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REPLY OV THK PRESIDENT AND DIRECTORS TO THK REPORT OF THE COMMITTEE OF INVESTIGATION, MARCH, 1861. M\ I i.^ui ^ • <■ tw»'i LONDON :— 1861. r:;iMi,ii i;v n ii.w. son, \nii tam.i'H, ii:ti:,\ii ^ti;i.!:t imi.i. CONTENTS. PAdK 1— INTlfOltlUTION fi II — llAMII.TdN AND TORONTO 9 III- DKTl.'OIT AND MII.WAUKKIv-V.OND ISSUE 18 iV.-DITlMilT AND MIIAVArKi;i:-I'l!Kr: LAND STIAIJES . . 22 v.— Dl.TlMHT AND MIIAVAI'KKF.-LOANS 21 VI. — MAIN LINK 34 Vll.- l.'KVKATn': AND DIVIDENDS 37 VIII.— ACCorNTANTS" AND HNiilNKKK' S KKl'OK'TS \C, IX.— CONCLUSION }9 APPENDIX. 1. LiriTEU FnoM C. .L r.lIYDOKS, Esq. tiik Managing DinECTon II. -HAMILTON AND TORONTO LKITKR FiioM OKOIKJK WVTIIES, Km,. Co.vtii.\ct.)1i . NOTI" )iv 1!. (ilLL, K.s(}. I^ukhident LK'ITKU Fuosi .1. U. SMITH, Esij. M.l' 111. -DETROIT AND MILWATKKH-LKTTERS IV. -STOKES-LinTEi; FuoM LSAAC P.U(MIANAN, Esq. 74 74 7.S 71) S3 sr» V. - CORI.'ESI'ONDKNCE with tiik COMMITTEE or INVESTKJATION S7 i# REPLY, TO TIIK SIIAIIKIIOLDEHS OF TIIK CillEAT WESTERN RAILWAY OF CANADA. TiiK PiiEsiDENT and DiuKCToiis of tliL" Grcnt Western Railway of The Committee of in- I TT ir 1 vcdtigatlon, Canada feel it their duty, before the occurrence ot the usual Uolt-ycarly Meeting of English Shareholders, to re[)ly at length to the very serious charges contained in the Report of the Committee of Investigation, which was issued to the Shareholders under date February 15th, 1801, with the signatures of Messrs. II, II. Cannan, Chairman, Allan Gilmore, Robert Kaye, I'. Margetson, D. Price, and R. Sutherland. The Shareholders arc aware that the Committee in question lu nppoin'mcnt and was appointed at the half-yearly meeting held on April 4th, 1800. They arc also aware that, although the Directors were anxious and even proposed that such a Committee should be appointed, they did not approve the constitution of the Committee, which was composed of individuals entirely inexperienced in railway affairs, and who had become Shareholders of the Great Western Railway at comparatively receiU dates, and who had, on preceding occasions, shown themselves very hostile to the Management. Your Directors were disposed, nevertheless, to give the Committee Hostiicspiritinwhich ..... it opened its in- every assistance, in the hope that the result of their mvestigations quiries. might benefit the property. They accordingly instructed the Secretary to " afford them access to all Books, papers and documents relative to " the Company's affairs, as well as to give all the information in his " power in furtherance of the investigation." They " confirmed and approved " the full powers entrusted to the Accountants who were sent B 6 Introduction. Ii~ imoriVi\iK'c »itl tin' <'iirrcni Imsiiu'ss 1 1 llio Cuuipiiny by tlic Committee to Caniula. Their co-operation, liowcvcr, was not acci'ptt'd by the Committee. It very soon became ai)parent that the inquiries of the Committee were being conducted in a spirit that couhl not be productive of any good results. At length your Directors conceived that their duty to your property and to themselves recjuired that tliey should decline to continue conununicalion through their ollicers with the Conunittee except in writing, in which form tlu-y expressed themselves ready to giv(? them every information they might require. 1 Although the jjowers of the Committee could only refi'r to matter., transacted up to the date of their appointment, your Directors during six montiis, from courtesy, gave the Conunittee access to their current documents ; but at length the danger of this proceeding to your interests and the abuse made of it became so apparent that on the lOtli of October, 1800, the Board felt constrained to pass the ful- iowintr resolution : — ■ It iiiipcuriug that various qucstious uro now poiuliiig upon wliicli iicti(Mi caiiiiot '• iiuniC'liuti'ly be taken, and that, in tlic meantime, it is for llic interest of the " Ceniiiany that imperfect information sliouM not be allowed to transpire, Itr.sdi.vED, •• Tii.it no further papers relating to current atiaira bo laid before the C'omiuittce of •' Investigation." So desirous were the Board and its officers to afford every possibh' t'acility to the inquiry, that on the Accountants asking in Canada to be permitted to take away with them some of the books and papers of the Company — a proceeding quite lunisual — their request was acceded to, on a written understanding that they were to be taken to the Conq)any's oliifc in London : the Accountants, however, took them to their own oiliees in Tokenhouse Yard, where thev have remained ever since. On Sn Apiieiidix ].. iu tjL'ing applied to for the return of these books, they replied, on November ~lst, ISOO, that they should be given up as soon as the report of the Committee was issued. Ibit now, notwithstanding the books and papers in (piestion are nuich wanted, the Chairman of till' Conunittee declines to give them up, although, from his httcr of ^larch Ith, ISGl, it appears that they arc not in the custody of the Couuiiittee, but in that of the Accountants, in whose hands Mr. Cannan says they ari' " iw pounded." li- llid'lc n| 0.\,llllin- iiifr "iliif.isos. Voiu' Directors have further to complain that the proceedings of the Conniiittee of Investigation in the collection of evidence and \\w examination of witnesses, were not only of a most hostile, but of an ( xeeedingly \mfair and improper character. They called for the attend- ance of yom- ollicers at all times and seasons, in Canada and in England, in utter disregard of the requirements of their oflicial duties. They txamined and cross-examined each witness separately, without any previous intimation as to the sid)jccts on which information might be Introduction. 7 desired, and consequently without affording the witnesses any oppor- tunity of rci'reshing their mcuiories as to dates or circumstances. Any imperfections in a witness's recollection arising from these causes, tlie Committee treated as evasions. They also endeavoured to extract from the witnesses admissions to which the Committee afterwards gave their own interpretation and significance. Their incpiiries were conducted with dosed doors. Your Hoard were ever kept ignorant of the nature with ckacd Joors, unil ol)ject of the Committee's investigations ; and although many discharged servants of the Company were examined, no one was present to represent your Directors, nor was there any one present to see that, by proper (juestions, the whole truth u[)on each subject was properly and fairly elicited. No one was allowed in the room but the party actually under examination, and his evidence was not in all cases (as is the ordinary practice of the House of Connuons, and the committees of other public bodies) submitted to him for his r(!vision. A shorthand writer was present to take notes of all that and with a shorthand . „ , , . writer. was said, and the witness was not always mformed ol his presence. j\Ir. J. li. Smith, M.P. for Stockport, who was formerly Chairman of your English Direction, says in a letter which will be found in the Appendix — " I attended a meeting of the Committee of Investigation at their request, but " not having had any previous intimation of the points on which they desired infor- " mation, I was unable to speak of transactinns occurring four or five years ago with " the precision whicli I shouhl utiicrwise have been able to do. " //"(/ /, (//.." Diri'i't.ir* licit ininii' (li;itely coiiivrncil in Your present Directors had notliiu"; wliatever to do with raising tlie Capital of the Hamilton and Toronto Unilwny. That Line was fornu'd as a distinct and separate and independent Company from the (ireat Western of Caniula, with merely an under.standing (which was very important to the Shareholders of the (Jreat Western), that at n j)roper time the two concerns shovdd be associated, either by lease or amalgamation. Your Directors, therefore, if they so ])leased, might very ])roperIy refrain from entering into charges of corruption and fraud against .Mr. Laing, as charges which in no way affect them, aiul which may more properly be left to the decision of the legal tribunal to which Mr. Laing and the Committee mutually threaten to bring each other lu f.vi it their duty to accouut. 13ut, regarding the nature of those charges, the mode in which they were suppressed until Mr. Laing had left Englaiul, and the way in which circulation has been given to them since his absence, your Directors feel it a duty to the parties interested, and the ptdilie, to state what, so far as their knowledge goes, the facts reiillv are. Til'- FiCT-i. Til." ori.'iiia; rro liic coustructiou of the Lme from Joronto to Hamdton was iii.it.r< .if ill.' lliimil- .• 1 1 p -1 I r^ \- r, • 1 /-. 1 Mil xmA T..i.jiit.) actively competed for by the two great Canadian Companies, the lirand Trunk and the Great Western. It was the key to a most important lailway position, and the Great Western Comj)any thought that if such a Line were constructed in the Grand Trunk interest, it would be u most serious invasion of their territory, and would ])revent them from meeting the Grand Trunk upon etpial terms in competition for the traflic of the West of Canada. Accordingly, in 185:2, two of the Canadian Directors of the Great Western, .Mr. Harris and 8ir Allan Macnab, came to England to endeavour, in conjunction with Mr. Peter Ikichanan, of Glasgow, who held u power of attorney from the whole Canadian Board, to promote the construction of the Hamilton apiiiy loMr Lainc and Toronto Line. They applied to Mr. Laing, as an influential l") |ir.)iii.)U> ilsc.iii- 1 •! • 'i nf T • 1 • 1 /• itructiu and experienced railway ollicial. Mr. Laing states that in the first instance he saw very great difHculties; and it was only after much persuasion, and much consultation with various other parties, that he was induced to interest himself in the negotiations which ensued. Hamilton and Toronto. 11 Of course, the first thing to be done, before any pci-son would venture lo subscribe capital for such a line, was to induce a competent and responsible railway contractor to undertake it. The Canadian Directors decided to apply to Mr. Wythcs ; and Mr. Laing, being well acfpiainti'd with Mr. Wythcs, made the application to that gentleman on their biihalf. Mr. Wythes's reply to Mr. Laing was that he had no experience in American works, and was not inclined to engage in them. The several j)arties interested j)resse(l him. Mr. Wythcs still hesitated ; at length he told Mr. Laing that he would only run the risk, if they — i.e. the parties concerned in promoting the object — would show their coiifidencc in their own estimates by tnking a share of his liability in case of failure. The Canadian Directors were not in a |)osition to do this ; but Mr. Laing, who was neither a Director, nor otherwise officially connected with any of the Companies, and who iiad assured iVIr. Wythcs that there would be no risk, undertook to show his confidence in the concern, bv takinji: an interest in the contract to the extent of a third part of Mr. Wythes's liability. This a])pears to have been really done in the interest of the promoters of the Comj)any, with the sole and only object of getting the contract taken up. If there had been any corrupt, unfair, or fraudulent object of any sort, it would have been a secret and underhand engagement, known only to Mr. Laing and Mr. Wythcs. But, on the contrary, this arrangement was known to every party interested. Mr. Wythes's projmsal respecting it was communicated in the first instance by Mr. Laing to the Great Western Directors who were promoting the Line, and it was at their urgent recpiest and solicitation that ^Ir. Laing assented to Mr. Wythes's proposition. Tlicy Kcek a Coii tractor, and Mr. I.;iin^ nean- tiatCK witliMr.Wyliicn on tliuir liulmlf. Mr. Wjllics rei|iiiie> partieH (o .>ihow con- iiilunci; in ulijeel liv sharing liiH liul)ility, and Mr. liaing takca u sliare of liability. in (ho interest of the Ciiuipany. to got the contract taken, and at the urgent re- quest of the Pro- motors. The Board see no reason "^o doubt the truth of Mr. Laing's assertion that the verbal understanding between himself and Mr. Wythcs was never reduced to writing or rendered capable of being carried out in any practical form, aiul that long before Mr. Wythcs had finished his work, Mr. Laing had put an end to the arrangement. The Committee otl'er no evidence to contradict this statement. To speak, therefore, of " the joint claims " of Messrs. Wythcs and Laing under the contract seems simply an luijustifiable aspersion. The Committee of Investigation very well knew that Mr. Laing And that, whilst the , , , . Company were bene- never received one farthing under the contract : that it was a mere fitcJ, understanding to enable the Line to be floated, to assure the mind of Mr. AVythcs in taking a contract in a strange country, entered into for the advantage of the {jromoters of the Coni{)aiiy, and not for Mr. Laing gained no the advantage of Mr. Laing ; and at their solicitation and not at the desire of Mr. Ijaing : — that it ceased when Mr. Laing became concerned in the conduct of the Great Western Company's affairs ; — and that wliikst the promoters of the Company profited by the facilities the 12 Hamilton and Toranto. iirrnngemcnt afforded them in going to the public, Mr. Laing never profited to the extent of one shilling by his share in the transaction. Other allcgiition« a^aiust Mr. Luiag. So nnich as to Mr. Laiiig's concern in the Contract. Rut then it is said Mr. Laing was guilty of a fraud on the Shnreholders by his subsniucnt acts : first, by signing the C(nitract in vhe capacity of " a Provisional Director and Trustee ; " st'comlli/, by " inducing fhe " Company to vote a resolution, that the Hamilton and Toronto Line, " when finished, sliould be leased by the Great Western Company;" " and lliinllij, " when no longer a Director, nor even a Shareholder, " accompanying Mr. Wythes to the Hoard Meetings and (as the " Connnittee are informed) advocating his claims." 