers (o inspect the works in the following spring, as soon as the snow was off 
 the ground. Accordingly, as early as it was possible in 1894, Messrs. Pearson sent 
 Engineers to survey and report on the Railway preparatory to making a contract to 
 complete it. Their report was received in London early in June. A contract was 
 thereupon entered into and the original Debenture holders subscribed for sufficient 
 First Preference Mortgage Bonds to complete the work. When these arrange- 
 ments were completed, a statement was forwarded to Sir Charles Tupper, Bart., 
 the High Commissioner, who was satisfied that the Company were in the position 
 required by the Order in Council of 1892, and I forwarded the following telegram 
 to Ottawa : — 
 
 "To the Right Honorable Sir John Thompson, Ottiiwa. 
 
 " We have now secured the Capital bo complete the Chiguecto Railway, and have 
 settled with first-class firm ot Contractors to commence the works immediately that 
 we I'eceive an extension of time sufficient to complete them, say two years, for which T 
 now apply on behalf of Company. 
 
 (Signed) A. D. Provand." 
 
 Sir John Thompson replied by cable that it was then too late in the Session 
 to consider the question. 
 
 Notwithstanding this, accompanied by Messrs. Pearson's Engineer, I went to 
 Canada in July. The Session had, however, closed before my arrival, but I saw 
 Sir John Thompson and also the Hon. Mr. Foster, then Finance Minister. I 
 explained that we were Jeady to recommence construction as soon as legislative 
 reinstatement enabled us to raise our capital. Sir John Thompson advised, and 
 Mr. Foster confirmed the advice, that I should memorialise His Excellency Lord 
 Aberdeen, Governor General, and before leaving Canada I wrote and sent to His 
 Excellencv two Memorials, one on behalf of the Board of Directors and the other 
 on behalf of the Debenture and Share holders, asking for the necessary legislation 
 extending the time to enable us to complete the Railway. No reply was received 
 to these Memorials. 
 
 In October, 1894, the Hon. Mr. Foster came to London in connection with 
 financial business of the Canadian Government, and a Deputation of the Share and 
 Debenture holders waited on him. Inthe course of his reply to the Deputation 
 Mr. Foster said : — 
 
 " The (Jovernment, however, in this matter is bound to take in other considerations 
 than those of strict and absolute legality, and I can assure you — and that is as far as I 
 can go in an assurance as a responsible member of the Government — that the Govern- 
 ment will take this matter up as was promised Mr. Provand, and we will give it our 
 
18 
 
 best consideration on the grounclH of what might be called moral obligations — of how it 
 may affect credit, and also, as we are primarily bound to do, in respect of the best 
 interests of our own people, for whom we are trustees, and for whom we are bound to 
 act with great caro and prudence. 
 
 "I think you are perfectly right in asking that you should have a decision upon 
 this question as soon as possible. It has been impossible, and I may say it is 
 impossible, to have a question of this gravity considered without what we call a full 
 meeting of Council, and circumstjinces during the holidays have rendered it impossible 
 for the Government to be assembled in force. As you know. Sir John Thompson is 
 coming to London for a few weeks, and as so(jn as lie returns I have no doubt at all 
 that the Government will take the matter up and dispose of it so that you may, I 
 think, confidently look for an answer to this question somewhere about the middle 
 of December." 
 
 The foregoing admits that the moral obligation of the Government to the 
 Company was very strong, that we were perfectly right in asking for a decision as 
 soon as possible, and informs us that this decision would be sent to us about the 
 middle of December. 
 
 A few weeks afterwards Sir John Thompson arrived in London and i had an 
 interview with him on the 11th December at the Office of the High Commissioner. 
 He said that he was too ill to receive a Deputation but added that he agreed 
 entirely with what Mr. Foster had told the Deputation which had waited on him 
 in October, and in answer to my request said that after he returned from Windsor 
 he would write a letter to the Secretary of the Company, stating why he was unable 
 to receive a Deputation, and also that he would "endorse Mr. Foster's statements." 
 At this time he was preparing to go to Windsor, where he died suddenly two 
 days afterwards under very painful circumstances. The promised letter was 
 therefore never written. 
 
 The death of Sir John Thompson was followed by the Hon. Sir Mackenzie 
 Bowell becoaiing Premier of Canada, and as this affected the Canadian Cabinet 
 arrangements, the reply promised by Mr. Foster was not received, but in May, 
 1895, I was summoned by cable to Ottawa, as the Government were then ready to 
 settle the question. I arrived there on the 14th May. After being a fortnight in 
 Ottawa the Hon. Mr. Foster, Minister of Finance, wrote to me that the Govern- 
 ment found it was impossible for them to consider any Bills that session involving 
 monetary liability. His letter is dated May 29th, 1895, and the last clause iu it 
 is as follows : — 
 
 "The Government will, however, take ujj your case for final disposition next year 
 and you may consider that the con.sequent delay does not in any way imply an 
 unfavourable view of the Company's claims, and is undoubtedly without prejudice to 
 their future consideration." 
 
 As the Government decided to have a short Session beginning in January, 
 1896, 1 went to Ottawa in December, 1895. 
 
Id 
 
 In order to renew the Company's charter and subsidy, it is necessary that twd 
 Acts should be passed by the Canadian Parliament. The first would be by a 
 Private Bill which had to pass before the second — the Subsidy Bill — which would 
 be a Government measure, could be introduced. 
 
 The Bill renewing the Company's charter was introduced, and the second 
 reading taken on the 9th March, 1896, when it was defeated by a majority of 1. 
 Under these circumstances the Bill was again put down as a Government measure 
 to be replaced on the Orders for second reading. After another Debate the 
 division on this was taken on the 26th March and the Bill replaced on the Orders 
 of the House by a majority of 17. 
 
 Meantime the Government had introduced the Manitoba School Bill — -a most 
 contentious measure — and as it was certain that it would occupy all the rest of the 
 time of Parliament, which had to rise in April, and that I should be unable to do 
 anything more for the Company, I left Ottawa early in March and returned to 
 London. 
 
 After Parliament rose the Government issued an Order in Council, approved 
 22nd May. (See page 52). This Order .'ecites the previous Order in Council of 
 9th July, 1892, and in the three paragraphs quoted below places the following 
 facts on record, namely : — 
 
 "The Minister observes that under the provi.sions of the last paragraph of tlie 
 Order in Council first above cited, the Company, before the 1st of July, 1894, secured 
 all the capital necessary to fully furni.sh and equip the Railway, Docks, and other 
 W(ji'ks of the Company in all respects in accordance with the requirements of the 
 contract above mentioned, and is now ready and desirous to proceed at once to thn 
 completion of the said Railway, Docks, and other Works, provided an extension of 
 time within which to complete the same for the purpose of the Contract entered into 
 with the Department of llailways and Canals on the 4th of March, 1880, be granted to 
 them ; such extension not to exceed three years from the 1st of October next. 
 
 "The Minister further states that it appears to him that the delay which has 
 occurred since the passage of the Order in Council above cited, has been owing to 
 circumstances entirely beyond the control of the Company who are bvnd fide desirous 
 of completing their undertaking. 
 
 ' ' The Minister, therefore, recommends that at the next Session of Parliament the 
 fiovernment submit the legislation necessary to extend, for the period mentioned above 
 the time within which to complete the said Railway and appurtenances according to 
 the said Contract." 
 
 The above Order acknowledges that the delay subsequent to the Order in 
 Council of the 9th July, 1892, " has been owing to circumstances entirely beyond 
 " the control of the Company," etc., and is a full and complete recognition by the 
 Canadian Government then in office of the Company's claim to reinstatement. 
 
 The Canadian General Election took place in June, and on the 1.5 th of August 
 following some of the new Ministers were in Ottawa and I went there to meet them. 
 
20 
 
 A Committee of the Privy Council was appoiuted to hear my statement and 
 to report to the Cabinet, and I had the honour of presenting the case of the 
 Company before this Committee on 2ad September, 1896. Being under the 
 impression that I should obtain at. answer I waited until the cud of October when 
 the Government informed me that they could not state their intentions until a 
 period nearer the time of the meeting of Parliament. 
 
 As no answer was received, a Deputation of Share and Debenture holders 
 waited on Lord Strathcona, the High Commissioner for Canada, on the 16th 
 February, last year, and pressed for a reply. Their Memorial was forwarded to 
 Ottawa. When Sir Wilfrid Laurier came to London for the Jubilee, a similar 
 Deputation waited on him at the othce of the High Commissioner on the 13th July, 
 and on the following day I had another interview with Sir Wilfrid and Lord 
 Strathcona. The proceedings at the Deputation were fully recorded, but they 
 would occupy too much space to include in this statement. In brief, we pressed 
 them for an answer to our application. We had been ready from June, 1894, to 
 recommence construction and complete the work, and had during all that time 
 been unable to obtain any definite reply from the Government as to what they 
 would do. We desired to be reinstated in order to complete the railway, but we 
 represented that if the Government for any reason decided not to reinstate us, 
 then we considei'ed that we were entitled to be compensated, and were agreeable to 
 negotiate with them as to the amount which would be fair compensation, and if 
 we failed to agree as to this, we were willing to leave the (juestiou of amount to be 
 settled by arbitration. Sir Wilfrid Laurier promised that the ([uestion should be 
 taken up and dealt with immediately on his return to Ottawa, and after his 
 return I received the following letter from him. 
 
 ( )ttawa, 28th September, 1897. 
 Dear Mr, Provand, 
 
 With reference to the Chignecto (jucBtion, I brought the iimtter to the attention 
 of my colleagues on my return from England, and it lia.s l)een referred to a Suit- 
 Committee of the Privy Council for con.sideration and report. 
 
 I am aware that time is an object with you, and that you aio naturally impatient 
 of having an answer. This 1 can pi'omise at an early day whether the answer be 
 ftflirmative or negative. The period of suspense must come to an end promptly. 
 
 Yours respectfully, 
 
 (Signed) WILFRID LAURIER. 
 
 A. D. Provand, Esq., London. 
 
 This brings the account of the negotiations down to a very late date. There 
 was a very large correspondence carried on by myself, the details of which it is 
 unnecessary to set out, as the foregoing substantially covers all matters of 
 importance. It will be seen that since May, 1892, a period of almost six years, 
 
21 
 
 we have been unceasing in our endeavours to rescue the Company from the 
 position in which it was placed by the legislative Act of the Canadian Parliament 
 and the consequent default of the Contractors, It is a long and melancholy 
 account, largely made up of Ministerial expressions of sympathy, of Ministerial 
 promises on behalf of the Canadian Government, and of postponements to consider 
 our Memorials, for only a few of which any reasons were given. 
 
 At length, on the IGth Febnuiry last, I received a letter from Lord Strathcona 
 enclosing the following Order in Council approved 27th January containing the 
 Report of the Sub-Committee of the Privy Council to whom the question had 
 been referred, the conclusion of which is that the Sub-Committee "are of opinion 
 " that the scheme cannot be regarded as one of such public utility as would 
 " warrant an application to be made to Parliament for a renewal of the lapsed 
 " subsidy." 
 
 It will be observed that nothing is said in the Order as to our claim for 
 compensation nor has anything been received from Ottawa on this point up to the 
 present time. 
 
 Extract from a Report of the Committee of the IJonorab'e the Privy Council, approved 
 by His Excellency tlie Governor-General on the 27th .January, 1898. 
 
 The Sub-Committee of the Privy Council to whom the subject of the Chignecto Marine 
 Railway Company was referred, report as follows : — 
 
 ^* First. It appears that in the year 1S82 a subsidy of $150,000 a j • r for a period of 
 25 years was authorised to bo paid upon the construction of this railway, provided it was 
 completed by the 1st of July, 1889. 
 
 " Secoiid. In 1886 a formal indenture was entered into between the Ofticers of the 
 Chignecto Marine Railway Compiiny and the (iovernmjnt of Canada, whereby the said 
 Company agreed to complete the said road by the 1st of July, 1889. 
 
 '^ Third. In 1888 an extension of one year appears to have been granted by Parliament 
 coupled with the proviso, that in the event of failing to complete the road by the 1st of July, 
 1890, the Company should be allowed a further extjnsiou of two years on condition of paying 
 a fine of $5,000 a month to the Government of Canada for each month during which the 
 works remained uncompleted. 
 
 '* Fourth. In 1891 a still further extension to July the Ist, 1893, was applied for and 
 granted by Parliament to the Company, and penalties incurred for delays amounting to 
 160,000 a year remitted. 
 
