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 m IBTEEKATIOm COBTBAOT OOMPibt. 
 
 K>R THB coNarauctroH or the 
 
 ) MONCTON, OK THB NOVA SRrm. 
 
 TKURO XNI) MON^x, OH THE NOVA BOm, .K. NEW 
 
 
;; TAPERS AND CORRESPONDENCE ; 
 
 ~ (;; ; -;; > RELATlNa TO THE 
 
 CONTRACT BETWEEN THE GOVERNMENT OF NOVA SCOTIA 
 AND, THE INTERNATIONAL CONTRACT COMPANY FOR 
 THE CONSTRUCTION OF THE TRURO AND MONCrTON, OR 
 THE NOVA SCOTIA AND NEW BRUNSWICK (INTERCOLO- 
 NIAL) RAILWAY. 
 
 
 The first odicial documenls on this subject appear in 
 the " Journals of the House of Assembly" (Nova Scotia) 
 for 18G5, Appendix No. 7, Railways, page 13, where the 
 proposed Heads of Agreement for the contract are stated 
 to have been handed to the Honorable Provincial Secre- 
 tary by J. Livesey, Esq., the Chairman of the Acadian 
 Iron Company (now the Intercolonial Iron and Steel 
 Company) on behalf of the International Contract Com - 
 ])any, on the iGth September, 18G4 ; and on page 14 the 
 proposal is shown to have been repeated and acknow- 
 ledged, as in the extract hereunder : — 
 
 [Momoiandum Imndcd to the IToii. rrovincial Secretary by J. LivoBoy, 
 Esq., at Quebec, October, I8G4.J 
 
 NOVA SCOTTA AND NEW «RUNSWrCK JUNCTION RAILWAY. 
 
 llEAna OK PunrosED Aourhmrnt with Nova Scotia Oovbrnmbnt, 
 
 1. The Intorniitionnl Contract Company adopts the Uesolutiou of last 
 (■'('KSioii, autbori/.itig a 8iii»veiition of f<<iir per cent. p(>r aniinin for 20 years 
 on £8,000 storlini; per mile, in con«ideration of which, i)ayablo ou seventy 
 niiiOH, tVe international Contract Company engages the construction and 
 working of a Railway from Truro to the New Brunswick border, (with 
 extension to Mont ton tind'M simultaneous urrangement with tho Gov- 
 
ernment of New Brunswick) intersedmg the mineral districts of Londonderry 
 and Springhill. 
 
 2. Payment of the subvention to commence one year from the com- 
 mencement of the wo''^':s, and to ho thereafter made half-yearly ; the ex- 
 penditure on the works heing at the rate of not less than X 100,000 per 
 annum. At the option of either party the subrention may he capitalized 
 and given in the form of six per cent Provincial Debentures at the cm- 
 rent value of the day, convertible, at the option of the Government, into 
 four per cent debentures cf like amount, bearing the Imperial guarantee. 
 
 . 3. The whole line to le completed within four years from date of com- 
 mencement of works, wh: ch shall be fixed by special arrangement between 
 Government and the Company. 
 
 4. Government to grant free use of Landing stage and Railway station 
 at Halifax, free impost and cost transit over Government Kailway for all 
 materials required in the construction of the Railway and its equipment 
 
 5. Land for Railway track to be provided gratis to the Company, by 
 assessment on the respective counties or otherwise. 
 
 C. The line to he etpia^ in point of constnution, and not exceeding in grades 
 and curvet the existing Railways in Nova Scotia. 
 
 7. A traffic arrangement to be made for transmission of trains, and the 
 Company to have the ri{;ht of running trains on the Government linos, 
 paying to Govornraent twenty per cent of all receipts arising there- 
 from. 
 
 8. The Government far the time being to have the nomination of two 
 Directors to the Board ol the Company for the operation of the Railway, 
 which Company will bo constituted and guaranteed by the International 
 Contract Company, 
 
 *9. Government to talie shares of the first issue in the Railway Compa- 
 ny to the amount of £105,000 sterling, on which calls to be paid equally 
 with other shareholders. 
 
 10. The foregoing engagements refer solely to the Railway. In the 
 event of the Company establishing special harbor accommodation, and 
 providing facilities for tl e transmission and export of coal at a conveni- 
 ent point on the Bay of Tundy, it shall receive annually an amount equal 
 to one-fourth of the Royalty accruing to Government from the coals bo 
 transmitted and exported. 
 
 11. Government to have the power at any time within -— — 
 
 years, of taking possession of the Railway by payment to the Company of 
 uu amount to be fixed by arbitration in the usual form. 
 
 Halifax, January Gth, 1865. 
 Dear Sm, — 
 
 In reply to your enquiry, I beg to say that the Government are not 
 in a position to give you «, decided answer to the offer made by you. on 
 behalf of the International C<jntract Company, for the construction of tin 
 Railway from Truro to Moncton, as *hey have not yet received a definite 
 reply from other parties with whom negociations are pending. I may say, 
 however, that if arrangements are not maile at an early day for the com- 
 pletion of this work, upon terras more favorable to the Province than 
 those offered by you, I am satisfied that the Government will propose to 
 
 * This clause was subsoquently omitted, and the yearly subscription Increased to 
 £24^00. 
 
of 
 
 to 
 
 Parliament the acceptance of the proposal of tho International Contract 
 Company. 
 
 Regretting very much the delay that has ensued in the consideration of 
 your offer, and fully appreciating the deep interest you have taken in the 
 matter, and the great nature of the exertions you have made in connec- 
 tion with it, I beg to subscribe myself, 
 
 Yours, &c., II 
 
 (Signed) CHARLES TUPPER. 
 John Livksey, Esq. 
 
 In reference to the preliminary question of route it 
 
 appears that the " other parties" with whom negociations 
 
 were stated to be in progress, included C. J. Brydejes, 
 
 Esq., tho Resident Director of the Grand Trunk Railway, 
 
 who, in his offer to the Honorable Provincial Secretary, 
 
 dated 17th November, 1864, and shewn on page 1 of the 
 
 Journals before cited, remarks as hereunder : — 
 
 " In regard to the question of the course of the line to connect the 
 existing Railways of New Brunswick and Nova Scotia, that will, 
 of necessity, be mainly determined by the results of the survey now 
 being made by Mr. Sandford Fleming; but, provided such survey show.s 
 no serious engineering difficulties, it would certainly be desirable that 
 the line should pass through the district whc^e the Londonderry Iron 
 Works and the Springhill coal fields lie : it beic, undoubtedly a matter of 
 great importance, as weU to the. Provinces as to the Jiailwai/, that existing iron 
 uiid coal mines sJwiddbe made available by having thefacililks of railway tratis- 
 port afforded them." 
 