1. Thiit he sigueillhc Contract as a " I'rovisional Uireclur " L Mr. Laing himself explained to the Conmiittcc that he did not sign the Contract as ii Provisional Director, although he was so styled in the Agreenunt. lie did sign it as a Trustee, but even in that sense on!}' as a Tnistei; for a special and peculiar jiurpose. Tlic fact was, tliat there were no such persons as " Provisiomd Directors " at the time the Agreement was signed, and as a Trustee, Mr. Laing told the Connnittee (which they have thought fit to suppress in the Report) DisriiuvKi.. that " lie was a Trustee simply for the limited purpose of seeing that " the deposits paid in were paid over to the Agents of the Company, — " the proper authority." The Committee say " that Mr. Samuel " Laing, M.P., Mr. Jolui Masternnui, jun., and Mr. Peter Buchanan, " were the Trustees ; " and they lead the Shareholders to believe that they signed the Agreement witli Mr. Wythes as " Provisional Directors and Trustees " in the order named. But a reference to the Agree- ment itself exhibits a very diflerent state of facts, and shows that Mr. Laing, in reality, only had a secondary share in the Agreement which he signed, in his capacity of Trustee alone. Here it is, as cited in the evidence : — The words liavini; only been intrniiiioeil into the recital by mistake. " Memorandum of AtmEEMENT made this .'JOth duy of November, 1852, between " rETEii BuciiAXAN, of Oliifgow, onc of the Provisional Directors of the Hamilton " ainl Torniitd Itailway Company, and Acting Aoent in Kugland for and on bciialf of " till' said Conniany, "/ flic tint /mrt ; .Samuel Laino, of lirighton, Esqnire, Member " of Parliament, and Joii.v Mastehman the younger, of Niciiolas Lane, in the City of " LoncUin, two of the Provisional I)irector8 of the said Ilamilton and Toronto Railway " Conipniiy, Tiiu-steks fur ami on behalf of such jiersons in lMif;;lftiid fts shall become " .Sliaroholdcrs in the said Company, of the siraml jxirt ; and Gkouoe Wytiieh, of " lleigtite, in the C'oimty of Surrey, contractor, (;/' the third jmrt." Mr. Buchanan, the acting Agent of the Company in England, who held the power of Attorney of the whole Canadian Board, was there- fore the first party to this Contract with Mr. Wythes, and was the real representative of the Company for the purpose of carrying llamilton and Toi'onto. 13 it out. Mr. Liiiiig and Mr. Miistcnuiin wore made parties to the Contract mainly to ciial)I(" them to cxecuto Ibrmal documciits in England, and to sign clic(itus lor the (h'posits to be paid over; and the Hoard hav(! hitely h'arncd that th(! words " Provisional Directors " were really .iserted in the Agreement hy the Solicitor's Clerk who prepared it, under a mistaken idea that the provisions of the Joint- Stock Companies Act ap[)lied to the; case of a Canadian Company, which they do not. II. Mr. liiiinf,' is further charged, as follows 2. Cliar<,'c tl];it.,'is C'liuiriiian, Ml'. I.aiiii; " iniliii'cil" tlLfSlian'- . Ill liiildcrs (if llie (ircal " Tim SliiirolioltlcrK wledj:e or consent ol' the Creat Western Shareholders an agreo- " ment, i.ai'takiii^ more of the nature of an amalgamation of the two ('omi)anies, was " in some way eil'ectod. The legality of the transaction is very doid)ll'ul." The Committee wiish it to appear from this, that Mr. Laing, being Chairmtm of the CJreat Western Company, and having made a corrupt and fraudulent agreement 'vith ]Mr. Wythes, on b/lialf of the Hamilton and Toronto Railway, induced the Shareholders of the Great AVcstern, for his own advantage, to execute a lease of the smaller line, which was afterwards set aside for some agreen.ent of even a uiorc objectionable nature. Now, how do the simple facts justify such insinuations? nl^p.MVED The (Irand Trunk Company were most anxious to secure the in- the lact^, which ,, ,,r . , ^hllu• thai ho\vas()ii!\ Hamilton and Toronto Lme, but the Great Western proprietary were •■ chairman ' of a ' I, ii 1' 1 1 1 J.1 I'lihHc iiioetin?^ at (leternuiied not to give it up. it was, therelore, resolved hy tlie „hiih the siiaro .,. ,, .1 ,1 TT Ml. I rn i 1 lii>lilers uiiauinuiiish Great Western ( ompany to lease the Ihuuilton and ioronto, and ...roed todo.o. only allow the Cirand Trunk ii right to use it upon payment of a toll. An arrangement to that eifect was come to, and in .May, 1S53, a meeting of the English Shiireholders of both the Companies was called in London, for the purpose of conlirming and adopting that arrangement. The meeting is reiiorted to have been most " numerously ami respectiibly " attended, and Mr. Laing was unanimously voted to the chair, lie opened the business by thanking the meeting for the honour they had done him in asking him to take the chair, for, he said, " my right to occupy that position does not extend beyond that of any other Shiuvholder present." lie then proceeded to explain the objects in view, and stated, in conclusion, that he thought "the " adoption of the proposition of the Great Western Company would be " politic and prudent." A discussion followed upon the general position M 11 Jliiiii'ilhhi ami Toi'oiilo. imil icliitioiis y the (irial W Oteru Uailway of Canada, as the niean.s most " likely to secure the permanent interests of hoth lines." \ vote of thanks was Lrivm to .Mr. l-aini^ "for his al)le eomliu't in tlu; chair:" nnd the Shareholilcrs separated. K.vtmoriliii.iry oliu- men;!' ol tiiU awuisU' (lull. It is u|)ou this that the (\immitti'e of lnvestij.n'.'iou found an accusation aij;aiust Mr. Ijaing, of having inipropi rly '' indnriul " the lireat Western C'ompanv to lease the Hamilton and Toronto Uailwav. In the alisence of any duly constituted IJoiu'd in Knt^land, a pul)lic man and a larije Shari'holdcr attends one of your ineetini:s, called for a specitie olijcct ; is unanimously called on to preside; conducts tho l)\isine>s of the day; receives your thanks for (he way in which he (l(jes M) : and then, ei^'ht_ years afterwards, is charjied by a Com- mittee of Investigation with having fraudulently " i/i(//'ir(/" you to do something for his own benefit and vour injury ! \\ hen your Directors consider all the circumstances attending the Metling in (piestioii, they cannot but express their astonishment !it the trmerity whicli could iMideavour to nud\i! a charge against .Mr. Laing out of such facts. The object to be accomplished was at that time considered to l)e most important to the interests of the (ireat Westt rn Company, and the nego!iations for its accompli>hmi'nt had been carried out successfully. Th,".t a Conniiittce- of Investigation (not one memhi'r of which was, in 18.53, connected with the Company) should, in |S(;i, pronoimce all this a fraud, is, your Directors niust submit, an afiront to the judgment of every Shareholder who at that time was coiuucted with the Company, and a course imj)recedente(l in llailway history. I sui,.-.eqiKiit -.iWtitu- Hilt the Committee go on to say that fur '.lie Li.ii.*(;, '' Tlio J.i'asu wii.s Hot o.\w'uti.Hl, uiul tliut, witlnmt joiir liiiowit'iigu nr cons.tMit, an '• agixeimiit juii-ttiking inuie o{ tlio ii;itiiio of an aiiialraiiialinii Ijitwcoii tiio two " Cuinjiuiiirs wa.s in Kume way rlluutcil. Tlio legality uf this truiisiu'lion," tlioy add " wati very doubtful." -liuwu to 1.C u iiic Now the fact is, that the Agreement which was ultimately sub.sti- imc'R>ts ot thu Cilo;il , Wctcni LoiiJiaiiy. tutcd for the Lease was adopted by the (ireat Western Shareholders because it allorded them more favourable terms than the Jicase pro- posed to give them. Under tlic Lease, the Cireat Western guaranteed UnmiKon , that the amalgamation was substituted for the original lease " without the knowledge and consent of the Great Western Sharelioldeis " is simjily untrue. 111. The Committee further charge against Mr. Laing, that — 3. Charge tbat " Mr, Laiiifj iiccom- 1. T\ ■ ii c Lt lii ^ L- -M 11- .1 ■ 1 ■ . . , I'lnied Mr. Wvllie." '• JJiinntr tlio j)ruj,'i'os,s ot tliu sottlt>niont ut .>ir. Wythf.ss cliiims, ultliougii uu i,, ii„ar(l Meetings " loiiycr ii Hirector, imr even ii Shiiioluildcr, Jlr. Liiiiig ivccoiiipiiiiiod Mr. Wythos to "'".' '"'y,"™'^'' '''^ " tliu JjoiU'il Muctiiigs, mid, us tlio Coimiiit.oo aro iuloniied, advociitud his claims." As to the earlier part of this case, it unfortunately hajipens that those gentlemen who could have given your l^oard the best information, namely, Mr. J'eter Buelianan, the acting Agent for the Company in Kiiglaiul, and Viv. Ilarkness, the former London Secretary of the Com- pany, arc both deceased. Passing, however, from such earlier facts to the allegation now Disproved before them, that Mr. Laing, " when no longer u Director, attended the Board and advocated Mr. Wythes's claims," your Directors are enabled to afford very distinct evidence. In the first place, Mr. Gill, your by the Evidence of President, writes as follows : — 4^ V- " ]\Ir. liiiing disqiialifiod as a Sliarcliolder in ilarcli, 18.)5, before the power to Robert Gill, Esq. " vote by pro.xy was secured, and upwards of nine months before the settlement was (I'^'^iJent.) " made with .Mr. Wytlies, wliich was only arrived at after a protracted correspondence See Appendix, " and a long uegotiution. It is not true that after having disqualilied Mr. Laing ?"£'' '''*• 10 Udiii'illou oiiif Toroufo. " ai'iciiii|i!iiiiril Mr'. \Vvtlu;i to tlio nuanl Mci'tiiif,'H •mul dilvciMtcd Mr. Wytlicn'.-t " t'htiiiix.' iM till' ('Miiiiiiilti'i.' Ill' liivcHlipitioii liavo hkm'I'Ii'iI, liiit lii< cuiin' to tin' llDanl '' to u'lvc us iul'iiniiMliiiii I'l'lMtivc til till' Ihiiiiilliiii uuii 'I'n.iiiiln lliiilwuy t 'uiii|i.iiiy, " wiiirli, fi'iiin till' I'li't lit' till' lunjurily nl' tlu' (iroat Uijiti'ni ll.iaril kimwiiiL,' ii.illiiiii; " I'f its I'ui'ly lii.stiii'v, \M' wi'i'o iiiiieli in wunt ipj'." .t.n.SiMiiii.i;*.|. M r Mr. .1. H. Smitli, M.l'. oorrohornti-s fliis statcniciit. Mr Smiili Soi' .\].i..'iili\. \'V,'.r \vritcs ; — " \\ lii'ii Mr. l,aiii;_' I'rasC'l tn lie a I)ii'i.'itiii'. Iio cMiiii' hi Inic tin' r.oanl in a iirw '■ cliaiai'tiT ; aiiii if, on any nri'.isinn. Iio ai'i'iiiii|iaiiiri| Mr, \V\ilii>, wliirli is iliiiilitrni, " tlicrt' coiilil hv III.1 iiliji'i'tioii til hi'* lining s". Iio liiil imt ailvocalo Wytlii's'.s ciuini.s." And, iipdii this (|iu sliiiii, yoiir Dii'cctors linvc, riirllur, the difi-ct >l;itriiuiit III' .Mr. U'ulifs liimsi'll'. .Mr. W'vtln's \^^it(',^; — f'lrnr.'i' U'uli.-. r,-ii '' It is nut Iriii'. as tlir ( 'uininittri' assort, that, wii.ii I ma^li' my ri.nni^ ii|Min tlio ■>n' .\l'innili\, I'. ;,"■ " I 'n:ii|iany fi'r t'Mni \\iiik, ' .Mr. I.aiii;^ ai'i>iiii|ianiL'il nii' to llu' I'manl ami ailvd' itoil "my riaims.' IK' iii'vrr ai'iiim|ianitil im- to tlir i'mard, (Mi nni' oi'casiim 1 •' liilirvi' 111' was |irr-i'iil. wlirn I alti'UiK'il wilii my Milii'il'ir tii j,'rl, a .m t ( li Hunt ; I nil. it. "is wlinljy uiitini' (iiat Mr. I,aiii'_', on tliatnrany utiii'r ii('i'a.-.ion, uttnalcil « itii nu' t'l '■ ailvncati' my I'laims. Ili' fiiiiid liavt' im iiitrrist in liuiiij^ so; ainl, iiidct'il, lit tlio "|"i'iinil «ln.ii I iiia^li' my I'laini. wu Wi'w iml actiiii.' in lu'rl'ii't liarniniiy." Mr l.iiiii- tiui'don, Till' Sli;irrliiilili I's can now jtiilgt' I'm' tlinnsi'lvcs liow I'ar tlu; ■■ll'llllUllll. •••II 11 I II I ( iiiiiiiiiltcc ai'i' iii^tilird III tin; cliarifr.s tlu'V iiavc aildiit'cil nyiaiii-st an alisi lit man. flllKr p.iiiii.- rc|iort' (I nil liV llli; folniliiltlT The M'tiiniHiii Willi Tiic i|iii'stii)ii.s ix'tuccii .Mr. A\\tlu"^ iiiiil till' ( 'oiiiiJaiiv , niatiii!' ■ '^ til til,' llaiiiilliiii and 'I'drouto Kiiiluay, iiivolvi'd ui>\vanl.s :)!' ^0,(iO()/, claiiiicd 1)\ .Mr. Wulics I'dr extras. Tlii' coiisidfi'ation of tlirsc claiiii's occupied the cari'l'iil attention of the (Irtat Western Hoard lor many inoiitlis, iind involved iniieh correspoiideiiee with Canada. 'I'he matter indeed was nut settled until Xoveinher, I ^."i."), when the lainlish Hoard, to whom the matter liiid liecn remitted IVoin ("aiiada, canic to a nnaiii- iiioiis deeisi'in, that it was the most jiidieions coiirst- to coin|)romi.so the. dispute with Mr. W'ytlies by paying liiin :,'n,0()0/. Ijcyond llie ainoiiiit ol' his contract. 'Ihcy pnt'erred niidung this settlement nither than ciiLcagiiiL; in a snil tit law or proceeding; to a rcCcreiiee to Mr. Robert J^'tepheiison, as the contract stipulated. Voiir Directors believe that all shown ii. 1h- uiivaii- who are jji'iictically actpiainted with the settlement of railwiiy contracts tlllTCollS. ... . /> 1 1**11 II will concur in the soiimliiess ol the general principle that reasonable coiii|)iomises in such cases are in the cud iar more advantageous to the Coiiipany than either references or legal conllicts. Jkit if the Share- holders think fit to reopen this (piestion, Mr. W'ythes professes liiiiKself sei' .