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I'llINTED BY WHITEHEAP, MORRIS & LOWE, 167 k 168, FENCHURCH STREET, E.C. 187& THE "TIMES" AND ITS CORRESPONDENTS ox CANADIAN RAILWAYS. THE MONTREAL NORTHERN COLONIZATIOin RAILWAY COMPANY. £onlion : PRINTED BY WHITEHE^U), MORRIS Si LOWE, 107 & UiX, I'ENOHUUCH STREET, B.C. COl Po ■'jiimfTOiMM"- Ha ^^^mJH^BI^B^^^^^KIm^ "^^^^H|i cor -■ out L PREFACE. I have decided upon publishing in pamphlet form, the articles from the Times, and tlie correspondence respecting them, which are to be found in the following pages. In doing so, I have in one or two instances corrected minor errors of detail in figures, and have supported my statements in important particulars, by references to authentic documents. I have added to these a few statistics bearing upon the statements of the Tmu-s, and shewing the com- parative advantages of the Montreal Northern Colonization Railway ; which received a more appropriate name fi-om the Dominion Parliament last week; and therefore will be hereafter known as the " Montreal, Ottawa, and Western Railway." I also pubHsh communications to the Times from Mr. Edward Jenkins, M.P., the Agent Geneml of the Canadian Dominion, commenting upon the attacks of the Times ; and of Mr. Richard Potter, the President of the Grand Trunk Railway; on Canadian Railways and Railway enterprise, — And finally, I add a short correspondence with the Times, upon an incidentjil matter, arising out of Mr. PoTTER^s letter to that paper. H. ALLAN, Presideni Montreal, Ottawa and Western Railway Company. London, 2drcl April, 1875. '■:i " me j'ingiisn investor, we nope wi yr^iWe^^aiivimif'mjOnny c' t At the time of the publication of this article, I had been less tlian twr, weeks in Eng:and. No prosDectus of the proposed issue had been prepared ; the mode of negotiation had not been decided on ; and the inatter had not been y IVM iia 1 -• shewing THE MONTREAL. OTTAWA. & WESTERN RAILWAY. ■ THE ONLY DIRECT ROUTE BETWEEN MONTREAL & OTTAWA. ITS EXISTING AND PROJECTED RAILWAY CONNECTIONS ITS POSITION RELATIVELY TO OTHER RAILWAYS.- R E F E REMCES. KonJatal,(ntawa,,it, Wetterw Maihray Ctmnaiing KaHways — — PrmecUdi Connecting Raibyays.. „ OOur RcdJbtvoys - o ^^Hi. rr^ T y\ y T- y y ^;vo'' \ IT \ \ AR\t pmo, TORTAQi / 4- — "tC U N D A S \h* T / / 4- ^AKC CH4lf/»ij||nr >,russell1 LAkrACeUBT^ L0i STAHDUe til , Xm^/^ /* / / / 7 cMr//>i/*icH^p^;/,:i:r;^ LACHilTS aMiOLT / / C^, / .V s/ nk RUN kS*" >^ / / 1-1*. / Jl ,qui THE "TIMES 3? AND CANADIAN RAILWAYS The Montreal Nokthern Colunization Railway Company appointed me, in the end of February last, its delegate to England, to effect arrangements for raising a certain amount of the funds required for the completion of its line. After my arrival I was awaiting the report of counsel upon some of the legal features of the project before taking any definite action, when an article appeared in the Tlmef< of the 29th March, of which the followino- is a copy : — " Erie Bonds and Shares on higher prices from New York show an important "advance, and Canadian railway quotations v,ere likewise better, notwith- •' standing the exceedingly unsatisfactory statement of the Great Western of " Canada regarding the results of the past half-year, which shows a deficiency " of i'l 4,000 in the amount necessary to pay the debenture interest for the " past six months. * * # * The advance in Canadian Railways is also " difficult to account for, if it be not connected with an attempt to float bonds " of a resuscitate! railway scheme about which there has \)een a good deal " said of late. The disastrous history of railway enterprise in Canada in the 'I past and the miserable position of most of the existing lines may well make " some manipulation of their stock necessary as a preliminary to'a new effort " at borrowing— an effort which, for the sake of the Dominion as well as of " the English investor, we hope will prove entirely abortive." At the time of the publication of this article, I had been less than two weeks in England. Nc prospectus of the proposed issue had been prepared ; the mode of negotiation had not be n decided on ; and the matter had not been 6 brought before the public in any form whatever. And therefore, although it was suggested to me that the Northern Colonization Railway was referred to in the Times article, I did not believe it. For the description 01 " a resuscitated scheiTie," could not truly be applied to the project. And I did not believe it possible, that the Tiivi'M could be either so ignorant of what was passing in the linancial world, as to make an outrageous and ridiculous charge of rigging the market in Canadian stocks, without , any foundation for it in fact ; or so unjust, as to make it without some such foundation. The news received from Mr. Hickson two days afterwards, indicated with tolerable certainty, the real cause of the increased activity in Grand Trunk and Great YT'estern securities — and it is scarcely necessary to add, that not only had noth'ng of the kind charged by the Tlmex been done, — but that nothing of the kind had ever been thought of. Times, April Ist, 1875. " A telegram has been received by the Presidents of the Grand Trunk and " Great Western Railways of Canada from the General Manager of the former " line, Mr. Joseph Hickson, which runs as follows : — '"We have settled all rates and fares on equal terms over the whole field of " ' competition. They go into force at oi-ce.' This is a very satisfactory step, " and likely to improve the position of these properties if fairly carried out. " Oorapetition in a .sparsely-peopled country like Canada could do neither " railway good locally; for locally, and where ihe population is thickest, the *» " people, we believe, will not travel by rail at any price, and as against *' competing lines in the United States, the more thoroughly the Canadian » "system iswek", >d together the stronger it will be. At the same time, the - " mere fact that t^iis policy is the first requi^-ite to any solid improvement in the " financial position of even the strongest Canadian lines proves how hopeh^ss " any further competitive schemes must bo — schemes such as the North Shore " or the Northern Colonization lines, to which we alluded some days ago. " When tralfic is so small that the public are safe from extortion after all " competitive action has been withdrawn, it is madness to speak of more " railways. They would, at all events, prove ruinous to British investors, , " and cause the name of the Dominion to be in as bad rei)ute as that of \ ■' Honduras." I This article explains the rise in the stock market mentioned on the 31st March, and it reveals the fact that the Northern Colonization Railway was referred to in that article. But it does not admit the ground- lessness of the absurd suggestion, that the Northerjg^ Colonization Railway Company had been engaged in raani^ puiating the Grund Trunk and Great Western securities, to -.. >r. And that the ) in the scription applied that the issing in idiculous without bo make 'ed from tolerable Q Grand scarcely he kind ^ of the [•runk and he former •le field of tor}' step, ried out. I neither kest, the** against * Canadian > time, tlie ant in the hopeless ;h Shore ays ago. after all of more ivestors, that of riarket fiXCt ■ed to ound- tliern raani 08, to create a demand for their own bonds. If the Tliifefiliad been writing hnpartially, doubtless such an admission of error would have been made. At that time, however, I was by no means prepared to expect that the Company I represent, was likely to receive partial or invidious treatment from the Times : and I believed that it was only necessary to point out the errors which it had published, (as I supposed inadvertently), to have the matter at once set right. I, therefore, wrote a letter to the Editor, which was published in tlie Time.>i of the 3rd instant, in which I only remarked upon the two statements of th" T'nnc><, that the Northern Colonization was a competitive scheme with the Grand Trunk Railway, and that it was a " resuscitated scheme." The following is a copy of that letter, an(' its assertions as to the relative positions of the two lines may be verified by the accompanying map : — " 32, Lombard Street, April 1, 1875. " Sir, — I regret to find, from portions of the Money Articles of the Thaes " of this morning and of Monday last, that there exists some misapprehension " with respect to the j^^ontreal Northern Colonization Railway ; and I venture " to ask the insertion of my view of its real position. " The project which the Company is cjirrying out is the building oi a " railway 116 miles long, following the general course of the Ottawa River " from Montreal to Hull (which place lies with regard to Ottawa as Lambeth "does with I'egai'd to London proper), and the extension of this line seven " miles further, to Aylmej-, that being th( foot of the navigation of the Upper " Ottawa.* " The Company has the power to continue its line to Sault St. Marie and " to a junction with the Canadian Pacific Railway, but since the promulgation *' of tlie scheme of the Dominion Government, any further effort will be " confined to the section which may be nec-essaiy to obtain a connexion with " the lines subsidized by that Government, i>xtending from the Ottawa Valley " neai- Renfrew, to the terminus of the Canadian I'acific Railway, and thence " to French River, on Georgian Baj-. "The line of the Grand Trunk Railway follows the general course of the " St. Ijawrence, and at a distance from ^lontreal of about 112 miles it reaches " Pr.'scott, a point 54 miles from Ottawa city, but connected with it by the " Prescott and Ottawa Railway, running at right angles with the (irand " Trunk Railway, from the point of junction at Prer.cott. oti miles from the " Northern Colonization station at Hull. You will perceive, therefore, that " practically, the Grand Trunk and Northern Colonization Railways form two " sides of an isosceles triangle, with a base 50 miles long, the sides being of " nearly the same length — namely, from 112 to ll'j miles long. And it is not " mora correct to speak of them as competing lines than it would be to call " two railways competing lines, which run fj-om London to Liverpool, and to " Hull, respectively. " When the lines of railway now partly contracted for and partly subsidized " by the Dominion Government, extending from Ottawa City to Fcench River, * See Ap])endije A, pagr. 22. 