 " Fifth. Subso(iuent to these extensions, the Company entered into negotiations with the 
 late Government in the year 1892 for the purpose of procuring still further extensions, but the 
 conditions on which the then Govorumout in their Order in C.>uncil of 1892 agreed to 
 recommend a further extension, to wit, that the Company should show that they had placed 
 themselves in such a Huancial [xisition as to enable them to proceed with the work, and should 
 also show that actual progress was being made ; were not complied with during 1893, nor was 
 any intimation given to the (lovernment that the Company was able to comply with the said 
 conditions until a period of two years or thereabouts iiad elapsed from the passing of the 
 said Order. 
 
 *^ Sixth. It further appears that a proposition to renew the charter of the Company, 
 although supported by the late Government, was defeated in Parliament in 189G on the express 
 ground that a renewal of the charter niight involve a renewal of the subsidy. 
 
22 
 
 « 
 
 " Seventh. That the late Government did on the 22nd of May, 1896, after the dissolution 
 of Parliament, pass an Order in Council agreeing to recommend the revival of the said subsidy, 
 but that such (Jrder, being passed in direct detiance of the decision so recently arrived at by 
 Parliament can in no way be regarded as binding upon tiieir successors much less on the 
 Parliament of Canada by whom such ijuestions must ultimately be decided." 
 
 The Sub-Committee observe that it would appear therefore, tliat so far from having been 
 rigorously dealt with, the Company has received repeated extensions and have failed to comply 
 with the stipulations agreed to by themselves in sutticient time to permit of legislation in their 
 favour. 
 
 It would also appear that the latu Govennnent were unable to obtain a renewal of the 
 Company's charter from Parliament, and througliout tlie sevcml discussions strong protests 
 were invariably made figainst further extensions, and that the Company were warned that such 
 applications would .lot be favourably regarded. 
 
 The Sub-Committee, in view of the above recited facts and bearing in mind the almost 
 universal testimony of experts and practical men of all shades of opinion that it is no longer 
 possible to believe that tliis enterprise can become a commercial success, under any circum- 
 stances, are of opinion that the scheme cannot be regarded as one of such public utility as 
 would warrant an application to be made to Parliament for a renewal of the lapsed subsidy. 
 
 The Committee, concurring in the above report, submit the same for Your Excellency's 
 approval. 
 
 The following was the reply which I sent to Sir Wilfrid Laurier in answer to 
 the above Order in Council. I hope you will carefully read this letter, as it shows 
 the technicalities with which the Canadian Government have tried to make out an 
 apparent case against the Company, and how these are supplemented by the 
 omission of important facts, by giving undue importance to others, and by 
 allegations which we, at least, cannot verify. 
 
 London, 26th March, 1898. 
 To the Right Honorable 
 
 Sill Wilfrid Lauiuer, K.C.B., 
 
 Prime Minister and President of the 
 Privy Council, Ottawa, Canada. 
 
 CHIGNECTO MARINE TRANSPORT RAILWAY 
 
 COMPANY, LIMITED. 
 Sir, 
 
 On February IGth I received a note from Lord Strathcona enclosing a 
 
 copy of an Extract from a Report of the Honorable the Privy Council, which Lord 
 
 Strathcona informed nje contained the decision of the Government in regard to 
 
 the application submitted on behalf of the Chignecto Marine Transport Railway 
 
 Company for a renewal of its Charter and its Subsidy. 
 
 In a letter to Lord Strathcona dated Februrry 17th, which was forwarded to 
 
 you, and also in a letter dated February 25th, which I sent to you through LorcJ 
 
28 
 
 Strathcona, I drew attention to the fact that when we had the honour of meeting 
 you in London last summer, you informed the deputation of investors and myself 
 that there might be difficulties in the way of obtaining the consent of Parliament 
 to the reinstatement of the Oompan}', and I then said that if the Cabinet decided 
 not to recommend Parliament to reinstate the Company the investors would be 
 willing to consider terms of compensation, and the substantial question I put in 
 the two letters above referred to was whether the Government would either come 
 to some agreement with us as to the amount of compensation, or failing 
 agreement, would consent to have the question of compensation referred to an 
 arbitration in which the Company's etiuitablc rights should be fully taken into 
 consideration. 
 
 I expected that the. Sub-Committee when considering reinstatement would 
 also have considered these points, and that before this we should have had a reply 
 to the letters above referred to; but Mr. Ferguson, Q.C., of Ottawa, has recently 
 wired that an answer would be received in about a fortnight. On account of this 
 postponement I take the opportunity of sending a brief reply to the Report of the 
 Sub-Committee which will arrive in Ottawa before the fortnight elapses. 
 
 The Report of the Sub-Committee consists of seven clauses. It will be 
 convenient to take the first three by themselves as they relate to the original Acts 
 incorporating and subsidising the Company. 
 
 "The Sub-Committee of the Privy Council to whom the subject of the Chignecto 
 Marino Railway Company was referi'ed report as follows : — 
 
 " First. It appears that in the year 1882 a subsidy of §150,000 a year for a 
 period of 25 years was authorised to be paid upon the construction of this railway, 
 provided it was completed by the l.st of July, 1889. 
 
 "Second. In 188(5 a formal indenture was entered into between the Officers of 
 the Cliignecto Marine Railway Company and the Government of Canada, whereby the 
 said Company agreed to complete the said road by the Ist of July, 1889. 
 
 " Third, In 1888 an extension of one year appears to have been granted by 
 Parliament coupled with tlie [)roviso that in the event of failing to complete the road 
 V)y the 1st of July, 1890, tlio Company should be allowed a further extension of two 
 years on condition of paying a tine of $5,000 a month to the Government of 
 Canada for each month during which the works i-emained uncompleted." 
 
 The above is an incomplete account of the origin of the Company and of what 
 was done by the Government and Parliament. I mentioned the principal facts in 
 the Statement of the Company's case, which I had the honour of placing before a 
 Committee of the Privy Council on the '2m\ September, 1896, and even at the risk 
 ot, to some extent, repeating what I then said, it is necessary that I shouUl refer 
 to the very important omissions from the above clauses in the Report, 
 
24 
 
 The first two Acts to incorporate and subsidise the Company were passed in 
 May, 1882. The preambles state that they were passed : — 
 
 " in consideration of the great advantage which would accue to the Maritime Provinces 
 and the Inter-colonial trade of Canada." 
 
 from carrying out the Railway, which would be : — 
 
 " especially conducive to the development of the commercial interests and coasting 
 trade of the Maritime Provinces, &c." 
 
 In 1883 *' Act of Incorporation was amended in regard to the Capital 
 Stock and Mortgage Bonds which were to be issued. The Canadian Incorporators 
 placed these offers of the Government before Finance houses in London and 
 Sir Benjamin Baker, the eminent engineer, and from them they received the 
 opinion that the Railway could not be undertaken on t he terms. They returned 
 to Canada, and in 1886 an Amending Subsidy Act was passed, altering the terms 
 and making a Contract with the Incorporators to carry out the work. 
 
 Further examinations and surveys were made for the Incorporators by 
 Sir Benjamin Baker, who went twice to Canada for this purpose. On this account 
 an extension of time for one year was necessary in 1888, and in Section 3 of the 
 Act of that year granting this, the Subsidy provisions were again amended to 
 make them acceptable to investors. 
 
 Therefore the Canadian Government passed two original Acts in 1882, and 
 amending Acts in 1883, in 1886, and in 1888. The value and importance to 
 Canada of the enterprise was therefore affirmed and reaffirmed by the Government 
 and Parliament, and the Subsidy and conditions were repeatedly altered until the 
 capital was obtained from British investors. 
 
 It was openly stated in Parliament by Ministers and ex-Ministers on both 
 sides of the House, that the object of passing the Acts was to obtain the capital 
 in London to build the Railway. This was expressly referred to by the Hon. 
 Alexander Mackenzie, the Leader of the Liberal Opposition of that day, who on 
 11th May, 1882, when the first Act was being considered, said that: — 
 
 " he (Mr. Ketchuni) will no doubt obtain the money in [the English market with 
 the guarantee of the Canadian Government." 
 
 And on the 19th April, 1888, when the last Act given to the Canadian 
 Incorporators was before the House, Sir Charles Tupper, then Finance Minister, 
 
 said : — 
 
 *' The Government is not asked to pay any money but simply to enable English 
 capitalists to furnish all tlie money required to give us the work at half the cost we 
 could obtain these advantages in any other way. " 
 
25 
 
 Therefore, from 1882 to 1888, the Government and Parliament promoted this 
 legislation with full knowledge that the Incorporators would ijot carry out the 
 Contract made with them to build the Railway which forms the Schedule to the 
 Act of 1886, and that their action as Incorporators was merely directed to obtaining 
 such measures from Parliament as would make it possible to raise the necessary 
 capital in London. 
 
 The names of the 21 original Incorporators are given in the first Act of 1882. 
 They were all Canadians with the exception of Edwin Clark, the inventor of the 
 machinery used in the Lifting Dock. Many of them were well-known public men 
 and they acted as Incorporators from motives of public spirit. They had no 
 financial interest in the work either before it was capitalised or afterwards. They 
 were not " promoters,'' They made no profit in any way. Some of them were out 
 of pocket for expenses. The real promoters were the Canadian Government and 
 Parliament, and they were the only promoters whom we investors ever knew. The 
 Incorporators in the Act were to us merely a part of the Parliamentary machinery 
 of Canada to legalise an enterprise of the kind. The only Incorporator who was 
 connected with the Company after it was brought out in London was Mr. Ketchum, 
 the Canadian Engineer, who acted as Resident Engineer to the Company. He 
 was the original projector of the Railway and was largely out of pocket for 
 preliminary expenses, only a part of which was ever repaid to him. 
 
 The third clause covers the year 1888. But nothing is said about the 
 alteration of the General Railway law made in that year by Parliament, and as that 
 change was the direct cause of all the difficulties which afterwards befell the 
 Company, I am entitled to draw attention to it. 
 
 The connection of our investors with the Company commenced in March, 1889, 
 by the issue of the Prospectus offering the Preference Shares. At that time the 
 whole of the capital would have been subscribed if offered, but sub-section 4 of 
 section 93 of the General Railway Act, passed in the previous year, prohibited the 
 issue of Bonds and Debentures until one-fifth of the total cost of the work had been 
 actually expended on it. We were therefore debarred from issuing our Debentures 
 when we might have done so. All the consequences that followed to the Company 
 were directly caused by this enforced postponement. I have dealt with this matter 
 on pages 8 and 9 of the before-mentioned Statement, and the omission of all 
 reference to it in the Report ot the Sub-Committee is significant. We knew 
 nothing of this sub-section until we came to issue the Company's capital, but being 
 compelled to comply with it, we were forced to postpone the issue of the Debentiires 
 until the close of 1889, and could then only place a part of them, as the financial 
 panic which ultimately overtook this country, as well as all the leading countries 
 
26 
 
 of the world, was already threatening the money market This sub-section was 
 the direct cause of our being unable to complete the Railway, and the Canadian 
 Government itself.'having found that it prevented the execution of public woiks 
 in Canada, was compelled to repeal it in 1802. I respectfully submit that tiie 
 Canadian Government must be held responsible for the existence of this law which 
 prevented the Company from obtaining the whole of the capital required at a ti: ne 
 when this could have been found, and consequently prevented the completion of 
 the Railway within the contract time. 
 
 Therefore with due submission I contend that the first three paragraphs of the 
 Report are incomplete in their account of what took place, inasmuch as they omit 
 all reference to the position which the Canadian Government and Parliament took 
 up as promoters of the enterprise, and to the alteration made in the General 
 Railway Act of 1888. 
 
 Clauses 4 and 5 of the Report to the Privy Council are as follows : — 
 
 " Fourth. In 1891 a still further extension to July 1st, 1893, was applied for and 
 granted by Parliament to the Company, and penalties incurred for delays amounting to 
 $60,000 a year remitted. 
 
 "Fifth. Subsequent to these extensions the Company entered into negotiations 
 with the late Government in the year 1892 for the purpose of procuring still further 
 extensions, but the conditions on which the then Government in their Order in Council 
 of 1892 agreed to recommend a further extension, to wit, that the Com[)any should 
 show that they had placed themselves in such a Huancial position as to enable them 
 to proceed with the work, and should also show that actual progress was being made, 
 were not complied with during 1893, nor was any intimation given to the Government 
 that the Company was able to comply with the said conditions until a period of two 
 years or thereabouts had elapsed from the passing of the said Order." 
 
 The fourth clause of the above refers to what was the Hrst application to 
 Parliament by the investors as distinct from the original Incorporators, and it is 
 these investors who really constitute the Company. All previous applications 
 were on behalf of the Canadian Incorporators who had no connection whatever 
 with the enterprise except to bring it by the aid of Parliament into a shape 
 sufficiently attractive to the British investor to enable the capital to be raised in 
 London. 
 