\|ii,i.ii.ii.v. p. 77 (iiiite willinir to consent to a fresh decision. .\mi.MiT{ii.s ihc Com- The Committee state that the scttleincnt was made by the English initlfe have slateil , . ,. i / , i- -m i o mm •ill spill of protest ." noard, "in spite oi the protests ol the Lunadian Managonieut, Ihere :M lldiniltoii mid Toi'onto. 17 ytllc'H'.l I'liMril iijKiMy, 'iiliiii'' Siiiilli 1 il llcW illlitl'lll, lililllS." ilinct wore no hiicli protests. Tlif Hoard rcffivcd nmucrous litfcrs' from Mr. Ilariis, Mr. I.ouf^sdon, Mr. UadclilV, iiiitl Mr. Urvd^cs, <^iviii^ tliuir cxplaiialion^ and tlicir views u|)on \\w dilVercnt matters in dis|Mit( with Mr. Wytlies, and ull tliese letters were didy eonsidcred and disenssed licl'ori! the settlement was inade. \\\\[ so i'ai from tlierc being any protest from llic Canadian Hoard, that JJoard, on tlic ^Ist Deeeinlier, 185.'), passed tile foHowing minute, on the terms of the settlement liein^ eommnnicateil to them : — '• Tliat till! .iii\iiit;iiiiiiil imiilc witli .Mr. W'ytlus Wiis hii^lily iUvouriililo tu that " gcntleiiuiii ; Imt tnkiii;; tin.' iintarc of tlui rontmi't luiil tlio ilinkultics of iirbitriitiou ■' into accdinif. tlic IVmrd coiLsiilci's flint tliu I.omlou iJirccturs l:iivc iimilu ii .suttlciauiit " witli Mr. \\'yilic.-> which hits thoir lull mHnuval.'' 1 1 hill tilt) .Ivii'.itod iM^imi I t ; Imt it illl 111!' t'l 1, lit tho far the iiii.>t an ivlatin^i; v(),(iO()/. ■se claims for miiiiy he matter sh lloin'd, ) a iinaiii- •omise the le amount ither than Ir. Kohert »•(■ that all ^ eontraets reasonahle ■ous to the tlie Share- ises himself The Conunittee allege as one of the instances " of the deception Tiioiiiinyonih.iiinc 1 • II I -I 1 I -111 I '•li" >ii 'i> 111'-" '''x>n " pnicti.seil hrst on those wiio snl)seril)(;u the eiii)itai, inid snhsetiuentiy i -< iiKuio.iii.'m- '■ on tlie Greiit Western Sharehohlers," that the Hamilton mid Toronto Uailwiiy has i:ost Us, 07:2/. instead of 3:2^,000/., which was the umounl of the original contract. The last, however, only included ii small uu.i ii:iv< iuciudaa .... . 1 .• • 111. ' ,< 1 <'X'r;i rolling htock (|iiantity ol lolling sIock and stations, and kit an extension oi almut imu woikM. a mile and a half to he made to form a connexion with the (ii'and Trunk liailwayat Toronto. The Directors' Report tu the (ireat Western Shareholders, for the half-year ending January 31st, IS'jj (long heioie the settlement with .Mr. Wythes was made), openly and undisguisedly stated that " These several items will reipiin; this (Company to expend "probably 1()(),0()0/. cnneney, " eiinal to 5l),()00/." sterling, beyond " the contract." The Share Cii|)ital anthori/ed by the Act of Incorporation amounted to 3()'J,t)tlU/. sterling, with po\»er to burrow .SO,()l)t}/. in addition; thus making the total estimated cost 4-l'.),U()()/., and, as the actual cost of tin: Line has been only W^Xu-^L, it is thus 3U,()0U/. below the oriLtinal estimate. the English lit." There 111. DIIKon AM) MILWAI Ki;i. UAII.WAV. MA!- •Illli'it iiltinnl'^ iMnnoxinii I'Otwicii tl:i) Dclrcit iitiil Mil waukec ;i!vl llic "iri'ii Wi-i 1 ii; of C'.tliii'li. rilAIKiPS Ol' llli; ( ((M.MITTKK CONCRUMNC! Illl. IU)M» ISSL'R. It is iirccssarv that nil wlio arc not tlioroiij^hly raiuilinr with tlif position of till' (Inat XN'i'stcni Kiiilway slioiilil icI'tT to llic Map a|)pt'ii(K'(l to tliis statciinnt, in ordt-r to ohtaiii a clear view ol' the cliaracter of the Line of which your Directors are now alioiit to speak. Tlie (Ircnt Westi-rn liailway c»f Caiiaila runs tln-oiijih the West of rppcr Caiiaila troiii Niaiiani halls to Windsor, on tlu^ river which coniiicts the upper with the lower lakes of the province. On the other side (it that river lies the American State of Miciiij^an, and the impor- tant and ra|iidly increasinj; city of Detroit. An American Company <()iiie \(aiN hack |iro|)nse(l to carry a Kaihvay across the Slate of Michiiran Irnm Detroit to Lake Michii^aii on the same principle that the (ireat \\ Cstern was carried across the I'rovince of r|)per Canada. I'his Hailwav. now called the Dvtroit and Milwatdxce, was made in sections, ritiniatelv it reached, as the Map shows, from the <'ity of Detroit to the important poit styled (irand Haven on Lake Michiifan. from which it comninnicatcd hy steam vessels with the port of .Milwaukee, m the state of Wisconsin, on the other side of the hake, a port of the greatest commercial iin|)ortancc Jis a llailway centre, and as the shippinjj; port of the j^rcater portion of the produce of the States of Wisconsin, .Minnesota, and Iowa. A smvcy of the Map must convince everyone that this Detroit mid (}rp'>! iiniiiirtarux' "f th" Dp'riiit iiii'l .Mil .,., i n i c i , . • , i- i i wRr.kc ;i> ai'cd.i t) iMilwaukee Kaihvav was ot tiic ^'rcatost nnporlancc as a teeder to the ilv Ui.'ii' \V,-r rii i'(iiii)i.iiiy. fireat \\ Cstern, of which it is, in fact, an extension of IS.") miles. It was eiiUailated to secure for our Liiu- the tratlic from the west side of l/ike Michigan. Hut more than this, it presented itself to the (ireat Western as the means of avertiu}; a competition most likely to 1)1' injurious to our system. It will be observed, that whilst the Groat Western runs on the north parallel of Lake Lrie, there is upon the soiitli side of the Jiuke a series of American Jiines called the Lake Shore System, which comnnmicate with Lake Michigan by another American Railway called the Michigan Scmthern, and that farther south still other Lines exist, cDimecting Chicago with the Atlantic. Without the Detroit Drfroif th/if l/ihrnti/xfi' Itoiul Imhup. W) mid Milwaukee Uailwu) tlie |ii>itluei' of llie dintrict iiruiiiid liitke Miehignn would paxn to Cluni<>;i), nud iVoui ('liica^^o eastward to tlic jioits of slii|)uieiit, l>y till' Auirricaii laiicH, or l>y water to Hullalo. Hy iiumiiH of the Detroit and Milwimkee Kailway, tii.' (Jreat Western ••an intercepf a |j;rnit part of tlu> inillie, auti pass it over its own liiiie. If tlicrefore, it is an olijeet wifli llio (ireat Western Company to secure the trade of the districts hnnleruiir on the };reat Lakes, and of the corn-proijiieiiif^ States of Mieliij^aii, Miiuusota, Wisconsin, and lowu, tlie posses8ion of a l.iiu from Del roil to Luk<' Michigan and Milwaukee is of the tirst importance. This The view whicli was taken liv vour Directors of the valiu- ^Ir '-"nijiiilim"* He- " ' _ |)iirlK on ilii-* i^iiliit'i-'t of this liinc to the interests of (lie Ciivat Western, was greatly m is:,4- r.. streiifftliened l>y the Keports wliieli \Mre i'roii. time to time addressed to them J»y the Hoard luid ollicers of the Companv in Canada; amouifst others, liy Mr. William JiOnfi;s(lon, who was Vicc-I'resideiit of the Company in 1*^54 and 1S.')5, and who from his railway experience in this country was specially electid l)y the lliii^lisli Shareiiolders to tliat ollice for the purpose of advisiiifj; as to the position and [irospects of the (Company. Mr. Lonj^sdoii addressed the Hoard u|)oii the siiliject on .several occasions. On 'iOth .lanuiuy, 1^.")"), he wrote — • Tilt' Onkliiiul luid Ottawa I'liilwiu' (iiftorwiiidHi'ulloil tin' Detroit iiiid MilwiuiktM '•, " wliioli is likely to lie coiiipleteil ill all next year, will briiii,' a )»n'iit iiicrea.se of •• |iiisseiigers and business to Detroit, and |irciliably will lie another liirge feeder to tlio '■ (Jreat We.stern." On .Marcli ITtli, 1"^.')."), lie wrote— '• There is no doulil of the j^ivat iniiiortanco of tlie Detroit and .Milwaukee to this '■ ('onii>any, and [ believe it will briiij;, when fairly in operation, ii traftie as valuable to " the (ireat Western, .ts that now derived from the Miehi^'an Central, and eonsemiently " it is our interest to supjiort and aid the Detroit and Milwaukee as far as we can." It was ill eonsecpieiice of such considerations and Iveports as tlu.-e I'-m-ouia-omout nm- , , , . , I I • • 1 • «'inii'iitlv);iven tolho that the Directors ot vour Company thought it right to give every Detroit ami Milwnu- encouragement and assistance to the Detroit and .Milwaukee. Karly in lSr)(), a traHic arrangement was entered into l)etweeii the two Com- panies, and the Fnglisli lioard of the (Ireat UCstorii agreed to ati'ord the Detroit and Milwaukee Company their assistance in obtaining capital to complete their liiiu'. The object was not immediately successful, because the (ireat Weslern themselves were issuing new Shares which appeared to capitalists to otlcr superior advantages, and which they therefore took in preference t' .subscribing to the caiiitalof the Detroit and .Milwaukee. At a latrv period however of the same year, the (ireat Western had obtii lied its capital, and it was then determined to endeavour to float the Detroit and .Miiwaiiket The first attempt was in February, the second was in July, 1851) In the iutennediutc period, negotia- tions had been entered into b\ .iic Detroit and Milwaukee Hoard with 20 Jh'truif and Mihcdithx'C — Ikmd ffmnc. Mr. Wytlics, the great contractor, to take up and eoniplete certain portions of the Line. The Railway was iSij miles long; of these it Cireniir i-suci ..I. vvas proposed to Mr. Wythes to complete 75 for a sum of 500, ()()()/., A- iir.iiu'os 111' Mr, 1 • I "^ 1 1 u' • Waik.r, the ciiair- U) l)e paid halt ni .Snares, and halt m cash, when Mr. u'aiker, the a'u.i Miiw-iiika.' (.'luiirMian of the Detroit and Milwauket', again applied to the Hoard of the Great Western to assist ins Mni' in floating their Honds. s,o Aiipi-miix, ivi;ic« I'poii tln^ assiu'anee that the contract with Mr. Wythes had been entered into, the lioard consented to issue a circular aiiionu;st their ShiiivhoKIei's, and to recommend them to take up the bonds as a mutter I'rw.uiti.ms takvii i.v jii' i,„p^,j.(.,,n,^, ;„n| honelit to t lio GiTut Western itself. The Board iiowever took such pri'caiitions as suggested themselves for the protec- tion of till' parties interesti'd. A part of their ri'soluliou to send nut the circular ran as follows : — • '• I'cl'oru tlif iili(iVi-irHiiti(>iiiii Circuliirs are issued, tlio Secretary to l)e .Nitistied ••thai the coutrat'l with Mr. 'Wvtliis to cdiiiplLle the J)i'treit ami Milv.aukee llailway is "exoeiitecl liy liotii jjarlirs, and that .Mr. 11. N. Walker has leyal jjower iiii heliall" eC '• tlie l)cti-(iit ami Milwaukee Directors." rile Seeretarv ilid satisfy himself upon these matters, and there are now in the otliees in Lor.doii properly certitied copies of the authority under which Mr. Walki r was acting, as well as of the contract entered into Oil the [)art of tin; Detroit and Milwaukee Company with Mr. \\ vtlies, and of a Kesolution of that Hoard, under the cor[)oi'utc iSeal of the Company, confirming the contract. Mr.WviiitV a.iitruci. 'Pin; cuHlraet with .Mr. Wythes having been made, your Directors coiisiileretl that they were tolerably safe in the hands of so res|)onsible a coiittactor, and regular payiiieiiis were accordingly made to him upon the terms of the agreement. In January, 16'>d, wlieii the money had all been paid, and the contract was su|)posed to be at an end, your Hoard learned with astonishment tliat .Messrs. Walker and 'I'rowbridge had thought proper to take a sub-contract from .Mr. Wythes as described by the Committee;, which sub-contract was subsecpienlly adopted by the Detroit and .Milwaukee Hoard, but was maintained a i)rofoinid secret from your Directors. The indignation of your Directors a:id the strong terms employed by them at the tinu! in writing to Canada u|)on this subject when it came to their knowledge are well known to the Committee, though it doi's not suit them to allude to the fact ; but, as usual, they put the chief blame on the wrong parties. Your Directors cannot dcfeiul Mr. M'ythes, who.se "'■'M'i 'I'iix, I.a-c^ letter they publish in the Apijendix, but there is no doubt that his 75 ami 70. . i l ' responsibility as a contractor never ceas d ; that he had a legal right to sub-let his contract to whom he liked without informing any one, and that your C'ompany was after all only a secondary party to the agreement. Hut of the part taken by .Messrs. Walker and Trowbridge, and subsciiueutly concurred in by the Detroit and rtiun ISC it )00/., •, thi' IJoiird londs. been thoir iniittor l^uarcl ^)l-()tL'C- inl nut siitistieil lailwiiy is iR.li^vU' of Detroit and Milwaukee — Bonrf [nme. 21 Milwaukee Board, your Directors will only allow themselves to say that such proceedings are happily unknown in this country, l)ut form one of the difficulties to be encountered in America. When the discovery was made, it was too late for your Directors to take any useful action. We had no claim against Mr. Wythes ; we were in actual possession of the Line itself, and ycjur Directors would hardly have benefited the Bondholders or the security they held by making such a transaction public. As to the retention of the original contract, your Directors cannot see with what object the Committee allude to it. Your Directors had a certitied copy, and they repeat that Mr. Wythes never shrank from or (luestioned the validity of the contract or his responsibility under it. The possession of the original contract had no bearing or intiuence on the matter. here arc vithorily entered ■ilh Mr. ate Seal Directors sponsible him upon loney bad rnd, yovn- i-owbridi!;c Vyllu's as l)si'(pu'ully naintaini'd a of your 10 time in kni)wUHlij;e lit them to me on the hcs, whose ,l)t that his ■gal rii^lit ^0 i(f anv one, ry party to Walker and Detroit and IV. DKTKOrr AM) iMlLWAl'KEK RAILWAY. ISSUK OF rUKK LAND SIIAIIKS. I'l.iarco .iu'iiin-r Hi Till' Coiniuittcc UKiIsi" it ;i cliargi' iii^iiiiist your Directors that in the rci-tdrs for aw-i>iiii-.' , ^.