8 on Georgian Bay ; and any .section required to connect with tlicir., are com- pleted : they will virtually be a prolongation of the line of railway ol" which the Northern Colonization Railway forms a section. And from the terminus of the system at French River, the Grand Trunk Railway and the Northern Colonization Railway with its cotiucxions, will still form two sides of an " isosceles triangle, each about 380 miles long, with a base about 180 miles " long, following the parallel of longitude down the map. " I submit, therefore, that the Northern Colonization Railway is not a " competitive railway with the Grand Trunk, in the sense in which the phrase " is used in the articles in question ; and that neither the fact that through " travellers between Montreal and Ottawa would take a direct line in preference "to one which does not approach within "(0 miles of Ottawa; nor the fact " that some portion of the traffic of the Westarn Lakes would probably come " over the Government line upon the Montreal Northei'n Colonization Railway, " can be regarded aa constituting it a competitive line, in any large or reason- " able sense. "As to the disparagement of the Noitheru Colonization Railway, implied " by describing it in the article of Monday as a resuscitated scheme — I tliijik " that the phrase is not correctly apiilitd to it. Since the work was oom- " meiiced in the autumn of 187'J, it has pi-oceeded steadily, with constantly "increasing strength, Oiirhig the working portion of the year— and, with all " necessaiy diligence during the winter. Nearly a million and a half of " dollars have been spent upon it in that interval. The work is being " vigorously firessed, and 1 have no reason to doubt that the road will be " steeled to Grenvillc, (half-way), by the 1st of July, and to Aylmer by the " Ist of October uext, with rolling stock complete. " I would merely further say that the Northern Colonization Railway is " regarded in the Dominion, by impartial persons, as one of the most impoi- " tant and valuable enterprises now being prosecuted there ; and it is largely " subsidized by the Government of Quebec, by the City of Montreal, and by "tie municipalities along its line. I will not enter into more details at " present, but if you disire to be satisfied as to the correctness of my state- " meuts, or as to the soundness of the proposal the Company intends to make " with regard tx) its bonds, I am prepared to furnish you with evidence upon " either or both points, and would prefer to do so m the presence of those " from whom you have derived the information on which your ai tides are " based. " Your obedient Servant, "HUGH ALLAN, " Prciiidertt Montreal Colon!::atlon Coinpauy.'" So far from dealing wiili the subject in the impartial spirit I had anticipated, the publication of my letter was prefaced by editorial remarks, in which, although the original charge of rigging the ^tock Market, and the subsequent assertions that the Railway was a " competitive scheme," and " a resuscitated scheme," were virtually abandoned; a new senes of objections was made.-^r-And these rest entirely on statements of fact so erroneous, that they would have been only ludicrous, if they had not been calculated to produce such serious effects ; nov*- only on the Northern Colonization Railway, but on all othjr Canadian 9 are oom- y ol" which e terminus Northern ides of an 180 miles is not a the phrase t through preference r the fact ably come 1 Railway, or reason- y, implied 3 — I think was coni- sonstantly 1, with all a luilf of is being d will be ?r by the lailway is )8t impor- is largely il, and by details at my state- 8 to make nee upon of those tides are N. ompauy." ipartial letter though ,nd the 9etitive irtually .-^And IS, that >t been on the (j;?.sibly " there is some on the route that might be capable of keeping a liue alive. ' We should Uiuch like to know where ? The country to the north is empty " of people ; to the south nearly so ; and in the south the line has, or will " soon have, to compete with the other more direct routes between the political " capital and Montreal. Such is the Canadian mania for railway buihling. " It would have to compete in the bulk of its wood-carrying with two rivers, " besides the Ottawa, the St. Lawrence, and one existing railway, the Ottawa " and Prescott, eastward ; while the Canada Central is fully equal to all the " trade west and south, and there are no passengers to carry. The 100,000 *■ odd of Montreal have little liasiness in Ottawa or the north, and have " ab^.ndant accommodation *or travelling in any other direction in which they " >vant to go. Let Sir Hugh Allan build his railway by all means, but with '■ Canadian money." It was impossible to permit the mis-statements con- tained in this article to pass unanswered. The Northern Colonization Railway Company had issued no prospectus ; it had not made public any statement of its situation, its connections, or its expected traffic ; and there was nothing before the public giving any inforraaticii on any subject connected with it, except my letter of the 10 I i i 1 1st inst., which was of a hiiiited and negative charac- ter. If the particulars of the project had been published, there would at least have been the statements of the Company to be compared with those of the Times. The article of April 3rd was therefore not a discussion of any plan or project, conceived or submitted b}'^ the Company. In it the Times took upon itself to describe the project ; and, upon its own description of it, to give it an emj)hatic condemnation. To have reraained silent would have been equivalent to acquiescing in that description, and of necessity in the conclusions of the Times. For, if it were true that there is no business, either between the two termini, Montreal and Ottawa, or along its route; if the country nortli of it is " empty of people, and to the soutli nearly so " ; if " Ottawa is as much out of the region of business as Washington " ; if the trade of the Ottawa district " chiefly lies at Prescott " ; if the line has, or will soon liave, to compete with " the other more direct routes between Ottawa and Montreal " ; if it has to " compete in the bulk of its wood-carrying with two rivers, besides the Ottawa, the St. Lawrence, and one existing railway, the Ottawa and Prescott eastward " ; I will admit that the T'lTiics is right in thinking, that the moderate loaj. which the Company may hereafter ask for on its first mortgage bonds, should not be granted. But if it be the fact, as I proved in my letter in answer to that article, that these statements, and other minor ones equally incorrect, had no foundation whatever ; and that so far from being true they were as nearly opposite to the truth as language could make them ; I claim that 1 was entitled to receive from the Times either an admission of its error, or the publication of my statement in reply. The following is that statement : and the subsequent article of the Tinies, published on the 6tli instant, will shew in what manner it was dealt with. To the EdUor of the Timks, Sir, —I am much obliged by tlie publication of my letter of the first instant, and 1 am pleased to perceive by the remarks accompanying it, that you do not strongly insist upon the pro))ositions upon which your two former articles rested (passing over the allusion to Honduras for the present). The gist of those articles was, that the Northern Colonization Railway was a competitive railway with the Grand Trunk Railway; and that it was a 11 re.suscitatetl achi-me. in a disparaging sense. My letter wan only directed to the correction of those two errors ; and in your article of Saturday you confine the fii*st of these assertions to *he North Shore Railsvay, which is true only in so far as its termini are in Quebec and Montreal ; but which does not apply to the tracts of country traversed by the North Shore Ruilway, no part of which is served by the Grand Trunk Railway. But your article states that I admit that the Northern Colonization Railway is " a section of the great scheme involving the construction of the Canadian Pacific, and the North Shore Line." I must say that I fail to perceive any such admission in my letter, and it would be incoi'rect if it were there. The North Shore Railway has nothing to do with the Northern Colonization Railway, either financially or geographically; and is in no way necessary as an outlet for it. There is no " great scheme," nor any schemeat all, for the construction of these railways as a joint or connected undertaking. Montreal is virtually the head of ocean navigation, and therefore an independent and sufficient terminus for an intei-nal sy •^em o^ railway com- munication. And at Montreal, the Northern Colonization will be in tl.e same position with regard to the eastern section of the (irand 'IVunk Railway, and to the North Shore Railway ; except th,;t the termiiuis of the latter will be more convenient to it than that of the former. Your .sugge>!ti(jn therefore of the absurditj- of believing that where " one Railway does not pay two may," does not apply directly or indirectly to the Northern Colonization project. As to tlie connection of the Northern Colonization with the Canadian Pacific Railway, I cannot see how that, if it existed, would affect the question of competition with the Grand Trunk Railway; and as, by means of it, the Northern Colonization would connect the Canadian Pacific w'th ocean navigation at Montreal; such an arrangement would affect most favorably the commercial merits of our project, to which the article of Saturday is chiefly confined. As to the resuscitation of the scheme, the statement that " it was first heard of in 1872 " neither supports the assertion, nor contraditjts any state- ment of inine. Railways are not built in a day, and their plans and resources arc necessarily discussed, before any attempt is made to utilise tliem. In poiTit of fact, no effort to get money for this Railway was made or thought of in 1872. It was not till the beginning of 1873 ; after the Statute of the Quebec Legislature was passed confirming the subscription of a million by Montreal and other municipal snbscriptions ; th&t the nxatter came to be considered; and until now, anything which has been done in that direction, has been merely informal and conversational. If, however, your remarks had been confined to these two points. I should not have further troubled you, as I think they are sufficiently disposed of by my former letter, and by your indirect withdrawal of your former statements in those respects. But your article of Saturday enters into the commercial piospects of the Railway, upon assumptions of fact so erroneous, that I feel eouipelled again to request from you an opportuinty of correcting thom. I am emboldened to do this by my belief, that you are writing of these matters 2?Ki.s/-judicially, in the jiublic interest, and neither from par'^-ulity to one Company nor hostility to another ; and you must pardon me if the task of making these corrections occui^ies some space, for neither you nor the public would be satisfied with a simple contradiction of tliem. You say the Northern Colonization Railway runs to Ottawa " with a population of some 25,000, and as much out of the region of business as Washington." The Railway really runs to Hull as its principal terminus. Ottawa and Hull township had a population of about ;J0,000 at the last census, 12 nearly five years ago, which is now j)rohab1y nearer 40,000. Ottawa is the Beat and centre of the enormous hunbcring butjiness of the Ottawa valley, with ])robably the most expensive saw and other wood manufacturing mills and machinery in the world ; to the beat of my knowledge, certainly the largest ill America; and its progress during the last five years, has been greiit'jr than that of any other town in the Dominion. You say, what trade the district has, chiefly lies at " Prescott ;" while in fact, as every Canadian knows, Prescott — though one of oldest small towns in Ontario — is little more than a village, with 2,617 inhabitants ; and with no hnniness at all except a few retail shops. And it in no sense formf; a pait of the Ottawa District. ^'^ou say, Ottawa "already has a railway through a more populous couiiti-y." It has in fact two railways within twelve miles of each other, but neither of them is in the direction of Montreal. The Prescott and Ottawa, to which T think you refer, runs about due south, while Montreal lies about due cast from Ottawa. The other railway is a little further westward. The jiopnlation through which the Northern Colonization Railway runs, and which will be exclusively served by it, amounts by the last census to 121,75:5 or 88!r! persons to the mile. For the last 60 miles its coui-se is along the front lino of this ])Opulation, and within the breadth of the Ottawa river of the counties of Prescott and Russell, which are not served by any railway towards the eastward. Adding a fair proportion of these, un-i excluding the populations of Ottawa and Montreal, the pi'oportion would exceed 1,000 persons per mile. If the population of the termini be added, the proportion would be above 2,000 persons per mile. The entire population by the same census through which the Prescott and Ottawa Railway passes, induAivi] Prescott, is 48,466, or about 8!'7 persons to the mile. And the two largest of the three counties whose population is included in this estimate, is also traversed by the other railway to which T liavc referred, ruiinirig i:i the t;a.mc general direction, and having the same terminus at Ottawa. Thus, it is the Northern Colonization which runs through the most populous country, and not the Prescott and Ottawa ; and, unlike the Prescott and Ottawa, it has the monopoly of the railway traffic of the country it traverses, and between its termini.