 Further, the Committee here take advantage of a fact which, instead of being 
 used against us, should I venture to say, entitle us to generous treatment. When 
 the Railway was brought to London we might have registered a new Company here 
 before issuing the shares, and it would then have been impossible to say even in a 
 technical sense — and that is the only sense in which it is true — that our investors 
 made any application to Parliament before 1891 ; but instead of doing so, we 
 showed our confidence in the Canadian Government by carrying out the work as 
 a Canadian Company operating under Canadian law. 
 
27 
 
 On behalf of the investors I therefore beg to protest against the refusal of 
 our request for reinstatement being supported on mere technical grounds. Until 
 we found the capital, the Company existed only in a paper and Parliamentary 
 sense, and what was done before March, 18S9, was not done either by or for 
 those who subscribed the capital of the Company. 
 
 It is an undeniable fact that extensions of time to complete Public Works are 
 applied for and granted as a matter of course. In answer to enquiries in Ottawa, 
 I was unable to find that the Canadian Government had ever refused to any body 
 of investors who had spent their money, renewals of time to complete works 
 which they had undertaken to carry out. In the Debate on the 26th of March, 
 1896, in the House, the Hon. Mr. Ives, formerly Minister of Trade and Commerce, 
 and therefore well qualified to speak on the subject, said : — 
 
 "I have never known during my 20 years of Parliamentary life of an instance 
 where a Company has been refused the renewal of a Charter. I have known 
 hundreds ()f eases in wliich not a dollar lias been spent, but where renewals have 
 been given not only once, but three or four times." 
 
 From this I presume that our treatment is without precedent in Canadian 
 Parliamentary annals. 
 
 Besides referring to the applications of the Company for extensions of time, 
 respecting which I enter the above protest, the fifth clause of the Report refers 
 to the Order in Council of 1892, and to what took place subsequently, and it 
 s there stated that no progress had been made : — 
 
 " nor was any intimation givnn to the Government that the Company was aljlo 
 to comjjly with the said conditions until a period of two years or tiiereabouts had 
 elapsed from the passing of the said Order." 
 
 From the above it might be inferred that we had not been moving in the 
 matter from the time of the issue of the Order in Council for about two years 
 afterwards. This was not the case. The Order in Council referred to in Clause 5 
 was granted in July, 1892. During that and the following years the financial 
 collapse was so complete that it was impossible to obtain the means to carry out 
 any enterprise of this character. On the 20th March, 1893, a deputation waited 
 on Sir Charles Tupper, then the High Commissioner for Canada, with the object 
 of seeking assistance from the Canadian Government, which, however, we failed 
 to obtain. During the same year I went to Canada about the business of the 
 Company, and towards the end ot the }ear, when the panic had to some extent 
 subsided, and financial confidence was returning, we succeeded in making a 
 Contract with Messrs. Pearson and Sons, of London, the Contractors, to complete 
 
the Railway, and in the spring of 1894, as soon as the snow was off the ground, 
 they sent engineers to survey and report on the condition of the works. In 
 considering what the Company did during these two years, it must not be 
 forgotten that, in Canada, during nearly half of the year no work at all can 
 be done. 
 
 Immediately on the return of Messrs. Pearson's representatives, financial 
 arrangements were made to complete the Railway, and these arrangements proved 
 to be entirely satisfactory to the High Commissioner in London, as required by 
 the Order in Council ; and I telegraphed to the Rt. Hon. Sir John Thompson, then 
 Premier, that we had secured the capital, and received a telegram in reply that it 
 was then too late to pass the necessary legislation. Nevertheless, I went to Canada 
 and saw the Premier and also the Hon. Mr. Foster, Finance Minister, with a view 
 to the reinstatement of the Company in the next Session of Parliament. Therefore, 
 during the time referred to in Clause 5, we were doing everything possible to 
 enable the work to be recommenced and completed. 
 
 The years 1892 and 1893 covered a period of financial collapse, not only in 
 London, but throughout the whole world, during which it was extremely difficult 
 to raise capital for any purpose whatever. These financial difficulties existed in 
 reference to many large public works, besides the Chignecto Ship Railway, which 
 were being carried on by Contractors for Foreign Governments, notably for the 
 Argentine Republic ; but in no instance did any Government take advantage of 
 these circumstances. Several Contractors and Companies — from causes which I 
 need not enter upon — found themselves during these years unable to fulfil their 
 obligations, but the Argentine Government has since settled with them at a cost 
 of several millions sterling, and has waived defaults which legally it might have 
 taken advantage of Many of our investors were also interested in the enterprises 
 referred to above, and we hope they will be ultimately justified in believing that 
 the treatment they have experienced from South American Republics will be at 
 least equalled by that which the Canadian Government will accord to them. 
 
 The following are the remaining Clauses and the conclusion of the Report : — 
 
 "Sixth. It further appears that a proposition to renew the charter of the 
 Company, although supported by the late Government, was defeated in Parliament in 
 1896 on the express ground that a renewal of the charter might involve a renewal of 
 the subsidy. 
 
 " Seventh. That the late Government did, on the 22nd of May, 1896, after the 
 dissolution of Parliament, pass an Order in Council agreeing to recommend the revival 
 of the said subsidy, but that such Order, being passed in direct defiance of the 
 decision so recently arrived at by Parliament, can in no way be regarded as binding 
 upon their successors, much less on the Parliament of Canada by whom such questions 
 must ultimatelv be decided. 
 
id 
 
 ' ' The Sub-Committee observe that it would appear therefore, that so far from 
 having been rigorously dealt with, the Company have received repeated extensions and 
 have failed to comply with the stipulations agreed to by themselves in sufficient time 
 to permit of legislation in their favour. 
 
 ' ' It would also appear that the late Government were unable to obtain a renewal 
 of the Company's charter from Parliament, and throughout the several discussions 
 strong protests were invariably made against further extensions, and that the Company 
 were warned that such applications would not be favourably regarded. 
 
 " The Sub- Committee, in view of the above recited facts and bearing in mind the 
 almost universal testimony of experts and practical men of all shades of opinion that 
 it is no longer possible to believe that this enterprise can become a commercial success 
 under any circumstances, are of opinion that the scheme cannot be regarded as one of 
 • such [)ublic utility as would warrant an application to be made to Parliament for a 
 renewal of the lapsed subsidy." 
 
 The sixth clause and the first paragraph of the seventh clause of the Report 
 deal with the Bill to renew the Charter of the Company which was before the 
 House in 1896, and with the Order in Council of the 22nd May of the same year 
 agreeing to recommend Parliament to reinstate the Company and revive its 
 Subsidy. Reference is made to the defeat of the Bill in the House on the 9th 
 March, and to the Order in Council having been subsequently passed in "direct 
 defiance of the decision arrived at by Parliament." 
 
 I respectfully submit that the facts do not justify the description given to 
 them in Clauses 6 and 7. In the Division on the Bill, there were 54 for, and 
 55 against it — a majority of 1 only. That this was a snap division is, I submit, 
 established by the fact — not mentioned in the Report of the Committee — that a 
 few days later, namely on March 26th, the Hon. Mr. Mclnerney moved that the 
 Bill be replaced on the Orders of the House for a second reading, and this was 
 carried by 80 to 63 — a majority of 17. The Bill was therefore again before the 
 House, and the Order in Council of 22nd May had no connection with, nor was it 
 in defiance of, the decision defeating the Bill, because by the reinstatement of the 
 Bill that decision was practically cancelled. The Order in Council was in fact an 
 agreement to recommend that the Bill should be passed by Parliament, and the 
 Subsidy revived in as full a Government sense as if the first Division on the Bill 
 had never taken place. 
 
 I respectfully submit that what may be reasonably described as an accidental 
 division taken without much previous deliberation as this was on the 9th March, 
 and which gave only a majority of 1, cannot be considered as a deliberate 
 decision arrived at by Parliament. And the reinstatement of the Bill on the 
 Orders ot the House shortly afterwards by a majority of 17 is definite proof that 
 the House itself did not consider it to be such. 
 
30 
 
 Therefore, I contend that the Order in Council of May, 1896, should be 
 regarded as binding upon the present Government, seeing that the foregoing facts 
 relating to the Order, and to the two Divisions in the House on the Bill, remove 
 all reasons for holding the Government free from responsibility, as the Committee, 
 in the first paragraph of the seventh clause, suggest that they should be. 
 
 The second paragraph of ihe seventh clause states that so far from the 
 Company having been rigorously dealt with, it has received repeated extensions of 
 time, and has failed to comply with the stipulations agreed to in sufficient time to 
 permit of legislation in its favour. 
 
 The last part of the paragraph above quoted refers to the Company not 
 having been able to obtain the capital early enough in 1894 to permit of legislation 
 in that session. This admits that if we had succeeded in arranging for the capital 
 soon enough, the Company would have been reinstated in that year. But the 
 Committee surely will not contend that, because we were then too late owing to 
 circumstances entirely beyond our control, we are therefore to be debarred from all 
 further favourable consideration. This would be to argue — not that we were 
 equitably disentitled to relief on the merits — but because certain financial arrange- 
 ments could not be settled by a particular date that the Company ought alone to 
 be the sufferer from the unavoidable delay. Neither the Government, nor any 
 interest or person in Canada, experienced loss or even prejudice from our being 
 unable for nearly two years after the granting of the Order in Council of 1892, to 
 obtain the capital to complete the work. Since June, 189-i, a period of nearly four 
 years, including two sessions with a Conservative Administration in power and two 
 sessions with a Liberal Administration, we have been waiting for a reply to our 
 request for time to complete the work. In cominou fairness our petition for relief 
 should not be prejudiced on account of delays before June, 1894, which we were 
 powerless to prevent, nor for delays since that date for which the Governments of 
 both parties are entirely responsible, while we alone are the sufferers from 
 their inaction. 
 
 In the third paragraph of the seventh clause it is stated that strong protests 
 were made during the several discussions, and that the Company was " warned " 
 that such applications — referring to reinstatement — would not be favourably 
 regarded. 
 
 I have difficulty in understanding what is meant by the warnings referred to 
 unless they are to be taken as the language used by some honourable members 
 personal to the Company, i.e., the investors. In that Debate the Company was 
 called a swindle and a fraud, and the investors swindlers and fraudulent, and the 
 Company's credit was to be destroyed if possible. But for this language no cause 
 
was shown except that we sought reinstatement, and to be allowed to expend our 
 own money in completing the Railway. Trusting in the Government and 
 Parliament of Canada, we had already expended nearly £750,000 in good faith on 
 the work which had been promoted by themselves, and with which no person on this 
 side of the Atlantic was in any way connected until, relying upon Canadian Acts, 
 the capital was furnished. I could quote the words of many Senators and 
 Members who have stated that our claim is one which the Canadian Government 
 cannot honourably disregard. 
 
 The Hon. Mr. Foster, Finance Minister in the last Government, told the 
 Deputation that waited on him in London on the 3l8t October, 1894 : — 
 
 ' ' that the Government will take this matter up, as was promised Mr. Provand, 
 and we will give it our best consideration on the grounds of what might be called 
 moral obligations," etc. 
 
 Several Members of the late Government have confirmed this statement, and 
 no Member will express dissent from these views. Indeed in the debate on the 
 9th March, when the Bill was defeated by a majority of 1, even the Hon. Mr. 
 Welsh, an opponent of the scheme (and who, I was informed, called the division), 
 referred to the interviews he had had with myself, in which he admitted the moral 
 obligation of the Government to the Company, and used these words : — 
 
 ' ' Then I advised him to apply to the Government on the ground of moral 
 obligation." 
 
 And on a former occasion he told the House that : — 
 
 ' ' If there were any honourable way of getting out of the scheme I should like to 
 see it adopted." 
 
 The last paragraph of Clause 7 refers to the testimony of experts and 
 practical men to the effect that it is no longer possible to believe that the 
 enterprise can become a commercial success. 
 
 I have to say with regard to this that no such expert evidence has ever been 
 submitted to the Company. One statement was repeatedly made in reference to 
 the difficulties of navigating the Bay of Fundy, but this was completely disproved 
 by Capt. Douglas's report made a year or two ago for the Government, showing 
 that it was an easily navigated water. And I have in my possession a large 
 number of letters from Shipowners, Shipmasters, and Shippers of produce ; also 
 from firms engaged in the Coal, Lumber, Building Stone and Gypsum Trades, 
 which are favourable to the Railway. 
 
 But I respectfully protest against any question of possible future commercial 
 success being advanced as a reason why the Company should not now be 
 
32 
 
 reinstated. If it fail to be a mechanical success we Hhall never receive any 
 money whatever from the Canadian Government, as this is a risk which we 
 accepted with the Subsidy ; and if it be not a commercial success, the Company 
 will have to abide by the result. 
 