^ , i !• • i- >> ■ tiic iKimii t',iiii].;iiiv your I''.)/ tiu'y were guilty ot a most improper procirdiiig, in (Muh'iiVduriiii:; to assist the Detroit and Milwaukee Company to dispose of an issue of i^H.ddO Shares, known as the " I'Vee Lain' Shares," whieli Ki.iK i.ANi. siiAi r-. were proposed \o lie issiU'd at 10/. "j.v, per Share, subsecpiently reduced liy aiitliority of Mr. Walker, the J'resident of that Comp;my, to 7/. D'lv. !)'/. |ur Share, witli an a[)propriation of 50,000 acres of hind upon tlie Line as a honiis; — ecpial lo two and a half acres for each share. Of these Shares, about '2,')00 were taken in this country, realizinir about .00,(100/. The Committee have not the candour to state tliat uhen it was found that but few Shares had been taken up under the first oHer, a circular was addressed to each Shareholder, giving them the oj)tion of l)ecomiiig holders at the reduced |)rice, or //ra/jo.sv/// lo rrlnni the moiii'i/ linlisiriljcd, anil Ihdt il ■iron so returned lu eeeri/ one irlio dexircd it. oi.jwu oiihe is-uo. The issue of these Shares l)y the Detroit and Milwaukee Company was necessary, us the Cominitteo themselves quote from tlie Prospectus, " to |)rovide for a larger Irallic on the Detroit and Milwaukee Line, " and to purchase rolling stock and complete stations, warehouses, and " wharves, not iiichuhd in previous contracts." hni.ori;iii.o of iiiosc 'I'lic Dinctors wcrc aware that the works on the Detroit and Mil- (iljoi'ts to tlif system. waukec l,ine had been vigorously prosecuted in IS.'iO and 1857, and they expected that the whole Line would be ready to be opened by the end of the latter year. It was as im[)ortaiit for the (jircat Western as it was for the Detroit and Milwaukee that rolling stock and stations should l)e provided lo work the Line, and that provision should be made for tlu' trailic that was expected. K very thing that assisted the Detroit and Milwaukee was beneficial to the Great Western; and your Directors, in that conviction, felt it their duty to you to do what lay in their ])ower to enable the Detroit and Milwaukee Company to raise the money they re(piired on the terms oflered. Defroil and Ililwanhcc—Frcc Laud Shares. 23 to do Wliat (lid lay in tlioir nowiT was, to autliorizc their Secretary AntiiorizationioBcna •' ' '' out a CircL'liir, to issue tlie proposals of the Detroit and Milwaukee Company, uiion the represt'utations of the accredited agents in London of that Company, acconn)auii'd by a circular explaining the nature of the security pro- posed. Your Directors, however, did not authorize this without taking proper procauiidiH • ... buiiii; taken far puliii ])ro|)er preca\itious. They required to he supplied, and were supplied, "ccuiiiv. with co])ies of the Acts of Congress granting the lands. They took steps to have those lands properly seciu-ed to Trustees for the benefit of the Company, and they saw that the deeds were executed by the proper authorities of the State of Michigan. The ojieration of raising the large sum retpiircd for rolling stock statemi'ins of iIk 1 • ^ -11 II 1 ii i\ -i. 1 <.'ii"i'iiit''-'i-' that iliy and stations liavuig only very paitially siieeeedcd, and tlie Dctnut and hk.ikv ha^ iiOLn n.u .Mihvaukei' Company being in the meanwhile in temporary (Inancial '' " " ' "' dilliculty, the small portion aetnally raised was advanced to .Mr. Wytlics in the way described by him in his letter in tlu' Ap|)en(li\. Tlie Committee state that " the Subscribers for these Shares have ami thai ihc Sni scrihors liav.' Iintu " been grossly deceived by the Detroit and .Milwaukee Company, I lie /c///^/iiweivuii, '' /jraiiiiscd iiivcr Imrijii/ licni I,K(;.\I.I.V id l/ir dUiia^nd iuiii.aiiv iiciii.a time of the Detroit and Milwaukee Comjjany ; but this land grant was not a misrepresentation, andyoiu' Directors cannot but express their astonish- ment that the Conunittee should have endeavoured to attach blame to them for their proceedings in relation to this sulijeet. Tn cousetpiencc of an attempt to subject the Company to a larger ami ontirciyrcfutca. taxation than that to which they were fairly liable on account of these lands, negotiations arose with the State of Michigan, and the final acceptance of the lands from the State by the Detroit and Milwaukee Comi)any \\;\s /jur/jasc/j/ delayed until those negotiations were adjusted. But all ditlicuUy has since been removed by special legislation in the State of Michigan. The deeds conveying the land to the Company have long been properly executed, and nothing is needed to complete the transaction but the final acceptance of the grant on the [)art of the Company. For all practical purposes the lands are in the possession and under the control of the Company ; and the statement of the Committee " that they have never been li'.()(dli) at the disposal of the Company, " is only calculated needlessly to alarm the parties interested. %. LOANS TO TlIK DIMROIT AM) MILWAUKEE. vA'.Kis.'i iu':uii4 Pi- Ln assist iiig tlic Di'troit and Milwaukee ('oiiipany to float their (iropMiy ii.iviiuv.i l)oiuls ami laiiil shares, it was scareely |)ossil)le even lor the l oimmttec Mii'ttaukeu uiii'i'aiiy, ''1' IiKjiiiryto coiiteiul that your l)irectors hail done anything pecu- niarily injurious to the. Great Western Company of Canada. Tlu'se iiiattt IS, then lore, aj)pear mainly to have been brought forward to support the still more serious allegations which follow, to the effect that yoiu' Direeiors most improperly induced you to advance two Loans of ir)O,()()0/. and 100,000/. to the Detroit ami Milwaukee Company; that .111.1 hiiviiiR ipcoived they did so without duly protecting your interests; and, above all, that llii>iievpMViiiciilj< troin ' i- i n i ^i • n- -.i i o i i til! liiiiuit ami Mil- tile meiulxrs ol the Hoard then in oihce, with the Secretary and the Registrar, ri'ci'ived direct money payments from the Detroit and Milwaukee Company for effecting the arrangement. The Fa. u -takd. Vour Directors will consider these charges under the several heads of — I. The Tuliey of the Loans. IL The Security obtained for them. 111. The Charge against your Board and OtHcers. The Doin.ii ami Mil- 1. 7'//'.' iV/f// q/' llirsr Loans. The attempt of the Detroit and waiikci' liaviiii,' failo.l,,., i i '• " i.i • r i j • II 1 I.) i-Kiio iiuir 1-r.o Milwaukee to raise money on their tree land snares had proved a ii'imaiitic.s ' ' ""partial failure. It was made hi July, 1S57 ; and, in September, 1857, the Detroit and Milwaukee Company had fallen into serious difiiculties, an.i in s. pt. iiiiicr, and OH tlic 7tli of that month an application was made to your IJoard, 1857, ai.plii'l t.)(iii'at , /• i i\ ■ »i-i \ r\ e \ We.s ,rii ol (aiiaiia on tlu' part ot tlic Dcti'oit niul Milwaukee Company, lor a Loan. for u Luaii, Y(jur Directors continued to be influenced, in 1S.')7 as in 1856, by considerations of the great importance of securing the Detroit and Milwaukee Line in the (jreat Western interest. Up to the period in fpiestiou they had confined themselves to circulating the proposals issued ill England by the Detroit and Milwaukee Company. Your Directors knew that unless money was obtained from some cpiarter, tlu; Detroit and Milwaukee Company could not complete their Line and provide rolling stock and stations. They knew also that means must be found by that Company to meet the interest uj)oii their bonds befon; the Line could be opened and earn revenue. Considering the financial position of Luro|)e and America in the autumn of 1857, it was not surprising ocompicicUiciii.inc that the Detroit and Milwaukee Company should need a loan, or that iml proviUo rolling ' •' I am! [J htock they shouhl ask the Great Western of Canada for such assistance. M "'^^; DclroH and Milwaukee — Loans. 25 tlicir niittcc pecu- Tlu'sc aril to ;ct that oaus of y-' that i\\, that unci the oit and > several lined for troit and proved a icr, 1857, litUcultics, mr Hoard, an. in 1856, Ictroit and I! period in jsals issued r Directors 3ctroit and Mc rolling uul by that Line could position of t surprising Dun, or that itance. The Directors were by no means nlono in their desire to aid that R.v wiiom tinir ap- iiiicaiiiiii wan sup- Company. Tlie npplicatKm of the Detroit and Milwaukee Company iMinc.i. was supported and even pressed upon tlieni by sonic of their hn-gest Shareholders; but by none more warmly or enerf^ctically than by a gentleman whose name appears appended to the Report of the Com- mittee of Investit;;ation of which he is a member. Mr. Robert Kaye, Mr. i! Kay,, a nuin of (Jlasgow, became a Shareholder m the Great Wiisterii, m which of invL-iiL'aiiun he always exhibited a lively interest, in 1851. In l'?56 he l)ecame a Subscriber to the Bonds of the Detroit and Milwaukee. In lb57 he took some of the free land shares. He knew thiit the latter scheme had only very partially succeeded. He kept himselt" in constant com- munication with the representatives of the Detroit and Milwaukee Comicniy, and in the sunnner of 1857 he went to America, personally inspected the Detnnt and Milwaukee Jjiiie, spent some time in informing himself of its merits, travelled over tlie hine in its then incumplete state, and then crossed to the other side of Lake Aiiehigan to examine for himself into the prospects of the through trallic that would flow over the railway. ]\Ir. Knve's knowledge of the wiiole cpiestion was therefore even Mr. Kay( .- p.is..i,ai ,',,, ciT- kiiiiHit Lint "linnlir llnui I lAor im'/i/v.v.v- /<» y.;». FrMui the bt;iiil syntoin, "and one tliat conlil very easily i>e put a .stop to ; inileed, I wan pleased to aeo nt " Wiisliinuton, that the station was ineloaed, and evei-y |iassengi'r had to show hist " tieiiet liel'ore gettini,' to the phittbrni. •• If yi n and another of your lirotiier Direetors were to visit tlio Lino, I feel -assiuvd yon wi>uhl he pleased with it, and with Mr. Hnii,'ey. It inii,'ht ho made one " of the most popuLir roads in tlio world. Tray exeuse tiieso very hasty ruumrks, " Aud believe mo to he. "Very respectfully, (Signed) " llOHKHT IvAYE." '■ KoUKiiT On I., KsQ. London." Tliiit this very gentleman slioiild, in ISO I, sign \\\c Uoport of the Committee of Investigation eondeinning in the severest lan'ma^e the whole of the tnuisactions whieh his letter of 1S57 declareil to be so i.Mi'EH.vrivE seems rather hard. 'riiese and otlier representiitions ttillying so nuieh with the ions (if \onr Hoard, derived from ( he Meeting of Great Western Slia the Sth of October, I'^o?, proijoscd : — The no.ii-.I act cii tlic>tf rc[iiOjiiit;itiim.-i, . . I, 1 1 • 1 ,. I. 1 ' luidiiropose to sii:uc- opmions (il \onr hoard, derived trom oi!:,eial sonrees, your Directors, l.oiin. at the Meetuig ot ureat Western bhareliolders, held m Loudon on to «hioi] tlic Sh.iro- hoiicvs uiiuniinously ag.-oc. '• That tlio Directors shonld be anthorized to advanee to the Detroit and " .Milwaukee Railway t'oiiijiany sneli an amount, not e.xceediui,' l.")0,(H)(V., as may be "necessary to .secnie the coiii]iletiou of the llailway across Miehiiran. in conne.Nioa " with the Lireat Western of I'anada, such advance bein;^ made as a temporary loan "on surticit'iit security, the expenditure of the same being subject to the control " of the Great Western liaiUvay.'' This resolution w;is unanimously ad()[)ted by one of the laro'est meetings of Great Western of Canada Shareholders that was ever assembled, and it shonld be mentioned that, previous to the meetin*', a circular had been issued to each Shareholder saying that tis iinanciai measiu'es of great iiiipDrtauee were proposed to be brought befon; them as stated in the Report, eaeh proprietor was retpiested, if unable to attend, to give his iiuliviilual opinion. P;. ■.Ill- lull? tiiki-n ti> i>"cii!'o iirnpei'ui'i.lica- ■ tioii of till; ni>juu\ II. 77/1' Si'oinlij ohhihiciL It is im])uted to your Directors thiit 111 recdiniueudiiig their Shitreholders to make this loan they did not take siidieieiit precautions to ascertain the position of the Detroit iind Milw;iuk;e Company, or to secure the proper applictition of the money. It is further stated by the Committee, thtit — '• Throe ihiys bcp.re the Meeting of Sharcbohlers Mr. Ih-ydires received a letter •• fn.ni Mr. Tnwiiridue, the .Seretary of the Detroit and Milwaukee Company ; and •• which letter he says he liiid before the (Jfeat Western Direct(jrii, eontaining a report •■ ujinn the state of the ( oiupuny's affairs at that time wholly at variance with all " previous statements furnished to the (Jreat Western Directors, aud with the repre- " i5eUtatiou.-5 of the Chainuan at the Meeting of .Shareholders." Detroit and Jlihcaiikce — Loana. 