* You say the traffic from Ottawa can be better conducted from Pre«cott, than by way of Montreal, where the Northern Colonization has no bridge. One would suppose from this, either that the St. Lawrence does not exist at Prescott, or that there is a railway bridge there ; especially as you say the Prescott and Ottawa is in direct contact with the American system. On the conti-aiy, the Prescott and Ottawa has no bridge, and its traffic crosses the St. Lawrence hy a ferry. But in any ease the Northern Colonization, which runs eastward, could not pi-etend to caiTy traffic which is intended to go south from Ottawa ; any more than one would suppose the Prescott and Ottawa, which runs direct south, could pretend to carry freight and passengers going direct east. You say there is no business between the two termini "worth competing for," and that there are " no passengers to carry." — How is it then that a j'ompany running two large steamers a day both ways, between Montreal and Ottawa, with 13 miles of railway connecting them, practically for pantieuyer traffi^c alone ; has for years paid dividends among the largest in the Dominion, though they occupy twelve hours in the transit? While passengers reach Ottawa fi'om Montreal via tl Prescott and Ottawa Railway in an average of • See Appendiw B, page 23. I 1 1 13 wa is the w& valley, ring mills fcaiiily the hn s been " wliilc in lall towns id with no f; a pai't of populous ich otiier, (scott and Montreal le further n Railway ist ceusus course is le Ottawa ;d by any rhese. uiiii on would I be above 3 Presc'ott about 8! '7 lies whose cr railwny nd haviiiu; t populous iscott and traverses, Presoott, uo bridge. )t exist at )u say the I. On the ;rosses the on, which ded to go 3Scott and jassengera competing len that a utreal and pasdeiiger Dominion, a;ers reach average of nine hours, and, therefore, to some extent adopt that ron. i, the Montreal Northern Colonization Rjiilway will easily run express trains through in four hours, and the increased facility will beget increased traffic. Besides this, there is the enormous freight traffic both ways, engendered by the Ottawa trade, comprising supplies of all kinds for the thousands of square miles of himbering area in the Ottawa region, of which Ottawa is the centre ; and increasing quantities of sawed lumber for export from Montreal to the West Indies, South America, and elsewhere. The manufacture of deals is dimi- nishing, but that of the lighter qualities of sawed luml)er is increasing, and 11 foreign trade is rapidly growing up. 30,000,000 feet were exported from Montreal in 1872 again*t 16,000,000 in 1871. This traffic requires no btidge, though the Grand Trunk has no monopoly of the "Victoria Bridge ; and if it had, being now of the same gauge, would, doubtless, gladly forward our freight cars over its line. The lumber manufactured in Ottawa, in 1871, amounted to 198,000,000 feet. That manufactured along the line of the Northern Coloni/zition Railway in the same year, amounted to 105,000,000 feet.* The logs from which this lumber is manufactured, are collected from the enormous area drained by the Ottawa and its tributaries, mainly to the northward ; and of all the trade thus created north and west of Ottawa, that city is the main-spring and c<-ntre. Moreover, large quantities of square timber are manufactured in the same region. The total tonnage of freight ))asi.sing through the Ottawa canals in the year ending 30th June, 1874, was 518.767 tons. The first sixty miles of the Kiuh.ay from Monti-eal, traverses the most tliickly settled and prosperous part of Lower Cariada, from which the supplies of farm produce, and from the rear of which the supplies of wood for the Montreal markets are almost exelu.xively drawn. The mineral wealth of the north bank of the Ottawa is vv<-ll known, and is now being utilised as respects plumbago and iron. As tnnber disappears, agi-iculture takes its place, the Gatineau being now settled in that manner for upwards of 100 miles to the north of Ottawa city. Is there any line in Canada, or aiiy section of similar length of either of tlio great Canadian Railways, that can show such a combination of the elements of traffic as this line affords 't \ I say, emphatically, that there is not. And when the time comes, I shall be prepared to establish what I claim for it. to the satisfaction of any one who will judge of the subject impartially, whatever prejudices may have been created in his mind by imperfect informa- tion, or by misrepresentation of the facts. You will observe, however, that I have only referred in this discussion to the local traffic of the Railway, because I felt I had no right to do more than correct the erroneous statements in the article, which statements only refer to the local traffic. What can be -aid of the advantages to be derived from tho connection of the Northern Colonization with the Pacific Railway, and the subsidized portion of the Canada Central is obvious enough; but as this subject is not mentioned in the article, 1 shall leave that part of the matter to the judgment of the public, and for future development. The other portions of the aiticie recpiire but little reply. A momentary reference to the map, is nearly of itself sufficient for that purpose. Y"ou say that our railway will have to compete, in the bulk of its wood- cany ing, w^ith "two rivers, besides the Ottawa, the St. Lawrence, and one existing railway, the Ottawa and Prescott eastward." 1 do not understand * Later returns make the quantity of lumbor sawn last year at Ottawa and alo.ig the lino of railway between Aylmer and Gronvillij, si.v hundred and forty milHon feet B.M. t See ^ApjpendiiB C, 'page 24. 14 what rivers yuu i«'f('r tu. Tlii'ie Ih no rivor in Caniula running eustwanl I'loui Ottawn, except the Ottawa river, and tlit-rofor'j no river that carrieH wo«mI eastward exccipt that river. The St. Lawrence does not approach witliiii 54 miles of Ottawa, therefore does not cairy one square toot of lumber east- ward from Ottawa, except in so far as the Ottawa river traffic passi's along a ])ortion of the St. Lawrence, from the point where the Ottawa enterr« the St. Lawrence, alongside of the island of Montreal. The mention of the othei- two rivers must, I think, be a misprint; as it is impossible that any on< could intend to sny that there are any such rivers carrying freight eastward between Ottawa and Montreal. The attempt to make the Ottawa and Prescott road, an eawtcni lumber-carrying railway; in contradistinction to what you call the Canada Central, can be settled also by a glance at the map. As I have more than once said, the Prescott and Ottawa runs directly south : it debouches upon the St. Lawi'cncc at about the same distance from Montreal as it leaves OttaAva: and its southern terminus is within 12 miles of tlie Canada Central terminus, or rather that of the Brockville and Ottawa, which is the outlet of the Canada Central. Yet, in your article the Canada Central is represented as carrying freight, south and west, and the Pi*escott and Ottawa as carrying it east ! You say that the line has, or will soon have to compete with " the other more direct routes between the political capital and Montreal." I should greatly like to know which these aro, lous stories about horses in Canada freezing to death, whiie they ai*e taking breath as they are ascending a hill, and the like, — as it did on the 10th inst. ; it cannot be held responsible for the correctness of such absurdities ; though one may doubt the judiciousness of their selection, even as padding. But when it makes state- ments editorially, equally absurd, and equally incorrect in point of fact; I think everyone injured by them has a right to demand their correction. And a news- which makes such statements, is fairly open to paper 17 f charges of injustice and partiality, if not of actiial bad faith ; if it refuses to acknowledge its error, or at least to allow the complaint of the injured party to be heard. If any sufficient reason appeared for the refusal to publish my letter, of course I should iiave had no just ground of complaint ; but I maintain, not only that there was no sufficient reason, but that the reasons given by the TimcH are an aggravation of the injury, and are as dis- ingenuous as the articles themselves. My letter is not a •' most elaborate prospectus of the scheme," nor a prospectus at all. It gives no particulars of the sum the Company may desire to borrow, of the rate of interest it will propose to pay, or of any other detail of any loan it may intend to ask for. It speaks of no subject in connection with the project, except such as had been previously wrong- fully dealt with by the Timrs articles. What kind of logic, or common sense, or common fairness, is there, in a journalist assailing a project before it has been communi- cated to the public ; denying seiiafim its possession of each of the qualities that would entitle it to the consideration of the public; and having thus forced its friends into the arena, refusing to publish their proofs that it did possess those qualities, on the ground that those proofs constituted a prospectus ? But this is not, according to the Times, its final and decisive reason, for not publishing the refutation of its statements. The main reason is, that the " subject has already been sufficiently dealt with." I fail to perceive where it is dealt with at all, in the modern acceptation of that phrase. It is the rules of " Jeddart justice " by which it has been " dealt with " in this article, and they are not in accordance with nineteenth century ideas upon such matters. The mode which the Thnotn adopts in the article, is to heap upon it a series of depreciating assertions, every one of which that is material, is grossly incorrect; then to refuse to receive a contradiction of them, on the ground that by simply stating the charges, the enterprise was "sufficiently dealt with:" — and then to condemn it without a hearing. Even if the Times was not disposed to pubHsh my letter, 18 it might at least have acknowledged its errors in geo- graphy, when pointed out on the map. But the only allusion it makes to its former statements, is the reiteration of the assertion that there is no traffic for railways in the Dominion. In another place it had stated that where population is thickest, the Canadian people do not travel by railway ; but this seemed so trifling and absurd, that I did not think it worthy of any notice. Now I would ask, if Canadians never travel by railway, where do the means come from by which Canadian railways pay the interest on their indebtedness ? Perhaps the Times thinks there are no railways in Canada except the Grand Trunk and the Great "Western ! I see the bonds of some Canadian Railways quoted at moderately fair prices on the stock lists, which doubtless would rank still higher, if in certain influeixtial quarters, Canada were not systematically decried. And, moreover, the returns of the Grand Trunk Railway show that even thai: Railway earns a sufficient nett revenue to pay interest on a larger debt per mile than the Northern Colonization Railway proposes to crente. Although its averages of population, and of traffic, will not equal those cf the Northern Colonization.