 I have to add that it is the first time in our experience that any Govern- 
 ment has refused to a body of investors time to complete a public work after 
 they had expended, on the faith of statutory engagements, more than two-thirds 
 of its total cost. In otir case the grievance is aggravated by the fact that the 
 difficulties of the Company are due to the before-mentioned subsection placed 
 in the General Railway Act of 1888, which Parliament was subsequently obliged 
 to repeal, but not until the mischief had, in our case, been done. 
 
 Therefore, in conclusion, on behalf of the investors in the Company, I 
 respectfully beg to ask that the Report of the Sub-Committee of the Honorable 
 the Privy Council be referred back to the Sub-Committee for further consideration 
 on the grounds herein stated. 
 
 I am. Sir, 
 
 Your most Obedient Servant, 
 
 (Signed) A. D. PRO V AND. 
 
 London, Slst May, 1898. 
 To the Eight Honorable 
 
 Sir Wilfrid Laurieu, K.C.B., 
 
 Prime Minister and President of the 
 Privy Council, Ottaxva, Canada. 
 
 CHIGNECTO MARINE TRANSPORT RAILWAY 
 COMPANY, LIMITED. 
 Sir, 
 
 The numerous facts with which I had to deal in my letter of the 
 26th March last, and the anxiety to shorten it as much as possible, led to my 
 stating the case for the Company on one or two points less fully and clearly than 
 should have been done. I beg, therefore, to otfer some further explanations, 
 
 In the second paragraph of the 7th Clause of ttie Report of the Sub- Com- 
 mittee they say that — 
 
 "So far from having been rigorously dealt with the Company has received 
 repeated extensions, etc., etc." 
 
33 
 
 It is, therefore, necejsary to ahow exactly what extensions of time were given 
 by the Canidiau Parliament, and under what circumstances. 
 
 The original Acts incorporating the Company and granting a Subsidy were 
 passed in 1882. The Incorporation Act was amended in 1883 ; the Subsidy Act 
 in 1886 ; the Contract to construct the Railway forms the schedule to this Act. 
 It was made between the Canadian Government and the original Canadian 
 Incorporators, and the 1st July, 1889 was the date stated for completion. Sir 
 Benjamin Baker was engaged by the Canadian Incorporators as Chief Engineer, and 
 he went to Canada in 1886 to make personal studies for the preparation of the 
 necessary surveys and plans. During the following year, 1887, these were pre- 
 pared. Much work had to be done in c maeotion with the hydraulic plant, for 
 all of which complete detailed plans were required, and many changes and 
 modifications had to be made until every detail was satisfactory. A great den I 
 had also to be done on the ground itself, making borings and obtaining necessary 
 engiueeriug data, which are indispensable in every undertaking of the kind, but in 
 a novel work of this character these were greater than usual. On this account 
 Sir Benjamin Baker had to go to Canada a second time, and it was therefore early in 
 1888 before the plans were finally completed, and they were approved by the 
 Governor General in Council on the 23rd May, 1888. In the Contract of 1886 
 the date for completion named was 1st July, 1889, but it was obvious that the 
 Railway could not be constructed within 13 months after the plans were 
 approved, considering that during only 7 or 8 of these would it be possible to 
 do any work at all. Besides this, the Contract was with the Incorporators 
 who, the Canadian Parliament knew, had neither the means nor intention to 
 carry it out, and it wa>i well known that the investors who were to supply the 
 capital to do so had still to be found in London and brought into the enterprise. 
 The Canadian Parliament therefore passed an Act, approved on the 22nd May, 1888, 
 making the date of completion the 1st July, 1892. Technically, it may be said 
 that this was an extension of time, but it was not so in the true sense, which implies 
 giving more time to complete a work already in progress. The Railway was 
 not in progress, it had not been commenced. The plans had just been approved, 
 and it would have been idle to do so unless the Incorporators also received 
 sufficient time to enable them to negotiate in London for the capital. The 
 simultaneous approval of the plans and the Parliamentary grant of time to 
 complete the work, showed beyond question the desire of the Government to 
 have the Railway constructed, and all this was done before we were connected 
 with the undertaking, in order to induce us to supply the needed capital. 
 
 ^n one point it is most important that there should be uo misappre- 
 
34 
 
 hension. From the date of the first Act of Incorporation ot 1882, down to 
 the last Act of 1888, the "Company" was to the knowledge of the Canadian 
 Government and Parliament only a scheme of the 21 Incorporators named 
 in the original Act. It was a pro-forma Company. There were five Acts 
 passed for them between 1882 and 1888, and it is in the last of these Acfs 
 that the time to complete the Contract was extended to the 1st July, 1892. 
 It is, therefore, a mistake to say that our Bond and Share holders who now form 
 the "Company" and who seek relief, ever a.ske(l for or received extensions of 
 time or anything else from the Canadian Parliament previous to 1889. The 
 Company (as we know it) had no existence before that year, and the object and 
 intention of all that was previously done in Canada, while nominally for the 21 
 Incorporators already mentioned, was really to call Bond and Share holders 
 into existence i-M London and obtain their money. This was stated in the 
 Canadian Parliament again and again by Ministers of both ^xirties. 
 
 Early in 1891 it was foreseen that the extraordinary physical difficulties met 
 with in carrying out the work already referred to would prevent it from being com- 
 pleted by the 1st July, 1892, and we made an application to Parliament and were 
 granted one year's extension of time, namely to the 1st July, 1893, a,nd this 
 extension of one year is the only extension we ever received. 
 
 I therefore beg to submit that it is a misstatement of fact to say that " the 
 Company has received repeated extensions," etc. Altering the date of completion 
 to 1st July, 1892, simultaneously with approving the plans can only be in a technical 
 sense called an extension of time, and in any case it was not given to our Company, 
 as it had then no existence. The Government and Parliament did everything with 
 the avowed object of enabling the Canadian Incorporators to get the capital in 
 London, and it would have been idle for them to come hero without having suffi- 
 cient time given them to complete the Railway. We — the Bond and Share holders 
 who now form the Company — had nothing to do with it until a year afterwards, 
 it was our money that made it a company, it is we who seek relief, and the 
 sole extension granted to us was, as before stated, for one year in 1891. 
 
 Some further explanation is also necessary in regard to the Ministerial 
 promises of time. ^-% 
 
 In 1892 the Government granted the Order in Council of 9th July in which 
 they promised that if we obtained the Capital riMjuired to complete the Railway 
 before the 1st July, 1894, they would recommend Parliament to extend the 
 time beyond the Ist July, 1893. This was done by the Government with the best 
 and kindest intentions towards us, and we are duly grateful ; but the Order proved 
 to be without practical value, because the legal date for completion remained the 
 
35 
 
 1st July, 1893 — the Ministers' promise that they might ask Parliament to 
 extend the time, did not meantime add one hour to it — and it was impossible for us 
 to obtain capital from investors in 1.S92 to complete a work which could not be 
 finished in the time allowed us. This position was explained to Sir Charles 
 Tupper, Bart., then High Commissiimer for Canada, on 2()th March, 1<S03, when he 
 promised that time would be given to us. A few days afterwards, namely the 
 28th March, I waited on Sir John Thompson, then Premier of Canada, who was in 
 Paris at that time, and begged that the Government would grant us two years' 
 extension in order that we might raise our capital. He agreed that it was 
 necessary, but said it could not be done until he returned to Canada. When he 
 did return in the autumn I went to Ottawa to obtain it, but I was informed that 
 certain Meaibers of the Government were absent whose presence was neces.sary, 
 and it was not granted. In June, 1894 — within the period covered by the Order 
 in Council — we did succeed in arranging for the recpiired capital, but were never- 
 theless denied the necessary time to complete the work. Since then T have been 
 four times in Ottawa endeavouring to get the required extension, but without as 
 yet being able to obtain it. 
 
 I therefore beg further to protest against Ministerial promises being 
 considered as furnishing any reason for the Sub-Committee's remark in the 
 second paragraph of Clause seven, that the Company had not been rigorously 
 dealt with. The promises made to us and their subsequent failure to fulfil them 
 do not form the least painful feature of these protracted negotiations to obtain 
 fair treatment for our investors. Four years ago we were ready with the capital 
 to recommence constructioti and finish the Railway, and during the whole time 
 since then we have done everything in our power to obtain the necessary 
 legislative authority, but have received iti return only postponements and a 
 succession of promises none of which have been fulfilled. 
 
 We are still awaiting the result of the reconsideration of our memorial asking 
 
 for reinstatement, or failing that for compensation, ami I respectfully hope the 
 
 further explanations in this letter regarding statements in the Sub-Committee's 
 
 Report will not be overlooked. Hut if everything is refused to us, it will in eflFect 
 
 be to decree the contiscati'ju of about ,£7oO,()00 of our money expended in 
 
 developing Canada on tiie faith of tlu' Acts of Parliament already referred to 
 
 while at the .same time we have abundant evidence that the Government, 
 
 Parliainnit and people desired the Railway, bi'lieving it to be a meritorious public 
 
 undertaking. 
 
 I am, Sir, 
 
 Your most obedient servant, 
 
 (Signed) A. D. PRO VAN D. 
 
36 
 
 Since the letter of 26th March arrived at Ottawa I have received the 
 following acknowledgment from Sir Wilfrid Laurier : — 
 
 Ottawa, IHth Apt-U, 1898. 
 Dear Mk. Provand, 
 
 I received from Lord Strathcona your letter of the 26th of March in which you set 
 forth your objections to the Report of the Sub-Committee of the Privy Council to 
 which had been referred your application in behalf of the " Chi<;necto Marine 
 Transport Railway Company." You ask that the Report of the Sub-Committee be 
 referred back to it for further consideration on the grounds stated in your letter. I 
 will have much pleasure in complying with your request. 
 
 I have the honor to be, dear Mr. Provand, 
 
 Yours very sincerely, 
 
 (Signed) WILFRID LAURIER. 
 A. D. Provand, Esq., M.P. 
 
 As I was afraid that the referring back of the report to the Sub-Committee 
 might be made a reason for further delays, I addressed the following letter to 
 Ottawa : — 
 
 2, Whitehall Court, 
 
 Westminster, London, 
 
 2nd May, 1898. 
 
 To the Right Honorable 
 
 Sir Wilfrid Laurier, K.C.B., 
 
 Prime Minister and President of the Privy Council, 
 Ottawa, Canada. 
 
 CHIGNECTO SHIP RAILWAY. 
 
 Dear Sir Wilfrid Laurier, 
 
 I have to thank you for your letter of the 18th inst. received a few days ago, 
 in which you inform me that you will ask the SuV> Committee of the Privy Council , 
 to whom the question has been referred, to reconsider the Report which they made 
 on the subject in January last. 
 
 May I again address you in regard to our great anxiety for an immediate 
 answer respecting the reinstatement of the Coiitpany, or failing that as to what the 
 Government will do in reference to agreeiiig on an amount to be paid to us as 
 compensation, or to leaving the settlement of that amount to arbitration ? 
 
 On this point let me draw your attention to the fact that it was on the 2nd 
 September, 1896, that I had the honor of placing the case for the Company before 
 
37 
 
 a Committee of the Privy Council which was appointed to receive it and report to 
 the Cabinet. I had reason to expect I should then receive an answer and for this 
 object waited in Ottawa for fully two months, but had to leave without obtaining 
 any reply. Twenty months have elapsed since then and meantime our Works at 
 Chignecto are deteriorating and we are subjected to a continuous heavy expense 
 for maintenance, taxation, and in other ways. While the Railway is in an 
 unfinished state each succeeding season will add largely to the ultimate outlay 
 necessary to complete it. 
 
 In a few weeks your Parliament will rise. Ministers will separate and further 
 postponements may arise therefrom. I therefore beg you to be kind enough to 
 let us have an answer to our appeal with as little delay as possible. 
 
 But whatever conclusion the Cabinet arrives at will, I hope, be transmitted to 
 us immediately. I beg to repeat what I think I have said in substance before, 
 namely, that if it is intended to repudiate all moral as distinct from legal obliga- 
 tions to the Company, then it is surely not necessary to postpone even for a single 
 hour giving such an answer. Time would only be required, if you intended to 
 recognise our claim to equitable treatment, in which case there would no doubt be 
 details to arrange. 
 
 May I further venture to remind you of another feature in the case to which I 
 think I alluded when I saw you in London ? When the Company was brought out 
 in March, 1889, the security of the Canadian Government was so highly thought of 
 that a considerable part of the Shares, and afterwards of the Debentures, were 
 taken in Banking circles and by Finance houses to hold as investments. They 
 also recommended their clients to invest. These houses still h )ld the securities 
 they originally subscribed for. 1 have had communications from some of them 
 indicating their position. They consider that having recommended these securities 
 to their friends they are bound to use overy effort to protect their intere.-<ts and to 
 guard against any similar occurrences in the future. This movement will be 
 entirely apart from my negotiations (ni behalf of the general bod)' of investors. 
 