27 In answer to this most serious charge tlic Directors bog to state that the letter referred to from Mr. Trowhridge was not opened l)y, or seen by, any Mend)er of your Board till two or three days after the Meeting. Mr. Haker, as well as Mr. Hrydges, fully explained to the Committee the eircumstanees under which this happened, as detailed at l(!ngth in Mr. Hrydges' letter in the Ap[)endix. The assertion of the Conmiittce, therefore, that the Chairman, after having read that letter previous to the Meeting, deliberately made statements to the Share- holders at variance with it, is a groundless and unworthy calumny. After the authority to make the Loan was obtained, it miquestion- ably came to the knowledge of your Directors that the Detroit and Mil- waukee Company were nmrc dee|)ly involved than they had reported themselves to be when they made their application for the loan. This circumstance, however, only made your Directors more cautions as to the ai)plieation of the money, and to ascertain whether it would TiicfmanciuimuniiL'cr accomplish the main object of opening the Line. They iinniediately ^'ute tiio'iinair^'.?niic issued instructions that Mr. Reynolds, the linaneial manager of the kc^'onipany. ' "'"' Great AVestern Company, should scrutinize the books of the Detroit and Milwaukee Company. lie did so, and reported to your Board on Nov. 2d, 1857, that whatever might be the involvement of the Detroit and Milwaukee Company, the advance of L")0,00()/. would be sullleient to meet the claims of the secured creditors, and open the l^inc. "Whilst his inquiries were pending, your Directors felt bound to protect the credit of the Company by advancing the money refjuired for the payment of the interest, which they consented to do to the extent of 20,000/. With respect to the proper application of the loan, a series of ittvuimionspasudbv resolutions appear upon the minutes under date October and Novend)er, 1837, laying down a strict code of instructions for its disposal, the last of which is as follows : — " Tliat it Ijo left to the diacrctiou of Mr. Brydgts and Mr. Reynolds, after com- " jjlete iiivostii;;iliuu of tiie Detroit and Milwaukee acccmnts, and al'ter IiaviiiL; inailc " fluch arrangements with the Creditors forming the 11 )aling debt as they may deem "satisfactory, to close w existing sub-contracts for works, Mr. \\'ythes having "expressed his willingness to reliminish his contract on iiaj-nient of a lialanee not "exceeding r),OOU/. dne to hiui, or to stojiall furlher expenditure on the works except " what is actually necessary for working the Line, or to cause the continuance of the "works to be ]iroceeded with as far as or beyond the (irand llapids, it being well " understooil that the basis of any advance of funds by the Great Western IJaiKvay for " this puriMise is that the expenditure shall be wholly under the direction and control "of Mr. I'.iydges and Mr. Ueynolds, and that such oiitlay shall not in any manner be "jeopardized by the cluimii of existing creditors of the Detroit and Milwaukee "Company." Armed with this authority, Mr. Brydges left England on the 14th rnsinuMiciis.nui im- and arrived m Aew lork on the 2()tli .November, Lb.)7, to take such UmiLro-MmiMr. idy- steps to secure the comi)letion oi the Lme as, alter due nivestigation 28 Detroit and Milicaukcc — Loans. mul successful nrrnugouicnts Avitli the creditors of the Detroit nnd Mil- waukee CoMipiuiy, he and .Mr. Keynohla niiglit cousidiT most (h'sirahle. iMiiuotliatily on his arrival iu America, these gcuth'iueu appHed tliem- selves to carry out the orders of tlio Hoard ; and, ou the iSth Decem- ber, IS.")?, they achlressed their first detaih'd Report upon the subject to the Hoard iu Loudou, stating the arraugeuients tiu'y had made with the secured creditors for the postpouemcut or payment of their (Kl)ts and also for the carrying ou of the works, so as to etl'ect the iuuuediate couipletinu of the I iiie. SLvniiiv ipipi:iinu>l iv Whilst Mcssrs. Bryrs. Ib'ydgi's and Reynolds, mid the money market having mall lially amended, the Hoard did not lie>itate to eoiiiu-m them in their letter of the CCitli January, IbTtb. Voiir Du'tct.ors do not deny that they have been (lisa])pi)inted in their expectations from tlu; Ddroit and .Milwaukee eouuexion; but it is one thing to \)v. mistaken, and it is (piite another thing to have misre|)resentation imputed to tliem. And it is to be observed, that the bargain, even taking the least Wt.nTii uf Caiia!iiivantac,-.;s under Directors had neglected to obtain the control ot it, anil had allowed it iai"iurr,i im.i !!io , , , Dvlrii.funil Milwaukee to pass into other hands, what then, thi'V will venture to ask, would ja^-.i iiii.,Miiit..i have been the positioi; of the Great Western Company ? Tlu; Grand Trunk would have been in competition with us at Detroit undir cireanistaiices of great advantage to that Line. The tnuU' of the northern portion of the Stale of Miehigan, now secured to our Comnanv, midit have been carried bv the Grand Trunk, and in so far the through traliic of the Great Western would have been niatirially damaged. Iiaiui III. 77/(' Chfirnc amtiiinf i/our Dirrcfors. — Iviit the Committee of Tiie .iiarge ai;ain>t Investii'lilion have reported to you that your Directors were bribed 2.1 no/, irratuii.v ami '^ I J •> 1(111 Shares of IKin.it by tile Detroit and Milwaukee Coiniianv to eltect these arrangements, and MiiwanUee fuiiv ' paid iii>. The Committee allege this bribe to have been administered in the form of a gratuity of 2,-10()/. to be paid " to the members of the London Board, and the staff at the otliee," together with 100 Shares ot the Detroit and jMilwaukec Company, " fully paid up," which were trans- ferred into the names of "each of the Six Great Western Directors." 11 wo Di'( !•()'/ (111(1 Mihraukcc—IjOdus. T IN I'll \\\',V. AK' Till' lnOSlmu>. I'n!l\ li.iiil uj)," iiliimii I.' In' ()lll> ' 'J' Al ll'li-ATI'tN Si s.\\> Tlu' siini)li' facts iiro these: — \\\ llir iiiriiiii,'i'iii('iit iiiidor which tlu- Detroit and Milwaukee Railway was jiliicid in the sole control and management of the (ireat Western Company, it was aLjreed that the London Directors of the (ireat Western Company, as well as Messrs. Ihydi^es iiml Hi-ynolds in Canada, should heeome Directors of the Detroit and Milwaukee Uaihvay in order to pn>tret the interests of yonr Company. For this purpose it hecaiui' nect ssary that they should he duly (pialitii-d as Directors ■>!' the l^troit and Milwaukee; and, accordin;j;ly, 1(K> Shares were duly tran.>i -ri-ed into the name of those Directors, for the |nir])ose of alliirdini; tiiem a cpudilii'ation. hut it was umlerstood that upon roiirnation of otiice each Director woidd return these Shares to the Company. Aceordiiiijly .Mr. Moves on his retu'cnu-nt from the Detroit and Milwaukie Hoard in Novend)cr, lS51), returned there and then his one huiulred Shares. Mr. (jovan on liis retire- ment did the same, and tlu' executors of Admiral Laws liavc also returned tlic Shares lornierly held by that ^'cntleman. Messrs. (.iill and Cullen, as also .Messrs. Hrydj,'es and Ueynolds, being still Directors of tlu? Ditmit and .Milwaukee Company of course retain their respective (pialilieatious. Your Directors have further to observe, that the Coiniiiiltee of Livestigatiou wiTc fully accpiainted with these i'acts when tliev im|)uted to voiu' Hoard that the 1(K> Shares wire transferred to and accepleil by each member of your Hoard for a corrupt purposi'. As to tlie remuneration derived from the Detroit and Milwiuikee Comjiany such iiuiid)ers of your Hoard as participated therein had 110 idea or iiiteniiii'i that that Company was to have the benellt of their services, whether as agents or as Directors, without remuneration. The bn>ine-s conimitted to them occasioned much care and anxiety, and the siiiii> allowed for their services were far below what thev must have cost that C.iiii]iaiiy had any other agency been selected. Whatever dilliculties a railway may be involved in, it has never vet belli suirgested that those dilliculties should be overcome at the sacrifice of gentlemen giving up their time and their labour to the task without remuneration. As to the unworthy insinuation that tlu; London Hoard were actuated in their advocacy of the Detroit and Milwaukee claims l)y the pecuniary advantiigcs to themselves, the gentleinen implicated repel the slander with the contempt that it merits, and appeal to every previous action of their lives as a refutation ; they advocated the claims of the Ditroit and Milwaukee Company for assistance from the Great Western Uaihvay in a well founded belief that its early Del roil and Milifinikoc — Lo/nis. n complition woiilil niatorially add to tlic pn)s|»n'ity of tlin (innt Western, from, in fact, flio pivcist- same motives wiiicli ilicy hiliivi' ficliiatod Mr. Kayc avIkmi lie wrote tin; letter on lliis suhject to wiiicli your attention lias l)een already directed. The transaction was treated like nny other matter of hnsines.s. 'I'liu Secretary and l\e;j;istrar of tlu! (Ircat Westi'rn Company were rennmerated for the troulile the Imsiuess liad ^'ivcn them, and when tiie arramjcnienls were perfected those ollicer.s were ])nt on a permanent salary. 'I'lie-^i: salaries and the Directors' renuineration have all fallen into mrear, in couniion with otiu'r engagements of tlu; Detroit an(l MiUvaideCL'nilier tl.c Sfcivtarv wrolc Mr. llndjics, stmnuly iir-iiiL' "»•> -tnUmoiit of liirn to iiiMiiifain liia pusitiou with uiirtlaxiiij,' seventy, . . . nini strictly toiliiildiiii,' liiin tu enter into luiy en^ai^enients that I'linds woiiM ho ft.rtiieominjr, t'ur ereditur.s or Works or fur anytliiii;,' el.su. 7'/iis /'Ittr (add the ('oniuiittei') tij'/'fiir.i !■> Iiufi ahu-nutl M'sxi-s. /!ri/'li)''.t anil /ii;/iio/il.<, who in a joint letter to tlie Direetor.s of tliu JSlii IK'- ceinlier, lf<.">7, say that Mr. Maker's letter had jiut them in a most iiainfidly awkward position." ..." On the samo day Mr. lirydgcs also wrote to Mr. (iill, the Chairman, urging his views, and intimating that there were a few nuitter.s Mr. (iill and his col- leagnes ought to know ' liardly Worthy of heing ollieially alluded lo.' hoping the Dircctoi-s would like the arrangements for the cmtlay of the Loan, and t^tating that the Detroit and Milwaukee Directors had aulhori/ed iiaynicnt of agency exi)enses to the extent of 2,000/., to be jiaid out of the Loan, and also •Km/, to the olhce, as suggested by Mr. Uovan. This lillrr i^mIA the Committee) aji^nrs t« hire had thr desired tjFa't." The Committee tell the Shareholders that the Secretary's letter ti.o letter uhiel. iiuy . .. It I I II I I " I slate to liave rendered of the Isth December "tilarmed Messrs. Ih'ydges and Iveynokls, wiio ,i,e i.ni.entees.aiv, tliereupon, 111 their letter oi December .O^tli, adnmusterctl the bribe wliicli ,,,.ive,ii,.v .Mr. iirvd-es > ■ 1 ri. , >> -v 11^ . I' 1 'r »l . „*: ,, w lien lie aunnuneed " liad the desired eflect. iSow, the ilates tit oiiee ialsily the aeeiisation, thepajmeuts. for when .Messrs. Brydges and Reynolds are said to htivc been so alarmed by the Secretary's letter as to have thought it necessary to administer the bribe, i/tc// hud never received (he Secreturi/'^ Idler at all ! t\ini|>lclt> nUproTuI l.f Itlf AltcLMlioll. !l>) M Di'lrail "iiif Mihi'tnihu' — LihitiH. Tho Secretary's litter was written dii the Istli Deccimlier, and coiilil not l)v any possiltility lia\.' reaclie history of the Compimy between the years l^lo and T^.^V; a vast amount of abuse is lavished upon individuals, aiul old and long-forgotten legends are raked n[) and reproduced from the party ne\vs])a|)ers of Canada; but there is not a single suggestion of any value offered which is not l)orro\\ed fi'om tlie existiuu' manairement. oxceni that we should ujo to law. The Conumitee place Iiefore you with nuich {)aratle, and as if it had i)een the result of grt'at skill and lai)oiir, some stiitistics respecting the Company's liuancial jxtsition, l)ut which are, in fact, nothing but a nure recapitulation and summary of the various statements which have been placed before you at your pi'riodical moctiugs, and whi<'h any i^haiflu'lder might draw up. for himstlf in an hour or two's leisure. I'liiKOiiuuir '"'''Ui The Committee conunence with what they tirm " a short statement respecting the origin of tlie (jreat W'otern C"onipaiiy in the year 1S|.,"»/' when a " Corresponding Committee " was formed in I'lngland to promote a (ireat Western Line. That Commitlee consisted of eleven gentlemen, of whom four are now dead, four are resident abroad, and not one remains in any way interested in your all'airs. 'J'lie Coininiltee of Investigation, after assailing the eleven gentlemen in (piestion for acts which tliev did no less than ,v;,//cr« t/rarfi sinci', invite voii to commence legal nroceediiitis to ncovt'r tlu' value of certain moiie\s whicii, in their opinion, those gentlemen, at that remote period, misa|)[)ried. Voiir Directors decliiir followini; the Commitlee into these labyrinths, from whicli nothing, in their opinion, can b(! gained but a series of lawsuits. It may l)e proper to observe that the Company of 1S45, although called r,>i,oiiinL'iiijiiicrs l,v the saiiK; title as the present Company, was by no means identical Willi whu-li Uiifs ( nm- • » I J ' J paiiv hii.-. uu couccrn. with it. Tlic Company in l^Sl.J appears never to have gone beyond obtuininjf subscriptions for capital. The present Company began on Till' < iiiiiiiiiit' '■ rii-iiiiiin.'ii.l |i r.i liriii.Tciliii5;.s, wliii'h llirciior- .1:,- uiiiuMve. The Main Line. 35 an cntiroly new basis in IS.') I, mid no inonibcr of tlio present Board Imd miything wliatcvcr to do \vitli the Conuniftee or Company of 184 0. Tl.e seeond topic of tlie Report under this head rehites to the k.. , ast^aupnu- contracts entered into in 1S48 for the eoiistrnetion of the I.ini'. 