 The allusion herein made to the line passing tlirough the 
 Districts of the Londonderry (Acadian) and Spring Hill 
 Mines, arose from the Government and Mr. Brydgos being 
 aware that the Acadian Iron Company had, at consider- 
 able cost, surveyed a lino of this character, and had proved 
 that (contrary to former general belief) it was perfectly 
 practicable, and possessed many advantages over the 
 northern lines, which had then alone been tried. 
 
 The result of Mr. Fleming's general Intercoloniul sur- 
 vey, as regards this section, is comprised in the following 
 extracts from his Report — pages 10, 11 and 13 : 
 
 "The portion of this lino extending 41 miles outof Truro wae surveyed 
 during the past year by Alexander Beattie, Esquire, C E., for the pro- 
 prietors of the Acadian Mines ; the section lying between the Provincial 
 Boundary line near Amherst, and Moncton, about 3:J miles in length, 
 was surveyed last year by J. K. Boyd, Esquire, C. E., under inst-ructions 
 from tho Government of New Brunswick." • ♦ « • « 
 
 " The country south of Amherst, on tho Macan River and some of its 
 tiibutiiries, abounds in coal in thick beds and of excellent quality. This 
 valuable coal field would be opened up by lines Nos. 3, 4 and 6. 
 
" The Cobequld range is rich in iron ore of tlie best description ; it is 
 now manufactured on the soutliern flank of the range, at the establish- 
 ment of the Acadian Iron Company. Annually considerable quantities 
 of iron are exported to England, and there converted i^to steel, for which, 
 from its quality, it is admirably adapted. It is considered that iron manu- 
 factures of all kinds would be established and greatly multi'iil-d in this 
 section were proper facilities created for bringing the coal ana ore i ogether. 
 Line No. 3 accomplishes this end, and so also does line No. G, although 
 the latter does not in the same degree accommodate the existing estab- 
 lishment of the Acadian Mining Company, now in operation on Great 
 Village River. 
 
 "In review of the above, it would Hcem that, apart from the question 
 of distance and gradients, a central route, whilst opening up the min- 
 eral districts both of coal ar.d iron, would at the same time serve gen- 
 erally the population of the country as well as any other line .sj)ecially 
 located with that object solely in view, and without regard to the 
 developcment of the rich mineral resources of this district. * * • 
 
 " Between Moncton and Truro, with the exception of the mineral 
 districts which are for tlie most part in a state of wilderness, much of 
 the country is settled, and in some sections cultivate.d farms of the 
 richest description can bo scon." 
 
 In the above extract the line described aa No. 3. is iden- 
 tical with that specified in the contract, both in the Nova 
 Scotia and New Brunswick Portions. 
 
 In the following 8j3rin<; the Nova Scotia Government, 
 having in contemplation to send a delegation to England 
 in conjunction with a delegation from New Brunswick, 
 for the special object of entering into a contract for the 
 construction of this line, instructed their Chief Engineer, 
 (Sandford Fleming, Esq.,) to survey this central route, 
 which was accordingly done, and it was strongly recom- 
 mended in preference to all others, as will be seen by his 
 Report, which is hereunder printed at full length : 
 
 Railway Officb, { 
 HaUfax, I7th June, 1865. f 
 Sir,— 
 
 In pursuance of tho Command of His Excellency the Lieutenant- 
 (iovcrnor, conveyed to me in your letter of the 15th ultimo, and in 
 accordance with tho verbal direction subsecjuently receivod from you, 
 I have instituted a siuvey of the country between Truro and the 
 northern boundaiy of the Province, with the view of determining the 
 best location of a lino of liailway to connect Nova Scotia with the 
 Sister Province — New Brunswick. Before proceeding far with tho 
 details of survey, I deem it advisable to submit a preliminary report 
 on the various routes which the line of proposed Railway may take. 
 I consider this essential, as the general direction of tho contemplated 
 liailway has fu'st to be cletcrmined before a Location .Survey can bo 
 made. 
 
Various lines have been projected from time to time for this con- 
 templated Railway extension ; and, so far as I am acquainted with 
 thom, and with the configuration of the coantiy, V.\ey may conveni- 
 ently be classified under three distinct heads, which again may be 
 designated "Eastern," "Western," and "Central" "Routes." 
 
 The Eastern Route follows the Railway, now under construction, 
 out of Truro easterly for about ten miles ; it then continues along 
 the Valley of tho Salmon River northerly to Earitown, thence it runs 
 in a direction generally parallel to the Gulf Coast, to Bay Verte in 
 New Brunswick, ultimately connecting with the European and North 
 American Railway near the Village of Shediac. 
 
 The Western Route runs from 'iVuro, almost due westoily along the 
 north shore of the Basin of Minas, to the neighborhood of Parsboro ; 
 and then turning northerly it i'ollows the Macau River to tho head 
 of Cumberland Basin, and connects at tlie New Brunswick boundary, 
 with a line surveyed to tho EuropL-an and North American Railway. 
 
 These extreme eastern and western routes are, at one place, nearly 
 seventy miles.') part, and the length of Railway, by either route, would 
 be considerably increased from that of an air lino by the great dc- 
 2)arturo from a straight course which each routM makes — tho one to 
 ♦ he east, and tho other to tlio west. ^. 
 
 A Central route can be liad nearly mid-way between these Eastern 
 and Western routes. 
 
 It may cross tho Cobequid range of high-lands by depressions, 
 either at tho head of Folly River, (ireat Village River, or Port an 
 Pique River, and after crossing this conspicuous range it would run 
 in a northerly direction to tho bouudai y line of New Brunswick, 
 
 Tho general character of these routes, so far as I am able, from 
 my present knowledge of the country to form an opinion, may thus 
 briefly bo stated : 
 
 The Western route would be the longest, while a Central route 
 would bo tho shortest. The Western route would have the greatest 
 length of easy gradients. 
 