 I have sent a copy of this letter to Sir Charles Tui)per and also to the 
 Honorable Mr. Foster. 
 
 I have the honor to be. 
 
 Dear Sir Wilfrid Laurier, 
 
 Yours very sincerely, 
 
 (Signed) A. D. PRO VAN D. 
 
38 
 
 WHAT IS SAID IN CANADA ABOUT THE RAILWAY. 
 
 I have already referred to my eight visits to Ottawa. I found that while the 
 Ministers knew the history of the enterprise that many Members of Parliament 
 were unacquainted with the facts. This was also true of the Press. 
 
 Shortly before my first visit there had been some political and financial 
 scandals in connection with carrying out public works for which the Government 
 had paid large sums, and the Chignecto Railway was usually spoken of by 
 members of the party then in opposition as if it was business of a similar kind. 
 At the General Election of 1896, the Chignecto Railway was frequently 
 referred to in a manner implying that the Government had found money for the 
 scheme. So often was this brought to my notice that I had to issue a circular 
 letter to Members and Senators on the subject (see page 53). So far from their 
 having found any money for the Company, the truth is that the Canadian 
 Government has received from the Company nearly 1^100,000 in duties on the 
 machinery imported for the Railway. 
 
 Party politics are discussed in Canaila with a virulence far beyond anything 
 we know of in this country. No statement is considered too strong to apply to 
 opponents or to anything with which they are or have been connected, and the 
 Chignecto Railway Charter was made a party ([uestion. 
 
 I sent copies of the statement of the Company's case, which I presented to 
 the Government, to all the Members and Senators, and in every instance where I 
 afterwards had the opportunity of t.ilking about the Railway they admitted they 
 had been unaware of the facts until they vet^d the Statement. Editors also told 
 me that they first learnt them from the Statement, and in more than one instance 
 I had to call their attention to gross misstatements of fact they had made about 
 the Company. Nothing that could possibly be .said against us was omitted by 
 those who desired to make party capital out of the Company's position. 
 
 In the two dwbates in the House which took place in 1S9G, the language used 
 towards us will come as a surprise not only to you, the Share and J)ebenture 
 hi iders, but also to our investing classes generally. When Sir Wilfrid Laurier 
 was here last summer these was referred to, and I found it necessary to write to Sir 
 Donald Smith (now Lord Strathcona) on the subject. I leave out parts of the 
 letters which it is unnecessary to reproduce. 
 
39 
 
 2, Whitehall Court, 
 
 Westminster, London, 
 
 July I9th, 1897. 
 
 To the Hon. 
 
 Sir Donald A. Smith, G.C.M.G. 
 
 High Gomviisnioner for Canada, 
 17, Victoria Street, S. W. 
 
 CHIGNECTO. 
 
 Dear Sir Donald Smith, 
 
 At our interviews of last Tuesday and VVeduesday I spoke of Canadian 
 politicians having made our business a partisan nuestion. 
 
 Wc only know it as an enterprise wc ai"e endeavouring^ to earry out for the 
 Canadian Government, and the investors — a body innocent of any knowledge of 
 Canadian politics or parties — are sufferers from statements such as were contained 
 in the telegram in question. 
 
 The language used about our Compau}' in i'arliament, in the press, and on 
 platforms cannot be justified. The quotations app.Muk'd show that we were in 
 effect called swindlers, our enterprise a swi?\dle and a fraud. We are accused ot 
 having sold our issues at a " most terrible discount." (I was a buyer myself and 
 paid par.) Our credit was to be destroyed, ami lastly it was said that " It is of no 
 "consequence to the people of Canada whether the English bondholders or stock- 
 '' holders have lost their money or not." These are a few of the things said of us in 
 Parliament, our only offence being that we had spent £750,000 of our money on 
 the faith of their Acts passed for the express purpose of inducing us to do so on a 
 work certified by them to be for the bonetit of the people of Canada. 
 
 Sir Wilfrid Laurier readily admitted that there is no precedent for the treat- 
 ment we have received, and this is also true regarding the language used towards 
 us. British investors have dealt with every Colony, self-governing and Crown, 
 but no such language was ever employed towards investors or such baseless 
 accusations made against them. 
 
 Many candidates at the last General Election spoke as if the Government 
 had given money to thi! Company. This was so often repeati'd that I sent a 
 circular to Members stating the tacts, copy of which 1 enclose. My inforniatiou 
 
40 
 
 is that even worse language — if that were possible— was used towards us by 
 candidates than in the House at Ottawa. 
 
 The story is almost too painful for publicity. If, however, no settlement is 
 arrived at soon after the Premier returns to Ottawa I must, of course, put the facts 
 before the investors, who up to the present moment know nothing whatever of 
 what has been said of them. The Deputation which accompanied me on Tuesday 
 last were not aware until then of the language used in Canada in regard to 
 themselves and the enterprise. I have always prevented these matters from 
 becoming more generally known than was unavoidable, as it must be damaging to 
 the interests of Canada to create in the minds of several thou.sand investors a 
 bitter sense of injustice at the treatment they have experienced, aggravated, as it 
 will be, by a knowledge of the language applied to them. 
 
 I am. Dear Sir Donald Smith, 
 
 Yours very faithfully, 
 
 (Signed) A. D. PKOVAND. 
 
 QUOTATIONS FROM HANSARD, 1896. 
 
 Mk. LisTEK. — Pngo 3097. — "Sir, by granting thi.s inmiey you are giving the promoters of this 
 
 sclieme a furtlier opportunity to swindle the British public, 
 because the sciienie upon its face is a swindle." 
 
 Page 4H32. — "It is a bogus concern." 
 
 Page 4031. — "I have no hesitation in saying that it is one of the most 
 astounding frauds of the present century." 
 
 Mk. Martin. — Pago 4648. — "A fraud it has been called, it is the worst kind of a fraud." 
 
 Mk. Listkk. — Page 3093. — Speaking of those who brought out the Company, he said : — 
 
 " I venture to say by men who have now little if anything 
 invested in this scheme. They floated the Bonds of the 
 Company no doubt at a vei-y heavy discount." 
 
 Page 4034. — And referring to our investors having taken the Issues, .said: — 
 "If tiiey have, they have taken them at a most terrible 
 discount. They have paid but a small price for them." 
 
 Mr. Martin. — Pago 4048. — "I would like to say for one, that if my vote is going to have the 
 
 efl'ect of destroying the cre<lit of institutions like the 
 Chignecto Marine Transport Railway Company in London, 
 I would be very glad to destroy their credit.' 
 
 Mr. Lister. — Page 4034. — "It is of no conseijuence to the people of Canada whether the 
 
 English Bondholders or Stockholders have lost their money 
 or not." 
 
41 
 
 I had again occasion to write to Sir Donald Smith, and the letter further 
 deals with the language applied to us. 
 
 2, Whitehall Coujit, 
 
 Westminster, London. 
 
 AuQud 16th, 1897. 
 To the Hon. 
 
 Sir Donald A. Smith, G.C.M.G., 
 
 High Commissioner for Canada, 
 
 17, Victoria Street, S.W. 
 
 CHIGNECTO. 
 Dear Sir Donald Smith, 
 
 ******* 
 
 The suspense is becoming difficult to endure, and I cannot ask too strongly 
 to have this business brought to a close as soon as the Premier returns to Canada. 
 If we are not to be reinstated and if some complicated method of compensation 
 has to be discussed, this will necessarily cause some delay, but if the Government 
 intend to repudiate everything because we are technically in default — our position 
 being directly the result of their passing the sub-section to the Railway Bill ot 
 iS88 — there can \ ; no valid reason for further delay. If they do not intend to 
 acknowledge their moral and equitable liability arising out of their own Acts, and 
 if their policy is to be that recommended by the Hon. Mr. Lister and the Hon. 
 Mr. Martin, may I earnestly urge that they will lose no time in communicating to 
 us their decision. 
 
 I have not hitherto in any communication which I have written on this 
 subject alluded to eith ilitical party. Our business is with the Dominion 
 
 Government without reference to which party is in power, but I feel compelled to 
 bring to your notice the partisan character of the treatment we have experienced. 
 So far as I am aware no Conservative has ever said a word against us implying 
 anything dishonorable in our motive or oar proceedings. On the other hand, 
 however, we have been called swindlers in the past and have been accused of 
 intending to swindle iu the future, the Company has been denounced as fraudulent, 
 and we have been accused of issuing false prospectuses, and all this has been done 
 by the supporters of the present Adniiuistralion in Parliament and in the Press. 
 
 A correspondent in Canada wrote to me at Ottawa last year as follows : — 
 
 " I had urged upon the Into Mr. Ketchum the expediency of making some little 
 ettbrt to educate the public mind of Canada as to tlie claims and rights of the Ship 
 Ilailway Company and its commercial advantages, and 1 wished to repeat the same to 
 you. For a number of years past 1 am ui a position to state that ninety out of every 
 hundred people one meets consider and believe that you are heading a movement to 
 
42 
 
 swindle all taxpayers. The term ' swindle ' has been used so often in Parliament 
 without any defence of it, or any assertion of tlie justice of its claims f)n Parliament, 
 or any tliorough and systematic declaration of its riglits througlj the press, it is hut 
 little wonder the scheme lias finally been accepted generally as a cheating venture." 
 
 I know that the above is a pert'eotly true statement of what was said of 
 myself, and those men who endeavour to make the public believe that the 
 Chignecto claim was merely a " cheating venture " and that I was " heading a 
 movement to swindle all tax-payers," are the supporters of the present Govern- 
 ment. You have spoken to me about the views held by the people of Canada and 
 the consequent difficulties the (joverument would have in reinstating the Company, 
 but, may I ask, what can their views be when they have been told little else than 
 falsehoods about the enterprise, and frequently by prominent politicians who must 
 have known better ? The Government have no real difficulties to contend with 
 except those which have been created by the language of their own supporters. I 
 had much difficulty in inducing Members to read the Statement of our claim, but 
 everyone who did so acknowledged that he had previously been unaccjuainted with 
 our true position in regard to the undertaking. In speaking to Members on the 
 subject I found I had to deal not only with those who did not know the facts, but 
 what was more painful still, with those who did not want to know them. The 
 Ottawa Free Press — a strong supporter of the present Government — followed a 
 series of attacks on us by an accusation of having issued false Prospectuses, but 
 when it was made aware of the facts and shown the Prospectuses which contained 
 the Clause in the Act of 188G, setting out the conditions on which the Subsidy 
 was granted, said that " The British investors have been grossly deceived, ot 
 that there is not much doubt." We are not yet complaining of being deceived. 
 Canada asked for and obtained our money on the faith of the Acts of their Parlia- 
 ment. But if they will not now carry out their bargain, which is all we ask, 
 then we shall have been grossly deceived. 
 
 I believe that the Conservatives as a party consider the Government bound to 
 keep faith with us and to carry out their bargain. In June, 1894, we were ready 
 to recommence construction, and from then until the beginning of last year, deaths, 
 changes of Minis-try and other circumstances — with all of which you are familiar — 
 were pleaded as reasons for postponing our application for reinstatement. I never 
 considered that these were adequate reasons, but in our position we were compelled 
 to submit and accept those reasons as made in good faith. From the last 
 Government we had at least the language of sympathy and regret for what they 
 con.sidered were inevitable delays, and they ultimately recognised our claim by the 
 Order in Council of the 22nd May, 189G, which we believed would be observed by 
 any Government. 
 
43 
 
 It has been openly stated to me repeatedly that the treatment we have 
 experienced is on account of the Subsidy having been granted by a Conservative 
 Administration. I have asked those who gave me this information, " Are we then 
 " to be called swindlers because the use of such language regarding us might 
 " indirectly be a reflection on political opponents irrespectively of its gross injustice 
 " to ourselves and our enterprise ? " While some — I hope not many — public men 
 in Canada seem to regard such conduct with approval, I cannot for a moment 
 believe that the leading men of Canada will not unhesitatingly condemn all such 
 unworthy methods of political warfare. 
 
 The longer this matter stands over the more difficult it will bo to settle it, 
 and the more certainly will there be an outbreak of just indignation on the part 
 of our investors at the treatment they have received. For years I have tried to 
 bring the negotiations to a close, and if no arrangement is arrived at early in 
 October I must place before our investors, and also those in the Investing 
 Companies holding our issues, a full account of what has taken place, of the 
 reasons why I have failed, of the treatment we have received, and of the language 
 which has been applied to us. It will then be impossible any longer to conceal 
 the fact that the Members of one political Party in Canada are the authors of the 
 deliberate falsehoods utter'id and of the abuse to which we have been subjected. 
 