'j'l,^; ;'i','^ '•""^'■'^■''"- i" Conniiittee report to you upon a innuljer of disputes of tiie ordinary character with contractors. h)ng since, your Directors rejoice to say, adjusted and settled. Into the details respeetinj; these- eoniracts, whii-ii are dwelt h'Ugth by the Connnittt'c, yoin- Directors do uot feel it necessary to follow them. The fa(;ts are fully explained by Mr. Hrydp-s in" his letter, and tht; occurrences all took place under the directions of the Canadian Board before any Hoi-.nl of Directors existed in this country. The Connnit'ee report (with what object at this distant date it Is impossible to say) that the Line was opened in 1^53 " in an unlinished state, and an innnense amount afterw arils expended by the Company." Mr. Brydges e.x[)lain.s this as follows : — upon at iiiid a>ti. Ilii' op.Miiir I'llii' \a\w \n 1,-iO:'. " TliL' Lino," ho s:iys, " was opeiicl in an unfmisli,.,! stalo, ;is is, an,l Im.s hecii, th.^ Kxi.laiuuiuns, "priictici! witli evoi-v iitlior IJiiilwiiy in AnR'rici uinl Cauiulii. " * * 'I'lio lar.'c outlay '• after tiic Lino was hiumi is an univoisal in-actico in Anu'vica, anil tin- liistoiy ol' tvciy '^^''^' -M'l'i-'ii'li^. I'- " Lint; (in tliat continent will exhibit similar resnlts. It is a neucssitv of the enmlition " of the country. Carria^'o roads, ilnring the construction ol' railways, hardly existed. '• Kvery article used in the cuiLstrnction of the Line, such as iron of all kinds, had to " lie iianled, at a yast exjiense of time .and money, from the ]iorts on the lakes to the "line of railway; an ahsohitu necessity therefore exi.stcd for licttinLr a track down at "the earliest i)o.ssilile moment, as f^reatly aidiii^i; the completion of the Line. 'I'he " two American lluilways, on each .side of us, pressed for the openiiii,' of a throu'di " route without delay. The rei|uircments of pnlilic coiiyenicncc iu Amu rira has also "always forced lines to be ojiened as soon as the rails are laid : and thus ihere must "always be a ycry yast jiroportioii of the cost of a Line expendeil after it is openeil. "The practice is entirely the opposite of that adi>pled in Kn-land, and (.Mr. Hrvd-es "adds) a very la'-ge portion of the ;,um spent since the Line was opened is for " istatioii.s, .siilin{,'s, and rolling stock." Mr. Hrydgfs further expliiins in his letter the eiirnmstances under Km.>u.,.uss,.„,n., which the l.ine was opened in 1«r)3, in eoiiforinity with a pledge j^jv^,,, "''"'^' '^''""■"'"^'-' to the ^li;n-eliolih'rs in the previous year. He shows tlitit tin- statement of the Committee that "shortly tifterwiirds tlu! culvert tit 'i'welve Mile "Creek gave wtiy, and that it cost tlie(^)mpaiiy upwards of 8(10,000 to "repair the diimagi'," (occasioned, as the Committee would liav(> you believe, by the improper opening of the Line) is ;i gross misstatement of the fiicta. The culvert gtive way firo ntoiilhx Itcfdrc the Tiiiic was opened, tmd not in consecpienee of any trains passing over it, but in conse(|iience of an engineering error with respect to the foundations. \Vith regard to the amounts ptiid to the Contractors for expenditiu'c under the certiticate of Mr. l{eiil, and the tilleged protests of Mr. Clark, i^r. th(>s(> matters arc so Mr. I'irviluvs i\i ciiti'V furtluT into these The ^faiti Line. fiillv treated and so coiuplotoly disposed of by DiiTctors do not feci it necessary to Mr. Mrvdi^es. in tlie opinion of your his letter, tliat yonr topic (Mlicv iinini-i Soi' ApiH-iulix. I'. Dircetors, does not appear to have l.een to blame in these matters. \. to tin- observations of tiie Committee respecting T.and rnrclmses Vir:i:!c;,r,vp'''> and the Uail account, it will be more convenient t\.r your l)irecU)rs to ,„•,,.->„•. un,i.,v.. ^_^_j, ^. ^^^ ^,^^,^^^ ;,, ,,,,,,f,,,.,. J,,,,,,,. The statements relating to the Sarma ,„d (lalt and (inelph branches, are disposed of in Mr. Hrydgcs' letter. With ri'spect to the loss sustained between 1853 and 1850 by the ,,nployment ot two steamers on Lake Ontario, that subject was so fully explained in the Reports tbr the half-years ending January 31, 1S5(;. July 31, 1S5(», of the Company at the time, that your Directors 'see' no advantag.> in re-opening this .piestiou. Mr. Ikydges' letter (xplains the objects with winch these Steamers were ordered and ,,ui,loved bv the Canadian Board, 'riic Report of your Board in July, "iS.-.f., "informed vou that "the Directors had been disappomted " that then- hopes in regard to tratlic by these Steamers had not been " realized ; that if a favourable opportunity ottered, the Steamers will " bf disposed of, and that in the meantime care would be taken that >'thev should sutler no mulue deterioration;" and in the Report of j'anuary 1S57, you were intormed that "the Directors had .•onelnded arrangenun.ts for the sale of the Steamers Camda and .Unrlra " Ml this was reported to you at the time a.ul was by you acce.>led and approve.l ; and you also accepted and received payments for those vessels in Shares of the Detroit and Milwaukee Company, which the Committee appear to think of " no value " to you-although in the case of Mr. Wytlies they describe them as "clear profit ■|'lio I.iiko Onlurm -team vessel*. VII. REVENUE AND DIMDENDS. Yorii Directors observe witli cratificiition that the Committee The Comp,\nyV Ac " founts of Investigation, after the most elahoratj examination into every transaction throngh a period of fifteen years, — after sending three l)rofessional Aeconntants witli their Staff to Canada, wlio spent there an entire sunnner, and ransacked every ledger on the lane,— and after not imp.ignea. exerting themselves in every possible direction to find eliarges against your Directors and oilieers, are nnable in any important point to impeach the general correctness of the Company's accomits. This cannot but be most satisfactory to all connected with the oi.aTvati..ns Railway ; for, indeed, it could scarcely be expected tiiat any Company should be able for so long a pt'riod of years to show accounts respecting which not an accusation can be made that assumes a graver importance than ilijfcrciicr of oii'uiion as to the appropriation. Having premised so nmeh, your Directors will proceed to consider on Dot.ii.. what the Connnittee of Investigation observe upon tlie Accounts and Dividends of the Company; and they think tiiey sliall be able to show that even in the few observations the Committee do oHer muler this head they arc entirely wrong. 1. The C.munittee say that— I'uyn^ni of oividcnd " It w.uil.l aiUHMr to luivo b.M'ii (■(.nsi.lcivd ,i vitv ,u'rc;it i»unt to (Mnuu'-net' " payin.: .liv..!.'na in IS.-.l, :uol ilu' prPCCLaiiifis nf Mr. I'-i-yd-os iuul Mr. J'-alu-r in '• sc. iiKikin- 'ip tl.o ;ur..uiits as to .JMstily a .livi.Uni.l of (i pur cout. at that lime, aro '• wi'U worthy the attonlivo coiiMilcratioii of thi' Siiarehohlors." The Committee an- evidently inllueueed by a desire to impress the impwmtion on vom- minds of Shareholders with n notion that there was sometlung wrong in the " proceedings of Messrs. Mrvdges and Uaker in making up the aceounts " in 1 S.") f. Looking at the long period whieli iias eia|)sed since the declaration of the dividend of ISaJ., the Committee evidently hope that Messrs. Rrydges ami Maker may be ue.able to justify eviry item of tiie accounts of seven years back, liut Messrs. jhydges and Maker say, i^pH"! .- that not only were tiiosc ilccoimts, so far as they w.'re concerned, faithfully prei)are(l, Iml that before they were submitted to the Shareholders they 38 Beretwc and Diridoids. .\inoutil> si.ili'ii to liavo Ik'oii impidperly •hariroil to lirvniiio. wi'iT considoiHMl and discussed attentively and minutely by the Hoard of Directors in Canada, 'riiey say that tliey were also specially subject to the supervision and investigation of Mr. Jjongsdon, who was at that time Vicw-l'resident of the Coniiiany in Canada, acting for the Knglish Shareholders, who had sent iiini to Canada specially, amongst otluT things, to see to the accounts of the Com|)any. And tlii-y say, further, that lliey were examined i)y two coiii|)etent and cflicient Auditors, who reported as to these accounts that " f/ic// had iimc/i pjcd.siirc in /jci/K/ ahic (o Icsllfi/ It) llicif (K'ciirdci/." Your Directors cannot hut observe tlial it is a monstrous injustice to the oillcers of a Company that upwards of six years after the results of their laborious exertions have passed successfully through such ordeals, they should be subject to a charge of having made up the accounts of (heir Company for the l)urpose of producing a divideud which was not fairly earned.* II. The Comniitte.' next report that their Accountatits '• F.nti^r into ,a (U'tailt'd account of sums aniduutiii,:^ to 111'], 071/. ll.i. {'>,!. improperly trciitcil ii.s revenue in tlic ^liflcrcnt lialf-ycarly accounts [tV.im IS,')!] up to .'ilst .Inly, l.^'lo. Tliey alsn state that u]> to tlie same time, in jfMition to tlio amount ex|HMiileil in renewals, the >um of I ;!."<. Umi/, sIkiuM have been provided, under that head, otit of revenue. The accmmts pre--'nted to tlie .Sliarehoiders would therefore u]ipear to have hoen sy.;tci;i.';tically fallacious." ■!k> itom'iconsi.ier-.!. 'Y\w it"ms whicli the Accountants report to have been [in thrir npi/iion'] " improijcrly treated as revemic," are as follow ; and vour Directors think they shtill be able to show that with one exception these ilt-ms have been carried to the proper accoimt : — 1. Saniia B'ancli — Kails 2. Steamlioats— boss .1. Detroit Steam Ferry — Wear and Tear . 4. Interest short ehar;_'ed to revenue .5. Expenditure nut sanctioned liy ."^harelu'lders 6. l)i>sjardin"s .\ecident — ("onipeiisatiiiii 7. P.ad Del.ts 8. Stock on hand • Deficiency on valuation X >. d. 28,001 12 4.^8-.'0 7 4 !).;i;!8 1!» 11 2--»..">0( 1) 7 i.nc. 1.^) Mur, (i 10 4,745 1!) 6 4.'5,(i.")0 10 11 l»;i,4s;{ 14 I 9. Interests dehitcil to various Aecotmts over six years I f.'! >fi,.l.s7 .M,(i71 17 T) II G * It was only f^r the ailvantajre of the Shareholders .and tho ( 'oiupanj- that Mr. 15r/dj.'es and .Mr. jiaker assisted in making; up these aceounts at .ill. The task was lievoud the limits of their i.rilinary duties. lint th(> fact was that the the 1 Accuuiitaiit of the Cnmpany had no knowlerl^e or experienco of Hail- way working', ami was entirely at sea as to the apjiropriatioiis in tlie dill'eroiit dopart- montfl. It wa.s therefore a matter of necessity that imth Mr. lirydijes and Mr. Baker should {jix'c as much assistance as their other duties would allow, to the prnpanition (if these aieounts if they had not dihed, the rails which had been in use for those purposes were all collected, and a stock tid\en of the (piiuitity in liand ; most of these rails were necessarily nuieh damaged from the rough usage they had been subject to ; and a value was put ui)on them in accordance with the then market value of old rails. As capital had bwMi charged originally with the full value of the rails when purchased, c;ipital was tluni credited with the value of the stock on hand, and the difference of .2"^, 001/. l;2.s'. represents the least sum which the contractors would have bicn paid if tliey had bc(;n recjuired to lind their own rails. Tn fact, there is no doubt that if any other plan than the one now explained had been [)iu'sucd, tin; cost of the liine would have \wv\\ even greater than it now is. The charge is, therefore, a proper one against Capital. 2. Slcaiiilioatx, Loss. — 'I'liis item is Mie loss sustained on the i.nR*"n stcwboais sale of the steamers on Lake Ontario. The steamers wer(> con- structed by the Company, at the expense of Ca|)ital, to promote the tratlic of tin; liine. They did not prove profitable, and they were sold. It remains a charge against Capital, as stiiti'd in the Report for the half-year ending January 31, 1857, and approved liy the Shareholders. ;L Ih'frolf Sfcai;/ Fom/. — This item is believed to be the amount nciroit Feny. which the Committee think shoidd have been set fiside to meet the wear and tear of the Lerry steamers at Detroit. ITow these figures are arrived at with such minute accuracy is (piite unknown to your Board, there being no account under this heading in the Company's books. These steamers are always kept in good working order, and the cost has been regularly charged to revenue. 4. Interest short charged to revenue. — As no explanation of this interest. to licvonic Olid Diviilcinls. sum has boon given by \\w Committoc, your Diivctors have some (Hiliculty in knowinu; to what it refers. It is, Iiowever, supposed to be the amount aecruiug eaeh half-year between the date at which the interest on Bonds, iSre. becomes due and the close of the half-year. But it must be renuMidx-red, that a full six months' interest is charged every half-year; and that the practice adopted by this Coiupany is the one piu'sued by nearly every English Railway Company. Kxpciiiliiii'f III Siirvov. ."). Ivrpt'iidilurr not minrlloiiod hi/ s7if/ri'//(iMrr'i. — -'riiis sum of l,41(i/. is for tlie surveying of lines proposed to be made so long ago ii.i L>.j.'}— !■, for wliicli Acts of i'arliament were applied for and in part obtained. They were referred to in reports to ,he Sharelioldrrs at that time, but were afterwards abandoned. The charge is a proper one against Capital, according to the practice of all Railway Companies. Ikii IVl.t.