 The Eastern route would have the lowest maximum gradients. 
 
 A Central route would have tho heaviest gradients. 
 
 Tho curvts and gradients on either of tho routes may be within 
 the standard of tho existing Government Railway in this Province. 
 
 The Eastern route would accommodate the Villages o f Tatiima- 
 goucho, Wallace, Pugwash and Bay Verte, and the traffic of tho 
 Gulf coast. 
 
 The Western route would serve tho traffic on the north shore of 
 tho Basin of Mmaa, and it would pass through or near the coal fields 
 south of Amherst. 
 
 A Central route would accommodate the iron district of tho Cobe- 
 quid range, and it would open up the Spring Hill coal field. 
 
 The accomi)anying paper gives detailed information with regard 
 to the ditlerent routes herein referred to. 
 
 In a commercial aspect a Central route appears to me, beyond question, the 
 most important, and if thia route is formally adopted, the discovery of 
 the most favorable line in an engineering point of view, that the 
 country will admit of, will become a (juestion of no little consequence. 
 
 / am satisfied, jrom an inspection of a plan of a survey made last year by 
 the Acadian Mining Association, as avell as from a personal examination of 
 the grou nd,that a Railiniay can be had on a Central route ivith grades and 
 
cuwes not exceeding those on the Trunk line, noiv in operation bet-ween 
 Halifax and»Jruro. 
 
 In view of the foregoing, I would respectfully recommend that the 
 surveys now in hand preparatory to locating the line for construction 
 be made on a central route. I have, Ac, Ac, 
 
 [Signed], SANDFORD FLEMING, 
 
 , _, Chief Engineer N. S. It. 
 
 Hon. Charles TurPER, Halifax. 
 
 No further official correspondence on this matter ap- 
 pears in the *' Jonrnals," although the negotiations were 
 continued ; and during the visit to London of the .Honor- 
 able Provincial Secretary and the Honorable Attorney 
 General, immediately afterwards, a contract for the con- 
 struction of the railway was finally concluded with the 
 International Contract Company. The contract was based 
 upon the Report of Mr. Fleming — above given — which had 
 been adopted^ aiid the jfroposed route approved of by the Gover- 
 nor in Council, as will be seen Irom clause 2, which also 
 provides that the surveying should be done entirely by, and at 
 the expense of, the International Contract Compa ny, who were 
 not required either by the contract or by the Act of Pai- 
 liament on which it was based to submit their detailed 
 working plans for the approval of the Government. Thiis 
 view of the case is believed to have been fully under- 
 stood and concurred in by all the parties to the arrange- 
 ment when made. On the same day the New Brunswick 
 Government concluded a contract with the International 
 Contract Company for the construction of the extension 
 of this line from the Nova Scotia boundary to Moncton. 
 The Nova Scotia Contract is hereunder given in exienso: 
 
 [Memoraudum of Agreement made and entered into the fifteenth day of 
 August, one thousand eight hundred and sixty-five, between the 
 Chief Commissioner ot liailways of the Province of Nova Scotia, by 
 direction and authority of the Governor and Council, acting by the 
 undersigned, Charles Tupper, Provincial Secretary, and WiUiam 
 Alexander Henry, Attorney General of the said Province of Nova 
 Scotia, hereinafter called the Itepresentatives, of the one part, and 
 The International Contnict Company, (limited), of 85 Cannon Street, 
 West, in the City of London, hereinafter called the said Company, 
 of the other part.] 
 WiiEnEAS, an Act of the Provincial Legislature of Nova Scotia was 
 
 passed on or about the second day of May, one thousand eight hundred 
 
 

 and Hixty-fivc, entitulcd An Act to provide for the construction of two 
 othor actions of the Provincial Kailwaya, and by such Act provisions 
 were made for the construction of a certain Railway from Truro to the 
 Boundary Line of New Brunswick, and from Windsor to Annapolis. 
 And Whereas, in pursuance of the jirovisions of the said Act, ii negocia- 
 tion has been entered into between the said representatives and the 8ai<l 
 Com])any, having for its object an arrangement by which the said Com- 
 ])any shall undertake the constrr.ction of tlie sections of the said Rail- 
 way from Truro to the Boundary Lino of New Brunswick, under the 
 provisions of the said Act, and subject to the +erms and conditions here- 
 inafter mentioned. Now this Agreement Witnesseth, and it is agreed 
 by and between the said parties hereto, as follows : 
 
 1. The before recited Act shall be the basis of this Agreement, so far 
 as it relates hereto, except^so far as the same may by this Agreement be 
 ngreed to be modified. 
 
 2. The said Company, in consideration of the premises and of the 
 Agreement on tlie part of the said Representatives hereinafter contained, 
 hereby agrees to construct the said Railroad, under the provisions of the 
 said Act and subject to the terms and conditions hereinafter mentioned, 
 on the central rout?, which hax been recommended by tht Government Engineer, 
 and approved by the Governor in Council, and the said Company shall com- 
 mence the nurveyi'Kj not later fhan the Montli of November next, and prosecute 
 the xame until completion, and .shall commence the Works bona fide at a 
 l)eriod not latcu" than tlie month of June, one thousand eight himdred and 
 sixty-six, and shall complete and open the line for traffic within four 
 years from the first day of November next. And further, that in respect 
 to section 19 of the said Act, no steeper, gradient, or curve, of a smaller ra 
 dijis shall be admitted on the said Railroad than on the present Railway line 
 from Halifax to Truro, and the said Railroad shall in all other respects be 
 equal in } mint of construction and efficiency to the said Railway from Halifax 
 to Truro. The rails to weigh 60 pounds to the yard, and to be joined 
 together with fish plates ; and it is also understood and agreed that by 
 mutual consent alterations may be made in the provisions of the said 
 nineteenth section an' -if this clause. 
 
