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 PAPEES 
 
 CORRESPONDENCE, 
 
 UELATINU TU 
 
 Cjjc (Itoitti'itct ijcthjccit tjjc (Sabci'iiiucnt of |toba Stotia 
 
 AND 
 
 THE mTERNATIOJTAL CONTRACT COMPANY, 
 
 FOR THE CONSTUUCTION OF THE 
 
 TKUllO AND MONCTON, OR THE NUVA SCOTIA AND NEW 
 
 BRUNSWICK (INTERCOLONIAL) RAILWAY. 
 
 LOJsyDON : 
 
 .JOHN HADDON S: Co., I'RIKTERS, 3, GEORGE YARD, LO.MUARD STREET. 
 
 186S. 
 
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 PAPERS 
 
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 S' 
 
 CORRESPONDENCE, 
 
 ULATIMO TO 
 
 f !)c Contract kWarn t!)c dobernment of |toh ^totta 
 
 AKD 
 
 THE INTERMTIOKAL CONTMGT COMPAinr, 
 
 FOE THE CONSTRUCTION OF THE ^^Wg^ 
 TRVRO AND MONCTON, OR THE NOVA SCOTIA AND NEW 
 BRUNSWICK (INTERCOLONIAL) RAILWAY. 
 
 LONDON ; 
 
 JOHN HADDON ft Co., PRINTERS, 3, GEORGE YARD, LOMBARD STREET. 
 
 1$6S. 
 
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 PAMRS AND CORRESPONDENCE 
 
 ItfLATIMS TO THB 
 
 I CONTRACT BETWEEN THE GOVERNMENT OF NOVA 
 
 SCOTIA AND THE INTERNATIONAL CONTRACT COM- 
 PANY, FOR THE CONSTRUCTION OF THE TRURO 
 AND MONCTON, OR THE NOVA SCOTIA AND NEW 
 BRUNSWICK (INTERCOLONIAL) RAILWAY. 
 
 The first official documents on this subject j^ear in 
 the " Journals of the House of Assembly " (Nova Scotia) 
 for 1865, Appendix No. 7, Railways, page 13, where the 
 proposed Heads of Agreement for the contract are stated 
 to have been handed to the Honourable 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- 
 pany, on the 16th September, 1864 ; and on page 14 the 
 proposal is shown to have been repeated and acknow- 
 ledged, as in the extract hereunder : — 
 
 [Memorandum handed to the Hon. Provincial Secretary by J. Livesey, 
 Esq., at Quebec, October 1864.] 
 
 NOVA SCOTIA AND NEW BRUNSWICK JUNCTION 
 
 RAILWAY. 
 
 Rbavs ot Proposed Aobeement with Novia Scotia Goveenment, 
 
 1 . The International Contract Company adopts the Resolution of 
 last Session, authorising a subvention of four per cent, per annum for 
 
m- 
 
 L>« 
 
 
 20 years on £8,000 Bterlinx per mile, in consideration of whiohii-pnyable 
 on seventy miles, the International Contract Company engages tlie con- 
 struction and working of a Railway from Truro to the New Brunswick 
 bordev (with extension to Moncton- under simultaneous arrangement 
 with the Government of Now Brunswick), intertecling the mineral dis- 
 tricts of Londonderrtj and Sprinjfhill. 
 
 2. Payment of the subvention to commence one year from the 
 commencement of the works, and to be thereafter made half-y ily ; the 
 expenditure on the works being at the rate of not less than £100,000 
 per annum. At the option of either party the subvention may be capi- 
 talised and given in the form of six per cont. Provincial Debentures at 
 the current value of the day, convertible, at the option of the Govern- 
 ment, into four per cent, debentures of like amount, bearing the Im- 
 perial guarantee. 
 
 3. ^ ^e whole line to be completed within four years from date of 
 commei^ment of works, which 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 Railway 
 for all materials required in the construction of the Railway and its 
 equipment. 
 
 6. Land for Railway track to be provided gratis to the Company, 
 by assessment on the respective counties or otherwise. 
 
 6. The line to be equal in point of construction, and not exceeding 
 in grades and curves the existing Raihcays in Nova Scotia. 
 
 7. A traffic arrangement to be made for transmission of trains, 
 and the Company to have the right of running trains on the Government 
 lines, paying to Government twenty per cent, of all receipts arising 
 therefrom. 
 
 8. The GoTernment for the time being to have the nomination of 
 two Directors to the Board of the Company for the operation of the 
 Railway, which Company will be constituted and guaranteed by the 
 International Contract Compan3'. 
 
 *9. Government to take shares of the first issue in the Railway 
 Company to the amount of £100,000 sterling, on which calls to be paid 
 equally with other shareholders. 
 
 • This clause was subsequently omitted, and the yearly subscription increased to 
 £24,000. 
 