-; (i and 7. — Dcydrdhi's Jccidriif, aud Bad Di'hl^.. — It is an absurdity to contend, as t!ie Report of the CoMunittee does, that the revi'inie is impropi'rly benefited by the expenses of the Desjardin's accidert beinii graduallv si)read over a series of lialf-vears snbse- (|uent to the accident itself, or that the liijuidation of bad debts is not to be ilialt witli on a similar prinei[)le. It was distinctly placed before the Shareliolders that this niodt' of dealing with these items woidd be adopted, and it met their approbation. A siiiiilar eunrse has repeatedly been adopted by Railway Companies ill l-Jiiilaiid. M.n'k. i)oii.-ii'iu\ ,111 s, Sliick nil liiiiid, l)i fu'iiiii 11 (III J'lih'iitiuii. — This chai'ue is pro- Valuali"ii, . , , ' [xi.srd to l)c made to bring the .•>tock of rail^, fuel, and stores to tlu' valuation wliicli. in the opinion of the Committee, they ought to bear. They now >tan(l in the hooks at their cost price, aud are charged at the same rate a-- tliev are used. It is impossilili! to alt("r the valuation of tlioe arliele^ eveiy --ix (ir twelve months. The only priiieiple, which is the one universally followed, is to Keep them at their cost price, charging any lo>s th.it may occur when the articles are sdid, or become useli'ss. Tiii'" pliiii luiM been a.lnpled hitlu rto on our liiue. The full (piantitiis I'eproeiited to lie oil hand, were found to be so, and the proper course is not to dislmi) the valiialiou until a loss is actually ascertained. )mki.f,-t>:— The foregoing reier to items, extending over seven years, aud amounting to 1(1 1,0(10/., which the Coiniuittce \\\\\\k ought to liav(> been debited to revenue. Your Directors will now proceed to consider the licccnne and Diridenih. dl following items, which the Couiniittcc thhik ought not to have been credited to revenue. 1. IntcroHt (lubitcil toSariiia ISrauch for RiiilsXS,.'?"! IG 9 2. Ditto, CunHtructiou Accniiiil t-',!)!'? 5 S 3. Ditto, Detroit and Milwaiilu'c Account . 2(i,702 10 9 4. Ditto, Sundry Coiistniction Accounts . . 10,S,S2 4 1 C). Ditto, Hank Loans, itu :M,;ty;t l.j 2 G. Prciniuins on .Sliarun and I'onds . . . , 2t!,S20 10 10 7. (-'onipL'Usation — nai)tistc (.'rcuk Vccidwit , 4,480 14 2 £ir)(!,,!)S7 17 ■> 1. Iiitcri'xl dehili'd Saniin Jinnich on Bails. — The facts stated by For \v.,ik.s. your Directors, justifying the charge of 28,001/. l.v'.y. to capital, apply also to the interest on that expenditure. 2. Iiilerent on Sanaa Coiislruvtion Jccouid. 4. Iidrrcut on smidrj/ Conslriicdon Accounts. These sums were charged to capital during the constrnction oi the works, and the facts have been regularly shown in the half-yearly accounts, which have been ai)proved by the Shareholders. It is a well recognised principle that interest should be charged to capital during the construction of works. It would be obviously most unfair to burthen the revenue of an opened Line with interest upon a capital ,vhich at present was adding nothing to the tralHc, and, by the same operation, improperly reducing the cost of the additional works. The interest was paid out of capital on the shares and bonds of the Great Western Line itself before it was oi)ened ; and the principle applies to the Sarnia and all other incomplete works, until they arc opened, and add to the general revenue. Your Directors instance the Indian lines, the Shareholders in which receive interest from the time of subscription, and which must obviously be charged to capital account. 3. Interest on Detroit and Milicdidcee Areounts. — This matter has ou i.,.;iiiv been dealt with in the ordinary and proper mode of treating similar items. Revenue was properly credited, and the failure of the Detroit and Milwaukee Company, to pay the amount, was brought before the Shareholders in the half-year ending July 31st, 1859, and then, as now, it stands in the balance sheet as an item due to the Company. 5. Amount received for Interest on Bank Loans, S)'c. — Whatever On liank Lo; interest the Company receives from any sums it may have at its Bankers, or from calls on shares not paid at the projicr date, &c., ni'.'.st of necessity be a credit to the revenue account, just as any interest L 42 Rcrc/iuc a, 1(1 Diridcnds. iraii'iii paid oil loans niacU' by the Hunkers to the Couipniiy is debited to iTvemic. Pv.nuuMi, (i. /'/Y7////////.V. — Tlic siiiu (if :2'^,S20/. 10,v. 10^/. was actually receiveil as pivmiums on bonds or sliairs sold, and the bringiiii; ol' the amount to the eivdil of revenue was proposed to the Shareholders in tlie Report for the half-year ending July !Ust, lb')('>, and, after full discussion, met with their approval. f.imi'tn.,iii,i!i 7. ('i'/i///r//,w//fl//. — As regards the last item of 1,1>^(!/. 1 l-v. i/ ; your Board are unable to recall, at this distance of time, the reasons which led to this amount being placed to Capital, but it appears to be an error, and it o.ight to be replaced out of revenue. Oitnivni vi.ws of Having thus gone through every item of the accounts, youi A.uiMiitiinl-ar.iU .ini . ' , V i , ' i i r^ ■ • i • n ' milt.! ,! iiuv.ti Directors will only turther ol)servc, that the Lommittee m their Keport treat this Mim of 13.01,071/. 1 l,v. Or/, as a// wrongly charged, whilst upon the same point the Accountants say (page 13) — " Wo lid ir.it intciul to say that to thr t'ldt extent of tlii.s amount tin- nvotiuc •• nccniiut will lie iillc'L-toil, bccauso, with esjicct to funu 'A tlie iloin.'*, n\ i(/iiiil that l/ir " iiiiuiiur in uliiili, thej alinidil U liiutul iwii/ Iw matlir (.'J njuiiivii." Yt't, ncvertlieU'ss, whilst the manner in which these items should be treated is thus ollieially declared by their own Accouutaiits to be " matter of oj)iiiion," the Committee of Investigation have the audacity to say that "the iiccoimts have been svstkmatically iai.i.acioi's." It is to be observed that there is this extraordinary absurdity about the Keport of the Committee, that whilst they distinctly assert that the whole amount has been " imjiropL.-ly treated us revenue," they go on to s.iy that they " are not items, a pro[)ortion of which is in any way chargeable on I'utiue earnings." No principle can be clearer than that, if account-; iiave been improperly charged in the jiast, they must be corrected in the future ; and tiie Committee have thus placed them- selves in the position of either recpiiring, if they can sustain their assertions, thi.t the future revenue of the Line shall be debited with 321,071/. Ms. C'/., or that they hiive made up this list for the purpose of founding a charge against the Directors, which they shrink from following up in its results. 1!k.m;w.u..-^ III. The Committee next refi'r to the important cpiestion of " Rknkwai.s," on which they do not offer any opinion, but content themselves with referring thereupon to the Keport of their " .Vccouiit- ants" — no very competent authorities, your Directors would observe. Hcccnuc onil Diridenda. 48 upon one of tlio most tliiTic\ilt nnd inulccidcd quostioiis uC Ilailwiiy maungcment. In the opii\ion of yo)ir Directors, llic correct course to pursue Vi.;«> a Dinciur,, is to vhariji' cttvlt Intlf-i/cdr irllli i/ic pmiirr ctisl of rfin'truls, as IIkiI ro-sf occurs. 'I'liis (|ii('sti<)U was most fully discussed imd considered hy your Hoard many years ai,'o. It was referred to iu the Iteports fur the Iialf- yenrs ending -'Ust July, 185:), and .ilst Ja- :\, IS.'jO. In Ihc latter Keport it was stated, — "The chiirj^o for nuiiiitiMiaiK'O of way, it will lie soon, iiicliiilos a sum of " :.',02;i/. ;i.<. \d. fur ri'iKiwals of rails, spikt's, ami sleepers, worn cut or ilei'ayf(l. " The Directors proiio.su to cliargo the cost of tlii'sc roucwiils tlircct to ruvcuuu cadi " half-year uh they occur."' That course was adopted l)y ilic Directors after full deliberation 'i'^ui.eruuiyaa..i,iod, and examination of all the circumstances. The matter was before the lioan' ui October, ISof), at which time, as well as in 1S57, full reports were submittid to the l^oard containing all the facts and information which could be collected upon the (piestion. The Board deliberately came to the conclusion that it Mas imijossilhc to say what the life of a rail in Canada woidd prove to be, and that any attem[)t to form a sinking fund for renewals, founded upon imperfect kuowledgi; and the absence of all experience as to the duration of rails upon a llailway in a country subject to such iniluences of climate, would be certain to result iu error and in the sid)se(pient diversion of the funds so laid aside for purposes not contemplated when the account was opened. In that view yo'i>' •^;;'^,.;;i;[;;;'^;:;' ''^ Directors were fortified by the opinions of the highest llailway autho- rities in the kingdom, including the late Mr. Robert Stephenson. Ami the conclusions arrived at by your IJoard were at the time adopted by the Shareholders. Tn the beginning of the Report, the Counuittee impute to your Directors that they have withheld from their Shareholders facts re- specting the exigencies of the road, until they were obliged to publish them by the arrival of Mr. Giles hi Canada. As the Committee adduce no evidence whatever to support or explain such an iuiijutation, your Directors can only deny it /// toh, and state that, iu accordance with the above views, they have from time to time given every re(iuisitc informa- tion to the Shareholders of the state of the road. IV. The Committee next report that 1,078/. has been laid «"^ ^*;;['^^;.,^|',/j;;.;|:"' upon the I'rtston and Rerliu Railway ; that the Great Western Railway '"" had sought to recover it, and had been nonsuited. The facts of tins matter are as folK)WS -. — rinl.iiiK'il tl Jiei'Ciiue and Dmdcnih. The Preston mul IVrliii Lino was promoted nnd constnietcd by pnrtics I'utirely distinct from tins Conipnny, who I'oinid all the money lor its construction. It was agreed to be worked by this Company, nnd was so for al)oiit two months in 18')/. It '^as found not to pay expenses, and was at once closed, and the amount here refirred to was the sum expended in the necessary preparations for working, wliicli it was found coidd not legally be recovered. raynitiit* !■) Mr. Br.vd^a■•^. V. Upon the (juestion of Mr. TJrydges' salary and commission, Mr. Hrydges has himself replied to the observations of the Committee in his letter in the Appendix, nnd your Directors will only further observe that Mr. Erydges was aj)pointed as your Manager by u Connuittce to whom the Shareholders delegated authority for that purpose. The amount of his salary has been stated by the Com- mittee /// cur re II CI/, not sterling, no doubt for the purpose of making the figures look as large as possible. With respect to the commission allowed him, your Directors can only ray that he was entitled to it under the terms of his agreement, and that the payment was made by the Canadian Board after taking legal advice, Mr. Brydges' salary was raised to 2,000/. currency, or l,(iOO/. sterling, per annum, in compliance with the wishes of the Shareholders, at the nieeting in England, of April, 18.j7. VI. With respect to the Directors' travelling expenses, your Board have merely to say that the principle followed in this matter from the commencement, has been that adopted by the London and North Western, and other railway companies in England. VII. Mr. .Juson is a partner in a house which has supplied stores to the Comp.iiiv, and your Board feels that this position retpiires some exj)lanation, and no person more readily admits this than our colleague himself. The comparatively limited nature of the commerce of rp[)er Canada, and the importance of securing the best commercial ex[)erience and knowledge at the Board in that country, in a great measure necessitated the course pursued. It was not considered desirable that tlic Company should lose Mr. Juson's services, as he had from its commencement in 1S")1 ever taken a warm interest in its pros[)crity, or that it should forego the convenience of obtaining supplies from so eminent a house on the spot. The Committee do not impute the slightest injury to your interests from this connexion, and Mr. .Juson, who has for some time been in this country, during which he has regularly attended the meetings of the English Board, will cheerfully accept at your hands any decision you may come to on the subject. The acts of the Canadian Legislature constituting this Jieromic and Dh'klemh. 