 3. Tho said Company shall be bound to provide such conveyance for 
 the Officers and Soldiers of Her Majesty's Forces, Ordnance Corps, Ma- 
 rines, Militia or Police forces, at such time or times, whether the sama 
 shall be the usual hours for st^arting trains or not, as shall be required or 
 appointed by any Officer duly authorized by tho Governor for that pur- 
 pose, and with the whole resources of such Company or body corporate, 
 at fares not exceeding two cents per mile, for each Officer, Soldier 
 Marine or Private of such forces respectively. And also for each wife, 
 widow, or child above twelve years of age, of a Soldier entitled by Act 
 of Parliament or other competent authority, to be sent to their destina- 
 tion at the public expense, children under throe years of age so entitled 
 to be taken free of charge ; and children of thrc • ars and upwards but 
 under twelve years so entitled, being taken at h. f price of an adult, 
 provided that every officer conveyed shall bo entit jd to take with bim 
 one hundred weight of personal luggage without extra charge, and every 
 Soldier, Marine, Private, Wife or Widow shall be entitled to take with 
 him or her half a hundred weight of personal luggage without extra 
 charge ; all the excess of the above weights of personal luggage being 
 paid for at the rate of not more than eiglity cents per one hunflred weight 
 per one hundred miles ; and all public baggage, stores, arms, ammunition 
 and other necessary things, except gunpowder and other combustible 
 matters, shall be conveyed at chargei not exceeding four cents per ton 
 
pormile, the assistance of the military or others ^eing given in loading 
 or unloading such goods. 
 
 4. The said Company shiill bo bound to convey Ilcr Majesty's Mails at 
 the same rate of charge as .jow paici for the sariio service to the liailway 
 Department in Nova Scotia. 
 
 5. And the said Representatives for and on behalf of the said Province 
 of Nova Scotia, under the autiiority hereinbefore -aentioned, in consider- 
 ation of the premises, hereby agree to and with the said Companv as 
 follows : 
 
 6. That the amount of the subvention mentioned in Section 2, of the 
 said Ace. shall Ix- reckoned on Seventy miles, or twenty -two thousand 
 four hundred pounds sterling per annum. 
 
 7. That in consideration of the Provincial Government taking no stock 
 in the said Railway, as provided in Section 2 of the said Act, th? uaid re- 
 presentatives agree to increase the annual subvention to the sum of twenty- 
 four thousand pounds sterling. 
 
 8. That after the firs* payment of the subvention, as mentioned in 
 Section 4 of the said Act, all future payments shall be made half-yearly in 
 the city of London. 
 
 9. Tlmt in case the eubvention shall not be capitalized as provided ia 
 Section 4 of the said Act, or in Clause 16 of this Agreement, the subven- 
 tion shall only be paid in proportion to the progress of the Works, and in 
 the event of less than one quarter of the entire works being completed 
 during the first year, or of one eighth during any subsequent half year, 
 the Provincial 'jovernment shall be entitled to retain a proportionate de- 
 duction from such subvention until such proportionate part is completed, 
 and oil the completion of the banie the whole of the said amount so 
 retained shall be paid to the Company. 
 
 10. That the pow«rg (ompriscd in Section 5 of the sain Act shall not 
 be put in force without the consent in wri .'ng under the Common Seal of 
 the Company. 
 
 11. That all lands required for the Railway track and appurtenanoes 
 shall be provided gratis to the said Company with the rights of entering 
 on all uugranted lands belonging to thf; Gov* rnment, and taking frc ot 
 cost all materials required for the Railway, as under the provisions of Sec- 
 tion 1 1, Chap. 70, r-.Tcrred to in the said Act. 
 
 12. That the said Company shall be entitled ,to make and enforce a 
 larilf of ciiarges foi fares and ireights equal to but not exceeding (except 
 1)V' mutual arrangement) the tariff now in force on the (iovernment lines, 
 copioK of wliich !ire this day signed by tiie said representatives, such lim- 
 itatidu iiot to apr-ly to *\u' charges for conveyance of horses and wnggons, 
 wiiicli shall b.' det^rminod by mutual agreement. 
 
 i;<. That the provisions of Section \) of the sai<'. Act as far as regards 
 the possession and ownership of the I'ailway by (Government s) .11 only 
 be put in force subject to the prior payment or tender to Uie Company of 
 the valve thereof, as meiitioiied in Section 7 of the said Act, such value 
 to bo ascertaihod by arbitraiion either under the prov'gions of Section 8 
 of the said Act, or of this Agreement. 
 
 .*. That should the said Provitcial Government exercise the po.vers 
 given them umtvr the ])rovisiou8 of Soction 7 of tlie said Act, prior to the 
 o|.ening of the said llailw;iy for tiallic, the amount to be paid to the said 
 Company us the value of the said lUilway shiill not bn less than the ca- 
 pit.il e.xpended including tl.e subvention an'l all liabilitcs ban i fiile incur- 
 re<l with six per cent per annum interest thereon, exclusive of the sub- 
 vention, and sliould the said Government ex'-n ise such powers after the 
 opening of the said Railway for traOic, the auiouat to be paid to the said 
 
 i 
 
Irds 
 
 |ul.y 
 
 of 
 
 llue 
 
 Comimny ha tin; viiliie of tlio Itiiilwtiy sliall not be less thnn tbo ciipital 
 oxpcnded iiu;lutl(ii .subvention muI all iijibilitios hona fide amount, 
 whiih witli tlio not oiirnin}i;8 of llio (said llailway shall bo o<|iU'l to <> per 
 cont pcraniunn interest on the amount ox|)on<li'(l (exclusive of t^u; sabvon- 
 tion. 
 
 J 5. That if Provincial Dobentunis be pai.l in imrHUPnoo of tbo provi- 
 sions of fjoction 7 of tho said Act, the mme shall he reckoned at a price 
 which sl'-.Il make them oipiivalcnt to cash ; and in case any diflorence of 
 opinion shall arise as to the value of tlio debentures to be paid, the same 
 shal! lie (ietc'ruiiiu-d by arbitration, either under the provisions of Section 
 8 of the said Act, or f)f this Agreement, 
 
 1(5. That in casa the said Company shall determine to capitalize for it- 
 self the said subvention, or any part tlieroof, the Provincial Gevernment 
 shall render every .asjistance in their power to accomplish this object, and 
 shall if necessary enter in^o a direct obli^^ation with all i)ro})er ])arties for 
 the payment for the future of tho said subvention to such parties direct 
 instead of to the said Company, provided that all monies raised under the 
 provi.sions of this Clause sh.alt be deposited in the joint names of the par- 
 ties lioreto, or such other names as both shall agree upon, in the National 
 IJank, or in some other Bank, in London, to be approved of by the par- 
 ties, and to be drawn out by both parties and applied only for the con- 
 struction of the Railway, ;»o lala with the progress of the works, until 
 the said Raihvay sliall be fully completed and open for traftic, aftur which 
 the balance, if any, shall Vie paid to the Company. 
 