1F» 
 
 10., T^e Iforegoing engagements refer solely to the railway. In 
 the e^iii'^f "tte Company establishing special harbour accommodation, 
 and providing facilities for the transmission and export of coal ut a con- 
 venient point on the Bay of Fundy, it shall receive annually an amount 
 equal to one-fourth of the Royalty accruing to Government from the 
 coals so transmitted and exported. > . *x 
 
 11. Government to have T'n\v%r at any Ifme within years, 
 
 of taking possession of the Ran way by payment to the Company of an 
 
 amount to be fixed by arbitration in the usual form. ^:» 
 
 ^4 
 
 Halifax, January 6M, 1865. 
 Dear Sis, 
 
 In reply to your inquiry, I beg to say that the Government ,%xe 
 not in a position to give you a decided answer to the offer made by you, 
 on behalf of the International Contract Company, for the construction ^ja^ 
 
 of the Railway from Truro to Moncton, as they have not yet Ipceived a 
 definite reply from other parties with whom negotiations ata pending. 
 I may say, however, that if arrangements are not made at an early day 
 for the completion of this work, upon terms more favourable to the 
 Pro\'ince than those offered by you, I am satisfied that the Government 
 will propose to Parliament the acceptance of the proposal of the Inter- 
 national 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 con- 
 nection with it, I beg to subscribe myself, 
 
 Yours, &c., 
 
 (Signed) CHARLES TUPPER. 
 John Livesey, Esq. 
 
 In reference to the preliminary question of route it 
 appears that the " other parties " witli whom negotiations 
 were stated to be in progress, included C. J. Brydges, 
 Esq., the Resident Director of the Grand Trunk Railway, 
 who, in his offer to the Honourable Provincial Secretary 
 dated 17th November, 1864, and shown on page 7 of the 
 journals before cited, remarks as under : — 
 

 " In regard to the question of the course of the lino ^ connect the 
 existing Railways of New Brunswick and Nova Scotia, that will, of 
 nocossii), be mainly determined by the results of the survey now being 
 mude by Mr. Sandford Fleming ; but provided Huch survey shows no 
 serious engineering difficulties, it would certainly be desirable that tr 
 line should pass through the district where the Londonderry Iro 
 Works and the Springhill cOal MUh lie : it brini/ nndoubtedly a matter 
 of great importance, as well to the Provinces as to the Railway, that 
 exitting iron and coal mines should be made available by having th<> faci- 
 lities of railway transport ajforded them." 
 
 The allusion herein made to the line passing through 
 the districts of the Londonderry (Acadian) and Spring 
 Hill Mines, arose from the Government and Mr. Brydges 
 being aware that the Acadian Iron Company had, at con- 
 siderable cost, surveyed a line 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 Intercolonial 
 survey, as regards this section, is comprised in the follow- 
 ing extracts from his Report, pages 10, 11, and 13: — 
 
 " The portion of this line extending 41 miles out of Tnuo was sur- 
 veyed during the past year by Alexander Beattie, Esquire, C.E., for 
 the proprietors of the Acadian Mines ; the section lying between the 
 Provincial Boundary line near Amherst, and Monc'on, about 33 miles 
 in length, was surveyed last year by J. E. Boyd, Esquire, C. E., under 
 instructions from the Government of New Brunswick." * ♦ * ♦ # 
 
 " The country south of Amherst, on the Macan River and some of its 
 tributaries, 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 Cobequid range is rich in iron ore of the best description ; it 
 is Kow manufactured on the southern 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 into steel, for which 
 troni its quality, it is admirably adapted. It is considered that iron 
 
 1" 
 
manufactM|iM.Qf ftU kinds wo\ild b* tstablinhcd and greatljr multiplied in 
 this Rcctton were proper facilitlft created for bringing the coal and ore 
 together. Line No. <3 accomplishes this end, and ro also docs lino No. 
 6, although the latter does not in the same degree accommodate the exiHt- 
 ing establishment of the Acadinn Mining Company, now in operation 
 on Great Village River. °'^^i||# 
 
 " In review of the above, it womcrSeem tlmt, apart from the question 
 of distance and gradients, a central route, whilnt opening up the mineral 
 districts both of coal and iron, would at the same time serve generally 
 the population of the country as well as any other line specially located 
 with that object solely in view, and without regaid to the development 
 of the rich mineral resorces of this district. ♦♦*•♦*■♦• 
 
 " Between Moncton and Truro, with the exception of the mineral 
 districts which are for the most part in a state of wilderness, much of 
 the country is settled, and in some sections cultivated farms of the richest 
 description can be seen." 
 
 In the above extract the line described as No. 3 is 
 identical with that specified in the contract, both in the 
 Nova Scotia and New Brunswick Portions. 
 
 In the following spring 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 : — 
 
 Sib, 
 
 Railway Offivr, Halifax, llth June, 1865. 
 
 In pursuance of the command of His Excellency the Lieutenant- 
 Governor, conveyed to me in your letter of the 15th ultimo, and in 
 accordance with the verbal direction subsequently received from you, I 
 have instituted a survey of the country between Truro and the northern 
 boundary of the Province with the view of determining the best 
 
8 
 
 locatbu 4if a Hue of Railway to connect Nova Sooti« ^wtth-jhe Sister 
 Province, New Brunswick. Before proceeding far with t'..o details of 
 survey, I deem it advisable to submit a pj^minary report or the various 
 routes which the liue of proposed Rail vay-majr take. I c nsider this 
 essential, as the general 4irection of th^i'^ptiiemplated Railway has first 
 to be determined before a Location Surf ey cau be made. 
 
 Various lines have been projected from time to time for this con- 
 templated Railway extension ; and, so far as I am acquainted with them, 
 and with the configuration of the country, they may conveniently be 
 classified under three distinct heads, which again may be designi^ted 
 " Eastern," " "Western," and •' Central " " Routes." 
 
 The Eastern Route follows the Raihvay, now under construction, 
 out of Truro easterly for about ten miles ; it then continues along the 
 Valley of the Salmon River northerly to Earltown, thence it runs 1:1 a 
 direction generally parallel to the Gulf Coast, to Bay Verte in New 
 Brunswickj ultimately connecting with the European and North American 
 Railway near the Village of Shediac. 
 