* But really such statements as those of the Times as to the indis- position of the Canadian people to travel by Railway, are too absurd and puerile, to receive any serious or extended notice. But the Fmrs has another reason for condemning every new Canadian railway, and for refusing to be corrected as to its geography and its statistics. And this reason is a fair specimen of the spirit with which Canadian enterprises are " dealt witli " by the Times. The article of the 6th instant goes on to ^y, that, supposing there were any ti'affic for railways in Canada, "their owners are exposed " to the constant danger that the Dominion Parliament ** may grant a subsidy for a competitive railway to run half " a mile off. In this way the Canada Southern has been " built, to the ruin of the proprietors of the Canada Great " Western." Here is a grave charge against the Government * See Appendix D, pagi- 25. 19 of a dependency — certainly of some importance — of reckless disregard of private interests, and equally reckless and useless expenditure of public money. One would have supposed that such a charge could not be made ; not merely by a paper like the Times, but by the most insignificant Transatlantic sheet ; vnthout some enquiry, some investiga- tion of the facts, and some at least apparent foundation for it. Yet, in this statement, ignorance of locality and of facts, are alike conspicuous. The geographical part of the assertion I leave again to maps. The financial one is best disposed of in the language of a familiar book of reference, as easily accessible here as in Canada, viz., Tackaberry's Atlas of the Dominion, from which the following is quoted : — " Financial — Much financiering ability has been displayed " in raising the necessary funds for the construction of the " road (Canada Southern), as it has no land grant or other " subsidy either from the Government of Canada or of " Ontario." Moreover, as Mr. Jenkins afterwards proved, it was the Great Western which could with most propriety be accused of factious rivalry ; since the charter of the Canada Southern was granted before the charter of the line upon which the nearest competing track of the Great Western was built. Mr. Potter afterwards abandoned the charge against the Government of subsidizing the road, but insisted that it was aided by local municipalities, characterizing it as a *' subsidized " road, &c. But a reference to the authority just quoted will show, that the entire aid granted to it by municipalities amounted to only £80,000, which may certainly be called a subsidy, but is not of sufficient importance to justify the description of a " subsidized Railway " to be applied to a Railway with a capital of £;],500,000. Like many others of the statements made in depreciation of Canadian Railways, such a description is deceptive to the last degree, without being absolutely and literally untrue. As, therefore, I find that the enterprise in which I have *' f 1 20 interested myself eannot make itself heard through the same medium which conveyed its condemnation to the public ; T have so much confidence in the fairness of the British people, that I am now taking the best means in ray power to place the facts before it : though I am aware that they will not reach thousands of persons, who will remain convinced of the correctness of the information of the Times, and of its disinterested patriotism in warning the public against unsafe investments. I shall accompany this statement with a few facts and figures, taken mainly from oflScial documents, which will shew that I am endeavouring to discuss this matter fairly. In some respects they are not as full as I would wish, as I have not all the references at my disposal, that I could have obtained in Canada. And if the Company should decide upon off -^'rir - a loan upon the English market, there will doubtlf a prospectus prepared, and published, which will set forth its claims to notice. If the English market la resorted to, it is simply because in this old and wealthy country, money is cheaper than with us ; and it is intended to pay what, according to English ideas, is a liberal return for it. The Company does not expect favor for its loan on sentimental grounds ; nor assuredly did it expect opposition to it, from such a sentiment of hostility to the country, as appears to animate the Times. Any motive for such a feeling certainly seems undiscoverable ; and the conduct of that paper may perhaps be accounted for by supposing, that some interested, prejudiced, or unprincipled person, has abused the confidence of the writer of the articles. Be that as it may, however, both as being interested in the railway now under discussion, and as a citizen of Canada, I protest against the conduct of the Times, I protest against its unfounded statements respecting the Northern Coloniza- tion Railway : against the tone and attitude it assumes with regard to other Canadian enterprises; and against the implied proposition which runs through its effusions, tha\ no Ca-nadian project is entitled to a hearing in the EngliF^; money market, until the Grand Trunk Railway is a conimercial success- And I merely ask from those who 1 21 may receive this brochure, a dispassionate consideration of the statements of the Xlmas : and a comparison of those statements with the geographical features of the country apparc;nt on any map, and with the facts and official statistics, applicable to the various matters referred to in this controversy. - HUaH ALLAN, President Montreal, Ottaiva ^ Western Baihoay Go. London : 32, Lombard Street. 22 APPENDIX A. Extract fron Tackahemfs "Atlas of the Dominion," sJioivmy the connection if the Northern Colonization Railway, at its terminus at Ayhner, with the steamers oh the "UPPER OTTAWA." " The Union Forwardiig and Railway Company -r- ; incorporated in "1859. * * * * " OranibuBses leave Ottawa City Hotel every morning during the week " for Aylmer, distant 8 miles, * * * * to meet the Company's ** steamers, one of which leaves Aylmer daily at 8'30 a.m. "These steamers are all first-class passenger steamers, replete with " every modern convenience, * * * * viz.: " Anne Sisson Captain Findlay. "Oregon „ Cowley. "Alliance „ Murphy. " JL..on Gould „ Bolton. " Pontiac „ Blondia. "Emerald „ Couvrette. "Pembroke „ Duggan. " Snow Bird „ Beattie. " Pembroke is reached at 9.30 p.m. * * * * whence steamei-s " leave daily at 7 a.m., for points further up the river." 2;! APPENDIX B. m COMPARATIVE STATEMENT. Statement of population served by the NORTHERN COLONIZATION RAILAVAY, as sliewtv by the census of 1871 : 1st. Montreal City (as against 90,323 in 1861). . 107 225 Ottawa City (as against 14,669 in 1861) .. 2l',545 2nd. Counties tmversed by the Railway— ' ^^^''^^^ Y'^'^Y''^'' 25,640 Laval g'^j,2 TeiTebonne ""O ""Ql Two Mo an tains 15615 Argenteuil ...........!..... 12806 Ottawa County (as against 27,757 in isei)... 38,629 3rd. Counties fronting on the Ottawa River served 121,953 by the Railway : — Prescott -in iT-An B--U ;.;:::::::;;::::::::::::::::::::::::: \liZ 35,991 Total population 286 714 Statement of popuJafion in the Oomttirs traversed by the PRESCOTT AND OTTAWA RAILWAY: - Grenville 13 197 Leeds and Grenville 13.530 Carleton 21739 Ottawa City ^.''^'^''^^'^^'^^'^'^^^'^^'^^'^. 21^545 Total population ijtq rvyx \.7^^ £^""/K« «* If «^« and Grenville and Carleton are also traversed by the Brockville and Ottawa Railway. Total population per mile. Northern Colonization Railway, 2,(.96 persons. Total population per mile, Prescott and Ottawa Railway ... 1 ,296 24 APPENDIX C. Comparative statement of ^Jopidation served by the Grand Trunk Railway from Montreal westward and from Quebec eastward for lengths of line similar to that of the Northern Oolonization Railway : — GRAND TRUNK RAILWAY, For about 154 miles, taken as being served by 144 mUes of Railway Montreal 107 225 Hochela^ '^ZZZ'.'.'''.'''. 25,640 Jacques Carticr 2j ^79 Soulanges .'."."".'I'...'.".".".'.".".'." 10^808 Glengarry 20,524 Cornwall 7,114 ^^■"'•"^ont ;;; ^^g^y Dundas 18,777 Grenville "3107 f'°c^^^ille '.ZZ'.Z.]ZZ'.'.'.'.'.'. 10,475 ^^^^^ 20,716 Total population 257,528 Total population per mile: Montreal to Lans- downe, taken as served by 144 miles in length of Grand Trunk Railway The same Railway, from Quebec, Eastward, 136 miles; taken as served by 126 miles of Railway — Quebec to Riviere du Loup. Quebec Levis Levis Bellechasse Montmagny Half of Temiseouata 59,699 11,810 13,021 12,117 13,555 11,246 Total population 121,448 Total population per mile Eastward from Quebec of Grand Trunk Railway NORTHERN COLONIZATION RAILWAY. Total population per mile, Montreal to Ajlmer, including branch line to St. Jerome, on the NoR'rHERN Colonization Railway.... 1788 964 2,096 ] inc Enj stit r K tioE and for por T repo newj Equ) ] 25 APPENDIX D. statement frou Orand Trunk Builu,a„ RepoH. 30«, Dec^i^r, 1874 shewing net rovenue for th^ /«»/ 7 "'"/, 10/*, milefithey,nrJ ''''' ""' "'^ "^ """"•*'" ^"• ^^ 3UtTs74 "".^ ^t^K "!'■"« December £ . ^ ^ 200,279 Total net revenue. £634,608 Total length of Grand Trunk Railway- in- '" ■ eluding leased lines, 1,388 miles. ' ^et revenue per mile for the year, about 4^ak<, a a EquaItomterestat5percenIpeVtnn\n'^ ' »y,iaO per m?le. the Northern Colonization Railway Com- D^rinl a""'"''™'' '» create, is £5,630 S,.7lV;"''",'''„'""'"''''S' at the rate of the Grand Trank Railway, would p,ay 8| inclU:drtr'ne't»„eTr/'r,f"'-«l'' "' — »>». ^Lould be Engineer's Report, fct t wa Tnnli .d ™ ?",' "T"*. " "^^^'^ ^v the *-^n« 3tee, Llsand i^^d^^rf^^ir'^ird totVbS.:!™^- tioTta^r^'Tft' "ZiiTStrLrinZ'"' ^[ 'ir,^-"-- ^---.a. aad an a™,age of 79 per cent „f°'' "'* "" "«»'= improvements : for the year, ^iU be snE-nT.; oovf, aH ™™?' '""'' °^ ''r ""'""'^'J pc^cent^wil, be „„ ample ^^^o..ZZt:^Z^7:Z.±'::i^ "« newa s. would amount to, per mile . , . ooi . « Equal to 5 per cent, on a capital of £6,280 per mile'. ■" ^^^^ ^ ^ 26 The balance assumed as net revenue in the report was applied as follows :— ^ To Postal Bondholders £32,877 „ Interest on lands 3,611 8 7 „ Interest on hired cars 10^006 17 „ Mortgages, temporary Loans, Bankers' Balances, &c., &c 14,826 4 „ On B. A. Land Company's Debentures... 1,233 „ On Seminary Debentures 1,232 17 6 „ On Island Pond Debentures 5,400 „ Half-yearly Instalment on Portland Sink- ingFund 5,136 19 8 „ Atlantic and St. Lawrence Lease in full 101,157 4 1 „ Lewiston and Aubuni Railway Rent 1,541 1 11 „ Detroit Line Lease in full 22,500 „ Montreal and Champlain Bond Interest ... 24,162 3 10 „ Buffalo and Lake Huron rent 65,500 „ 1st Equipment Bond Interest 30,000 u 2nd „ „ „ 30,000 „ 5 per cent. Perpetual Debenture Stock ... „ Balance carried to Dividend Account 81,633 16 1 £434,329 tl ai B tl hj G ps sa an in rai 27 APPENDIX E. MONTREAL, OTTAWA AND WESTERN RAILWAY. DESCRIPTION OF LINE. MwVlor::;"Sfg^ f-^-/- the only projected of Montreal anTottail? ""dependent connection between tL Cities Its total length is as follows — H„rri,tS"'' ^°'"'°t °"^™^ ''1""* • St. Therese to St. Jerome, Branch Line °.'.. Total length of Railway 116 miles. 7 „ 136f miles. CANADIAN CAPITAL. 1. Stock Snbscx-iptions ^^^^^^^^ 2. Bonus 3. Aid in Cash from theCovernment'of the Provmceof Quebec 5,000 161,000 LAND GRANT. panics interested retaW the land^ rZ '5 ?o«f deration ; the Corn- satisfied their expeSons Thfs CnT''''^' '^ .