IMAGE EVALUATION TEST TARGET (MT-3) /. 1.0 I.I f IIIM IM '■ IM |||||22 2.0 S, 4 9 1.8 1.25 1.4 1.6 ■^ 6" ► p*. ^ .^ 0> /y m ■ c,$- # O ■rf Photographic Sciences Corporation €d v^ 73 WEST MAIN i TR«T WEBSTER, NY 1 4580 (7)6) 872-4503 riy >>'■ c^ - • ipj "f^fl "Q -n^ ^Q> rj- rjt OP ■V7" ^V T_. T DE t;^ S XI j^.. l^T HL Y m tlnFUE^.E ^f ^;^? '^i ( THREE KIVEKS The Three Rivers Printing Company ISTO. I I i m i m .r> » --—»»~-^ — *■ H .) |M i y il»».| | l»i li m iliiiiiBi P I III " ? V (V) /9,.wr^/ I I Qo "^ />-i i T/JSr THIJi] 'JN/I.A.TT3:ilE. OV DUNC^AN IMACDOTiALI) CO-INI TI^ A-OTOIR. And Iha Quebec GovorniTaent ■^•-♦-♦t»»— Ji'j* j^ OK ■v;r„A.LTEi^ si-i^a^TX^ir <. • • • • m • REPORT ON iu-e!ifui;iliiiii oi i([.\\it\Ti in j_|if;initc BEi'r"W"E!B:]sr DUNCAN MACDONALD AND THE QWE^EV &Q¥EEMlIF^r ARISING OUT OF THE • CONTRACT OF 16 NOVEMBER 18T5 By orJer in Cmiucil datcJ 2 1st September 1S78 the undorsigiKHl was appointed to " make a complete examination of the respective claims of Duncan MaclVniaW against the Province of (Juehec an J of the Province of Quebec ajjainst the said Puncan MacDouald in order to establis!i a balance of accounts between the parties. " — 51750 A 'lu!v I'l'llillt il r.'l.V III till' nl'ilrl ill Ciillliril W,.- I IM II -lliit r •il (i i t lr • IJ.Iirrc I'll Titli (ictnli, r. wli'ii Ik' .it mur ihititiil il lu Mr. M.nl'niiaM, iiiviliii;; liiiii to dj" ii Iii- im-v' ;it llu'ciilir I iiiuiimhi ih.it he fmiM Ii' jiivji.ui 1 t'l ill' .-1). On Ttll ( )rl'ilMT Mr. M:ii-| '■ IluM r'j'lir'l si^'nilyin:.^ anU-llill' il arri |.l;ilic,' tiiilv. Ill' tlh' ii'i' iiii.T. 1h'i-:iu-^'- tif jii'nvi-iiiii iint lia\in^ li^ u iiiaili' lii!" iri-('i\iii_' t« -tiiijnrv U[Hin c.itli, Imt mi ln'iii/ inli'Tiin'il tliaf lii-: ulij' rtimi In. i^r niilv |iaitial ari|iii.'Ti'iici' in, tlr' innji'i-i'il cxaiiiiiiatinii rcnili'int it ;iii|in.--iMt' that till' ca-^f ciiiilil In |>;-im'.ii],'i1 w itli lir .--iiIi-riiuintlN . thfuti.:!! lii- cniiii.-i'], a'.^ivi'(l t'l till' ]irn].ii-itiiiii .is oiiilinilit'il in tlu' onU'i-iii (.'niiticil ainl tin rf- uj>oii, nauioly. on ITtli < tit'ilMi-. tlic lu'ariiiL' was fufnially ciiti'i^'il uimn. To iiuikt: ckar what tho niatltTs ri'l'crii.'il were it will ho iieufssiiy to L'ive a sliort lii>tnry nf tlio CDiUracts anil tomlitinns umlrr which tht'Wo.^tcrii Section of what is now known as tin- '; Quebec, Montreal, Ottawa, ami Occitlental Kailway n ha* heen built. Ill ISt.J'J a coniftaiiy wa« chartercil iinikr the name ami style nf i Th" Montreal Northern ('olnnizatiun luiihvay Company n tor cnn-tnu-timr ;i Railway on the north .-iile of the Ottawa Rivi'r i towards the city >A' Ottawa, fee, kc. » Four years later the charter was amoniloJ and enlarged emjiowerinj.' tho (/Ompany to continue its line to the tcnniims of the " Canadian Pacific Railway. )/ No decided measures were taken towards the construction of any part of the line until 1873, wheu, on 24 July in that year, the company made a contract with I)unean MacDonald of Montreal and Harry Abbott of Brock- ville, carrying on busness under the name, style and firm of « Duncan MacDonald and Company m, for the making of the railway from Montreal to .\ylmer with a br'uich from Ste. There.se to the Tillage of St. Jerome. The length of line .so undertaken was estimated at 142 miles and the gross amount ;»;.M-eed to be paid to the contractors was 84,224.5(11) — being at the average rate of 829,750 for ea.h and every uiile of completed Railway. Fi.l till' ]ir!r,' nr >U1II -II -tipnl.il'il in li ■ |Mi'l l!i'' liri'l^f- Wrlf tn ]i III V,. (. 1 : t!i • ll;iil- iiMii : Tin' I'.jlL. tin.,' litiiii'il (■' LMnii cuLif \:iii!- to ili.- mili- ; :ii, ! lli.' .|ii;i!i:ii_> i.r ll'uliii;/ -t'ick ;i'- >{.' I'ili'.l ill ;i .-I'll' 'In!'' ;i j.|" ihI''! tM tin r.'iitr;irt. In all ntlirr cnti'liliMii- tin' ini'I, l .'inialiN, w.is to !••■ ■il''ii-l I'll-,! iil'li r th" -t upliril i.r tlir (iiT.it \Vt ;■ Hi Kailsv;) i.!' ( ';i:i;iila. Th'' kiln I iif'j'ivru '111 I'l" I'liMtrai't.'l- ulT.' .l t'l ;!'•'• I't \\a-; a liiiX' il "ii nrCa-li aiiil Jtail'.s.iy ll'i:i'l- - in tlir ]':i>|"iMiMii nf i.lh'iit mic nl'tlii- li'iiirr t'> li'Ur (^n.iiniiKtl) (inllar--- nf tin- latliT ; tlir !■ 'ii'l- ln'iii,; rat''il tn tliriii at .-iVriiiy- tivc cu'iilsin til'' dollar ay — tlic ••^ l.L'2 l.wt'ii wcit.- .-ujiiin.