 The Western iioute rurs from Truro, almost due westerly along the 
 north shore of the Basin of Miras, to the neighbourhood of Parsboro ; 
 and then turning northerly it follows the Macan River to the head of 
 Cumberland Basin, and connects at the New Brunswick boundary, with 
 a liue surveyed to the European and North American Railway. 
 
 These extreme eastern and western routes are, at one place, nearly 
 seventy miles apart, and the length of Railway, by either route, would be 
 considerably increased from that of an air line by the great departure 
 from a straight course which each route makes — the one to the east, and 
 the other to the west. 
 
 A Central route can be had nearly mid-way betweeu ♦hese Eastern 
 and Western routes. 
 
 It may cross the Cobequid range of high-lands by depressions, 
 either at the head of Folly River, Great Village River, or Port au Pique 
 River, and after crossing tliis conspicuous range it would run in a 
 northerly direction to the boundary line of New Brunswick. 
 
 The 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 
 be stated : 
 
 The Western route would be the longest, while a Central route 
 would be the shor+ert. The Western route would have the greatest 
 leng'.Ii of easy gradients. 
 
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 ']^||d|P^nri'6ute would have the lowest maximum gradients. 
 A Central route would have the heaviest gradients. 
 
 
 
 
 
 
 
 The curves and gradient.%^ either of the routes may be within the 
 
 
 
 
 
 standard of the existing tSovi^irnment Hail way in this Province. 
 
 
 
 4 
 
 
 The Eastern route would omtmrnodate ftie Villagifis of Tatama- 
 
 
 - 
 
 % • 
 
 gouche, Wallace, Pugwash and BBx.VertQ, aitii the traffjic of th6 Gulf 
 
 
 
 
 ■ 
 
 coast. " » 
 
 
 • 
 
 
 ■ 
 
 The Western route would serve the traffic on the north shore of the 
 
 
 
 
 
 Bauin of Minas, and it would pass through or near the coal fiel||a south 
 
 
 
 
 
 of Amherst. .» 
 
 A Central route would accommodate the iron district of ;^ Cobe- 
 
 quid range, and it would open up the Spring Hill coal field. '^Wjk^ 
 The accompanying paper gives detailed information with regMdro" 
 
 the different routes herein referred to. 
 
 In a commercial aspect a Central route appears to me, beyond 
 
 question, the most important, and if this route is formally adopted, the 
 
 discovery of the most favourable line in an engineering point 'Of view. 
 
 
 
 t 
 
 , 
 
 that the country will admit of, will become a question of no little 
 cousequence. 
 
 / am sa isjied, from an inspection of a plan of a survey made last 
 year by the Acadian Mininy Association, as well as from a personal 
 examination of the ground, that a Railway can be had on a Central route 
 tvith grades and curves not exceeding those on the Trunk line, note in 
 operation between Halifax and Truro. 
 
 In view of the foregoing, I would res])ectfully recommend that the 
 
 surveys now in hand preparatory to locating the line for construction be 
 
 made on a central route. I have, &c., &c., 
 
 (Signed) SANDFORD FLEMING, 
 
 Chief Engineer N. S. Ji. 
 Hon. Charles I'upper, Halifax. 
 
 No further official correspondence on this matter ap- 
 pears in the " Journals," although the negotiations were 
 contmued ; and during the visit to London of the Honom- 
 able Provincial Secretary and the Honourable Attorney 
 General, immediately afterwards, a contract for the con- 
 struction of the raiiwtiy was finally concluded with the 
 
 '4 
 
 
 
 
 International Contract Company. The contract was based 
 
 
■-»■;. 
 
 III 
 
 10 
 
 upon the Report of Mr. Fleming — abov4 0i^i^»<^^^<ph had 
 been adopted, and the proposed rotite approved, ^ by the 
 Governor in Council, as will A seen from Clause 2, 
 which also provides that the ,w0ve^ing should be done 
 entirely by, and at the expense qf^'the international Contract 
 C(Anpar.y, who were not required either by the contract or 
 by the Act of Parliament on which it was based to submit 
 their detailed working plans for the approval of the 
 Government. This view of the case is believed to have 
 been fUlly understood and concurred in by all the parties 
 to the arrangement 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 Moucton. The Nova Scotia Contract is 
 hereunder given in extenso : 
 
 [Memorandum of Agreement made and entered into the fifteenth day 
 of August, one thousand eight hundred and sixty-five, between the 
 Chief Commissioner of Railways of the Province of Nova Scotia, 
 by direction and authority of the Governor and Council, acting by 
 the undersigned, Charles Tupper, Provincial Secretary, and William 
 Alexander Henry, Attorney General of the said Province of Nova 
 Scotia, hereinafter called the Representatives, of the one part, and 
 the International ('ontract Company, Limited, of 86, Cannon 
 Street, West, in the City of London, hereinafter called the said 
 Company, of the other part.] 
 Whereas, an Act of the Provincial Legislature of Nova Scotia was 
 passed on or about the second day of May, one thousand eight hundred 
 and sixty-five, entituled an Act to provide for the construction of two 
 other sections of the Provincial Railways, 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 provisions of the said Act, a negotia- 
 tion has been entered into between the said representatives and the said 
 Company, having for its object an arrangement by which the said Com- 
 
I 
 
 ^ 
 
 11 
 
 pany shall jH^dwtafee the constructlij^ivOf the sections of the said Rail- 
 way from Truro to the Boundary Line of New Brunswick, under the 
 provisions of the said Act, and. subject to the terms and conditions here- 
 inafter mentioned. NoW'this Agreement Witnesseth, and it is agreed 
 by and between the said parties hereto, as follows s 
 
 1. The before recited Act shall b<! th^bttsie of this Agreement, so 
 far as it relates hereto, except so "fai; as tKe isame may by this Agreement 
 be agreed to be modified. 
 