^^°"^ ^' ^^^«^ ^^"y amounts to 686,525 a^es a narticML ^^^^ ' '>? ^° *^^« trad^ in Appendix F, page 31 P^'"'"''^^" description of which will be found BOND DEBT. 28 COST OF CONSTRUCTION. J Original contract price, ■with Iron Rails and Wooden Bridges Extra cost of Steel Rails and Iron Bridges . . . Cost of construction, including extra cost of Steel Rails and Iron Bridges of 50 feet span and upwards £869,660 87,662 £957,322 Passenger Traffic. • The population directly served by the Railway, numbers 286,714. The estimated receipts from Passenger Traffic at $1.50 per head, will give a revenue of £86,000 General Freight. 100,000 Tons at §1.20 24,000 Lumber. 100,000,000 Feet B. M. at $2.00 per 1,000 40,000 Fire Wood. 150,000 Cords at $2.00 per Cord 60,000 Mails and Sundries 4,000 £214,000 Assuming the above Estimate of Traffic of £214,000 to be correct ; and that 05 per cent., which is a liberal allowance, will cover operating expenses, the net profit will amount to £75.000 or very nearly 10 per cent, on the Bond debt, without taking the land grant into consideration. The above calculation is based on a careful consideration of the different sources of traffic — the very large tonnage of freight — and the denser population of the section of the country traversed by the Montreal, Ottawa, and Western Railway, as compared with other portions of the Dominion. And due regard has also been given to the proportion of the traffic that will probably be carried by water. As the population, manufacturers, and natural products of a country, constitute the sources of traffic for railways ; and, as the manufactures and natural products in different parts of the country, bear about the same relative proportion to the population ; it follows that the proportion of the actual Traffic of existing Railways to the population, is a safe basis of calculation upoi. which to estimate the traffic of similar proposed Railways. m I 29 The following calculations are based on reliable geneml data, and aiford proof that the above estimate of traffic is not in excess of what may be expected : — First. Estimate of Traffic of the projjosed road, based on the average receipts per head of population in 1871, of all the Railways in the Oominion, according to the returns furnished to the Government. The average receipts from Passenger Traffic, per head of population, were ^1.27 ; applying this to the population served by the line of proposed Railway, viz., 286,714, the resultis £73,000 The avemge receipts from Freight, per head, were S2.73, making the revenue of the proposed Road from that source equalto 156,546 The average receipts from Mails and Sundries, per head, were 5^0.14, making the revenue of the proposed Road from this source equal to 8,026 This process would give a result as the total Traffic of this Kailwiiyof £237,572 Second. Estimate of Earnings, based on the average mileage traffic of the more important Railways in the Dominion. The average Receipts of these Railways per mile per annum, were £1,366 in 1872. This sum, applied to the mileage of the Montreal Northern Colonization Railway, will give a gross revenue of £187,142. But it will be recollected that the population and traffic per mile of the Northern Colonization Railway, is greater than that of any railway in the Dominion. erent enser treal, f the the jntry, and same of jasis losed Thii'd. Estimate based on tl.e population along the proposed Line of Railway, as compared with the population along the existing Railways in Quebec and Ontario, above referred to. As the fairest mode of making the comparison, the calculations are based on the population in the divisions used in taking the last Census, through any portion of which the Railways run. The population in the Census Divisions along the Lines of Railway above referred to, averages 1,204 persons per mile of Railway, and the population per mile along the Line of the proposed Railway amounts to 1,833 persons per mile of Railway. The aveitige Receipts of all these Railways amounted to $5.66 per head per annum; which rate, applied to the population per mile of thq proposed Railway, will give a gross Revenue of £207,486 per annum. 80 Fourth". AVERAGE, fol W- ^^' °^ *^''' estimates, made from entirely diiferent date, is as „ .^'"T^f^if *^® ^^f^'J on receipts per head of the pnne>pa RaUways m ^^^ ^237,572 i' T^-l. i'^^"" on mileage traffic 187142 4. uitto ditto on Revenue earned bv Northern Railway of Canada ...^ 247,018 Total revenue by four methods £879,218 'o Average of the four methods of proof, say . . . "19,804 31 APPENDIX F. ExtraciH from OJUciol Reportu, a\iil other document i^, nhowing the value of the Land Grant coiuprlxed in Block A. DESCRIPTION OF TRACT. Block A contains 1,827,400 acres, or about 2,855 square miles of land, of wliicli 686,525 or about 932 square miles, is granted to the Northern Colonization Railway. It is traversed by the Ottawa River and by chains of small lakes, or expansions of streams, emptying into it in such a manner as to afford great facilities for transporting timber; including stretches of navigable water, in all 86 miles long, within the block. And the 70 miles of unbroken navig; ion of Lake Tcmiscamingue reaches within 8 J- miles of broken wat( , of the navigable waters within the block. The Ottawa River has been surveyed for 200 miles above Block A, and is reported to extend 150 miles further. fCondensed from Report of A. J, Uussell, Official Manager of Orown Timber Agency, Ottaioa, made by expresn permission of the OovernmentJ " Within the Block, its waters present very great facilities for the " movement of supplies into it, from the manner in which they intersect " it in different directions. It is easily practicable, and has long been the " established route of communication used by the Hudson's Bay " Company. Mr. Russell's same Report. — " I hold the adjacent lands to Block A. I have manufactured timber " on these lands during the last two winters, and brought it to this " market. It arrived here (Quebec), about the middle of July, and " was about ten weeks coming from the place of manufacture. " Although this place is upwards of 300 miles from Ottawa City, it is " more accessible than a g^eat deal of lands not so remote, and lumber " can be brought to market quicker and at less cost. The Ottawa is " navigable for steamers for its whole length, excepting in the broken " reaches, and steamers are now upon its waters almost to Lake " Temisoamingue." {Published Letter from Mr. John Boche, Quebec, ^^one of our moat trtensivo lumber merchants, possessing an erperienae of many years, and the most implicit confidence to be 2>l<^ced on the statements of his letter." Ofjieial certificate of Mr. P. Oameau, Mayor of Quebec.) 32 QUALITY OF LAND AND TIMBER. The Commissioner of Crown Lands for the Province of Quebec, in his Official Report to the Legislature to 30th Jnne, 1872, describes Block A as "comprising the best wooded and most accessible part of the " territory watered by the Ottawa above Temiscamingue." And he adds that the bonuses received by the department for the license of timber limits in the neighbourhood of Block A " are about the highest " received " in that province. — Be^ort of Commissioner oj Crown Lands, to SOth June, 1872. « " As far as has been seen by explorers, this Block seems to contain ' on an average as great apropoi+ion of arable land as is commonly found ' in the Upper Ottawa Country. * * *" " In speaking of the value of the bnd fit for cultivation, it is to be ' remarked that it would be quite a mistake to suppose that it is in a ' locality where settlement is not likely to take place, owing to its ' remoteness, or from inferiority of the climate, owing to the northerly ' latitude. On the contraiy, the country around the head of Lake ' Temiscamingue is the most likely place on the Upper Ottawa, above the ' flourishing town of Pembroke, for the site of extensive settlements, ' because by far the greatest extent of continuous good If nd is to be ' found there, and much of it, the richest land known in Canada. Some of ' the best of this adjoins this Block. ** * * As for the climate, it is as ' good as that of Sorel or Three Rivers, though in the latitude of ' Kamouraska, for the climate of Fort Temiscamingue, though in the ' latitude of Isle aux Coudres, closely resembles that of Montreal ; the ' mean heat of summer at Fort Temiscamingue being 66° 20 ', while that of ' Montreal is Gb'^ 55 ' ; and that of the whole vear being, at the former ' 39° 49', and of the latter 42° 6'. * * * " My approximate estimate of the present value of the Block is ' 84,229,606.00." But he adds that the value of this Block may be more correctly estimated by making a certain addition, which '' addition will ' increase the total value to .1^5,228,965.00." " To exhibit approximately the rapid inci'ease of the Ottawa lumber ' trade, I may stft^e, that the revenue from my Agency is rapidly increasing. ' It was but little over $200,000 annually ten ye? rs ago, while last year ' it amo- nted to $565,007, as dues accrutJ on square timber and saw logs ' out on Crown laud, ground rents, and bonus on timber licenses." — Report of Mr. Russell, Ottawa Gr^^wn Timber Agent, 15fh November, 1872. At the above estimate »h , . Montreal.Ottawa and Western Railway, Pacific Branch, and Canada Central Difference in ^favor of proposed /^^•••^^"' '^^^...Total, 954 „ P'^'^P^'"'* ^'^^*e o^er Jfo. 1, 307 mile. » » No. 2, 170 From MONTREAL to DULUTH. 1st.— Bv Wnf^- T»- ■?fl'^'''- ^liles. Ar;i„ 2nd B^^at and- '''™-' ^^''■•■'^•*-.1.0c,.5...Ca.a./r»:::Tot,, iS' Rail, mV. Collinff. ' wood ... Srci-Bj Waterand ^''^^' ^^^^-Rail, 428...Total, 1 174 Rail, via Montreal, Ottawa, and West- ern Railway, Pa- cific Brancl, and Canada Central t Difference in favor of n..n. 7 ^^^'•••^^^^' ^^^...Total. 1.004. ^^ fayoz of proposed route over No. 1, 4)2 miles * »» n No. 2, 170 „ ■ *.;, THE "TIMES, ?5 THE AGENT-GENEEAL OF CANADA, AND THE PRESIDENT OF THE GRAND TRUNK RAILWAY. The attention of Mr. Edward Jenkins, M.P., Agent- General for Canada, having been attracted by the remarks of the Times upon Canadian Railways generally, he wrote the following letter to the Times : — CANADA AND ITS RAILWAYS. " To the Editor of The Times. " Sir, — As the remarks which have appeared in the Money Article of several recent issues of the Times, have relations to the general interests of the Canadian Government and people, far more wide than those therein directly adverted to ; I must ask you in all fairness to permit me, as the representative of Canada, to offer a few wc Is in remonstrance against the tout and bearing of those remarks. I should have asked this opportunity at an earlier date, but that I have been seriously indisposed. " As my concern with the subject is only in relation to its general bearings, I am sure that your courtesy will permit me to withdraw it from the financial corner of your newspaper, into your other columns. " The immediate subject or cause of the animadversions which the writer of the Money Ai'ticle has made upon Canada was, I believe, the prospect of an appeal to the British public for funds on behalf of the railway to connect Montreal and Ottawa, which, as it was alleged, would simply be a fatuous rival of the Grand Trunk Railway. " It is not my business, nor am I personally interested, to enter into that controversy ; but I desire to point out to you that what has been virtually laid down in the Times, and requires to be either explicitly defended or withdrawn, is in effect this — that because the Grand Trunk and Great Western Railways have not paid, and are not paying, anything like proper mtei ^st or dividends on their immense capital, any other schemes which may be held or proved to compete with them, however superior their advantages, ought to be discarded by British investors. And I also under- stand that a second principle of a far more perilot^s and general character 35 lDA, LWAY. Agent- remarks e wrote Article of 1 interests se therein le, as the ;ainst the Iportunity [bearings, 1 