^i ,1 til ivjip-fiit alii'Ul till' C'lslf valih' ut'tlic wmk. ami I'ur the thnn' luillinn ilnl- lar^ whii-li WiTc tn I'.' [aiil in l!"nil.- tli'-y itlif (.'niUra>.ti>rs) wnc in r. ality to roc'.'iwil iiuo tliini Kmro than tl.at ainnimt. The !«()urco> whoncc the ra-li {mrtion nf tin.- }i;i}iin.'Ut to the Cnntrac- turs was to \h: drawn wciv the j-uli-idiis grantnl to nr i-Un-.k takt'ii in, tin' railway by tlie city of Montreal and other ninnirii'alitirs inti'iv^tcd in its c'on.-truftii.iii. — Subsctjucntly to tli'" luakitiL' of thr (•ontiaft of 2 i -Inly IS"."!, iiainrly in .January l>>7i,tho Iniani-ial jm-ition ofthr " Montr(,'aI N'oitlu'in Coloniza- tion Kailway Couiimny " hieanie ;^ivatly iuiju'ovcd throiiuh thi' iia>siii:,' of an Act by tilt,' (^uoboc Lcyislatiuv cnablini; the govornnant to sub-titute for a Land-drant whit.-h tlif Couiiiaiiy had previously lield a Money-Grant > i •5750.<)<>n. The transaction was th facto tantanioiiiit to the Goveruiiieiit taking that amount of the Couipauy's Bonds -At par. Under this Coueessiou on the part of the Province the Contractors po- sition was bettered in at least eijual de;j;rce with the ConipanyV^ for it does not apjx'ar that the latter claimed any modifieatioti of the contract bccau-e of this conversion into current money of so large ;i proportion of the bonds which the former had agreed to accept. The Cash they were to receive in payment for their undertaking bein^ thus increased by three (piarters of a million of dollars and their bond- paynjcnt proportionally lessened the Contractors could now count with cer- tainty on receiving in money aWut Sl,80l>,00(,) leaving them with some three million (hillars ol" bonds still lu neirotiate. c I'll'Iil llnCmtlMrt .>rL'I.IlllN \^~'.l '■ DuiUMll M.iA-n.iliall ;lll.l ('nliili.i H)' I' fill ill. 1 mi th'-ir v.i.f!. \vit!inut iiiinkMl iMt'iru|it!''ii I't almut t\\ xtiviii'/ il.iU' lim!: ■•! 1m. ( >>i.il-i.T l>7ri. •' ,' .• 'l'\\]< iiiMilTuiuit jipr.^ii-- \va- iluf t^ tinatnial t'lii^i ■,; .-.'oi.tU'iit . 'I'lir t'iiii' iiiillinii iif']5mi'l- ].r"V.l {■> ]i~: '• iiK'.'iiVvitiM''. " ', '"' ■'lUnr jiartiiti ill till' tinii (Mr. MacUmiaM ^ji iif .-uni ■ c-uii-iilrialil - 'inliiii S(.'L'kIiiL: a iiiai-'Kit iiir tli" -i'curitifs h, ji.i'l t i nlK r but fail". I ■> . i liuyiT.<. Sir Hii:;li Alii'ii, Vri'M.l at nt'th. ('.iiii[i.iiiy, lu-xt t^uk ih'' ittOI'^ili liaiiil-, Ijiit with iiiilKtlfi' .suc(•e^^-!. Nk takifs \virr to lu f'uuinl i'-'r .tin' iJomls ol' a rail- way to whiih was npj>>..«cl thi' [-"iworlul iiifliu'iiw of'tlio firiUi;} Trunk. Compiiiiy aii'l Ci>mractnr.s having alike fxliau-tfil tl. ,ir ri'simrces the .«uniiii''r iif 1S75 t'ouiKl lMth,iri respoct (ifiiu'atis to c liiiuc the work ithc railway, praetit-ally iii->lvt'nt ; the Cuiitractor-i being Lmrdeii (lb\ ,arge sums b<)rri)weii li.r ai.i carrying on of their 'uulertaking, ami by 'Icbts duo to Sub C'lil-racturs and oth- rs. A su-'pension of work natu/ally ensued, and thui it v/a-* that the Govrrnment nsolved on adopting the railwa) ;ls a I'roviiieial work. In November 1S75 a formal transfer of all its llights, Franelii-.s. and Propertie.s wa.s made by the Railway Company to the rfovernicnt. and on the sixteenth .same month the latter executed a contract with Duncan Mae- Donald, .>;enior partner of the pre-existing firm of i Duncan MacDoriaM & Companyi', for the completion of the line from Montreal to Aylmer — including the St. Jerome Branch. Thi.s Contract it i.s, and the matters in variance growing out of it, that have formed the subject of a six month.s iuvcstigatioii '■ in order to establi.^h a balance of accounts between the parties." The results of that investiga- tion the Referee will now proceed to report. — a*.* ( 1 '1 ' M' 'I'lu' rniitnic-t (if l an'<-''t. Ttio (inwi'iiiiunt \vi iit liack, so tM .-ji-a'-c, ami a>Muiii.'il tli'' uiiiliitakiiiL; aiii] its rrsjin-abilitii;s IVnin tin/ wry fni.'i- iiu'infiiu. iiL id' till.' wi-rk uiuKt the Xiirtlirni C.'oi"iii/.ali(i[i llaihvay ('nii!- pany's Cliaittr. — By tlio ti-Tui-^ uf tho now contract, tlic contractor, J)uiieaii 3Iacl>.'iiaM. inJivi>luaIly, uiiilertivik that the CDiupletod railway shmiKl cu.-t, from fir.-t tn liist.ju.