 17'. That the said Company shall, for the purpose of carrying out this 
 Agreement have the power to form a Joint Stock Company, under tho 
 provisions of the English Company's Act. 1802, with such amount of cap- 
 ital, and with borrowing powers and such other articles of Association as 
 the said Company may think jiroper ; and when such Company is fo-med 
 and capital jilaced to tho satisfaction of the jiarties hereto of the <ir.st 
 part, the said intended Company, so to be formed, shall be accepted in lieu 
 of the said Com])any for iho purpose of this Agreement. 
 
 18. That an Act of Incorporation for such intended Railway Company 
 shall be submitted to the liOgislature of Nova Scotia, and upon such in- 
 corporation being made, the Government for the time being shall have 
 the power of nominating two 'directors to the Roard of such Company. 
 
 10. That all materinls and stores re(]uired for the construction and 
 working of the Railway shall bo entitled io a drawback of the amount of 
 import duties paid thereon by tln> said Company, and that the Provincial 
 Ciovernment shad grant the frea use of the landing stage nnd railway 
 stations at Halifax, Bedford and Truro, and ♦ransit over the Oovernment 
 Railways, the s.dd (^ompany paying all exiienses incurred in landing, and 
 for Imulago and handling of such materials and stores, and also the cost 
 of transit thereof. 
 
 20. That should any Legislative alterations bo required for tho pur- 
 pose of carrying the terms of this Agreement into elTect, tbo saicl parties 
 of the first part hendiy undertake and agree to use all proper means in 
 their power to obtain ihe same, 
 
 21. And it 18 further mutually agreed that prior to the opening of the 
 Railroad, a taritr arrangement shall be made between tho said Company 
 an<i the I'rovinci.il Government fur the mutual use aiul employment of 
 their respective linos of Railway, or fur the jo.nt operation thereof on 
 e(iuituhl«, terms. 
 
 22. That the third Arbitrator proposed to bo appointed under seition 
 8 of the said act, by tho Principal Socrctary of State for the Colonies, 
 
lO 
 
 shall act only as Umpire in the event ©f disagreement between the other 
 two Arbitrators therein named. 
 
 1'i. That by mutual consent the appointment of an Arbitrator under 
 the provisions of Section 8 of the said A«t, by the Principal Socn^tary of 
 State for the Colonics, may be dispensed with, and the same may be up- 
 pointed in such manner as the parties liereto may agree upon. 
 
 24. That in every Arbitration required under this agreement, or under 
 the said Act, in case the Government or the said Comi)any shall fsiil to 
 appoint an Arbitrator, and to notify such appointment to the other party 
 within three calendar montlis after request in writing, the Principal Soc- 
 retury of State for the Colonies shall nominate and appoint the Arbitrator 
 for the party so refusing, and such Arbitrator shall have the same po^vcr 
 and authority as if ho had been nominated and appointed by the said 
 Governmsnt or the said Company re'^ipectively. In witness whereof the 
 said Representatives have hereunto set their hands and the Company 
 their seal the day and year first above written. 
 
 CHARLES TUPPER. 
 WILLIAM A. HENRY. 
 
 JOHN GAY, 
 D.J. HOARE 
 
 £. PICKERING, 
 Managing Director. 
 
 > Directors. j-t y ■, 
 
 W. S. HOPLEY, 
 
 Secretary. 
 
 In pursuance of their contract, the International Con- 
 tract Company commenced surveying in the month of No- 
 vember, 1865, completed their plans, and began the con- 
 struction of the line early in June, 1866, after havinj^ 
 given the Government notice tliat they were about to 
 commence. On the 27th of the same month, the Com- 
 pany's Engineer, (Mr. Alexander Beattie), having become 
 aware that Mr. Fleming had been surveying other routes, 
 addressed to the Provincial Secretary the letter hereunder 
 given ; but they were not favoured with a perusal of his 
 report (which has never been made public) ; neither did 
 they receive a striltment of the conclusions at which ho 
 had arrived, oi* any expl&uation of the reason why he con- 
 tinued the survey, that under the contract had to bo done 
 by the Company. That the work was dnly commenced 
 and prosecuted will be seen by the Report for 1866 
 of the Railway Commissioner, pagt 15, in which it is 
 referred to, as being an integral part of the Intercolonial 
 Railway. 
 
 All the B'lbsequent corrQ«pondei)ce is given in extenso^ 
 
 
II 
 
 and fully explains the reason why the Company — not- 
 withstanding their very large outlay in surveys, earth- 
 works, and in the purchase of permanent way material, 
 &c. — eventually suspended operations on the line, under 
 protest, although they continued the New Brunswick 
 contract, and one-half of the road is now constructed : — 
 
 Halifax, June 27, 1866. 
 To the Hon. The Prov. Secreta*j. 
 
 Sir,— 
 
 III reteronce to the location of the Railway Uno under the con- 
 tract entered into between the International Contract Company and 
 the Ciovernment, I beg to say, that I have no power to sanction any 
 alterations of the route fixed by the Company. 
 
 It was entirely upon the commercial advantages expected to bo 
 obtained from following the line along the Sutherland Lake, that 
 tlie calculations of the Company were based. Any change therefore, 
 in that respect, would materially alter their position in regai-d to the 
 contract. 
 
 I herewith submit, for your inspection and information, the plan 
 and sections of the line approved oy the Company. 
 
 I have the honor to bo, r. 
 
 Your obed't servant, 
 [Signed], ALEX. BEATTIE. 
 
 SlR,- 
 
 Provincial Secretary^ s Office, Halijax, July i^h, 1866. 
 