 I have been to Canaaa again and again to represent the hardship of our 
 case, which has been admitted by Members of both the last and the present 
 Government. Nevertheless a sertlement is postponed, while our property is 
 deteriorating year after year. We are distant and voteless claimants, and are 
 treated as such. If a Canadian body of investors had found the money, no one 
 who knows Canada will venture to say they would have had to wait years for 
 reinstatement. While you have informed me that time could not be found to 
 consider the very simple issue which is presented in our case, nevertheless ample 
 time has been found to consider new and complicated proposals for which fresh 
 demands will be made upon our investors, such as the Fast Atlantic Service, for 
 which £2,000,000 are now being asked in London. 
 
 I know that we had, and still have, many friends amongst the public men of 
 Canada. On page 6 of the print of the address I delivered before the meeting 
 of the Committee of the Cabinet last September, you will find remarks quoted by 
 the Hon. Mr. Power, which were those of an honest opponent. In 1892, when we 
 applied to Parliament for power to issue Preference Debentures, hoping by that 
 means to raise money to complete the work which we had been precluded from 
 obtaining by the sub-section to the Railway Act of 1888, the Hon. Mr. Kaulbacb 
 said : — 
 
44 
 
 " If wo attempt now by uny means to prevent this undertaking from going on 
 after an expentlitiire of $3,r>(X),()0(), we will show tliat we are endeavouring to 
 repudiate our obligations. Tlie ol»ject of tliis amendniont is to frustrate the Bill 
 altogether and to stultify ourselves and make the people of England feel that they 
 have no conhdence in tile future legislation of the country. We have, by the subsidy 
 we have otl'ered, induced capitalists to go into this enterprise, and invest their money, 
 and if we now repudiate our agreement we will be acting in bad faith with those 
 people. ... If we throw out the Bill, and by so doing ruin this undertaking, 
 it will be for ever a monument to the perfidy of I'arliament in trying to get rid of an 
 honorable obligation which we assuuied, and by which we entrapped the capitalists 
 of England into investing their money in an enterprise for which they believed they 
 had the guarantee of Canada," 
 
 This is the truth both as regards how we were induced to invest our monev 
 in the enterprise and the motives for opposing our claims. Further comment is 
 unneccessary ; the views thus expressed by the Hon. Mr. Kaulbach are held by 
 many politicians and business men in Canada. 
 
 May I add one word more ? All that has been said of us in Canada does not 
 in the least affect our belief in our own case. We know that we are right, and 
 that Canada is morally bound by every honorable sentiment, tbat can animate a 
 Government to recognise our claim, and either reinstate us or pay adequate 
 compensation, and until a settlement is arrived at I am certain this question will 
 not be closed. 
 
 I am, dear Sir Donald Smith, 
 
 Yours faithfully, 
 
 (Signed) A. D. PRO V AND. 
 
 The foregoing shows what has been said about ns by certain members of the 
 political Party at present in power. But the last Government by the Order in 
 Council approved 22nd May, 1JS9G, fully admitted our right to reinstatement 
 and recommended Parliament to carry it into effect, and if they had had a 
 majority at the last General Election, and been reinstated in power, they would 
 undoubtedly have given their recommendation legislative effect. While you 
 should know what has been said against you in Canada by a certain section of 
 politicians on the platform, in the press, and in Parliament, these utterances 
 must not be taken as representing Canada and its people, nor even as repre- 
 senting all those who are in political alliance with the men who have made use 
 of the language to ''hich I refer. I have quoted in the Appendix (see pages 53 to 55) 
 expre.ssions of opinion by politicians favorable to the Company. I may here 
 add that while in Canada I had many conversations with Bankers, Merchants, 
 
45 
 
 and business men, and in every instance (hey expressed the opinion that the 
 Government was honorably bound either to reinstate or compensate the Company. 
 
 A natural question for you to ask is, Why should we suffer because of 
 political differences in Canada, considering that we have nothing whatever to do 
 with it, our business being with the Canadian Government without reference to 
 which party is in power ? 
 
 Many paragraphs could be quoted from the press in Canada, sympathising 
 with the position of the Company. I (|uote two, the first of which is taken from 
 the Toronto Globe, which possesses a cojnmanditig influence in Canada, and is the 
 chief suppoiter in the presi of the present Liberal Government. In an article 
 dealing with the Chignccto Railway, in 1891, it said : — 
 
 "The ([ueation more iininedi)itely cimoeniing the (Janadian people is to what 
 extent the Dominion (ioveminent is liable. It is true that tlie promise of a twenty 
 years' subsidy was conditional on tlie completion of the work, but it is etpially obvious 
 that the action of Parliament was the bait which caught the British investor, who 
 would not have bitten at a naked hook. The original subsidy promised in 1882 was 
 for §150,000 a year for twenty-five years, but in 1880 this was changed to a subsidy of 
 §170,000 a year for twenty years. If we repudiate all responsibility, us terhnicaUij loe 
 nho^dii be warranted in doui.ii, the credit of the Dominion would sutler, for there can be 
 no doubt that we have incurred a considerable degree of moral responsibility in 
 connection with the undertaking. -Just now we cannot afford to run fresh risks in the 
 IJritish money markets. The census figures, the Ottawa and (Quebec scandals, the 
 history of the bankrupt railroads in the Maritime Provinces, whicii after having been 
 built out of Dominion or Provincial bonuses, have been unloaded upon Englishmen, 
 and otiier matters have not done us any good over tliere ; and I*arliament should be 
 cautious is dealing with the Chignecto enterprise lest it shcmld create a perfect 
 stampede." 
 
 The foregoing shows that the denial of our claim would in the opinion of the 
 Toronto Globe, the leading Liberal newspaper in Canada, be repudiation on 
 technical grounds. 
 
 The other quotation is recent, and is from the Uttaiva Daily Free Press, 
 which is also a strong supporter of the present Liberal administration. 
 
 The article after commenting upon . e issue of the Report of the 
 Sub- Committee of the Council, which declined to recommend Parliament to 
 reinstate the Company, then says : — 
 
 "But there is an aspect of the case which is almost painful us it practically 
 amowits to a national disgrace. On the strength of the endorsation given it by 
 governmental and Parliamentary procedure, many people in Britain have been 
 induced to sink money in the project which must now be regarded as lost. 
 
4d 
 
 CONCLUSION. 
 
 The facts set out in the foregoing statement arc too numerous to summarise 
 but there are two or three matters which are entitled to notice. 
 
 A meeting might have been held sooner, but it has been put off from 
 time to time pending- a definite reply from the Canadian Government. It has, how- 
 ever, now become imperative that you should be called together without further 
 delay to be informed of the position of the negotiations The .Sub-Committee of 
 the Privy Council are, according to the letter which I received from Sir Wilfrid 
 Laurier, reconsidering the question of reinstatement. If they finally decide not to 
 recommend that course, there will then arise the cjuestion of compensation and 
 how it is to be dealt with. In view of the many postponements which we have 
 already experienced, I am unable to say when a final answer will be received, but 
 I do not think it can be delayed much longer. 
 
 The (juestion of granting time to complete the Railway is many times referred 
 to in the previous pages. In all such contracts the time to complete the work is 
 usually stated, but extensions of that time are granted as a matter of course. In 
 this case we were spending our own money, and the delay has not prejudicially 
 affected in the slightest degree either Canada or any Canadian interest. The only 
 persons who have suffered are ourselves. Further, the default on our part is only 
 technical, and arises through our Contractors stopping construction, and this was 
 the direct effect of the Canadian Parliament's change in the law by the General 
 Railway Act of 1888. 
 
 In any case a default in point of time should be considered relative to its 
 origin. Work on the Railway was kept back by various natural difficulties, 
 excessive rainfall, the absence of solid rock foundations within the calculated depth, 
 and boggy places on the line which could not be known before the work was in 
 process of being carried out. The delay thus occasioned equalled from one to two 
 seasons. But such obstacles might have taken years to overcome, and it is 
 certain that even a delay of years, arising from unavoidable causes, would furnish 
 no equitable reason for refusing all the time that was necessary to complete the 
 Railway. There is no precedent either in Canada or out of it for the Canadian 
 Government's doing so, having regard to the facts that we were spending our own 
 money and were prejudicing no interest whatever except our own by the delay. 
 
 The following letter from Mr. 11. D. M. Littler, Q.C., one of the best known 
 leaders of our Parliamentary Bar, shows how applications for time are dealt with 
 by the British Parliament. Mr. Littler was Chairman of an investment Company 
 
4>1 
 
 which subscribed for some of the Company's Debentures and Preference shares. 
 He was t<i accompany the deputation which waited on the Hon. Mr. Foster, 
 the Canadian Finance Minister, in London, but at the last moment he found 
 himself unable to be present and sent this letter : 
 
 "2 PcMP Court, Tkmi-le, 
 
 "yO</i Oct., 1894. 
 
 " My Dear Mr. Provand, 
 
 Chionecto. 
 
 " I very mucli fear, as T told you, that I sliall lie unable to be with you in your attendance 
 on the Finance Minister tu-morrow owing to the shortuusH of tlie notice and a very imperative 
 previous engagement. I should have much liked to have l)een with you, representing as I do 
 £40,000 of solid money invested in reliance on wiiat we believed, and still believe, to be the 
 deservedly good name for absolute good faith of the Government of Canada. 
 
 "Of course, on most of the (piestions I cannot pretend to speak with anything like the 
 authority of tiiose intimately connected witii tlie City, but on one [unnt I am clear, and that 
 is, that now nearly thirty years' ex[)erience of tiie practice of l)nth Houses of the English 
 Parliament assures me tiiat, under sucii circumstances, not a single Committee of either House 
 could be found to refuse an extension of time to those who had exi)euded their money under 
 very great ditKculties, and tliat, even were it necessary to again and again renew tiie apjdication. 
 I believe 1 am absolutely rigiit in saying that no single railway work in London in the last forty 
 years has been made witiiin the time originally limited. Many have had ten or twelve 
 years' extension. It is true that there was not in any of these cases any <juestion of guarantee, 
 but that makes the position stronger ; for here not a soul would have invested his money in 
 Chignecto, save in the belief that Canada gave the guarantee because she wanted the railway 
 and was determined to have it. Their country has sutlered no loss save that of the delay of the 
 advantage of the works as completed (while it has received the gain of the outlay of our money), 
 but we, on the contrary, have lo.st heavily in interest on our outlay and in all the expense of 
 endeavouring to complete. Not unnaturally, British investors deem that these arguments — 
 irresistible at home— .should prevail in case of need in Canada. I own I feel the less regret at 
 my inability to attend when 1 think of the moral position we hold. 
 
 "I cannot conceive it possible that an answer can be found to your arguments which would 
 satisfy not only us who have invested but any person asked in the future on the faith of 
 Canadian Guarantees. Yours truly, 
 
 "(Signed) R. D. M. LriTLER." 
 
 The sum at stake is large. About £750,000 have been spent on the Railway, 
 all of which, except the amount paid for hydraulic machinery (which had to be 
 made here), administration, and other necessary expenses, has been expended in 
 Canada in duties, carriage, in labor, and for material. By the terms of the Contract 
 we are bound to repay the Canadian Government the whole of the Subsidy 
 received, after meeting the agreed dividend. But assuming that we collected all 
 the Subsidy for the full term of 20 years — an extremely unlikely contingency — 
 — it would amount to less than we shall expend on the Railway iu Canada itself. 
 
 The Railway has been constructed for a special purpose and is unsuitable 
 for any other. If therefore we are not to be reinstated or compensated, we shall 
 lose the £750,000 we have expended. No such risk as this was contemplated by 
 
48 
 
 us when we subscribed for the Shares and Debentures. Under no circumstances 
 could we have supposed that on account of the default of our Contractor in com- 
 pleting the Railway within the time tixed, we should have been deprived of our 
 whole property. The penalties in a Contract for such a work are rarely exacted, 
 and then only to meet actual loss, but in this case the penalty will involve the 
 loss of the whole amount invested, and this will be incurred for a default, trifling 
 when considered relative to the magnitude of the enterprise itself, and from which 
 no one has suffered loss except ourselves. Such a penalty has never yet been 
 exacted by any Government under such circumstances. If we could have for a 
 moment imagined that the Canadian Government would have treated us as they 
 have done, we would not have invested one shilling in the enterprise ; and while 
 this question remains unsettled, it will be nothing less than a national misfortune 
 if they can find in this market investors who will furnish capital for any similar 
 undertaking. 
 
 No answer can be accepted as tinal from the Canadian Government without a 
 settlement of our claims. The ([uesLiou must be kept prominently before our 
 public in order that every country may know that it is impossible for our investing 
 classes to accept such treatment. If the Canadian Government do not reinstate 
 or compensate the Company this policy will firstly ati'ect ourselves, but it will 
 ultimately also affect all our investing classes. If we tamely submit to the 
 repudiation by the Canadian Government of its obligations in this case, it will be 
 accepted as a precedent by all other countries which they may follow when it 
 suits their convenience. 
 