^t , 83.001,010.05 Out of this auiounthe was to pay, or, as .socnis to I'.aveltoen umlorstooj, allow the Railway Couuui.ssioiiors to pay Duncan MacDunald and Com- pany's liabilities for woik done previous to 6 Novcmbv r 1875, and also !:,■ was to give the Government credit for the cash paynlent.v his former firm had received previous to that date from the Railway Company, a-; so much paid to hinixlf, individually, on account of the now contract. A schedule attached to and f)riijiiigau integral part of the new contract set forth in detail, the quuntitiui, of work and properties Involved in the construction and furnishing of the whole line. That schedule as.-.uuK'd that there were, originally, so nuiuy cubic yards of Earth and Rock tn bo excavated and removed : .-^o many cubic yard.sof 3Iasoury to build : kc, \'c, — A certain sum in bulk was .set apart as the assumed probable cost ot Right-of Way : and certain other bulk .sum.s, in like manner, to provide for the erection of buildings and the payement of Engineering expenses. — The num- bers of Engines and cars were .specified with the pric(!S at which, on de- livtry^ they were to be rated to the contractor.— By '• figuring " all the quantities and properties at the prices, or rates, set over against each in the Schedule, and adding the "lump" sums referred to, the gross amoulit of the contract was uiade to be ^3 001,010,05. But the whole of this sum was not iu reality applicable to the work of ''nit~iru.''i"M : 8 Fl \v;:> iu:l'1'' SilliKct . at t! V iv ii\it-.t. I" a il'iluctiuii oT 8''T,1 U'.!'") Wliicli wiH till' :u!!.umt till' Covciiiiiu'iit :iunvl r.. pay tlf VvaiUvay CuiiilKiny i"V tli" traii-l'T of its Ki-lit^ ami Iraudii-.s aiwl wWu-h tl'a- {■.•ini-r thru UKuK' a cliaiuv 111^11 MacHoiiaM"^ (•oiiirad.— J'7.'.y i-~ i""t. rn-m a Imsinrss ],nint ol" vic%v, .'a^ily umlcrston,!. Tli.' practical rflWi upna tlio 001,- tnirt, (.r, rath,'!', upMi, til.' (■.>atrai't..i--\vas in iv,lu.',. l,y al)niu on- aivl a half p.'i- (••■lit til.' })ric.' atTiM'd to oacli itiMii in tlu' Sl'Iio.IuI.' of-Tlatc-, v:v]\ < InicaiiK;, as iinlioatin- what wa-^ to ho paid fur each (le.iription of work, to tliat cxtLMit firtitiou-. In othn- wnnls tlie s:ros> sum MacDonaM was to receive for the whole wr.rk ami furnishing of the railway was imf S3.n01, 040.95 but S 3,f)44.5iM) One of the tir-^t^-tep> to -ive efhrt to the contra'-t hetw.m Mael'onaUl and the rxoveniment wa< the •' srttliii- up " for tho work of all wnik done and materials delivered up to the time of iimkin- the said new cuntract, namely Hi Nov. IST"). and that the money-value of the luantities so certified .-huuld lie fixed hy apply- inuncan Mac- I'omild.-^ The Kailwuy Commi^:— ]J3]'* I ("-i-li iKiiil l'iii!f;ili MacI'cMaM ") ».*i: Cn I'V Nnrtt;i 111 ('(ilniii/.a- >■ ri(/ii ]l:iiiu:iv Ciuipaiiv J sTm;;, ir»2 BaliiK.v ..",t^.].'.U The ('(iiumi.-.-'iiiiiiujs jiuM C'laiiiH | apiiiist tlif i<\<\ woik to ttu aniuiiiif of J Si^<'''<'"».f't*('.0(i Paid ill excels of Ball HOC touiid to }K;dutj ^StilliO^SJifi Thv qnis oi' Mr. IVti'i'Min's (tlifuowitiiiioiit Eii-^iiK'tr's,! viliiutloii ai'u lint uiiUly dilRixut ihnu tlm-o jirivi-uivly ci-ititifd Jjy Mr. Li-ui' Cliiof KiiLiiiu'ir of the Xoitheni ColcnizatioM Kaih\;u Cciii- jniiiy. IJut the ^ re.-ult in a money difference between tlio two estiiAtes of nearly SSoO.UIHt Mr. Peter.sun, as by chiuse 5()f the new contract lie was bound to do, adopted the schedule prices of that aLriveniett. and which were striety itish prices, Mr. liCirue, ei{ually ofci>iir<.', had taken as the basis iiflii> valuation the '^^ (Contract rates, wliieli were \ery much liiuher than the syl»(ituted rati> in till! new in.-tniiiient and which. alsi>. it must be reiiieniberetl. were payable not all in current umney Irut in larp' prnportinn in railway bonds. • :^ ^m ID v;i!irit''ii I'lTin- ;i Ira^liiij i"i!:it ;ii tl'.'' fluin-- ww iiiii'l' !iy ."^1 1'. Ma;' I '•; iKiM :u:ain-; tlu' ( I'.i\t'riii:!.Mit. Nntwitli-litii'liiiL: tli'.' <'!i';tr wm-iliii- u[.'Mi t\,\-< <\\]>y\-[ n\' til' a^i-'.vn-iit <>!' lt''t!i X'T,-. HT,") li' ImM- t'lii '•'t'l/ iuiil"r-i:',\uliii.; ' \v;i- that li..' v,;i - to ivct'ivi* ^•|•<.•'lit in acciuni iur llir oM wui'Iv ;it it- uriuin;'.!. tui'I lii^lu'r, v.ihialiuii. It is iKil of iV'f'.rtl iluit Ml. .M:H'l>(iiiaM .-.'t uy llii- (.-lii:!! al th ■ tiiiioMt Mr. iVlci-iiii'.- valiiati'Ui l^iii.' ina^c ( i-arly in IST'I ) — -"V t!,it !i" (.■nt.'r'.'il any pi'nto.