 I have it in commaad to inform you, that your letter of .Funo 27th, 
 hati I'eenMuly considered by His Excellency the Lie utenant-(4ovemor 
 in Council, and that as you have declined on the part of the Interna- 
 tional Oontru t Company, to comply with that jmrt of the contract 
 between the Government and the Company, which requires that the 
 location of the Railway should be approved by the Lieutenant-Gov- 
 ernor in Council, upon the recommendation of the Chief Engineer, 
 and as the agroemenl to commence the work ''bona fide" at a 
 period not later than the montli of .Juno, 1806, has not boon ful611- 
 od, the Govornniont consider that the contract is at an onil. 
 
 [Signed], CHARLES TUrPER. 
 
 Nova Scntia and Neiu Brunsivick Railway, 
 
 Halijax, July t^th, 1866. 
 To the Hon. Charles Tupper, 
 
 Provincial Secretary. 
 SlK, — 
 
 I hiive oiily t.o-day received your letter of the ]4th inst. 1 loam 
 fi'om Mr. Thompson, that thougli ho was promised by you t!i*t when 
 the answer of mine of the 27th wiw ready, it should bo handed to 
 liim, ho has never received any further communication from you. 
 
 1 can only oxprosB my regret that tiio (Jovornmont ropmUato thi* 
 contract ontorou into with the Intornational Contract Company. 
 
\i 
 
 Tho Company consider the route settled by contract, and approved 
 by tho Government, and accordingly tho Company have been work- 
 ing on the line during the last live weeks, at a large outlay of 
 money, I cannot, therefore, with my present instructions, wholly 
 susijend my operations, but will report the lacts for the information 
 of the International Contract Company. 
 
 Should there be any delay in the lulrilment of the contract in con- 
 sequence of tho action taken by tho Government, the responsibility 
 will not rest with the International Contract Company. 
 
 I am your obed't seivant, 
 [Signed], ALEX. BEATTIE, 
 
 Agent for I. C. Co. 
 
 Nova Scotia and Ne-iv Bruno-wick Rail-way, 
 
 JVindsor, y««e 26//*, 1867. 
 A'vard Longley, Esq., 
 
 Chief Commissioner of Rail-ways, 
 
 Pro'viiice of Nova Scotia. 
 Sib, — 
 
 I have the honor to inform you that the contracts for the con- 
 struction of tho liailway from Truro to Moncton, maile by the Gov- 
 ornments of Nova Scotia and New Drunswick. rcispectively, with tho 
 International Contract Company of London, have been purchased of 
 tho ollicial ILjuidators of tliat Company, by Messrs. Edwin Clark, 
 and William .11. i'unchard, of 24, (treat Oeorgo Street, Westminister, 
 (i. B., and that they (in conjunction witli a party of capitalists,) have 
 determnied to immediately proceed with the work, and carry it on 
 with the utmost vigor, and complete tho same within tho time men- 
 tioned in the contract. I have received instructions (under a power 
 of attorney) to make a final location of tho whole Nova Scotia por- 
 tion of tho Line, and as this will necessarily occupy a consideraljlo 
 time to com])leto, 1 am to commence tho work on those portions 
 of tho Jjino that wore gener.ally approved and adopted. 
 
 Being instru'it'xl that a question arose between the Govcrimient 
 and the former contractors, as to tho most desirable position of tho 
 Lino in tho (Jobecjuid Mountains, I liad the iionor to co)il'or with tho 
 IIonora})lo I'rovincial Secretary on the subject, and waj favore<l with 
 the perusal of a detailed report m.ado Ity Mr. Siindford Fleming, ('.E.. 
 to tho (iovernment under date of tho 1st May, 1806, and of an in- 
 spection of the plan which accomi)anied it. 
 
 I learn therefrom that of tho numerous trial lines surveyeil, 
 (which, however, only varictl in the centre point, tho extremities 
 being c<)mmon to all), Mr. Floning selects two routes, one of which 
 passes through Folly Lako, and the other througli Sutiiculand Lake, 
 both situated in the Cobecpiid lange, the I'urmer buing hi a more 
 «'asierly itosition over the half of its length. Tho lulvantages of the 
 Folly Lako route;, are expressed in the lighter character of tho work 
 and the avoiding a long and shm [) incline. Tho di.sadvantag(<s are 
 its rather greater length, and a larger total proportion of heavy 
 grade, ami its boing so far oil tho Acadian Iron Slines, that they can 
 (lerivo no benelit from it. 
 
 The two last of thodisailvantages an; avoideil, at tho cost however 
 of increiUjing both the length and tliu work in a third liuu takou by 
 
' ' " n -- ' • 
 
 Madfiison's Brook, and Otter Lake, this woukl pass through the Iron 
 Mines in the most convenient position. 
 
 On the tracing which accomp.oniea this letter, (made from Mr. 
 Fleming's plan) I have shewn these three Lines, and beg to state 
 that on behalf of my piincipals, I am prepared to construct either 
 Line that may after more mature consideration be preferred by the 
 (lovernment. And if you express > preference for either routt', I 
 will immediately complete the survey thereon and lay befor-^^ you all 
 the inibrmation I can obtain, in order that a just conclusion mny be 
 arrived at. 
 
 I have at the present time to nvjuest your most serious considera- 
 tion to the greT.t benefits that would arise, both in regard to the 
 progress of the work and the interest of my Princii)als if an olHcial 
 sanction were given to those portions of the route from the New 
 Brunswick boundary to the Forks, anil from Truro to the Ingonish 
 Kiver, (which have never been in any degico questioned,) as I would 
 then secure and ufihi;o the labor that is now being discharged from 
 the Pictou Line, and finish these portions of the work before the 
 approaching Winter. In view of the great amount of work that has 
 to be done daring the three remaining seasons the contract allows, and 
 the great scarcity of labor arising from the ro-opening of extensive 
 Kailways and I'ublic Works, in New Brunswick, Canada, ami the 
 United States, which scarcity will be greatly intensilietl by the com- 
 mencement of the lutcrcoloiii'il Railway beyond th(j boundary, I 
 cannot too earn(;stly impress upon you the lulvisability of the im- 
 mediate ai^iiroval of the course I venture most respectfully to urge 
 upon you. I have the honor to be. 
 
 Your most obcdt servant, Sec., 
 (Signed], C. IL ({RANT. 
 