 I am. Gentleman, 
 
 Your obedient servant, 
 
 A. D. PROVAND. 
 
49 
 
 APPENDIX. 
 
 Copy of a Report of the Committee of the Honorable Privy Council, approved by His 
 Excellency the Governor (ienernl in Council on the \'2th April, 1882. 
 
 On ii report dated 10th April, 1882, from the Minister of Rjiilways and Canals, submitting 
 propositions of Mr. H. G. C. Ketchuui, supported by a large mass of evidence going to prove 
 their entire practicability under which, should it be countenanced, a Company will be formed 
 for the construction and operation of a line of ship railway across the Isthmus of Chignecto, 
 to connect Haie Verte witli Bay of Fundy, such line being built between a port at the mouth 
 of the river La Planche on the liay of Fundy, and Tigniah Head, on Baie Verte, a distance of 
 about 17 miles. The Minister states that a number of arguments and statistical facts showing 
 the commercial value of the projected work to the country at large, the cogency of which he 
 (the Minister) fully recognizes, are set forth in pamphlets submitted by the originator of the 
 scheme, which pampidets accompany the present Memo ; that in consideration of the work to 
 be executed the Ct)mpany asks from the Government assistiince as follows :-A subsidy of 
 $150,000 per annum, for a period of 25 years ; the entry free of duty of all rails ; the entry 
 free of duty of such materials and maciiiuery recpiired for the hydraulic lifts and other purposes 
 as were not made or manufactured in Canada ; the carriage free of all such materials over 
 Government Railways. Tiie Minister observes in relation to the above scheme that for many 
 years past very considerable importance has been attfiched to the possession of means by which 
 the water distance between the St. Lawrence river and the Bay of Fundy, representing the 
 circumnavigation of the entire Province of Nova Scotia, could be reduced ; tiiat as early as 
 1825 a survey for a canal across the Isthmus of Chignecto was etl'ected, and that further, in the 
 year 1871, a conunission sat for the consideration of the matter. This counni.ssion, after an 
 exhaustive enquiry, reported as follows : — 
 
 " Inseparably connected with the growth of inter-colonial trade is the construction 
 of the Baie Verte Canal across the isthmu.s connecting the Provinces of Nova Scotia 
 and New Brunswick. 
 
 "The advantages that must accrue not merely to the Dtjminion as a whole, but to 
 the conunerce of the Maritime Provinces are so clearly jwinted out by the Boards of 
 Trade of all the leading cities of Canada, and by men interested in the development of 
 our connnercial interests, not sim[)ly the merchants of St. John's and other places in 
 tlie locality of the proposed canal, but merchants of Hamilton, Toronto, Ottawa, 
 Montreal, and Quel)ec, that it is superlluous for the commissioners to do more than 
 brieriy refer to a few salient features of the scheme." 
 
 The Minister further ol)serves that, as an instance of the saving in distance to be effected, 
 the connnissioners state the distance by tiie existing route, via the Gut of (!an.so from Shediac 
 to St. .lohn— namely (iOO miles— woidd be reduced to 100 miles by the construction of this 
 canal. The Minister having referred the whole ([uestion to the Chief Engineer of government 
 railways he reports as follows : — 
 
 1. That the project is one ijuito practicable of execution. 
 
 2. That the ship railway as proposed woulil be a good substitute for the canal originally 
 contemplated. 
 
 n. That the advauMige in n^spect of cost as compared with that of a canal, would be greatly 
 in favour of the ship riilway, the cost of a half tide canal being calculated by the government 
 engineei-s at from §5,(>50,000 to $8,217,840, whereas the sui»sidy asked for by the coujpany, 
 namely of !? 150, 000 for 25 years, if capitalized at 4 per cent, would l)e e(pial to the sum of 
 «fj,343,312 only. 
 
 The Minister submits an estimate made liy Mr. Ketchum, under date 4th April instant, of 
 the cost of the projected ship railway, including the necessary docks, piers, and wharfing, such 
 estimate amounting ti> tlu^ smn of $4,.'{50,0<MI, as to which the (-hiof Engineer of Govern- 
 mont canals reports tiiat, accepting Mr. Ketchum's representationn as to iiuantitios and the 
 
50 
 
 character of the lino that can be obtained, the cost of the works proposed, if throughout of a 
 suitable and permanent character, would, in his opinion, bo at least the sum named. The 
 Minister, in view of the generally acknowledged importance to the commercial intd'osts of the 
 whole country of means of crossing the Istlimus of Cliignecto, and furtlier, in view of the 
 feasibility of the plan now proposed and the saving cost which it offers as compared with canal 
 construction, recommends that autliority be given for the entering into arrangements with 
 Messrs. Ketchum and Co. on the following terms for the construction of a line of ship railway 
 acro.ss the isthmus, with the distinct understanding that all risk and expenditure connected 
 therewith be borne by the company, and that the .said line, being substantially built, thoroughly 
 equipped, and capable of satisfactorily performing the services set forth in Mr. Ketchum's 
 offer, a subsidy of §150,000 a year be granted by the (government, sucli subsidy to be 
 payable for a terui of 25 years and no longer, and that ])ayment commence whenever the 
 ship railway .shall be in full operation, and continue only during such time as it may be satis- 
 factorily worked. Furthermore, tliat the tolls to be charged by the company be subject to the 
 approval of the Governor in Council. 
 
 The committee concur in foregoing recommendation of tlie Minister of Railways and 
 Canals, and submit the same for your Excellency's approval, it being understood that the claim 
 for remission of duties and free transmission on material be not entertained. 
 
 The following resolution was passed by the Board of Trade of St. John, N.B., 
 20th Octcber, 1883, in favour of the Ship Railway, and is an example of the 
 expressions of approval and support made by public bodies : 
 
 " Whereas, means of communicaticm between the waters of the Bay of Fundy and the 
 Gulf of St. Lawrence, whereby i)roducts of tlie several Provinces bordering tiiereon may be 
 interchanged without encountering the dangerous navigation of tlie Atlantic coast of Nova 
 Scotia, whereby steamers and sailing vessels, adapted as well for inland as for ocean navigation, 
 may be safely conveyed across tiie Isthmus of Cliignecto, witliout tlie cost and delay of transliip- 
 uient or lireaking bulk, and wiioreby tiie sailing distance between tliis port and all ports north 
 and west of said Istlimus may lie reduced about (iOO miles — would materially increase the 
 volume of trade and benefit tiie shijiping interests of this and otlier ports in the Bay of Fundy 
 and Gulf of St. Lawrence ; and 
 
 " Whercan, by means of a Ship Ilailway across the Isthmus, the objects aforesaid may be 
 accomplished, and thus stimulate the development of tiie agricultural, mining, lumbering, and 
 fishing resources of the districts contiguous to the aforesaid ports ; and 
 
 " IVhereas, a company has been formed for tlie construction and operation of a Ship 
 Railway, with commodious docks and hydraulic lifts, for raising and transporting over its line 
 laden vessels of 1,000 tons register ; therefore 
 
 " Jienolred, That this Board is of opinion that the undertaking of said Company would 
 greatly facilitate trade and commerce between the eastern and western provinces ; and 
 further 
 
 '' Jie.iolred, That this Board cordially approves the project for building the said Ship 
 Railway, believing that this is a movement which will coinuiend itself to all cla.sses, and prove 
 to be of great convenience and benefit to our trade and commerce generally." 
 
 THE CLAUSK FN THE ACT OF PARLIAMENT RELATING TO THE 
 
 SUBSIDY IS AS FOLLOWS:— 
 
 "8. Her Majesty doth hereby for herself, her heirs and successors, covenant, [ironiiso 
 and agree to and with the Company, their successors and assigns, in the manner following, 
 that is to say : — 
 
 "(I.) Should the said railway and docks, and works appurtenant to the present 
 undertaking, be completed in every respect in accordance witii this contr.vct, and 
 should they bo accepted as such by the Governor in Council, then and in such case 
 
61 
 
 only and so long during the term of twenty years from the date of said acceptance oy 
 the Governor in Covnicil, as the said ship railway is kept in thorough repair and satis- 
 factorily performs the services aforesaid to the satisfaction of the Government, a 
 subsidy at the rate of §170,602 per annum shall be payable to the Company at the 
 end of each half year in instalments of §85,301 ; it being ex|)ressly understood 
 and agreed, iiowever, tliat sucli subsidy shall not l)e payable for any period during 
 the said twenty years during which the conditions above mentioned have not been 
 complied with. 
 
 " (2.) The Company shall only call upon the Government of Canada for the pay- 
 ment of sucli portion of the subsidy, payable as aforementioned (which shall not in any 
 case exceed tlie amount then due or payable), as may be reciuired to make up the net 
 earnings of the undertaking to seven per cent, per annum on the authorised share and 
 bond capital of the Company (§5,500,000). 
 
 "(3.) In case the earnings of the undertaking should exceed seven per cent, per 
 innum upon the aforementioned capital, the Company agrees to pay over to Her 
 Majesty's Government of Canada, one half of the surplus profit beyond the said seven 
 per cent., until the whole of the subsidy which may then have been paid to the 
 Company shall have been repaid to the Government by the Company." 
 
 Copy of a Report of a Committee of the Honornble the Privy Council, appi'oved by 
 His Excellency the (governor General in Council on the 9lh July, 1892. 
 
 On a Report dated 7th July, 1892, irom the Minister of Railways and Canals, stating that 
 the Chignecto Marine Transport Railway Company has made application to him with a view to 
 obtaining one year's extension of the time now limited for the completion of the works to be 
 constructed by the C'ompany under the Contract entered into with the Departuient of Railways 
 and Canals on the 4th Mai-ch, 188ti. Tiiat tlie Couipany, in support of such application, has 
 represented that about 75 per cent, in value of the works undertaken have been constructed at 
 an expenditure by the Company of between §o,000,0(J0 and §4,0<K),000 ; that it will 
 require over a million dollars furtlier expuutliture to complete the works ; that the operations 
 on the works were sus|)ended in the latter part of last year, and have not been recomuienced ; 
 that this suspension was owing to the Company's contractors being unable in the depressed 
 state of the money market to raise money on the Company's seoiu'ities ; tiiat in order to raise 
 the further necessary cajiital to recommence and comphite the works the Company ap])lied for, 
 and has obtained, authority from Parliament at its present Session to issue First Preference 
 Mortgage Bonds to the extent of £;550,(JOO sterling ; that the Directors feel satisfied they can 
 upcm these Bonds ol)tain the reipiisite capital to complete the works provided they can feel 
 reasonably certain that the time for the comidetion of the work will be extended by Parliament 
 for at least one year from the time now limited, which is lat .luly, 18!K{ ; that this extension is 
 reijuisite owing to the tiiue which has alioady been lost since the stoppage of the works, as well 
 as to that which nnist necessarily elapse l>efore they can now be reconnnenced, but that uidess 
 the Company can show that they have the assurance of the Government of Canada that a Bill 
 will be introduced and |)romoted by the (ioverninent at the next Session of Parliament extend- 
 ing the time for completion of the works as above montioneil, it will l)e useless for the Directors 
 to endeavour to raise the money necessary on the new Bond issue. 
 
 The Minister under these circumstances, and in view of the large amount of private capital 
 which appears to have been already invested in the works, of the further fact tliat the works 
 appear to be so nearly comi>leted, that the susjiension of the works was owing to unforeseen 
 circumstances, and tliat it would appear necessary in order to obtain the further capitiil and to 
 complete the works to have the additional time asked for, recommends : — 
 
 That provided that the works necessary to complete the Railway and ajipurtenances are 
 actually in progress, and the Company establishes to the satisfaction of the Governor in 
 Council that it has secured all the capital necessary fully to finish and equip the railway, docks 
 and other works of the Company in all respects according to the requirements of the Contract 
 
52 
 
 above mentioned on or before the 1st July, 1894, and that an extension of time to the said date 
 for the completion thereof, is necessary, the Government at the next session of Parliament will 
 recommend to Parliament the lej^islation necessary to extend until the 1st July, 1894, the 
 time within which to complete said Ilailway and appurtenances according to the said contract. 
 The Committee submit the above recommendation for Your Excellency's approval. 
 
 Extract ^rovi a Report oj the Committee or the Honorable the Privy Council, approved 
 by His Excellency, the Governor General, on the 2'2nd May, 1896. 
 
 On a Report dated 24th February, 1896, from the Minister of Railways and Canals, 
 submitting for consideration the f(jllowing approved Minute of Council, dated the 9th July, 1892. 
 