financial le writer aspect of connect fatuous ito that virtually Inded or Id Great proper which jr their under- liaracter " is insisted upon by you — viz., that it is so. immoral thing for the Government " of the Dominion or for any of the Provincial Governments to sanction or to " aid any schemes which are likely to be injurious V/O the intenists of ihe " Grand Trunk and Great Western Eailways. " If these principles are not to be deduced from the words of your Money " Article, I am in serious error, and I shall be very glad if it should turn out " that I have placed a wrong interpretation upon them. In the meantime, on " behalf of the Government and people of Canada, whose good faith, honour, " and responsibility have been deliberately attacked in your columns, I have " to ask the public to inquire for itself on behalf of what enterpriser, and on " what responsibility, they are asked to visit Canada with this drastic punish- " ment. " The injiTed tone adopted in yourjournal would justify ignorant persons " in supposing that the people and Grovernment of Canada had concocted " gigantic railway schemes which they had presented to the Bntish public ; " and that now, indifferent to the interests of those who had been half ruined " by these schemes, they were preparing to establish other enterprises which " would throw them into the background ! " But, Sir, I ask that the public will first inquire — Where these vast " schemes originated ? Who built and equipped these railways ? Who were " the contractors and the engineers ? How much per mile did these railways " cost ? And, at the same time, let the question be asked and answered. How " much per mile have railways managed and financed in Canada, and now " paying large dividends, cost per mile, in comparison p Let the question also " be asked. How much of all the vast sums of money expended on these " enterprises has reached and benefited Canada, and how much has remained " in England ? And, again, how much from first to last has the Government " of Canada itself advanced and expended in the effort to make these railways, " property, equally advantageous to Canad'an and to English interests ? When " these questions have been answered, if iiculd prove that the unfortunate " shareholders, in whose interests I have i o doubt that you are conscientiously " writing, have less lo complain t Canadian Governments and Canadian " people than of other persons — t <> unknown — it will at least b' ■ . just " that the responsibility for themialortunes attondini'' these schemes, isibould " rest upon the proper persons. "Ac ■'sgards the uncalled-for attack upi a the honour (^^ the Cana'lian " GoTtiximent contained in the direct charge ]>ub! hed in you; article of the " 6ili of April, I am obliged to give it an unqualified contradiction. You say, " without reference to locality and necessity, ' No amount of arg. iit>nt can, " we should hope, lead sensible people in this country t put more money " into railway projects in the Canadian Dominion, for, ' i only is there no " traffic for such railways, but, supposing there were, their owners are exposed " to the constant danger that a Dominion Parliament may 'jfrant a subsidy " for a competitive railway to run half a mile off. In this wa^ 'he Canada " Southern has been built to the ruin of the proprietors of f uiada Great " Western.' With all respect, I am obliged to say that charge is as " ridiculous as it is unfounded. The geography of the Doiumion is open to •' any schoolboy, and though they run parallel and near each other, it would " be interesting to know at what point the Canada Southern and the Great " Western come within half a mile of each other. In the second place, the " Canada Southern never received any subsidy from either Dominion or " provincial governments, " In conclusion, I have but one question to ask. I appeal to you to knovr ** whether you are prepared deliberately to insist, that all other enterprises in " the Dominion of Canada, developing, as it now is, with unparalleled rapidity; " are to rest in abeyance ; are to be discountenanced by the people and 36 " Government of Canada ; aud are not, however promising, to be aided by the " capitalists of England ; until the Grand Trunk and Great Western Railwayg " are paying interest on their bonds and dividends on their capital. " I have the honour to be, Sir, "Your obedient Servant, "EDWAED JENKINS, " Agenf.Oeneral for Gamada, " Canada Government Building, Fing Street, " Westminster, April 9." In answer to this moderate and able remonstrance from the Representative of the Dominion, in London : the Times took occasion to pubhsh an article which was characterized by the same erroneous ideas as to facts : and by the same tone of prejudice; as had per>aded its former utterances. The charge against the Canadian Government of subsidising another Railway within half a mile of the Great Western, was virtually abandoned : but it was renewed in another form, as if the Tinier had erred only in an unimportant detail. The article was as follows : — TiliRS, I5th April. It is with some reluctance that we recur to the subject of Canadian Rail- ways, their position being so plain to all men. But Mr. Edward Jenkins, the Agent-General of Canada, has chosen to publish a letter complaining, in a deeply-injured tone, of our statements, and by his outcry implies that we have dealt unkind blows at the credit of the Dominion. We are sorry that Mr. Jenkins does not better comprehend the state of affairs ; and in pub- lishing the following reply to his letter, we take the liberty of recalling a few prominent facts which will show how the matter stands. At the lowest estimate this country has Iti.t Canada £38,000,000 for railway purposes, only about £10,000,000 of which yields any return. Thus the Grand Trunk Eailway, on which nearly £30,000,000 has been spent altogether, five-sixths of it being English money, pays nothing on about £20,000,000, and only paid 2i per cent, last time on its first preference stock. The fireat Western of Canada, to which this country has given eight odd millions out of nine odd, payu nothing now on five of that eight. Tho Canada Southern is in default on its bonds; the Midland as well ; while the Prescott and Ottawa— the railway with which the Northern Colonization lini' is partly to compete — was sold some time ago to pay for its rails — its capital and bonded debt being thus clean wiped out. So with the small lines that run up to Lake Huron, and towards Georgia Bay, with a view to draw the Western American trafiic to Canada, and away from Chicago and Milwaukee. Most, if not all, of them have been disastrous to their owners. Some of these lines paid formerly better than now, but, as our correspondent points out, I'eckless disregard of existing interests in the planning of competing linos, has brought them to the verge of bankruptcy. Surely, with such a state of things, while three-fourths of the English cajiital spent on Canada is unpioductive, it ■ unot be expected that we shall go on lending to oil comers, asking no questions .»* Canada has not dealt fairly by herself nor by the English investor, n, id no principle can be more sound or jnt^t than that which rules that Canada shall have no more English money until she has mended her ways. These are the broad facts, and they speak 87 in lat we that pub- a few timate about ly, on lieing cent, da, to othing jonds ; which me ago ed out. la Bay, y from ,0 their as our in the uptcy. nglish ihall go fairly sound money speak for themselves, so that we need not dispute with Mr. Jenkins whether existing railways do race with each other, half a mile apart or not. Some of them have been so made as to ruin each other, and that is enough. But, indeed, Mr. Jenkins carefully avoids disputing the facts we gave. We have, it need hardly be said, no ill-feeling towards Canada, and wrote rather in her true interests than against her ; for it is not for her interest that her name should be financially discredited in the markets of Europe, as it certainly must be if she goes on as she has done. The letter referred to in the Tunrn article was signed by Mr. Lewis Paine. In this letter Mr. I'aine makes two points : one, that " the Canada lines have been made by " foreigners, while other colonies have made their own, " raising the necessary capital on bonds ; " that the competing lines were authorised by Special Acts of the Canadian Legislature; and that the Canada Southern never should have been sanctioned, at least until existing Rail- ways earned fair returns. And a second point, that the Grand Trunk only earns a dividend on about £7,000,000 of Capital, or on a cost of £5,000 a mile — although it has made other large expenditures : and therefore that even a cheaply constructed road would not pay. Mr. Paine puts these points with great fairness and candour, but he is mistaken as to the facts. Canadian lines are nearly all constructed in the same way. A certain amount of capital is raised in Cfinada, either by subscrip- tions, by municipal bonus, by government subsidies, or by all three. And the balance is raised upon bonds. Just, as Mr. Paine says, other colonies rrdse their capital. No Canadian Railway, except the Canada Southern, has ever been assisted to any extent by foreign capital ; by which I understand Mr. Paine to m.ean, capital from foreign countries, not England. And Canada has made railways of its own, larger than the government of any other colonial dependency, and is now engaged upon similar railways, as national undertakings. With regard to the Canada Southern, he is mistaken in the circumstances under which it was chartered by the Canadian legislature, as has been already shown, and will more clearly appear from Mr. Jenkins' subsequent letter. As to his second point, that even cheap railways will not pay in Canada, I would remark ; that the amount he states 36 ! I ttl- Tf! m to be earned by the Grand Trank Railway, would constitute a dividend on the entire debo proposed to be incurred here by the Northern Colonization Railway ; the extreme limit of whose borrowing powers on its first mortgage bonds, is £770,000, or about £5,630, per mile. But in reality the net earnings per mile of tha Grand Trunk Railway during the past year would pay interest at the rate of 81 per cent, upon the extreme amount of first mortgage debt which this Company can create.