-t a^aiii.-t it- ailojitio;i. It wouM have li.^ai hafl to do .-o lii-ir.i'.ly ill tin' lace ol' tin: VI i-y [ilaiii wurJin;^ of clau-ij ;"), itl'lhe then newly maJ ' (joiitracl. li'.'.-idi's, {ivactieally. the Ilaihva) Coiuiiils.-ioners in.uleiiit aeeoiint of the new vuluatinii, fur, a.> has Loen shown, the sum they paid out ior liabilities accrued uj'Oii, added to moneys paid to Duncan Mac Donald i\: Co by the Railway Company on account of, tlie i.»ld work ('Xceeit.s linal com])leti 0:1 ill 1877 wa.s to be limited to, in round munbers, 63,t)01,r)50. The ^i^lement for the old v^irk '^ took cleiin out of that amount be- >■ fore the work had beenbe^un oven. ) 81,r)r)0,5i2 « » There then remained " in the Treasury " 31,947,108 V But from this a^iuii there was to bo taken the 1 suui paid to the X. C. Railway C'umpaiiy j S ;>7,150 Lfaviri;j; to complet'' the work.. 81,8S0.0:)8 The ((ucstiii •' was this .-urn >ufficient for the purpo-e ? " can be answered otF hand and in the neuatiu; — It was not sufficient by close upon • n , I !' \ ■ ;f ^\ >7Ult,(IIIU I,, ((.;ii],l,'t>' lllr V,Ml-k .-l!!! fM .],, uli.'ll t!i'' fii.'.i llllll :it (■■.;itl I't v,\ lli XnV. lS7.') V.;l- rX'illI il ;'rii'' r-rf I, ill- tlllt ll;- .j.t.i;it't:';- n|\ X.M',;it'.M;, iiii-niiry, \''-. \i'. "Ml \\ lii<-Ii that '.••i;itr.i'-t w !■; La-c I w. r ■ I'allai :>.ii- , a -wiii i lint umI. N'Mil^s all til'' il'ii;- il.[i •iilin^ I'T tlirii arr.ii-ary nj, m i:i ,i-iii • ■ . iiiv'iit, aihl ojIu;-.-- 11^ wril. |ii>i\ • I, alt"!' thr wi'ik !;.. 1 l- u il.iic ,i:i 1 '• |(ii4'm1 iiji " ill l.^TS, t'l l>i- Iii'^i'n, ill .-.'!ii.' iii-!anr.'» (.■iio;-iirr.,-!\ , ii, !,■:<. ••■" ul'wliat hail li.'i,'!! ::Ui'-~i-il ;it ill HT.") ; wliijr ^f th'' bulk .-iiiii- ^ t apart I'u ci'i'taiii purjin-r,-, that i'lf Hi jht-n'-way i ■'^1 ."lO.lHilh ii\ii-raii."i' \'.ill v\Mitiiahy rwr-ruii. hy. ].i"hahly, .>:j'iii.(mii. -.i^l h]n;^iiici-iiu- r;'.ti' 1 t" CM-t >^1 l^n.ihMi ivachoel ih' aiiUKiiit "f SlTrj.Hnil III brief sumiiKitinii nf'Uio " rui:i;ii.'i:il .-iitualinn " as lUvrliijujil in tho jOft'p'iiii; iviww Wlitii tlio Huilway \\'iirks Wfii.' iwnimni iR-nl in l.STii 9 the (.'uiitraitnr in uratTto cany out the ciii:aut'uu'Ut.- lii' hail ont..!Xil iutn with the GovcniiiKul on It) Nov. {irovinu>!y, and being htM strictly tu tliein, sliouM have bjcn in a {xt^itimi t') {trovido i'roui his own iiii.'ans and ri^nurc,-- noma sccca hundrt (I thonxntid doKurs buyund what tin.' ( rovcrnUK'iit had •agreed to uive and he to accept for the comiiletod railway. Tcw erinntractnrs cnuld have bcjii fnuid able, nunc williii--. to fultill ^n burdensome an dbliu^atinn, and in this particular case the cnn-eiiuenccs of Mr. Mac Donald's y);//t' rni:Jtcrc very speedily bi-^^an to make thi'insi-lves felt The estimates, predicated upou assumed, iiotTcal, ipiaiitities beiiiL; in-ntlicient tu V ,4 keep puce with outlay the work fla.'i^ed fur lack of nourishment : Sub dm- tractors ; Laborers : and supj)liers of all classes wore short paid or not paid at all : Dissatisfactiun was rife all alonu' the line : ThoOovernuient Knj-ineer and Contractor were not in accord, and before the work hand been six mouths in progresi(after reeuuuu.'iicement)it became evident that somjthin.; entirely beyond wliat the contract provided for would have to bo done. That something' was done toward- the close of the year (lS7(i) by the paisiiiyof LMi act. (10 ^'ict. Cap. Ill) two .-(.etions of wbi'h Nos. 10 & 11' Were desi/^ned speclaly to provide lor the dilVieultio u;iowinu out of the Con- tractors inability to fulfil hi- obligations. The s.vtions in ipie-tio'i read as follow : — Sect lO '-The Commissioners of the (Juebee, Montreal. Ottawa and Oeci- 12 a.'iiMl Uiilv.ay .Miaraiib'^' ill.' I'lMih'iil ..i' Mic nr.inuiil.^ <<{' {\iv Mil. r'lHtiac;- iiKul.- I'\ I'uii.v.ii .Ma'-!». !i;iM, th.' oMitracfur i\.v tlic \\\-tLTii ]n'Minn nl till' >a'\i\ nuvl, jiiovi'lr.l tliat siirh i-uiUi.vt< :UV ■il'l'iovnl l>y tlniu.' S.r II •• 'I'll'' -;;i.l ('Mii!ini:v-i.>ii"rs :iri! autliuii/.C'l to lAr Ir";;: (In- ~nin iiiliai.lr.l tnin.'i't tl'..' i-oiiti:!.: .lit .•:q'ai- - ..I'll'- m.i 1 ti\'- sum n'.vr--ary to (•()ti!j'l.-L.- tlk' .-ai.l rai'\vay. Frnii! till' .lat.j ..fthf i.a.--^!iii: uf tlic ;\lnVi At;t tin (.•niiiii/b-:; m.jr.- t.M.'i uiMUi t!ii'iii.^..l\v- t!i..' hupl. !i ■'{' iuvi-.