 2. The said Company, in consideration of the premises and of the 
 Agreement on the 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 mefitioned, 
 on the central route which has been recommended by the Government 
 Engineer and approved by the Governor in Council, and the said Company 
 shall commence the surveying not later than the month of Novejnher next, 
 and prosecute the same until completion, and shall commence the Works 
 bond fide at a period not later than the month of June, one thousand 
 eight hundred 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 radius 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 point 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 and of this clause. 
 
 3. The said Company shall be bound to provide such conveyance 
 for the Officers and Soldiers of Her Majesty's Fr ces. Ordnance Corps, 
 Marines, Militia or Police forces, at such timt or times, whether the 
 same shall be the usual hours for starting trains or not, as shall be 
 required or appointed by any Officer duly authorised by the Governor 
 for that purpose, and with the whole resources of such Company or body 
 corporate, at fares not exceding 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 oi age, of a Soldier 
 entitled by Act of Parliament or other competent authority, to be sent 
 to their destination at the public expense, children under three years of 
 age so entitled to be taken free of charge ; and children of three years 
 
12 
 
 and upwards but under twelve yS^B bo entitled^ ,fe jjia g^ l^ea. At half 
 price of an adult, provided that every officer convfeyed snaU^e entitled 
 to take with him one hundredweight of, ]|er8onal luggage without extra 
 charge, and every Soldier, Marine, Prival®, Wife or Widow shall be 
 entitled to take with'Mm or her ht^lf -a handredweight of personal 
 
 -' • i u ? • ■'■■■ 
 
 ' luggage without extra charge 5 all Jthe; excess of the abov, weights of 
 personal luggage being paid for ja.t tWs- rate of not more than eighty 
 cents per one hundredweight 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 charges 
 J^ N not exceeding four cents per ton per mile, the assistance of the military 
 
 or others being given in loading or unloading such goods. 
 
 4. The said Company shall be bound to convey Her Majesty's 
 Mails at the same rate of charge a; iiow paid for the same service to the 
 Railway Department in Nova Scotia. 
 
 6. And the said Representatives for and on behalf of the said 
 Province: of Nova Scotia, under the authority hereinbefore mentioned, 
 in consideration of the premises, hereby agree to and with the said Com- 
 pany as follows : 
 
 6. That the amount of the subvention mentioned in Section 2, of 
 the said Act, shall be 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, the 
 said Representatives agree to increase the annual subvention to the sum 
 of twenty-four thousand pounds sterling. 
 
 8. That after the first 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. That in case the subvention shall not be capitalised as provided 
 in Section 4 of the said Act, or in Clause 16 of this Agreement, the 
 subvention 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 com- 
 pleted during the first year, or of one-eighth during any subsequent half- 
 year, the Provincial Government shall be entitled to retain a propor- 
 tionate deduction from such subvention until such proportionate part is 
 completed, and on the completion of the same the whole of the said 
 amount so retained shall be paid to the Company. 
 
 10. That the powers comprised in Section 5 of the said Act shall 
 
n 
 
 not be putift foW*"*ithout the cpoBettt In writing under the Common 
 Seal of the Comply. ,' 
 
 11. That all landa?;required for the Railway track and appur- 
 tenances shall be providm graps ta the said Company with the rights of 
 entering on all ungrantea%n^[ltKG||l|||||^^|Q (lieJi^overnment, and ^Icing 
 free of cost all materials reqii||di^^BPwB{i\vay, as under tlie pro- 
 visions of Section 11, Chap. 70, referred to in the said Act. 
 
 12. That the said Company shall be entitled to make and enforce 
 a tariff of charges for fares and freights equal to but not exc9eding 
 (except by mutual arrangement) the tariff now in force on thi^ovem- 
 ment lines, copies of which are this day signed by the said repjresenta- 
 tives, such limitation not to apply to the charges for conveyance of 
 horses and waggons, which shall be determined by mutual agreement. 
 
 13. That the provisions of Section 9 of the said Act as far as 
 regaras the possession and ownership of the Railway by Government 
 shall only be put in force subject to the prior payment or tend^' to the 
 Company of the value thereof, as mentioned in Section 7 of the 'iJaid Act, 
 such value to be ascertained by arbitration either under the pro\i8ions of 
 Section 8 of the said Act, or of this Agreement. 
 
 14. That should the said Provincial Government exercise the 
 powers given them under the provisions of Section 7 of the said Act, 
 prior to the opening of the said Railway for traffic, the amount to be paid 
 to the said Company as the value of the said Railway shall not be less 
 than the capital expended including the subvention and all liabilities 
 bond fide incurred with six per cent, per annum interest thereon, ex- 
 clusive of the subvention ; and should the said Government exercise such 
 powers after the opening of the said Railway for traffic, the amount to 
 be paid to the said Company as the value of the Railway shall not be 
 less than the capital expended included subvention and all liabilities 
 bond fide amount, which with the net earnings of the said Railway shall 
 be equal to 6 per cent, per annum interest on the amount expended 
 exclusive of the subvention. 
 