 Provincial Secretary s Office^ Halijax, "June ■J.<)lh, 1867. 
 Sir,— 
 
 I iiavo the honor to inform yon, in rejily to your letter of the 2'.)th, 
 in reference to tiie Truro andMoncton Railway, that the (lOVornment 
 cannot ontorUiin your proposal. 
 
 1 have the honor to be. Sir, 
 
 Your obedient servant. 
 [Signed], CHARLES TUPPER. 
 
 [This loiter wni* only ruet ived on lliu 4lli of .luly.] 
 
 July iml 1867. 
 
 Sir, — Not having receivod any n^ijly to my letter of the -<)th, 
 on the subject of the Monctou and 'i'ruro liailway, .an<l presuming 
 that the del.ay is caused by the transfer of liailway matters to the 
 (Jeneral (iovornment of the Dominion of ('anada, 1 liavo most ro- 
 H|)ectfully to rcHjuest tliat you will take the n(^cessary piocee<lingH to 
 ensure my having a dt^finite answer as soon .as po.ssible. 1 am the 
 more anxious for this from having secured the services of Engineerfi 
 and Con ti actors, who are ready to actively commence tho work. 
 I am. Sir, your obedient Sorvanl, 
 
 Hon. tho Provinciai, Si:(!R|;takv, 
 Province of Nova Sootia. 
 
 (Signed) C. 11. (I RANT. 
 
H 
 
 SlR,- 
 
 Amherstf July rind, 1867. 
 
 H 
 
 'W 
 
 As the duly authorized Agent and Attorney of Messrs. Edwin Clark 
 and William II. Punchard, of 24, Ch-eat George Street, Westminster, 
 G. B., on behalf of the International Contract Company, (limited) 
 I beg to submit for the consideration of His Excellency the Lieuten- 
 ant (.lovernor, and Her Majesty's Executive Council, the following 
 statement of facts in relation to the Contract made by the Company 
 Avith the Nova Scotia Oiovernmcnt, for the construction of a lino of 
 railway from Truro to the Now Brunswick border, in connection with 
 a line contracted for by the Company with the New Brunswick Gov- 
 ernment, extending to the Moncton and Shediac line of railway. To 
 this contract, made in August, 1865, and executed by two members 
 of the Provincial Government, ^on behalf of the Chief Commissioner 
 of Railways, 1 beg to refer for further particulars. 
 
 Previously to the execution of this contract, Mr. Alex. Beattie, 
 C. E., had made a survey of the hne from Truro via the Acadia 
 Mines, .Sutherland's Lake, Spring Ilill and Little Forks, to the New 
 Brunswick border, which was communicated to the Government En- 
 gineer ; and the contract i)rovides that the line should be constructed 
 " on the central route, which has been recommended by the Govern 
 ment Engineer and approved by the Governor in Council." No other 
 Une, it is believed, had previously been surveyed on this central route 
 nor was any other line spoken of or contemplated until long after 
 the making of the contract, and after the continued survey had been 
 completed l.'y Mr. Beattie a.s hereafter stated ; and as it was provided 
 by the contract that the surveying was to be done by the Company 
 and not by the Government, they considered that this line had been 
 approved, and was that on which the Railway was to bo built. Under 
 the provisions of the contract, the Company, in the autumn of the 
 same year, 18G5, caused the survey to be continued under Mr. Beat- 
 tfe's direction, and after extending throughout the Vvinter, it was fi- 
 nally completed, and the line -staked out early in the following 
 spring. The lino, thus surveyed, fulfilled all the requirements of the 
 contract as to curves, gradients, ifec. During the fii'st week in June, 
 18G0, Mr. H. G. Ketchum, C. E., on behalf of the Company, arrived 
 in Halifax to commence the work, according to contract, on the 
 north-western end, between Little Forks and the border, and per- 
 sonally rejiorted his instructions to the then Provincial Secretary and 
 the Cliief Commissioner of Railways. In the following week ho 
 broke ground, and commenced the work on the lino in both Prorin- 
 cos, and prosecuted it bona fide and continuously near Amherst up to 
 tiio 19th July, 18G6, when Mr. Beattie received the annexed answer 
 of the 14th of July. Although Mr. Beattie's movements were thus 
 j)araly/,etl by the action of tho Government, yet, in tho absence of 
 mstructions from his i'rincipals, ho did not feel himself justified in 
 wholly suspending the woik, but continued on with a "mall force du- 
 ring tho remainder of tho season, and took delivery of ai;d j)aid for 
 a largo quantity of sleepers which had been contracted for by tho 
 ('om])any some months previously in anticipation of tho work. Do- 
 tails of tho work, and cxpomliture, can bo submitted to tho Govern- 
 ment if rc(iuired. Shortly previous to tho correspondence above ro- 
 I'erretl to, Mr. Beattie became awaro that, under tho directions of tho 
 Provmcial Govorrment-- but for what reasons f ho company wero not 
 
15 
 
 lUS 
 
 >of 
 
 ill 
 
 du- 
 
 for 
 
 the 
 
 Do- 
 
 crii- 
 
 ro- 
 
 tho 
 
 not 
 
 I 
 
 informed — >Sandford Fleming, Esq., C. E., had made a survey and 
 report upon anotlier line, which followed tlie Beattie lino from Triuo 
 to Tngonish liiver, and fi-om Little Forks to the Border, l)ut<liverged 
 at intermediate points to the extent of one to eight miles, atid 
 lengthened the line about two miles as compared with the Bv ittie 
 line. In his report, Mr. Fleming, while recognizing the commercial 
 ami other advantages of the Beattie line, connecting, as it would, die 
 Goul and iron districts, expressed a slight preference to the one sur- 
 veyed under his direction, via Folly Lake and Tillott's creek, 'i'he 
 company is not aware whether this Re})ort has been formally adopt 
 ed by the (Jovernment, although Mr. Beattie strongly urged upon 
 the (lovernment in -Tuly, 1860, that those i)ortions of the line at 
 either end, which were common to both, should be sanctioned, so 
 that the \ rork might not bo interrupted. On the New Brunswick 
 siilo of the bolder, where no ditliculty w.is matle by the Govein- 
 ment as to the route, the work "..as continued vigorously to the 
 close of the season, was resumed this season, and will be coni- 
 plete<l by the close of next year — thus forming the first finished 
 portion of the Intercolonial llailway. Meanwhile a large outlay of 
 money has been incurred by the (company in this Province in making 
 the survey, in grading ond providing sleepers, and other materials. 
 To evince the determination of my Principals to carry on the work 
 to completion, pursuant to and within the time limited by the con- 
 tract, I beg to refer you to a letter which, in the absence of a reply 
 to Mr. Beattio's last communicadon, I addressed on the 26th June 
 last to your predecessor, the Hon. C. Tapper. As the Gove.nment 
 declined to accede to this j)roposal, I must now invite the serious at- 
 tention of the existing Government to the position of the Company, 
 under the present changed aspect of atiiiirs. 
 