-ti_^aiii:i an.l I'-iyiuLr ;ill ace.j;;ut- :i;i..l osruiiat'.'S 11) c'..>!i;ii-Ttiiv!i willi tlu' (.•■Miirart ; .Mai'DoiiaM.t': ■ uOnt.arl^T, K./uu;, ineflVet, rcli-atol inti tUo iin.-itiun (.fan Aueut, or Iiitrniualiary, J.. twoL'U the Coiiiinission.n's ami tli.j suK cuiiti-ict.irs and tlio wi)i'k-!iu.'ii, aii'l tlioru i< proof ill til.: (loouin.iilary''viil.';i'V laidk'iuiviho lloieivo that thoiiL-riurwar.l no r^pecial catv was tak'jii on ciih. r sLic to k..H;p exi-'ivlituro within prop^ji'ly ecoDoiiiical ttuuu.l-^: oach partly scMiiiuj,- to eon-id.jr thf responsibility ut' tl cost as restin- on the other. The results have been— Injudicious (Utlay : i^reat contiision nfa-eounts ; and a largo imuibi.T tifelaiins held by Mibcm- traotors and others wh.. Ki.>k t.) tlie Covernment toh.>ld th.jiu havma-sbeeau^i^ of the Uailway Coninii--ionei>, under autliority ..>f the Aet (jU.ited ab.«ve havin;,', by uifereiice, at all events, where not diivetly. -uarant.."ed their euu tracts or wa2,os. — ic It is hardly necessary to pursue furtlier the chain of events which, ?top by stop, and inevitably, le.l u[» to the dilTereneos and disagreement^ whieli have rendered it necessary to make the (iue>tion involved a matter of .pecial reference with a view to elucidation and adjustment. The contractor, as lui-ght liave been expei.ted, makes la.r-e claim.> against the government, and on various counts. ^.I > claims payment for the (piantities of work d.aie in exces.sof the nuantities .-eheduled in the e.tntraet. He claims large .-urns f ir works extra to and out-ide of the contract. He htjlds that he ha> >uffered heavy pecuniary i aiiuu. s througli obstacle^ and d.tention- neelle-sly put l:i hi.s way by goveinimnt officials : Abo that the iiio.le ado[>ted fir valuiuj, the *' old work, " though verbally in accord with the agreement to tliat end in 4 ' i 13 ihr \w\\ i-imlr;u-l, is \v 'ij.d .iii-.p. ha- li 1 u UMJ'i :lv [<> ki''i' h:u-\< .•( hvj.:- .-uiii iil'iii'ta.'y Imi^ ^mh-' Iik' liiin. Til- .-um ji.iiil I'V t!i'' d'l'. •I'lMii.Mt !■ ill.' NmiiIi'Tii ( "ilw.ii/.air,;! Il;til- \v;iy (V.r.iij.iMiy (•?.'7,!r,n) ,1; .uM i, ,t .Mi. \J,u' I '..'i il^l :ill-.'>, li;ivc 1i,mi clrir vlfil to Iiiiii at all iMtwitli-tiMi'liiij tluU lliv L'LM (.'Ian-. i.!'lii> iMiitr;a-t -j. •.■I;,!!y |iioviili - t'nr ir- InMii- -,j t'luir;_ d :--Aiil, i;i -ily, li" * laiin- that tli ■ iiilf.;^ aii'l iiioaniii-- ef the 1 1 ;li Svition <•{' i\w .\(;t -l'' \'u::. Cap. 1 I 1 wa- l > lual. a lavui' iiiMiiry-u.MitiiMi t I tlic i^r^--; aiUMimt ni'thr entrant aiiJ that tli'Hi.li nut .-{.■rilifally .-tat;.l in the a.t th^; aiuuuut .-i t^hj a.lh l wa- v.\'ll kn'p\',;i ami iunlci>tuu(l at th'j tini..', tu I'o the exact .-uiu ol" §100, '11)0 Tlio folhnviiii; is a Suuimary of the claims suhniitt'd. 1. Value of work iiuaemM (Jnntract 81,(140,401 .^ 2. Do Do Now dn 2,r)r>:-i,74i 3. Extra works H15.!lli:i 4. Dama-.- % HOU.OOa 5. Amount jiaid toN. C. Ivailway Co ; ' 57,15'» 0. Addition Claiuied iuiikr Act of ISTt; 4r.t'..'till) ^ So^3:n.2-5 Making an execs.-* over the yros.-. >iiecifieJ amount of tlie contract ^83,- <)01,G50) ofSl, 731, 1)3.'), an I in this i^ not i-icluded the tini.-hinu-.'t'the rail- way. /}n the line heini,' finally taken out of the Contr;i,ctors hands, on l^t September 187S, it wa.s .>till nnjiufslud to the extent »i' aluml h'll/ a mi!- lion o/ihllars. The details of the fore/oin- .six itoius of claim arc emhodicd in th^^ Appendices accompanyini:; this Report and as such of the details or sub-iten!- as ret' dealing,' with, and rca.-oiis for re-cctiii- r ailoptin;..;-, them explainul ('/( «.i''/i- 80, it is umiocessary to do more here that\ touch -cnerallyujxMi th.i.-c of th... m J! «i *3 If III ••I'ooii.'^l W'Tiliv .■I'li!' r.il r.i!..' !■ r.itifMi aM'l t'' ill-iiii-- a-^ ii!1 wni-k >hi.iiM IVniii til'' fir-t liavr Icvii valai.l til h'ln !• lla- oM iMiitrart j.i-irvs M r. Mav|)niiaM lia- mail/ ;t iial'ialil' riTcr. In hi- cnaii'ar! w itii t!n' ( losi'i nira'i.t li- 'Irlib T.'.tvly aia! u'l'.i- .-i-ly, it' i:v li-rfo>t'y, aurc '•! t" t'lo iii'l' i.l' \alua';i.;i whii-li hj nnw (.•Mini.'.ain.- (if as all inju-tic''. 'I'lu' wi-o (.MUr.-'-j wlaii ho inuii-l iliat tla.' a;_'i'i-iiuviit acti'il hivi-iUv aii'l Miu'i-ou-ly ui"'ii liim. a.