 15. That if Provincial Debentures be paid in pursuance of the 
 provisions of Section 7 of the said Act, the same shall be reckoned at a 
 price which shall make them equivalent to cash ; and in case any 
 difference of opinion shall arise as to the value of the debentures to be 
 paid, the same shall be determined by arbitration, either under the 
 provisions of Section 8 of the said Act, or of this Agreement. 
 
 16. That in case the said Company shall determine to capitalise 
 
II '^ 
 
 14 
 
 for itself the said subvention, or any port thereof, the Provhiehfl <3tovem- 
 ment shall render every assistance in t&cir power to accomplish this 
 object, and shall if necessary enter into a direct obligation with all 
 proper parties for the payment for the future of the said subvention to 
 such parties direct inste:ti^ of to the said Company, provided that all 
 moneys raised under the provisions of this Clause shall be deposited in 
 the joint names of the parties hereto, or such other names as both shall 
 agree upon, in the National Bank, or in some other Bank, in London, to 
 be approved of by the parties, and to be drawn out by both parties, and 
 applied only for the construction of the Railway, pro rata with the 
 progress of the works, until the said Railway shall be fully completed 
 and open for traffic, after which the balance, if any, shall be 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 
 the provisions of the English Companies Act, 1862, with such amount 
 of capital, and with borrowing powers and such other Articles of Associa- 
 tion as the said Company may think proper ; and when such Company is 
 formed and capital placed to the satisfaction of the parties hereto of the 
 first part, the said intended Company, so to be formed, shall be accepted 
 in lieu of the said Company for the purpose of this Agreement. 
 
 18. That an Act of Incorporation for such intended Railway 
 Company shall be submitted to the Legislature of Nova Scotia, and 
 upon such incorporation being made, the Government for the time being 
 shall have the power of nominating two Directors to the Board of such 
 Company. 
 
 19. That all materials and stores required for the construction and 
 working of the Railways shall be entitled to a drawback of the amount 
 of import duties paid thereon by the said Company, and that the 
 Provincial Government shall grant the free use of the landing stage and 
 railway stations at Halifax, Bedford and Truro, and transit over the 
 Government Railways, the said Company paying all expenses incurred 
 in landing, and for haulage and handling of such materials and stores, 
 and also the cost of transit thereof. 
 
 20. That should any Legislative alterations be required for the 
 purpose of carrying the terms of this Agreement into effect, the said 
 parties of the first part hereby undertake and agree to use all proper 
 means in their power to obtain the same. 
 
 21. And it is further mutually agreed that prior to the opening of 
 
# 
 
 the RlolMQ^PwifF arrangevnent 'snail 'Ibe made between the said 
 Company ana the Provincial Govttnment for the mutual use and employ- 
 ment of their respective |fne» of Railway, or for the joint operation 
 thereof on equitable terms, 
 
 22. That the third Arbitrator proposed to be appointed under 
 Section 8 of the said Act, by th& ' Principiil' Secretary of State for the 
 Colonies, shall act only as Umpire in the event of disagreement between 
 the other two Arbitrators therein named. 
 
 23. That by mutual consent the appointment of an Arbitrator 
 under the provisions of Section 8 of the said Act, by the Principal 
 Secretary of State for the Colonies, may be dispensed with, and the 
 same may be appointed in such manner as the parties hereto may agree 
 upon. , 
 
 24. That in every Arbitration required under this Agreement, or 
 under the said Act, in case the Government or the said Company shall 
 fail to appoint an Arbitrator, and to notify such appointment to the other 
 party within three calendar months after request in writing, the Principal 
 Secretary of State for the Colonies shall nominate and appoint the 
 Arbitrator for the party so refusing, and such Arbitrator shall have the 
 same power and authority as if he had been nominated and appointed 
 by the said Government or the said Company respectively. 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. 
 
 E. PICKERING, 
 Managing Director, 
 
 HOARe! ) ^''"'"'''- [L.S.] 
 W. S. HOPLEY, 
 
 Secretary. 
 
 JOHN GRAY, 
 D. J 
 
 ^-^"^¥^1^ 
 
 In pursuance of their contract, the International 
 Contract Company commenced surveying in the month 
 of November, 1865, completed their plans, and began the 
 construction of the line early in June, 1866, after having 
 given the Government notice that they were about to 
 commence. On the 27th of the same month, the Com- 
 pany's Engineer (Mr. Alexander Beattie), having become 
 
16 
 
 W^y: 
 
 \ I 
 
 aware that Mr. Fleming nad been surveying-t>th©r routes, 
 addressed to the Provincial Seocetary the letter hereunder 
 given ; but they were not favoured with a perusal of his 
 report (whicli has :never bfen made*" public) ; neither did 
 they receive a stateiueht^ of the^'^-Cbnclusions at which he 
 had arrived, or any explanation of the reason why he con- 
 tinued the survey, that under the contract had to be done 
 by the Company. That the woi*k was duly commenced 
 and prosecuted will be seen by the Report for 1866 of the 
 Railway Commissioner, page 15, in which it is referred to 
 as being an integral part of the Intercolonial Railway. 
 
 All the subsequent correspondence is given in extenso, 
 and fully explains the reason why the Company — not- 
 withstanding the very large outlay of surveys, earthworks, 
 and in the purchase of permanent way material, &c. — 
 eventually suspended operations on the line, under protest, 
 although they continued the New Bininswick contract, 
 and one-half of the road is now constructed : — 
 
 Halifax, June 21th, \%%Q.' 
 To the Hon. The Prov. Secretary. 
 