 We are prepared at once to cany on and i'ulfil the contract ; but 
 should the Government throw any further obstacles in the way of 
 this, we consider that we have a legal, as well as equitable claim upon 
 the (jiovernment for full compensation, not only lor the outlay, but 
 for the withdrawal of the contract. The Company's action through- 
 out has been in good faith and was based upon the conviction that 
 Mr. Beattie's Line, was that referred to in the contract as having re- 
 ceived the recommendation of thf J'rovincial Engineer, and the aji- 
 ])roval of the Governr.ent. They submit that their view of the 
 r^ifttter, is strengthened by tlie fact that th-^ length of the Line is 
 limited by the contract, and if it be contend-^ci that the Government 
 had the power of afterwards lengthening it, or deviating to so w'ule 
 an extent as eight miles from the Line, where is the limit, and what 
 protection had the contractor? from an enormous expenditure, when 
 they were expressly restricted as to piracies and curves by the contract. 
 
 In conclusion, I humbly submit that my Principals are anxious not 
 to throw any obstacles in the way of completion of the Line, and 
 desire cordially to cooperate with the Government to this end. t^hould 
 it therefore bo considered undesirable to carry out tiie contract in its 
 present form, I shall be hai)j)y to negotiate a new contract upon any 
 terms the Government may desire, and upon satisfactory terms being 
 arranged, to abandon any claims wo may have under the i)resent 
 contract. Requesting your immediate con.sideration of this matter, 
 
 I have the honor to be, J^ir, 
 To THE Hon. P. C. TIn.i,. ( Your most obed't servant, 
 Provincial Secretary, Ilahfax. ( L'^'igned], C. II. GRANT. 
 
 ft 
 
 v; 
 
i6 
 
 tio'-va Scotia and Neiv Bransivick Ra'thvay, 
 
 Enqincers Office, Dorchester, N. B., July 2.ind, 1867. 
 Tho Hon. A. (1. AR(;niHAi,i). 
 
 Secretary of State I'or tho Dominion of Canada. 
 
 Sni, — I liavc the honoi' to enclose you herewith a copy of a letter 
 this (lay atldressed to the Provincial Secretary of Nova Scotia, on tho 
 suhject of theliaihvay from 'r)nro to the liomidary at Amherst, the 
 contracts for which were undertaken by my Principals. 
 
 As tlio recent chanjjjes in tlio (lovcrnment may l)ring the matter 
 ollicially before you, I venture to trouble you with it at this early 
 stage, and to re(|uest that you will, as far as in your Province, expe- 
 dite its settlement. 
 
 I have tho honor to bo, Sir, 
 
 Your obdt. Servant, 
 
 (Signed) 
 
 C. IT. GRANT. 
 
 Pronjincial Seeretarfs Office, 
 
 Halifax, July ^f)th, 1867. 
 Sir, — I have the honor to acknowledge the receipt of your com 
 munication of tho 22nd instant, and. in reply, beg to say that there 
 is not a (juorum of the Executive Council at present in town ; but 
 that at their first meeting your letter will be laid before them, and 
 receive full consideration. I am, Sir, your obed. Servant 
 
 (Signed) P. CARTERET HILL, Pro'v. AVr>. 
 
 Charles II. Grant, Esq. 
 
 No further reply has been received from tlie Nova Scotia 
 Government, although their attention to the matter has 
 been subsequently requested. 
 
 The Government do not correct or further explain the 
 letter from the Honorable Provincial Secretary, dated the 
 14th July, (seventeen days after they received Mr. B6at- 
 tie's first communication of the 27th Jnue !) which evident- 
 ly shows that a totally incorrect view wa» taken of Mr. 
 Beattie's letter, since that gentleman (whatever his opinions 
 may have been as to the requirements of the contract) so 
 far from refusing to submit his plans, actually sent them in 
 with his letter, and, therefore, in suflicient time to have 
 them approved by the Governor in Council, and in opera- 
 tion within tho month. Dii the Government assume this 
 to be either necessary or desirable ? 
 
 No exception has ever been taken to the prescribed 
 route, nor has any other route been recommended or sug- 
 gested. 
 
^7 
 
 The Railway Commissioner and the chief members of 
 Government had frequent notices, and were well aware 
 that the work was being prosecuted during the greater 
 part of June on the route adopted by Mr, Fleming, (then 
 Chief Engineer to the Government) in both his published 
 reports. Mr. Beattie's protest affords but slight grounds 
 for coraplamt, as it would be an extraordinary assumption 
 that the powers of an agent extended to altering, on his own 
 authority, the basis of a contract he was commissioned to 
 fulfil. 
 
 In conclusion, it is submitted that on a fair view of the 
 matter it is not probable that a purely Commercial Com- 
 pany would und. rtak' to provide the whole of the capital 
 for, and construct a long and difficult line of Railway, 
 which the Government had the power to lengthen at will, 
 or to make the work indefinitely costly, or so to divert as 
 to eliminate all the local traffic on which, by its nature, it 
 ought p>'^icipally to depend for producing any remunera- 
 tive return, or, indeed, to enable it to be kept open in the 
 winter. Further, the character of the Line, as shewn by 
 the plans submitted to the Government by the Company 
 was, in every particular, greatly superior to that formally 
 prescribed by the contract ; was much shorter than any 
 other line mentioned in the Report of Mr. Fleming, and 
 in the details of construction was far more economical. 
 
 [The Papers and Correspondence above given comprise the whole of 
 those in any way connected with the contract, and are printed at full 
 length fiom the original documents.]