> a->ur',''lly it diil. wuuM lia\c l''' u V> have it-^kril I'm- a iTi'i.i'>iil''r.itinu nii n'aitaltlo lTiUiiuIs. In the rce.iiuiu.ii.latiHii-. liorfiiiaf'trr ma'hi in thi- K-i".rt it v.-il! h>- Jralt w'th tV.r.ii that p.iiiit nf view No 2. The iii'vK' of o.-tiiuntin-- the work doiu; luvhr tiio now contract is tin; gvouihl w>..ik of iliis flaini V)Ut while iu ch\itu No. 1 a question of ;;>-uy.s only i^^ invuKeil hero the real point at issue is a to ijii.nntUlr.i. Not that there are any material dilfereneo.', between the <7..>veni- uieiit Kiiiiineer aiisuiiu-d (^iiaiitirio- iiiwwhieh the bulk auimuit ef the contract was based. Tlie contraet^r elain.s payiuent fa- every thinu he did : tho Govenunent Ilng'meer (atid he certainly had no option in the matter) .-uy- — ''No i 1 uuist so shape uiy E^tinlates that the co-t of the railway c^npl ete.l awordin^ to Ciiitract shall not exceed the eontract sum of S3,0(»l,G5U.* The contention raises an important (piestion which will be con.Mdcred urthor on from the Referee's point of view.— No. 3. Extra Work. This elaiui in GI items (No. 55 tollGaiul 125 12G Appendi.K C,)amounts to 8315, •?>. The larger proportion of the items are wholly uiuduiissablc for rea.-ons -iv:n iu the appendix ; and after a thoroughtsiftiu;^ the amount recommcufled r^sallowable is S9«,052. No. 4 Dama-es. Tnder six separate headings (Kos. 117 to 122 Approndix C.) "J)aiiia:..es" are alleged to have been done the eontraetin- t.. the amount of 8300,000. For no one item in the list has any proof been offered and with the exception of a small snni again-t No. lll» the whole claim is invalid. Fo; anal;. -is and reasons see x\ppcndix. As illustrating tlie utter un<(jundue -s of the claim it may be stated here that ^SO.OHO of it 1 •) • :ri>' r..v all. ■;:•.] ".l. l.iy.-" I'Uf in ll.rway nf •■|'.;iil:i-t!ii_; " : Th-' Mil.i..ii- trartur.- wli.i .Jiil t!ic l.:i!l ! -tiiiu r^tiiiMt'' tlu' iMay^ u: K- tli. mi $4,000 ; an'l till' wli.rli lialla^tin.: '.(' tlic wl,..!.' li 111' (Mill] I't- i airnnll'l- t'l riHil;,, winiM (Mily Ik'iVi; iMi;iiui]!i'.| t" ST'i. ••"■'. No. 5. Alll'tllllt p;l! 1 Mn;it!Val Xnrill.TIl ('m!'> li/ il;, jli )! liJwjV C 'Iil[M!iy i'oi' its l!i^lit-> aii'l lM-aiu!ii,M\^ aii'l f!ia!;^c'l a-aiii-t tit-' c^ntrai't, — $57,150. 'i'he ciiiitrai'tur auiTLil tliat this payinrnt >li'raM Ii ■ n.iaile a rhar-v Ujn'ii hi- rruitiaet ; Ni'\X'rtlirKs- li.j now claims tli:;t it >In.ul 1 not lia\e lirrii m» chargi'^l ; auaiii inakiiiu the mistake of" fX;ii.'tiii_::; a.- a ri^ht wliat In; si. null have a.-ki.'il as a coiK'','--ir.ii. In '' t'slalilishiu:: a iialaiU'': (if at'cduiit- hLtwi.'i':i tho p:ii-ties " tlu' liefcico is (if opinion, that thi- it(-'i)i i-ImuM Ivj flimiiiat'.'l fnim the contractiir's ueCdUiit altOLrethor. — IMo 6. Aui'iiint claimcil t'l have bi.'cn aiMr.l tn the cuntraet l>v t! • Act of 1S7G «i .{CC.doi) %■ Wliile the Kailway Cdinmi-siouers do nni ailn.it .liat the Act i|iiot' '1 (.Sec. II) was int' iidcd to a'M anythiiiu jieinianently to the cmitiaet sum tliev <'<:ft.il as il' it did .-o The wliolo contrucl sum was .. / When the Railway was taken out of the ooiitractois ") hand.'* l.>t Sep. ISTS, there was contract work .still to do [• to the value of upwurd.s of j . , , 83.0(11.050 .8 50i> IIUO Therefore in the strict letter of the contract the | value of the work done wa.s ) 83.1<'1,050 But the Railway Commi.s.sioncrs had paid about 83.*J7(>.O0l> Excess of pavuient over contract value of work di)no SSOSjooH A large amount to pay away without '• authority of parlianunt'" and in assuuun^ the responsability the couiuiissionerd uiu-t, it is fair to supp"-.'. have had .-'(luie contidence that, pleadini,' " justitication, " they would ho 10 vvludi tlu'oni(i;.rt..r ii.uuU thi^vlMiiu IraVrs if ditli.'nll I- 'Avriu its ^oinr v,!ki! iuNuU.V, \v..r,lii._-;>My..t!vT ini.Ti'V. i.,tlni, (liaii tlun of l.(.i!:tii.-..ut tM th,' Cinnni-MPi'.Tsa o,Ti,ui. nlli.T .--/(Vvv tlrui that i'l '.viru-li ^v;^^ k.'l't wliat ,,,„i:,in..l ..rtli>' nriJnaUrai.i .■!• ^:;,l;(ll .c:.". nvIu no- cnuM l.. .Irawi, nt!„.i mr.iu'y-^ to ai'i'ly (■> t!'a> rMini^l.tinM ol'O.w vailv.ay v.-nrl;<. Tla' Ovhv ill Cciuicil sulujiiliiiL: tli.- inatt-i- in varia!!*-.' l'« >\'rv\-A iiivrstiLMlinn aamilN in cRVct, tliat t'.> arrive ai :x final a'lju.tinent ('l claims an'l acrnuut- tin' n-ntra.'t WduLl have in a ni.-a~ure t'. le .