* As to the article of the Times itself, it merely anticipates the statements of Mr. Potter in a letter from him dated the 13th instant, published in the Times of the 19th instant : with a few words of introduction by the Editor, to the effect that the letter contained " a graphic and veracious history " of Canadian Railway enterprise. They are discussed together by Mr. Jenkins ; but first it would be well that a word should be said upon an ejaculation by the Times in the above article. " Surely," it says, " it cannot be expected that we shall go on lending to all comers, asking no " questions !" No one ever assumed so absurd a position. The Company assailed does not object to questions being asked. It is prepared to answer them in advance : and to place its success upon the sufficiency of those answers. But the course taken by the Times prevents questions from being asked of, or answered by, the Company. It does not ask questions. It publishes what might be called a negative prospectus of the railway ; confusing direction and distance ; makmg what I have shown to be the most gross and unpardonable mistakes as to facts ; and pronouncing an unequivocal condemnation of the project, before it could have known what was to be proposed ; and, indeed, before the delegation to this country had decided as to the details of the intended proposal. As the letter published by Mr. Potter, in so far as it apphes to this controversy, merely goes over, with more detail, but in nearly the same order, the arguments and assertions of the Times articles, it is not reprinted here in full ; but may be found in a file of the Times on the date * 8ee Appendix D, pcufe 25. )> to Jut bive md It )re in ite already quoted. The points in it which Mr. Jenkins discusses, are indicated by that gentleman's exhaustive letter, which is as follows : — " Canada Government Building, King-street, Westminster, S.W., April 20, " Sir, — The terms in which your Money Article refers to my commmiication published on Tuesday last on the subject of Canadian Railways, and the indignation which I learn through the cable that its strictures have excited in Canada, oblige me, in justice to myself as well as to the subject, to ask the favour of inserting what shall be my last words on the matter. " In addition, I now have the advantage to have drawn from one of the highest and most interested authorities, a statement vouched by the Money Editor to be ' gfraphio and vfc. ~ cious,' and which at least has the merit of not floundering helplessly among the facts. I will try as briefly as possible to meet the joint attack. " I may say without offence, that expressions such as ' things that are plain to all men ;' about things patent to ' sensible ' men ; about ' reckless disregard of existing interests ;' and appeals to ' broad facts ;' which, as I will show, any one with a map and a few reports can disprove ; seem rather to resemble the tactics of convicted ignorance, than of judicious criticism. " Pennit me first briefly to recall the circumstances under which I ittervened. If your Money Article had done no more than to reflect upon a scheme of Sir Hugh Allan and others, it would have been wholly out of place for me to interfere. It is one of the points which I make, that every railway undertaking must stand upon its own merits, and, for all I know, there may bo in the character of ibhe Northern Colonization Railway, enough to justify any amount of strong writing. In criticising all such undertakings in a fair and equitable manner, the Times, as was demonstrated in a recent case, discharges a duty which is equally beneficial to the English and Canadian public. But the Money Editor went beyond this to propound the extreme proposition, that no investment in new Canadian railways ought to be entertained by ' sensible' people, and that they were exposed to the constant danger that the Dominion Parliament might grant a subsidy for a competitive railway to rim half a mile off. I simply challenged the justice and the accuracy of these statements. The only arguments offered in support of them were, that two great English railway under- takings in Canada, and some smaller ones, had had a disastrous history ; a statement of which I endeavoured to diminish the effect by asking a number of questions about Grand Trunk and Great Western management, which even Mr. Potter has not attempted to answer. Then Canada Southern was thrown at my head. I will here dismiss Canada Southern in a few words. The statement that Canada Southern and Great Western ran within half a mile of each other was a misleading one, and Mr. Potter will perhaps say whether it is not at points where they cross, that he is able to give evidence that they come within half a mile of each other. Further, if they do run so close, who is responsible for it ? The charter for the Canada Southern was obtained in 1867. The charter for the ' air line,' which runs nearest the Canada Southern, was obtained in 1868-69, and was acquired by the Great Western. There is, therefore, as much ground for asking how far Great Western helped to kill Canada Southern, as to put the alternative question. " As to the so-called ' subsidies ' to this line, they are subscriptions of muni- cipalities granted on the Canadian method, and amounting altogether to only 1^000,000 or $5,000,000,* out of §17,000,000, and therefore to call it a * subsidized' railway is simply to delude an uninformed reader. So far from issuing ' two or three millions of its bonds in London,' its issue was simply and solely $1,000,000. " To i-eturn. There are no just grounds, either in the erroneous statements of the Money Article, or in the long story of Mr. Potter, for declining to grant to new Canadian railway schemes a fair hearing, or even a favourable roception, in the English Money-market. I do not argue that English capitalists should go on ' lending to all comers asking no questions.' Let every scheme be carefully considered in * This is probably a misprint, •bout £80,000. The real amount of the aabsidies is 1400,000, or h lit J fi 40 relation to its own direct prospectR of Baoceu, and not be condemned by reference to an unfortunate history, which, if written in detail, might certainly read a valuable lesson to the British investor. What, I ask, might now have been the position of the Grand Trunk Kailway, if extensions had not beeu built where they oonid not possibly be remunerative ; if a suicidal competition had not been attempted with American lines possessing the advantage of seve til hundred miles less distance to the seaboard ; if internal traffic had been developed with as much care as a traffic, which tlr. Potter seems to admit, scarcely pays its expenses — for if it did, it could occupy the whole line, and in that case other railways would be required. — And, lastly, hail there been less effort ana sacrifice in endeavouring to absorb into the Grand Trunk system other Canadian railways — had there been greater economy in building and management, will any business man contend that Grand Trunk might not to-day have stood in the position of one of the most promising railway enterprises in North America P " As to the original responsibility, Mr. Potter says, in reply to my words ' managed and financed ' from England, that it was also ' worked ' by the Canadian ' Boai'd,' nominated origir.ally by the Prime Minister of Canada, with a 'committee' in London, to 'raise and remit' its funds. Does Mr. Potter wish me to go into the early history of the Grand Trunk ? Who allotted the stock on the 25th of April, 1853, and how many Canadians received allotments ? Does he wish the public to infer that an English Board, stated in the celebrated original prospectus to be •directors', with the names of Baring, Glyn, Wollaston Blake, Robert McAImonb, Kirkman Hodgson, and Alderman Thompson, were a subsidiary * committee ' to a number of Canadian gentlemen P " Mr. Potter asks me to be good enough to note that ' cheap construction always means in the end, dear maintenance and excessive renewals.' I defer to so high an authority, but I ask Mr. Potter whether this is not a question of degree and whether if a road can be built well at £8,000 a mile, it is good economy to build it, only a little better, and no more to the purpose, at £16,000 per mile ? I simply take a hypothetical case in order to show the futility of the argument. " Again, what is now virtually contended ? The Grand Trunk and its feeders, and the Great Western, run through the most populous portions of Quebec and Ontario. Is it possible that at the rate at which Canada is increasing in population (vide Grand Trunk circulars and reporLs passimj and looking to the prospects of the development of the country, northwards and westwards, these roads are entitled, or can hope to obtain, a monopoly of the railway traffic of Canada ? Their disastrous history, and the disastrous history, of 20 other railways, cannot shake the common sense of the position that the opening up of other parts of Canada, and shorter and cheaper commnnicationa between some of its most important local centres, may be financial undertakings well worthy the attention of English capitalists. It would be as judicious to argue that the histories of the Great Eastern, Metropolitan, and Chatham and Dover, were reasona for discrediting a lino between Glasgow and Edinburgh. " This, I contend, is the whole question ; to which the only answer is a general blackening of Canadian railway undertakings, by citing the misadventures of a period when Canada was, politically, economically, and, as regards population and development, in a totally different position. " But, Sir, some authorities differ at different times. I have before me a circular issued on the 23rd of May, 1873, and signed ' Richard Potter, President,' which I may ask those who by that circular may have been induced to become interested in Grand Trunk, to lay side by side with Mr. Potter's letter to you. It states : — " ' In spite of the disadvantages under wliich the company has hitherto laboured, of being unable to caiTy the existing traffic ; a steady increase has taken place year by year, the receipts having increased during the last ten years about 10«.) per cent. ; the traffi.c for last year approaching two millions sterling. There cannot be a question that the rate of increase will proceed even at a much greater ratio.' '■ After quoting statistics, the circular says, — " ' A country which in such a short period has doubled its home an " foreign trade, must command confidence in its present resources, and faith in its future development.' And a speech of the Hon. W. Tilley, Minister of Finance, is quoted, in which he said, — ' We can bear an increased debt of 30 millions in the next ten years, without materially inoreasiug the taxation of the people ; while at the same time we are opening up a I eneral of a and fcular I may Grand red, of ar by ;. ; the estion trade, Iment.' paid, — erially up a 41 magniflcont country for the millions who will pour into it,' — Ac. Tliifl was a Bpeech made in relation to proapective railways, quite out of any lines of competition with the Grand Trunk, " May I not ask by what rijfht the President of the Grand Trunk, which runs from Detroit to Riviere du Loup, undertakes to warn Enf^lish capitalists from having any- thing to do with railways projected by the Government, and not going witliin some hundred of miles of his ? The decency of ' bucIi intervention is at least questionable. " Before proceeding to deal carofnlly with Mr. Potter's statements and, what are worse, his innendoos, I desire to say a word or two concerning the ' broad facts ' on which the writer in the Money Article has been relying, to support what I call his preposterous propositions. Let me take the statements made in the Friday Money Article seriatim .