 Sib, 
 
 In reference to the location of the Railway line under the contract 
 entered into between the International Contract Company and the 
 Government, I beg to say, that I have no power to sanction any altera- 
 tions of the route fixed by the Company. 
 
 It was entirely upon the commercial advantages expected to be 
 obtained from following the line along the Sutherland Lake, that the 
 calculations of the Company were based. Any change therefore, in that 
 respect, would materially alter their position in regard to the contract. 
 
 I herewith submit, for your inspection and information, the -plan 
 and sections of the line approved by the Company. 
 
 I have the honour to be 
 
 Your obedient servant, 
 (Signed) ALEX. BEATTIE. 
 
 B!i: ! 
 
>^, 
 
 11 
 
 8lB, 
 
 '"^"•^ovincial Seaetary!fS§^lHai^, July 14M, 18fi6 
 
 I have it in command t<> infoim \uu, that your letter of June 27th, 
 has been duly considcrcwby^liifl ^Excellency the Lieutenant-Governor 
 in Council, and that an yoli^;^v^"<=OTa||^;qn tHe part of the Interna- 
 tional Contract Company, to comply .witli that part 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 agreement to commence the work '■'■ bond Jicle " at a period not 
 later than the month of June, 1866, has not been fulfilled, the Govern- 
 ment consider that the contract is at an end. 
 
 (Signed) 
 
 CHARLES TUPPER. 
 
 To the Hon. 
 
 SlE, 
 
 Nova Scotia and New Brunnwtck Railwa\ 
 
 Halifax, July 19M, 1866 
 
 
 Charles Tupper, 
 Provincial Secretary. 
 
 I have only to-day received your letter of the 14th inst. I learn 
 from Mr. Thompson, that though he was promised by you that when 
 the answer of mine of the 27th was ready, it should be handed to him, 
 he has never received any further communication from you. 
 
 lean only express my regret th: the Government repudiate the 
 contract entered into with the International Contract Company. 
 
 The Company consider the route settled by contract, and approved 
 by the Government, and accordingly the Company have been working on 
 the line during the last five weeks at a large outlay of money. I cannot, 
 therefore, with my present instructions, wholly suspend my operations, 
 but will report the facts for the information of the International Contract 
 Company. 
 
 Should there be any delay in the I'ulfilmient of the contract in con- 
 sequence of the action taken by the Government, the responsibility will 
 not rest with the International Contract Company. 
 
 I am, your obedient servant, 
 (Signed) ^ ALEX. BKATTIl'., 
 
 Agent for I. C Co. 
 
p 
 
 18 
 
 Xova 
 
 ^StaMaand New Brumwi^ R^ilnkty, 
 
 Windsor, June 2Qth, 1867. 
 
 
 Avard Longley, Esq'.\, 
 
 \ief CommiisittMf of Railwayt, 
 
 Pmtiiiceqf IifQva Scotia. 
 Sin, 
 
 I have the honour to inform you that the contracts for the con- 
 struction of the Railway from Truro to Moncton, made by the Govern- 
 ments of Nova Scotia and New Brunswick respectively, with the Inter- 
 national Contract Company of London, have been purchased of the 
 official liquidators of that Company, by Messrs. Edwin Clark, and 
 William H. Punchard, of 24, Great George Street, Westminster, G. B., 
 and that they (in conjunction with a party of capitalists) have 
 determined to immediately proceed with the work, and carry it on with 
 the utmost vigour, and complete the same within the time mentioned 
 in the contract. I have received instructions (under a power of attorney) 
 to make a final location of the whole Nova Scotia portion of the Line, 
 and as this will necessarily occupy a considerable time to complete, I 
 am to commence the work on those portions of the Line that were 
 generally approved and adopted. 
 
 Being instructed that a question arose between the Government 
 and the former contractors, as to the most desirable position of the 
 Line in the Cobequid Mountains, I had the honour to confer with the 
 Honourable Provincial Secretary on the subject, and was favoured with 
 the perusal of a detailed report made by Mr. Sandford Fleming, C.E., 
 to the Government under date of the 1st May, 1866, and of an inspection 
 of the plan which accompanied it. 
 
 I learn therefrom that of the numerous trial lines surveyed (which, 
 however, only varied in the centre point, the extremities being common 
 to all), Mr. Fleming selects two routes, one of'which passes through 
 Folly Lake, and the other through Sutherland Lake, both situated in 
 the Cobequid range, the former being in a more easterly position over 
 the half of its length. The advantages of the Folly Lake route, are 
 expressed in the lighter character of the work and the avoiding a long 
 and sharp incline. The disadvantages are its rather greater length, and 
 a larger total proportion of heavy grade, and its being so far off the 
 Acadian Iron Mines, that they can derive no benefit from it. 
 
 The two last of the disadvantages are avoided, at the cost however 
 of increasing both the length and the work in a third line taken by 
 
'# 
 
 Maddlsi 
 
 Mines in the most convenient 
 On the tracing which 
 Fleming's plan), I have b! 
 on behalf of my principals! 
 may after more mature cons! 
 
 19 
 
 IS through the Iron 
 
 letUr (made from Mr. 
 >nd beg to state that 
 net cither Line that 
 by tho Government. 
 And if you express a preference for either route, I will Immediately 
 complete the survey thereon and lay before you all the information I 
 can obtuin, in order that a just conclusion may be arrived at. 
 