-t ;-'alr. literally int. rpreteJ and strietly mrnreul , ii' that werej-.-siMe, flu re wouM Iw nothin- to ailjuaieat- ui'-n. Tt rr,i.iire> that the euntniotnr for a certain specifiOLl sum shall do any tliin-and every thin-, in relation to the Mil mile-; of roa.I with whieh it deals, that the; Government might see tit to demand of him— whether speeilied or not. It is a one-sided instrument bearin- ine^ui- tahly, on the weiiker j., rty, who. in order to have fuUllleTl ull the ohli-ati(ms he weakly undertook, would hav. had to Hnd from other sources than the contract provided him with at lea^t three quarters of a million dollar^. Contracts so drawn mi,^> thoohjeet-at \vl)i(di they aim and instead ..f elo.in;. the door to dispute, and, litiiration are more often the means of enuend-'rin;^- them Treatin- the oppresive clauses/^hen. as of no force or effect eipiit) practice is adopted throughout in offering the .subjoined conclusions. The first Claim in the coutractors Schedule is : That work done under tlie old contract should have Wen valued to him at old contract prices notwlchstanding that in the new contract he agreed to accept theucw-price, and lower, valuatiou f..r all work. The difference between the two modes of estimaitng would be about -Sy.')! •,< K M > The old contract prices were to a certain extent ba>ed upon the fact of payments being largely in Ix.nds : Conse-iuently sr.me of them, treated as Cash prices, would be extravagantly high. The new contract provides for a lower, nominal >cale of prices but ,>fl cmh, and considering the fallen values of labour and materials takin- place about the time of the making of that contract (187")) and the low prices since ii 11 ■f 17 lilliii.:, til'-' Dew fuhtnirt l.it.v- ;ir.' •. , ii,i .illj, laii nii'l 1 1 ii.iiii. r,>t !\ • ('..itlf MWlal kiii'l.- (ifwiiik til uhkli th. y aj'j'ly. 15nt tiny v,(.u].l li;i\r 1..tii iii-iiflri. lit j.ri.w- in t!.. ii,{l:ir. •! tiiii' - i.|' 1 ^Vii an 1 ISTl wln'utlic wmk was Icirii: raiTirl on a!rl to i -tiriiat ■ th it w.irl; I'V tlioir .-taii'l ii-d ill 1 -.Td, a>tla' ('nntfa.'t .-laf.'.-- .-1 all It ili'Ur. \^,.- :i -lii, lin.j ceinlitiiiii f'lM tla/ >trnii.,',r juuiy to' I'Xad, :in(l a r-.!;-!: (.iir (iir tli.' wak' r U> accC'iK' til. IV'siilc-. — Tin.- wurk nnilr the nKl fniitrirt \va< doin- uinli.r trviiiu iiuanrial (.•nii.liti.uis. Paynifuts. at fii.-t uiiciTt.iin aii'l inv-ular. wrrr at la-t wholly su.-ji.'U'lvil ; liaiut; bnrrnwin;^' \va- li iil ixrnur-o to aiiil. altomtli'T. thrifty ainl fLunniniral inaiiaL;>-'nunt was rciuloivil imjio.-silile ainl the L'liii'i'al result — excessive CH-tof wurks. The first financial act of the Hailway Ci.niiiii»ir,iier ( in 1S7G j was the {layini;- dft' of arieai> and liabilities fur f he old wmk ai\d in dniim so they tiiok no account of the new and le.-.er mode of valuation hut jiaid in accordance with— in fact in e.\ce^.> of— the old and hi-hcr one ; thus prac- tically recii-nizin-, in advance of its heini;- uiado, MaePonald',' eiaiiii on thi> Cutting down the extruva-atit prices in the old contract-Schedule to fair proportions iiud allowuig all others to stand at their ori-inal tiu-urcs, the old work su valued amounts to g l.r)7tJ (»10 And it is recoiiiiuended that it be allowed FOR DETAILS SEE APPENDIX " A " \ SECOXi) for cousideratiou stands the claim founded on tlie ijuau- titles that should rule in determining the value of the work done since ( in 1875) tlie Government adopted the railway. It has already been uoteil that the bulk money-amount of the contract was arrived at bv a>suuiini: certain (luautities of the several kimls of work involved in the fmishiiii; of IS ,,,„v,.l t..^-<^.. ^vi-^■ly Nvmn/ lli:it 1 ..I iir,o-,'.l t'> I"' '•" " "" '«' " ■ ' tlf a.'-.M.'iuu. 1' , , • 1 ..v,v Iv tlio .•oii.iii'.n l::;'.l """"-" •''^■""■"- „ . ,, ^ , -^ ,.i,l, v.itl..ut any -ln;v.- ot .,^^,,...,W,.,n.yt,1wo.a,....ti^.'th..v,.h^u,.tl' til.-, now work w.mM :nn.mi,t L. s 2;.n7.27r) A.hl shoulU>'aU..v,-a. Sek \PPKND1X " B THlRi> Kxtni Work. Atnuunt rkiinit il- S 315,003 n fU.t >»,(> Vlot'oreo can reconnnona .V .«.,.,lt^,:. u».u- tV. «,. .r '- ; ,^ „,' ,„,,oo.. cl.n„, witlua r il of tHl^ Items It l1A>.-i'l 'I . Kxtra work " u ull.nv.l . >...-! ^^ .„^,,,,, ,, ...eneral wouH bo tbun.Moin^ 'Ivily tNVic. o..., b. m, .via. > esthnato.APPKNDlX'B". See APENDIOES-C" an^ " C C " Items 55 to no ana 110, 125, 12.'