- — ■' * At the lowest estimate this country has lent Canada 38 millions for railway purposes.' I ask, when and where ? Further, ' of this nearly 30 millions has been spent altogether by the Grand Trunk Railway.' I ask, when and how ? These rail- ways, spite of Mr. Potter's disclaimer, wore essentially English undertakings ; the property, contx-ol and management are almost entirely English. When the Great Western had been built by English capitalists, the Grand Trunk was projected, built, equipped, and managed by English rivals. Whatever may have been the original Canadian Committee, the really responsible persons were on this side. What justifi- cation is there for designating the expenditure of such Companies as money lent to Canada ? It might better be called money mis-spent in Canada — But the Money Article is out to the trifling extent of over £9,000,000 sterling, on the authority of the Grand Trunk report of the 30th of June, 1874. Of the items in the capitJil account, £3,111,000 were contributed by Canada, and there is a change of £H,075,000 for discount on the celebrated issue of 1873, when stock at 100 was placed on the market at £22 10s. " Other misstatements in the Money Article will be refuted in the course of the following reply to Mr. Potter's letter. With regard to that letter, I must remai-k that Mr. Potter's process is exceedingly disingenuous. It is to enumerate the new railway schemes ; to assert them to be rivals of the Great Western and Grand Trunk, which helps to discredit them with English capitalists ; to declare that former schemes have been, and of course he must contend for the purposes of his argument will long continne to be, disastrous failures ; and then to condemn every new enterprise. Now, in fact, such roads as the North Shore, the Northern Colonization, the Canada Central, may be said to compete with Grand Trunk, just as you may say the Great Northern or Midland competes with the London and North Western — that is to say they run between the same termini, but tap and develop totally different districts. Even if those districts were absolutely uninhabited or uninhabitable, does it fairly lie in Mr. Potter's mouth to say so ? One of them certainly would compete with the Grand Trunk for, the traffic from Montreal to Quebec ; and another in some degree, for the traffic from Ottawa to Montreal. But it would be a strange thing to contend, that if railways can be maintained by local traffic between those termini, as we must suppose the projectors believe they can ; that they are not to be built, because they will obviously bring great centres into nearer and more rapid communication than by existing linep. I should have thought that even Mr. Potter would not contend, that people would long go from Ottawa to Prescott in order to take their chance of any time between one to live hours to catch a Grand Trunk train to Montreal, when a short line could be built which would take them from Ottowa to Montreal with less mileage and in less time. It is this consideration which renders Mr. Potter's statement that the greater portion of these lines compete directly or indirectly with the existing lines now in operation ; a disingenuous one, if simply read upon its face. " I will now very shortly take up Mr. Potter's commentB on the railways. I observe, by the way, that the President of the Grand Trunk, is not above performing an ingenious financial sleight of hand. He adds to the capital expended on the Grand Trunk, £1,000,000 said to have been lost by the contractors for its construction. Is it usual in railway accounts to add to the capital account, the sums sunk by the misfortunes of contractors P But, Sir, I will use this very point in favour of my hint that there may be better management by local adventurers in Canada, than even by the distant magnates of Lombard Street. Part of the contract for the Grand Trunk 42 I w waa taken b^ MesBrs. Gait, Gzowski, and Moopherson, who mado fortunes out of it. Those gentlemen offered the English contractors £200,000 for their oontraot. " Mr. Potter says that in the year 1874 (contrary to certain predictions made in the statements published when he was issuing the stock of 1873) the Grand Trunk * was only for the first time in its history paying interest out of revenue upon its original bonds and capital, the sum of £80,000 in the year 1874.' That there may be no mistake, he designates this £80,000, the net result of a capital of 12 or 13 millions sterling. But this statomont is fallacious. The Grand Trunk has chosen to take iato its system, by lease or otherwise, the Atlantic and St. Lawi-ouoe, the Detroit, the Montreal and Champlain, and the Buffalo and Lake Huron Railways ; to which it has guaranteed sums amounting in the aggi-egate in the half-year ending the 30th of June, 1874, to £95,782 sterling ; or, I may presume, double that sum per annum. Making a fair estimate of amounts earned by these railways, and of the sum paid to them by the Grand Trunk, I a.sk whether it is likely that Mr. Potter would have made the above statement if he had been drawing up the circular for a new loan ? Besides, Mr. Potter is in a dilemma. Either ho must admit these railways earn all ho pays for them — in which case they are far froni disastrous — or else he has not credited the capital account of tho Trunk road with a sufficient profit. " Several of Mr. Potter's statements about Canadian railways and those in the Money Article of Friday, are, I regret to say, exaggerated. Mr. Potter must know the facts. " 1. Prescott and Ottawa. — It appears that many years ago, before the seat of (rovemment was removed to Ottawa, and when Ottawa was little more than a village j the company failed to pay the interest on its bonds, and therefore the bonded debt was Ov>nverted into stock ; a further bonded debt was created to rehabilitate the road, which was subsequently increased to extend it. And on this total present capital of a little more than £1,250,000,* its net earnings in 1873 reaohed the sum of .S92,000 ; which left after paying for mterest, and conversion of American money into gold, the sam of $46,000, or about 5J per cent, on the stock rejiresenting the old bonds. If this rate improved, as it probably did in 1874, the dividend on the old bond debt would be a liberal one. So that far from the railway being sold to pay for its rails, it paid for its rails with its bonds. And, so far from the bonds being ' wiped out,' they wore converted into stock on which dividend was earned. Thus the case was not so bad as was i-epre- lented. " 2. Brockville and Ottawa was not constructed entirely by English capital, but about 20 years since, mainly with Canadian capital, the municipalities granting $1,365,201 46c. A long tunnel under Brockville, the only tunnel in Canada, made its cost exceptionally heavy. It has not been ' ro-constructed ' ' By a composition effected with the municipalities, its position has been bettered. It has not been amalgamated with the Canada Central, nor is it known by that name Its history and prospects are ueither more startling nor disastrous than those of many English railways. " 3. The Canada Central, commencing at Ottawa, runs westward for 28 miles, until it strikes the Brockville and Ottawa at Carloton Place, whence it runs over 28 miles of that road to Sandpoint. There it recommences its line proper, and is complete to Renfrew, from which point it is to be continued with heavy subsidies from the Dominion Government, for 125 miles, to the projected terminus of the Canadian Pacific. It will open up a fine country now being rapidly populated. The portion from Ottawa to Carleton Place was built by Messrs. Bolckow, Vaughan & Co., who sold it at cost price, after it had been running for two years, to Canadian contractors. From Sand- point to Renfrew the line was, I believe, constructed by the purchasers entirely with Canadian capital. The Ontario Government has commuted for the land grant made to this road, and this grant will practically cover more than half the cost of the portion for which it was granted. Can Mr. Potter's representation about these two roads ^9 termed a candid one ? " 4. The history of the Midland is referred, to ' years ago.' It was constructed largely with Canadian, not, as Mr. Potter's statemeut implies, wholly Wtth English capital, $920,000 having been contributed by lounicipalities alone, out of something orer $3,000,000. If it has not pnid interest this yeur, that may be due to the fact that * This also must be a typographical error. Tho amount is $ 128,902*20. 40 but mtiiig ita iffected I mated Its are until lilea of Hete to the Pacific. )ttawa ^t cost Sand- with lade to Portion lads '^e Iructed English 3thing bt that the bosiness of its new extension has not developed. The news of its connection with Georgian Bay must have reached Mr. Potter by oable. It is wholly unknown to mo. Though it is a merely ' sectional ' line, with no termini of importance until it roaches G<)orgian Bay, I am informed it will pay on a reasonable cost, including ita laat idsue of debentures. "5. The Buffalo and Lake Huron ia said also to have a ' disastrous history.' It may be to the Qrand Trunk, which has leased and managed it, but not to the original proprietors. Those have been receivintj on it an annually inoroesing payiiitmt, which amounted in 1873 to 7^ per cent, on £)s,000 per mile, and will in 1879 pay the interest on ita debt and 5 per cent, on ita shares. Its bonds were (juoted in Iho Timts of Friday, as follows, which is not an indication of that ' verge of bankruptcy ' spoken of in the Money Article : — 6 per cent , 99 to 101 ; 6i per cent., 96 to 98 ; business done, 97. "6. The Nortliorn Railway 1st Preference Bonds, were quoted on Friday 99 to 100; 2d Preference, 92 to 94; business done 93. Its bond capital is tlio chiof capital, the stock having been almost nominal, about half being held by two municipalities. It ia not correct to say it was * wiped out,' but explanation here would bo impossible. It la one of the best equipped and most prosperous railways in Canada, and hixs this Session made an anter [xreat ,, the iusive that idian jiple, [upon that Lring, Icome the Idhig. ] have I, and In effect, I may fairly thus describe their pretensions. These two great EngUsh companies have spent enormous sums in the struggle for the traffic of the Erie Peninsula, and for the carriage of the produce of the Western United States. They are competing for this traffic with American railways, by which they are over-matched in distance, in cost, and in economy of management. And while they are pounding their railway and rolling stock to pieces in this contest, for inadequate remuneration ; tliey are neglecting to cultivate ttie local traffic, which is always carried at a profit. Again, there is a superabundance of carrying power in the extreme west of Canada, where the traffic is large ; the Grand Trunk is alone in the extreme east, but has very little traffic there ; and its carrying power has been created at a cost per mile, far exceeding that of any other railway in America. Because these railways, under this combination of adverse circumstances, do not pay; therefore another railway, dissimilarly and more advartageously placed, in all of these respects, will not pay either ! The mere statement of such a line of argument sufficiently destroys its weight. I am unwilling to purbue further the discussion of the causes of the non-productive character, of the invest- ment in tlie two great Railways of Canada : and I would not have referred to them, had I not been forced to do so by the line of argument which has been used against the Northern Colonization Railway. Their management is a question for their own shareholders. And so incompre- hensible is the violence of the attacks upon Canadian Railways, that one might think they may have been intended to prepare the minds of the Shareliolders of one of them for the semi-annual report which immediately followed. But I have said enough to shew that there is a manifest injustice ; not to say an absurdity ; in using the natural result of such a state of things, as a ground for the condemnation of a new Railway ; in the heart of Canada ; serving without a com- petitor a large population, in a prosperous and rapidly increasing manufacturing section of the country, connecting the Canadian Pacific with ocean navigation ; and the commercial capital of Canada with its political centre ; con- 52 structed equal in all respects to the best part of tlie Grand Trunk Railway : at less than one-tliird of its cost. An(^the policy which dictates the opposition is not a wise one. The development of Canada is as necessary for the increase of tlie prosperity of the Grank Trunk Railway, as of any other of the great works it contains. Any check to its settlement and progress, will so far check its natural increase of trade and traffic. And no company or person can be so much interested in that increase, as the Grand Trunk Railway Company. HUGH ALLAN, President Montreal, Ottawa and Western Railway. 32, Lombard Stkeet, April 2Srd, 1875. ■Whitehead, Morris k Lowe, Steam Printers, London.