 I have at the present time to request your most serious consideration 
 to the great benefits that would arise, both in regard to the progress of 
 the work and the interest of my principals if an official sanction were 
 given to those portions of tlie route from the New Brunswick boundary 
 to the Forks, and from Truro to the Ingonish River (which have never 
 been in any degree questioned), as I would then secure and utilise the 
 labour 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 during the three remaining 
 seasons the contract allows, and the great scarcity of labour arising from 
 the re-opening of extensive Railways and Public Works, in New Bruns- 
 wick, Canada, and the United States, which scarcity will be greatly 
 intensified by the commencement of the Intercolonial Railway beyond 
 the boundary, I cannot too earnestly impress upon you the advisability 
 of the immediate approval of the course I venture most respectfully to 
 urge upon you. 
 
 I have the honour to be. 
 
 Your most obedient servant, &c., 
 (Signed) C. H. GRANT. 
 
 Provincial Secretary's Office, Halifax, June 29M, 1867. 
 
 Sib, 
 
 I have the honour to inform you, in reply to your letter of the 29th, 
 in reference to the Truro and Moncton Railway, that the Government 
 cannot entertain your proposal. 
 
 I have the honour to be. Sir, 
 
 Your obedient servant, 
 (Signed) CHARLES TUPPER. 
 
 [This letter was only reccivecl on thu 1th o{ <laly. I 
 
 I 
 

 Sib, 
 
 JM^9mi,l»^7' 
 
 Not hftving received any repl]f ^l^ny letter of the 26th, on the sub- 
 ject of the Moncton and Truro Uajljnr, and presuming that the delay 
 ia cauHed by the tranHrcr of llaUwa|^t|p)tttci's to the General Oovernment 
 of the Dominion of Canada, I ha%o nidsl rcBpectfully to request that you 
 will take the necessary prucccUings to ensure my having a definite 
 answer as soon as possible. I am the more anxious for this from having 
 secured the services of Engineers and Contractors, who are ready to 
 actively commence the work. 
 
 I am, Sir, your obedient Servant, 
 
 (Signed) C. H. GRANT. 
 Hon. the Provincial Secretary, 
 Province of Nova Scotia. 
 
 Amherst, July 22nd, 1867. 
 
 IK, 
 
 As the duly authorised Agent and Attorney of Messrs. Edwin Cl^rk 
 and William H. Punchard, of 24, Great George (Street, Westminster, 
 G. B., on behalf of the International Contract Company, Limited, I beg 
 to submit for the consideration of His Excellency the Lieutenant-Gover- 
 nor, and Her Majesty's Executive Council, the following statement of 
 facts in relation to the Contract made by the Company with the Nova 
 Scotia Government, for the construction of a line of railway from Truro 
 to the New Brunswick border, in connection with a line contracted for 
 by the Company with the Now Brunswick Government, extending to 
 the Moncton and Shediac line of railway. To this contract, made in 
 August, 1865, and executed by two members of the Provincial Govern- 
 ment, on behalf of the Chief Commissioner on Railways, I beg to refer 
 for further particulars. 
 
 Previously to the execution of this contract Mr. Alex. Beattie, 
 C.E., had made a survey of the line from Truro vid the Acadia Mines, 
 Sutherland's Lake, Spring Hill and Little Forks, to the New Brunswick 
 border, which was communicated to the Government Engineer ; and the 
 contract provides that the line should bo constructed " on the central 
 route, which has been recommended by the Government Engineer and 
 approved by the Governor in Council." No other line, it is believed, 
 had previously been surveyed on this central route, nor was any other 
 

 21 
 
 Si 
 
 line np^jl^tof or contemplated 
 contract, and after the continuj^ 
 Beattie as hereafter stated ; (Ri< 
 the surveying was to bo done 
 ment, they conBidercd that thin 1 
 which the railway was to ^ttHiil* 
 
 until li^nK ufter the making of tho 
 8i!j|V«y hiul. been completed by Mr. 
 was provided by the contract that 
 Company und not by the Oovern- 
 ipprovcd, and was that on 
 e provisions of the cunlraot, 
 the Company, in the autumn of the naoie year, 1865, caused tho survey 
 to be continued under Mr. Beattie's direction, and after extending 
 throughout tho winter, it was finally completed and the line staked out 
 early in the following spring. The line thus surveyed, fulfilled all the 
 requirements of the contract as to curves, gradients, &c. During the 
 first week in June, 1860, Mr. H. O. 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 personally reported his instructions to the then Provincial Secretary 
 and the Chief Commissioner of Railways. In the following week he 
 broke ground, and commenced the work on the line in both provinces, 
 und prosecuted it hondjide and continuously near Amherst up to the 19th 
 .July, 1860, when Mr. Beattie received the annexed answer of the 14th 
 of July. Althougli Mr. Beattie's movements were thus paralysed by the 
 action of the (iovernment, yet, in tiie absence of instructions from his 
 principals, he did not feel himself justified in wholly supending the work, 
 but continued on with a small force during the remainder of the season, 
 und took deli^ cry of and paid for a lurj^c (juuntity of sleepers, which hud 
 been contracted for by the Company some months previously in anti- 
 cipation of the work. Details of the work und expenditure can be submitted 
 to the Government if required. Shortly previous to the correspondence 
 above referred to Mr. Beattie became awure that, under the directions 
 of the I'rovincial Government — but f'<r what reasons the Company were not 
 informed — Sandford Fleming, Esq., C.E., had made a survey and report 
 upon another line, which followed the Beattie line from Truro to Ingo- 
 nish River, and from Little Forks to the Border, but diverged ut inter- 
 mediate points to the extent of one to eight miles, and lengthened tho 
 line about two miles as compared with the Beattie line. Tn his report, 
 Mr. Fleming, while recognising the commercial and other advantages of 
 the Beattie line, connecting, us it would, the coal und iron districts, 
 expressed a slight preference to the one surveyed under his direction, 
 vid P^oUy Lake and Tillott's Creek. The Company is not aware whether 
 this Report has been foTaally adopted by the Government, ulthougii 
 