., 1'"<*''IITII . 'i'lii- ll-ih ill tl,i' (I lititM t.j'v hM.i.Iii',. >; ;;li(i (,(,(!_ I'nr I)alii;.ui'- nil . 1 1 t'> I,;i\, |,,h .> ii • I; i i 'I I'iluV lil'\ l.l-i.ilii- t'-l ]>) [.ivnC. I \( r|,t !i>ti':i Mi;;ill .•iii)..uM ill t! - Tlii.; i'].'.]u :ili \.. .-1 Mil.! 1'^ 'li 'in"\''' 1 1"T. i,ii'tiui!\. ,I». t:iiN aii'l .nia!;,,-i- li ill, ('l.i'i:, ;nc in APPKXDIX '• C " Iti'iii- 117 t.. 12;! iticlii'i\f. ■% FIFTH. Aiimuut y.xld tM N(,rtlM'iii ('(.li'iii-alion Itaihvav Ci niiiaiiv )<\ the (jovciiiuiiiit gi57 j;-,() Thi> uiiK-uiit liar ]>vvn c1kii-l(1 in tli>' Kaihwiy ('niiiiiii-.-ifii.rs ]it,ok< ap\iii>t }ih: MacDuiiiiM :i< ly tlif cmtiaotit ir.l.clartd it >l:(.ul.l \'v. Hut if tin' oqultablo mode litToiii rtroiinnnMlt d ii.r •■ i.-iaMi.-liiiiu a lalaiiie of accounts Intwrcn tlir {lavtior " ]k' adc^i.tnl fl.ui tliis itt ui vntvnlii/ ociMi- to be a cliar^'c uiioii tlu' wi.rk and tlir Mnnuiit iii.w >taii(]ii;_L: a,Lain.-t tl:i' t'» ii- tractor mu-t bo li-hti.iii.'d by ><> murh. SIXTH. The >uui (.laiuicd tolia\u btiiKiddid to the C'ontiact by the Act 40 Vict. Cap III 84»;t;,(.oo, The RailwayCouiinix-ionei^ jiractically aihiiittcd thi.s ehiim by jiayiim it ; but a.sin tliouiudc of .settlement herein reeouiineiided it i.- coviivd by the General K.^tiuiate Appendix '^ B ". it muM be .-truek out here and cea.-e to have fr(>in as u distinct and seperate elaini, or reeninuiendation. The foregoin- si.K headin-> eoniprise all the claims put fui\\ar had then already madi' payments on account. — 'I'lli'M- it. Ill- li;lVr 1i,\ 11 (•X.llllilli.I ;il|.l V» lilii .1, ;llll ll •iil.Tnl (1 !■ ■ «Im.' ll]. Ml til 'll i- Mii'iiiiit'il. \\iili (!• t 'iU. :iltl' illif (•<'(!■ 1\ Ai'I'KXDIX -D wii .'ir ;\iii..ui,t -0 i'..iiii 1 1 . ! tiue .*:-{t>,f;2n. — 0- Iii tli>' I5,il;iii(.c Shut, li.ifwitli ( Apiit'iitlix E ). v.-ill I- tniiirl crvj- (liti.'il tM tilt.' L'tiiiti-.ictor ri'i-lHiii (itluT itt.'iiis tli;ui tlm.-.' alinvc ivcoiiniii'iialt now bo takon out oi'his ;ji'tu'ral debit. The otht-r •• Suiiiliy " itoni> appoarin.; on tho tuvdit <'ul- ut'tlio Bala'ico Sheet will L'xplain thL'inMlves. A Balance struck upon tho plan rocouuiiend'd for the adjustment of accounts .-hows the ::OVi'riuncnt indebted to MacDonald in the .t tin Chief-Contraeter an MHy^^VvY guarantee of which, at ad events, is ;;ivcii by tie OoveniiJicnt in the Act 40 Vict :Cap III Section 10. Till'-'.' i-liiiiii- aK; (■I,i--ili lirailiii;;-; ; li' I, Aj'j: •iiili-A ■• F ' li !•■ \.i:;i. u:rl r tv.n 'J'liij air '■'>'.', ill iiuiuli'.r ,Miil iiiii.i.iii! ill I 111 HI ry tn •'?7'.',77."». I.; No 2. ("laiiii- wliirli have I'oon IVl-'l v.itli tli- K-f.T.'r lut wliirli Mar- J 'iiiiaM (livliuf.- in i\'cn_;iii/r. Tlu'ro uiv 3S ut tlu-" aiiiMUi!liuu ill tlir a'j'.'ri natr I ^?)\.22^.-u The GovcnK'iin'ut, dou'utle.ss, ill ilcaliiii; with any iiMutjy "t'Mr. Mac- Donald's thai may jtruvc to ho in its haii'ls will iint a'liiiit or jiay' chiiiiH the justin'.-s of which lias nut btoi: o.-itablishcJ, or which arc >till in Ji.«{pute. Inclui.hd in thi> No, 2 Schedule is the claim nf Air, II. Al'l'utt. {luitn'.r in the tunnel- firm »f Dnnean .Mac|)nuaM ..^ Co in the ('oiitract with tlic Nortlioin Colonizatiun Railway Company. The claim as iyled, amnunts to 5?34.t)r)l,5*) Aud special reference is luado to it in the contract (Clause 21) between Mae Donald and the Govoriiuieut witli a view tu saving the rights ot Abbott and at the riume time protecting the Govenunent I'rom any rccouiM- he might possibly have against it. The case has l(jn;j, bceu in litiLiati-nf between the former partners and at would .xeeiu iniiMirtant that before uiakiii;^ a iiaal .settlement with Mr. MacDonald (iovernment should taki- eare to be relieved from any possible future liability to Mr. Ahbott. One other class of claims remains to be noticed. They are tlio^e which have long been on fyle in the llureau nf the lite Railway Coiumi>.-in!it rs but concerning which no applicants have appeared in the course of the invcsgatioii now being brought to a closie. Mr. Mac l>onald either wlioUy ignores . • • « • • • • • • t • • 2i4 'i'hc whoK- iv>inTtiv.>!y .-uluiiittoiL Montreal, 8th May ISV.K To tilt' H(»N-. H. n. .TOLV. Commifsioiur Fiiblir Wori, kc, k^r. \V. .SUANLV, QCEBEC. R>J< n