 " On a Report dated 7th July, 1892, from the Minister of Riihvays and Canals, stating 
 that the Chignecto Marine Transport Railway Company has made application to him, witli a 
 view to obtaining one year's extension of the time now limited for the comi)letion of the Works 
 to be constructed by the Company under the contract entered into with the Department of 
 Railways and Canals on the 4th of March, 188(). Tliat the Company in support of such application 
 has represented that about seventy-five per cent, in value of the Works undertaken liave 
 been constructed at an expenditure by the Company of between §J, 000, 000 and $4,000,000 
 that it will re(iuire over .^1,000,000 further expenditure to complete the Works, that 
 the operations on the Works were suspended in the latter part of last year, and have not 
 been re-commenced, that tiiis suspension was owing to the Company's contractors being unable, 
 in the depressed state of the money market, to raise money on the Company's securities. 
 That in order to raise the further necessary capital to re-connnence and complete the Works, 
 the Comi)any applied for, and has obtained authority from Parliament at its present Session, to 
 issue first Preference Mortgage Bonds to the extent of t350,00() sterling. That the Directors 
 feel satisfied they can, upon these Bonds, obtain the re(|uisite capital to complete tlieae Works, 
 provided they can feel reasonably certain tliat tlie time for tlie completion of the Woi-k will be 
 extended by Parliament for at least one year from tlie time now limited, which is the 1st July, 
 1893, that this extension is recjuisite owing to the time which has already been lost since tiie 
 stoppage of the Works, as well as to that wliicii must necessarily elapse before they can now be 
 ro-coiiunenced, but that unless the Company can show that they have the assurance of the 
 Government of Canada that a Bill will 1)0 introduced and promoted by the Government at the 
 next Session of Parliament extending the time for the comiiletion of the Works as above 
 mentioned, it will be useless for the Directors to endeavour to raise the money neces.sary on 
 the new bond-issue. 
 
 "The Minister \mder these circumstances, and in view of the large amount of private capital 
 which api)ears to have been already invested in tlie works, of the further fact that the wt)rks 
 appear to be so nearly completed, that the suspension of the works was owing to unforeseen 
 circumstances, ami that it would ap[)ear necessary in order to obtain the further capital and to 
 complete the works, to have the additional time asked for, recommends : 
 
 " That provided that the works necessary to complete the Railway and appurtenances are 
 actually in progress, and the Company establishes to the satisf.iction of the (iovernor-inCouncil 
 that it has secured all the capital necessary fully to furnish and efjuip the Rjiilway, docks, and 
 other works of the Company, in all respects according to the rfecpiirements of the cimtract above 
 mentioned, on or before the first of July, 1894, and tliat an extension of time to the said date 
 for the completion thereof, is necessary, the Government at the next session of Parliament will 
 recommend to Parliament the legislation necessary to extend until the first of July, 1894, the 
 time within which to complete said Railway and appurtenances according to the said contract." 
 
 The Minister desires also to refer to the minute passed on the 21st day of October, 1893, 
 with reference to an a[»plication of the Chignecto Marine Transport Rjiilway Company, in which 
 the grant of any further aid to the project of that Company was declined, and to call attention 
 to the fact that the re<iuests whicii were so dealt with by that Order of Council, was one for a 
 re arrangement of the subsidy to the project, which would have involved a change in the 
 principle upon which the aid is granted, and thl^t the refusal in the Order in Council last 
 mentioned refers to that reiiuest. 
 
53 
 
 The Minister observes that under the provisions of the last paragraph of the Order in 
 Council first above cited, the Company, before the first of July, 1894, secured all the capital 
 necessary to fully furnish and equip the Railway, Docks, and other Works of the Company in 
 all respects in accordance with the requirements of the contract above mentioned, and is now 
 ready and desirous to proceed at once to tlie completion of the said Railway, Docks, and other 
 Works, provided an extension of time within whicli to complete the same for the purpose of 
 the contract entered into with the Department of Railways and Canals on tlie 4th of March, 
 1880, be granted to them ; such extension not to exceed tliree years from the first of (> tober 
 next. 
 
 The Minister further states that it appears to him that the delay which has occurred since 
 the passage of the Order in Council above cited, has been owing to circumstfiuces entirely 
 bey(ind the control of the Company, who are bond fide desirous of completing their undertaking. 
 
 The Minister therefore recommends tliat at the next Session of Parliament, the Govern- 
 ment submit the legislation necessary to extend for the jjeriod mentioned above the time within 
 which to complete tlie said Railway and appurtenances according to the said contract. 
 
 The Committee submit the above for Your Excellency's approval. 
 
 The following letter was sent to all the Members of the Canadian Parliament : — 
 
 Chignedo Ship Kiiilway. 
 
 Rideau Club, Ottawa, September 2'3rd, 1896. 
 
 Dear Sir, — (Jn behalf of the British investors in the above enterprise I have come to 
 Canada and applied to the Dominion Government for a revival of the subsidy to the Railway, 
 in order that it may be C(jmpleted and opened for trattic. The cost of the work has been 
 §3,500,(X)0 which lias been entirely ])rovided by the investors without receiving a cent of 
 public money, and has been expended for labour, for machinery, and for material ; nothing has 
 been laid out for any other purpose whatever. The Railway is now about three-fourths C(«i- 
 structed and could likely be finished in two seasons. The investors are in no way responsible 
 for the unavoidable delays which have prevented the works being completed. 
 
 Inaccurate statements have so frecpunitly been made in reference thereto that many 
 erroneous opinions have been formed about the Railway. I therefore beg to enclose a 
 pamphlet giving a brief account of the origin and position of the enterprise and respectfully 
 request its perusal. 
 
 The present investors have subscribed the capital to complete tlie works, which will bo 
 called up and construction re-couimenced as soon as the Dominion Parliament passes the 
 necessary legislation. 
 
 In reference to the trattic prospects I beg to refer you to a letter of tlie late Mr. Ketchum, 
 C.E., the projector of the Railway, on page 26 of the pamphlet. —I am. Sir, your obedient 
 servant, 
 
 (Signed) A. D. Provanu. 
 
 Bearing on the moral and equitable liability ot OAnada to the Company, I 
 beg to quote a few opinions expressed in debate . 
 
 In 1891, the Company applied to Parliament for one year's extension of 
 time, and in reference lo this application the Hon. Sir John Abbott said : 
 
 "It seems to me that we are to a great degree bound in good faith to give these 
 contractors the opportunity of completing this work. 1 do not see very well how we 
 could refuse them. I think a refusal to all<jw men who have spent three millions of 
 dollars to spend $1,500,000 more would work very unfortunately on our enter- 
 prises, when we apply to England to borrow money to finish them witli, and T think 
 it would be an extremely hard measure to mete out to these contractors to say that, 
 not having completed their work within tiie jtrocise time mentioned in the contract, 
 they should be mulct of so large a sum as they have invested in it." 
 
54 
 
 The Hon. Mr. Power, following Sir John Abbott, said : 
 
 " I do not rise for the purpose of opposing the motion of the leader of the 
 Government, because T cannot help feeling, as the hon. gentleman has said, that the 
 faith of the country is pledged to this undertaking, and the gentleman who have 
 charge of it have given the best evidence of their good faith in spending the large 
 sum of money which they have spent on the undertaking. I have never been a 
 believer in the utility of the work, and 1 never thought it was a scheme which should 
 receive the immense subsidy from the Government of this country which it is to 
 receive when completed. But that is a matter as to which my views were not shared 
 by the majority of this House, or a majority of the other House. That being the 
 case, I think there would be no justification perhaps in our undertaking now to stop 
 the progress of the work." 
 
 The Hon. Mr. Botsford said : 
 
 "The Parliament of the Dominion is pledged to these parties to assist them as far 
 as possible, and it would be a breach of trust — in my opinion a breach of confidence — 
 that could hardly be justified by any legislative body." 
 
 "The money has been advanced by capitalists in England upon the faith of the 
 Parliament of Canada." 
 
 The Hon. Mr. Howland paid : 
 
 "It wcmld be very unjust on the part (jf this Parliament, after an expenditure of 
 three millions of dollars on the work, to stop in and prevent its completiun." 
 
 The Hon. Mr. Poirer : (in French) 
 
 "I think it would be bad policy tu refuse this extension of time to a company 
 that has shown such good faith, a company which lias already spent three millions 
 of dollars of its own capital on the enterprise, without demanding one cent of 
 assistance from the Goverinuent — a company which at their own expense will complete 
 the work if they are not obstructed. The Company have to ask for this extension 
 through no fault of their own. The difficulties in which Baring Bros, and other 
 English compivnies became involved affected the enterprise. That they have been able 
 to continue their work sliows that English capitalists have confidence in this project, 
 especially in view of the fact that the Government of Canada has invested nothing 
 in the work. This road has been graded, the rails have been laid, and more than 
 two-thirds of the work has been done. To refuse now to this Company the extension 
 asked for would be something unprecedented in the histt)ry of our legislation." 
 
 In 1892, application was made to Parliament for power to issue Preference 
 Debentures for sufficient capital to complete the work. On that occasion the 
 Hon. Mr. Dever said : 
 
 " Now, would it be fair on our part to go back upon the legislation that Parlia- 
 ment has already passed, and repudiate the whole transaction, when these gentlemen 
 have laid out some three million of dollars on the enterprise? They wont to work 
 in good faith under their charter. They spent all their own money and all thoy could 
 borrow, and did so much of the work that it is acknowledged some 83,0()0,0<J<J have 
 been spent on it. Are we to deprive the parties who hold securities against the road 
 of their rights, which thoy will ne practically deprived of if the railway does not go 
 on ? If the railway is not finished the property is virtually of no benefit to anyone. 
 It will be no benefit to the Company, and certainly nime to the creditors of the 
 Company. It devolves upon us, as fair-minded men, to see that fair play is given, 
 and that this Company are permitted at their own will to raise a certain amount of 
 
66 
 
 money, that will complete the work in such a manner that it will be able to earn 
 something ; at the same time, if they comply with the conditions of the charter that 
 they obtained from Parliament, they will oe entitled to the subsidy that the country 
 has promised them." 
 
 The Hon. Mr. Kaulbach said : 
 
 * * * " but we are in this position, that by our own act we have granted the 
 charter, and induced capitalists to expend a large amount of money — not money of 
 Canada, but money of other people brought into this country in the construction of 
 this work. Should the Company fail now in getting what they asked for, the money 
 would be lost to those persons who have embarked in this undertaking upon the faith 
 of the legislation of this country." 
 
 And on a subsequent occasion a few days later he again spoke the language 
 which I have quoted on pages 43 and 44. 
 
 The foregoing could be added to by many other expressions of opinion, to 
 the effect that a refusal to re-instate the Company would be unjust treatment to 
 the investors who found the capital. 
 
 
 
 • • t • 
 
 '•I • '• ' 
 
 PriQtod by the N»kioii»l Prees Agency, Limited, Whitafrian Houae, Ouiqelite StMst, Iiondoq, S!.0.| 
 
2, Whitehall Court, 
 London. S.W. 
 
 June 14th. 1898. 
 
 4>ilV 
 
 To the Honourable •• 
 SENATOR LANDRV, 
 Ottawa. 
 
 Dear Sir, , ;. . .. ■ - ,: i' . • ■ : v'T-- ' ? ^'-rv i' 
 
 :''" ■ '■' CHIGNECTO MARINE TRANSPORT RAILWAY CO. LTD. 
 
 •/ •■* " •• 
 
 ■^ i^t 1 1 .-^ * 't 
 
 . ... ;...■>.♦ 
 
 I enclose herewith a copy of my Report to the Share & Deben- 
 ture holders in the above enterprise giving an account of negotiations 
 with the Government for the reinstatement of the Company. 
 
 You are no doubt already familiar with the question, as in 
 September 1896 a Committee of the Privy Council was appointed to re- 
 ceive and consider the statement of the Company's claims of which I 
 had the honour of sending you. a copy. lii February last we received ' 
 the Report from the Privy Council set out on page 21, to which I re- 
 plied by two letters dated 26th March and 3iat May beginning on pages 
 22 and 33 respectively. C -^ '•• . 
 
 In accordance with our request the Premier referred the 
 Report back to the Sub-Committee for reconsideration, and no final 
 reply has yet been received. If the Government decide not to re- 
 vote the Subsidy and grant sufficient time to allow the Company to '■'' ' 
 spend its own money in completing the Railway, then I respectfully 
 urge that we are entitled to be compensated. The amount of compen- 
 sation we are prepared to discuss, and if we fail to agree we are 
 willing to refer the question to arbitration and abide by the award, 
 
 I shall be pleased to receive your kind acknowledgement of 
 the Report and also any communication in regard to it which you may 
 think proper to forward. 
 
 I am, Bear Sir, 
 
 Your obedient servant, 
 
 ^ly^/^i