'M 
 
 22 
 
 Mr. Beattie strongly urged upon the Government in Jai.jf^6(i, that 
 those portions of the line at eithte^nd, which were common to hoth, 
 should be santioned, so that the wprkljnghttiot be interrupted. On the 
 New Brunswick side of the bfflKj^^^we no difficulty was made by the 
 Government as to the rout'U^H^HPI^as continued vigorously to the 
 close of the season, was resraWTrois seasons and will be completed by 
 the close of next year — thus fcining 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, pur- 
 suant to and within the time limited by the contract, I beg to reftr you 
 to a letter wh' ,n, in the absence of a re;_>ly to Mr. Beattie's last commu- 
 nication, I addressed on the 26th J'lne last to your predecessor, the 
 Hon. C. Tupper. As the Government declined to accede to this pro- 
 posal, I must now invite the serious attention of the existing Govern- 
 ment to the position of the Company, under the present changed aspect 
 of affairs. 
 
 We are prepared at once to carry on and fulfil 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 
 Govemnent for full compensation, not only for the outlay, but for the 
 withdra\.al of the contract. The Company's action throughout 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 received the recommenda- 
 tion of the Provincial Engineer, and th«" approval of the Government. 
 They submit that their view of the matter is strengthened by the fact 
 that the length of the line is limited by the contract ; and if it be con- 
 tended that the Government had the power of afterwards lengthening it, 
 01 deviating to so wide an extent as eight miles from the line, where is 
 the limit, and what protection had the contractors from an enormous 
 expenditure, when they were expressly restricted as to grades 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 co-operate with the Government to this end. Should 
 it, therefore, be considered undesirable to carry out the contract in its 
 present form, I shall be happy to negotiate a new contract upon any 
 terms the Government may desire, and upon satisfactory terns being 
 
m 
 
 .%», 
 
 23 
 
 arranged, to aban(|on any claims we may have under the present contract. 
 
 Requesting your immediate caB8i^*((!ation of this matter, 
 
 I have the Hon^ to be, Sir, 
 
 YflHHt|M^ obedient Servant, 
 
 ^^Biiflid) C. H. GRANT. 
 To the Hon. P. a mil, ^^. 
 
 Provincial Secretary, Halifax. 
 
 i>. Nova Scotia and New Brunswick Railway, 
 
 Engineer's Office, Dorchester, N.B., July 22nd, 1867. 
 The Hon. A. G. Archibald, 
 
 Secretary of State for the Dominion of Canada. 
 Sib, 
 I have the honour to enclose you herewith a copy of a letter 
 this day addressed to the Provincial Secretary of Nova Scotia, on the 
 subject of the Railway from Truro to the boundary at Amherst, the 
 contracts for which were undertaken by my principals. 
 
 As the recent changes in the Government may bring the matter 
 officially before you, I venture to trouble you with it at this early 
 stage, and to request that you will, as far as in your province, expedite 
 its settlement. 
 
 I have the honour to be. Sir, 
 
 Your obedient Servant, 
 
 (Signed) C. H. GRANT. 
 
 Sib, 
 
 Provincial Secretary's Office, 
 
 Halifax, July 29</*, 1867. 
 
 I have the honour to acknowledge the receipt of your com- 
 munication of the 22nd instant, and, in reply, beg to .say that there is 
 not a quorum of the Executive Council at present in (own ; but that at 
 their first meeting your letter will be laid before them, and receive full 
 consideration. 
 
 I am. Sir, 
 
 Your obedient Servant, 
 (Signed) P. CARTERET HILL, 
 
 Provincial Secretary. 
 Charles H, Grant, Esq. 
 
i il 
 
 24 
 
 No further reply has beeu received from the Nova 
 Scotia Government, although tKfiiT attention to the matter 
 has been subsequently requested. 
 
 The Government do not correct or further explain 
 the letter from the Honouttible Provincial Secretary, dated 
 the 14th July (seventeen days after they received Mr. 
 Beattie's first communication of the 27th June !) which 
 evidently shows that a totally incorrect view was 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 sufiicient 
 time to have them approved by the Governor in Council, 
 and in operation within the month. Did the Government 
 assume this to be either necessary or desirable 1 
 
 No exception has ever been taken to the prescribed 
 route, nor has any other route been lecommended or 
 suggested. 
 
 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 complaint, 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 
 Company would undertake to provide the whole of the 
 capital for, and construct a long and difficult line of 
 
 Ml 
 
J'ipw' up 
 
 
 26 
 
 ii*r-- 
 
 Railway, wliich the Government had the power to lengthen 
 at will, or to make the work indefinitely costly, or s<^ to 
 divert as to eliminate all the local traffic on which, by its 
 nature, it ought principally t^ depend for producing any 
 remunerative return, or, inde|^, to enable it to be kept 
 open in the winter. Further, the character of the line, 
 as shown 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 from the original documents.]