IMAGE EVALUATION
TEST TARGET (MT-3)

s^ S'

:/.

i.O IfriM ilM

1.25

1124

2.2

2.0

1.4

1.8

1.6

6" —

>;^.

(f^*.

Photographic

Sciences
Corporation

33 WIST MAIN STMIT

WHSTIR.N.Y l4SitO

(7t«) •73-4S03

^s ^■^>

rama

CIHM/ICMH

Microfiche

Series.

CIHM/ICMH
Collection de
microfiches.

Canadian Instituve for Historical Microreproductions / Institut Canadian da microraproductiont historiquas

Technical and Bibliographic Notes/Notes techniques et bibliographiques

The Institute has attempted to obtain the best
original copy available for filming. Features of this
copy which may be bibliographically unique,
which may alter any of the images in the
reproduction, or which may significantly change
the usual method of filming, are checked below.

[—71 Coloured covers/

IV/ 1 Couverture de couleur

I I Covers damaged/

D
D

Couvertuie endommagee

Covers restored and/or laminated/
Couverture restaur^? et/ou pellicul6e

Cover title missing/

Le titre de couverture manque

I I Coloured maps/

Cartes g6ographiques en coulaur

□ Coloured ink (i e. other than blue or black)/
Encre de couleur (i.e. autre que bleue ou noire)

□ Coloured plates and/nr illustrations/
Planches et/ou illustr<$ ions eri couleur

Bound w>ith other material/
Keli6 avec d'autres documents

Tight binding may cause shadows or distortion
along interior margin/

La reliure serrde peut causer de I'ombre ou de le
distortion le long de la marge intirieure

Blank leaves added during restoration may
appear within the texc. Whenever possible, these
have been omitted from filming/
II se peut que certaines pages blanches ajouties
lors d'une restauration apparaissent dans le texte,
mais, lorsque cela itait possible, ces pages n'ont
pas 6t6 fiimies.

Additional comments:/
Commentaires supplAmentaires;

L'Institut a microfilmd le meilleur exemplaire
qu'il lui a 6x6 possible de se procurer. Les details
de cet exemplaire qui sont peut-dtre uniques du
point de vue bibliographique, qui peuvent modifier
une image reproduite, ou qui peuvent exiger une
modification dan» la mdthode norrnale de filmage
sont indiqu^s ci-dessous.

□ Coloured pages/
Pages de couleur

n
n

This item is filmed at the reduction ratio checked below/

Ce document as^ film* au taux de reduction indiquA ci-destout.

Pages damaged/
Pagos endommagdes

Pages restored and/or laminated/
Pagas restaurdes et/ou pelliculdes

Pages discoloured, stained or foxed/
Pages ddcoior^es, tachet^es ou piqudes

Pages detached/
Pages ddtach^es

[""Tl Sljowthrough/
I I Transparence

I I Quality of print varies/

Quality indgale de I'impression

Includes supplementary material/
Comprend du materiel suppl^mentaire

Only edition aveilable/
Seule Edition disponible

Pages wholly or partially obscured by errata
slips, tissues, etc., have been refilmed to
ensure tite best possible image/
Les pages totaloment ou partiellement
obscurcies par un feuillet d'errata, une pelure,
etc., ont 6te film^es 6 nouveau de favon A
obtenir la meilleure image possible.

10X

14X

18X

22X

30X

12X

16X

20X

24X

28X

32X

ails

tdifier

une

nage

The copy filmed here has been reproduced thanks
to the generosity of:

Library of the Public
Archives of Canada

The images appearing here are the best quality
possible considering the condition and legibility
of the original copy and in keeping with the
filming contract specifications.

L'exe'^nplaire filrn^ f ut reproduit grflce d la
gAnirosit* de:

La bibliothdque des Archives
publiques du Canada

Les images suivantes ont 6t6 reproduites avec le
plus grand soin, compte tenu de la condition et
de la nettet^ de I'exemplaire film6, et en
conformity avec les conditions du contrat de
filmage.

Original copies in printed paper covers ore filmed
beginning with the front cover and ending on
the last page with a printed or illustrated impres-
sion, or the back cover when appropriate. All
other original copies are filmed beginning on the
first page with a printed or illustrated impres-
sion, and ending on the last page with a printed
or illustrated impression.

Les exemplaires originaux dont la couverture en
papier est ImprimAe sont fiim^s en commen9ant
par le premior plat et en terminant soit par la
dernlAre page qui comporte une empreinte
d'impression ou d'illustration, soit par le second
plat, salon le cas. Tous les autres exemplaires
originaux sont fil^te en commen^ant par la
premiere page qui comporte une empreinte
d'impression ou d'illustration et en terminant par
la dernidre page qui comporte une telle
empreinte.

The last recorded frame on each microfiche
shall contain the symbol -^(meaning "CON-
TINUED"), or the symbol V (nr^eaning "END"),
whichever applies.

Un des symboles suivants apparaftra sur la
derniiri' image de cheque microfiche, selon le
cas: le symbole — *> signi7ie "A 3UIVRE ", le
symbols 7 signifie "FIN".

Maps, plates, charts, etc., may be filmed at
different reduction ratios. Those too large to be
entirely included Sn one exposure are filmed
beginning in the upper left hand corner, left to
right and top to bottom, as many frames as
required. The following diagrams illustrate the
method:

Les cartes, planches, tableaux, etc., peuvent dtre
filmte A des taux de reduction diffdrents.
Lorsque le document est trop grand pour Atre
reproduit en un seul cliche, il est fi!m6 d partir
de Tangle supArieur gauche, de gauche d droite,
et de haut en oas, en prenaiit le nombre
d"images nicessaire. Les diagrammes suivants
illustrent la mithode.

Tata
o

)8lure,

32X

1 2 3

I* A PER 8

xm>

CORRESPONDENCE,

KBLATUW TO

^'^^i^Wi^fikkmmfUflm

ASD

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.

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

Irds

|ul.y

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,

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^

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.

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.

SlR,-

Amherstf July rind, 1867.

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

lUS

>of

ill

du-

for

the

Do-

crii-

ro-

tho

not

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.

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.

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.]