15 Comjiany do not rontiiin, na is fm|iu!ntly tho case in England, any prohibition of Directors being otherwise eonnectcil vvitli it. A letter I'rom Mr. Isaac Hiichanun relative to tho statements made s,v vppcMi.iix, p. l)y the Committee respecting the accounts of his tirm with the Company will be found in the A[)pendix. VIII. The Committee conclude this portion of their Report bv MiHarriuir.' "icum llliltli' (if llivi'sti«;i stating that liniiii. p,rfi.nn;m.o ° ci| ilicir ilutii's. " TliPV had inleiuloil to havo prcparod a Htatciuciil in detail of all the sums " which have boon oithcr iniHappropriatod or waHtcd. l!ut," they add, "thiif will not " )>irmit ; it vmild be n loinj atlaloi/ii'', tiinl uvidil j/fibtibli/ onwunt to \ MILLION ■' STEULINO." That a Committee invested with full powers, which sat for a space of no less than eleven months, employing an Engineer and three pro- fessional Accountants with their respective statls, to investigate every transaction of the Company, at an expense which your Board fear will prove enormous, should fail to report specifically respecting moneys misapplied and wasted to the extent of " a Million Sterling/," on the frivolous pretence that "time will not permit," is, your Directors submit, either evidence of negligence and incompetence, or that their allegations are utterly unfounded and incapable of proof. It cannot be expected that your Directors sh luld pretend or attempt to answer a charge at once so vast and so vague. VIII. HKI'OUTS OF TIIK ACCOINTAXTS AND llNCilNKKU. Most of till' iimttiTs rcfcriTd to in tlu'sc reports Imviiii^ Itot'ii nlri'iuly dealt with, your Directors proceed to iiotiee tlic lew poiiiK wliieli sit'iii to liave been omitted. i..ihi i.u .hisi-,. Cnsl iif liij/lil (1/ Ifdi/. — How I'ar tlie opinion of " Aceountaiits" is to be taken upon the (pustion of how much land siiould \w srcincd for railway piu'posus, or as to what was its market value at thr time such ])urehasc's were made, is 11 ])oint on which your Directors will 'enve Shareholders to decide for themselves. All who practically under- stand the (iiiesfion will a''rcc that railwavs arc evervwiicre helter oil, especially in a now country, liy having too much, ratlur than too little, land at stations. The Directors rej^nt that the Committee of lnve>lii,M. tijii have adduced no evidence which wouid show thi' reasons which induced them, and the circumstances luuler which the various purchase's of land were made. Upon tlu'sc (luestiims the Directors may refer to the letter of Mr. Hrydges, cdntaining tlic opinion of .Mr. Shaidy, the Manager of the Grand Trunk Uailway. !;A I \r,'..unt. lla'il Arvoditl, — The Conunittec state that •• Tlio Acciiiuitiints ri']iiirt l.oOO Tons uf ll;iils to In' ;iIti'L,'(.tlH'i- iiiiiR'cuiiiit'.il t'nr, " .tin! tliiit in tlio (';ir Account tlure is a ilctiiiency nl" l'J,|.V;/. iillf^eil lo K.' caused " liy -"ill (inivcl Curs liuvini.' liccn lirokcn np." As the Aceountauts givi; 110 (k'tails concerning the Iron aecouiit, it is impossihle to give any full cxi)lamitioii. If, as it would ajipear, fliev have arrived at their >tateiiieuf l»v simnlv estimating the weiijht of the iron from the tmml)er of mik's now laid down, and tleu deducted the total from the original quantity ])urehased, the Directors can rciidily understand that in a large ipiantity like 4.^,000 tons, n diH'erence s\ich as they state of ahout two per cent, woidd be found to exist, especially as the Accountants do not appear to have taken any notice of the rails used for making switches, crossing.s, &e. which will alone accomit for 11 very large pro|)ortion of the alleged delicieney. 'J' allude liine, ill '■ Direi '• to ell add th proball maiiitcl the Cm liille. Mr. Giles, the Engineer, found \\\(' full tcriijlil of iron stated in tin; CDinjM The Arcotnifdii/tt' ouil ICuf/iiico'H lirpurt. 17 linlf-vcnrly acciniiils to lie iii stock, l)ut lie iissiimrs an iirliitniiy viiliic, loiindid upon the prisciit |iricco|' iron, wliidi lliictiialrs every y riondon Odice. om,. i:x|,.ii. ■«. They make no special remark coiicerning them; and your Directors lielii've that they will hear com[)arisou with any similar estiihlishnieiit in liOiidon. The Accountants state that 30,000/. has been addi'tl to rovemu' cuii.iiro ..r .Mii.iImI- ft)r the carriage of materials, \c. used by tin; Company. The practice of charging each dcpiirtmeiit or any iu;w Line with the cost of carriage is niiiversally followed by all railway companies ; ami the total of such charges which has accrued n[)on this Line in seven years amounts to an average of very littli; more than 2,000/. each half-year, sii|)posing the estimate iiuuh; by the Accountants to be correct, but for which they adduce no evidence. The Accountants, also, at page 2') of the Report, inform the Share- holders that the fixed charges of the (,'oiiipauy for Interest, iVc. amount to 1 ll,0™o/. per annum; this is an error, the real sum being 111), 01::?/. or 21,!)S;J/. less than the Accountants state. The Accountants, in dealing with the accounts to July 31, 1S54, Mainiduiun ..i «ay allude to the charge for maintenance of way on the first opening of the Line, and object to what they call " tlu statement of the .Managing " Director that it is the usual practice in luiglish Railway Companies '• to charge maintenance during the first six months to Capital," and add that " they know of no such practice." The Accountants are pro- probably not aware that every Railway contract in I'^iigland includes maintenance of the Line for at least a twelvemonth after its opening by the Contractor, which, therefore, forms part of the capital cost of the Line. ill i,«"ii. y\\\. GILLS. The Committco state that — •A iiHijniilij (if tlio Coniiuittoo of Iiivustigatinu Ucouictl it essential to tlie AinioiutiiK'H' oi " complt'tciicss of tliuir iii')iiiry. tliut tin i xj'i rioiiCLHl I'liiiiucor sliuuld iirocccd to Ctuiatlu Mr. Oiles. 48 The Accountants' and Encjinecr'a Bcport. '• to examine into and report upon tlic stnto of the Company's property. Mr. Alfred " Giles wiis accordingly appointed." (Report, jiage 1.) II, > i;,i..-ri A- to W^nkx. Kiijiii ' I ■ .1--. I!.iil.-. Kii.-l W i'.iii- ilviivw..!^. Mr. (iilos's Report is, upon the whole, highly favourable to the jMnnngriiunt. ]\lr. Giles coincides very much with the opinions of Mr. Rcid, the Company's engineer, as to the condition of the Line. His Ut-port being of such a character, your Directors arc not surprised tliat the Connnittce of Investigation have scarcely made any reference to it in their Report. Your Directors will supply the omission by brietly sunnnarising what Mr. Giles says. Mr. Giles reports :—" That the works generally have been well constructed. The stations, wharves, and sidings are conuuodious and well arranged, and the rolling stock is ample for the carrying of a large Iratlic." lie finds the full number of engines that were stated by the Directors to exist. He found all but 11 out of the 1,552 cars belonging to the Line. The 1 1 were probably on some other Line at the time, or his assistants may have missed the numbers. He found the full stock of rails said to be on hand, but he thinks them valued at too high a rate per ton. He found all the fuel said to l>e on hand, but would wish to alt'.r the price of some of it in the stock-book. He found the Company to be in possession of the amount of stores set forth in the accounts, but that each item did not exactly agree with the entry in the ledger. It would be very singular in such a large account if it did. He considers the Line to be worked very cheaply, and, on the whole, thinks the aggregate expenses is even lower than they should be. He enters into some calculations about renewals, which have already been referred to, upon which, without oflering the slightest disrespect to Mr. Giles, the Directors prefer to rely upon their own oflieers and their own judgment. IX. CONCLUSION. Your Directors luive now considered, and, as tlioy submit to ueportofCommiitc, you, have sutisiactonly disposed of all the allegations in the Report ot the Coiuiaittee of Investigation. Those allegations have been of the most reckless character. They have enihraced a period of si,vfirii years, and have affected no less than forf// gentlemen of staiuling and reputa- tion. They embody charges of wholesale fraud and corriiption against individuals, when, as your Directors have shown, no ground whatever existed for such imputations. They unsparingly assail those who have contrasted witii devoted their time and talents to your service, and ngaiiist whom, except in the Report of this Committee, there has never been an imputation. This Committee was appointed for a very different purpose. ^^ '^);J,^7,^'i/j^,[/;;;!;^^^^ was ajjpointed at a period of adversity to intjuirc into the position anil appoint^. prospects of the Company, to give an impartial opinion of its manage- ment, and, if possible, to devise measures for the future prosperity of the Line. It might have been hoi)ed that its investigations would have tended towards that end; that this Committee, instead of applying themselves to matters long gone by, would have endea- voured to discover where errors existed in the working of your Line, how economy might be promoted, how working expenses might be decreased, and by what arrangements with other Companies, or otherwise, trallic might be developed which would be profitable to you; but the eleven months' lal)our, and the serious outlay of this Com- mittee, have resulted in no practical benefit. In the history of the Line, there may have becui errors of con- whicii hu.. ii.rcto. struction, and errors of judgment in its management: such things auspi.iou, were unavoidable, especially in a new country. But the Half-yearly Reports of the Company have ever given a fair and honest representa- tion of its affairs. The Line was nromoted in Canada, and was taken up in England, wbich -i piomotid • 1 • 1 • f for National object <. as the pioneer Railway in the most important colonial possession ot 60 Conclusion. . onstnicleil with ijreat ditlioiilty, the British Crown. It was designed to aid in dcvcloj)ing the resources of ii territory capable of inlinite expansion. At the time this Rail- way was originated, there; were harilly any roads in many parts of the country through which it passed ; and such roads as there were, were more like ploughed fields than connnon highways. In many districts the Lino ran through dense forests, in which it was scarcely possible to carry out a survey, and the geological formation of the country was scarcely better known than its surface. All this the Railway has changed ; Western Canada is now the most thriving and most densely populated portion of the province. Slid whicli ii.i« 10- That country has had to pass, recently, through a period of temporary .1 pcrio.) of iiqircs- deprcssiou, froui which your l^ailway has, of course, suffered ; but the Province is now reviving, and with the revival of the country the stream of intercourse and traffic is reviving also. With this revival you might naturally and fairly bo expecting increased profits for the capital you have invested. i> unjust ifi.itii.v It is at such a moment that the Conunittcc of Investigation have ilnmaeoil 1)V the . , • ^i i • i i i i i Committees mis- issucd a Report m tlio Inglicst degree calculated to damage your Railway in the eyes of cajjitalists and the public, and thereby to depre- ciate your i)roperty, and inflict upon you lasting injury. Your Directors cannot but look about them to discover an ade([uatc motive for so peculiar a course. In doing so they camiot but call to mind what was said many years ago by Mr. Ednunul Dcnison, M.P., the Mr. E ooiiison. Ml'. Chairman of the Great Northern Railway, when a Committee of Inves- tigation was proposed at a meeting of that Company. His viows as to dm- mittces of Invosti -'aiinn, ■' I i>tit the proprietors,"" lio said, ' upon tlieir guard. I do not object to tho ■ principle of a Committee of Investigation ; but I ask yon to be cautious in selecting • ami ajipoiiiting your Comniittce. I have had some experience in llailroads, and I •' know perfectly well tliat ii jrreat deal of the future prosperity and liarmony of tho •• ("onipany depends upon the character of the gentlemen, aud the ohjcrf (hey hate in •' going into an investigation. To n fair, impartial, and candid inquiry wc have not tho "smallest objection. . . . All I ask of yon is to lie cautious, and not heedlessly run " the risk of d'.^ing harm. I am told, upon very good authority, that harm has accrued " when a Committee of Investigation has been nppointed,/or it h 72. progress of the inquiry. They might also allude to the proceedings of other parties who had no real interest as Shareholders of the Company, but who took an active part in the agitation preceding the appointment of the Committee. But your Directors feel that such matters h.id better be left lo the discrinnnation of the Shareholders. The Connnittce have made their Report, and it remains for the Shareholders to decide upon the manner in which they have performed the duties entrusted to them. The depression under which Canadian property has so long cvnclosiuk. laboured, is now rapidly giving way. A good harvest, and a con- se(iuent improvement in the general trade of the country, has siiper- scnled a period of dearth and scarcity. Your Directors have every reason to hope and expect that this improvement so happily begun will be steadily progressive. At the same time they must not conceal their opinion, that from many causes, son'*' > hich arc obvious, the present is a very critical epoch in the exi ; ■i-.c >f the Great Western Railway of Canada, and that a very moderate amount of inexperience or misuianau,omei\t may do more mischief than can easily be repaired. Your Directors have now, as they believe, fully and fairly replied to every one of the mass of heavy charges adduced against them by the Connuittee, and they feel perfectly confident that their fellow Share- holders, calmly reviewing the whole case, will acipiit their administration of having been either corrupt, or inelficieut, or unsuccessful. Siirned on behalf of the Board, ROBERT (JILL, /' ■• !«lt nt ')/ llf (.'utupanii. (iuEfr.AM Horsi', Oi.D ntiOAD SinrnT, 1.onD'j:<, APPENDIX. APPENDIX. LETTi:U/row C, J. miYDGKS, Esq. MAXAGixf} DntKcron. To the IMiKSIDENT and DlIUXTOUS of the MkKAT WkSTKKN R.Vll.WAV ('OMI'ANY 01' CaXAKA. Gentlemen,— As in the Ilc'i>oit duted I'lth February last, issiica by the Coininittee of Investigation appoiutcd at the meeting in Lonilon on 4tii Aiinl, IH()0, many charges arc brought siiecifically against me, I beg now to comiiiy with your instructions, that I -liouUl reply yu-iatnn to the various statements which the (Committee have made in relerence to niysell'. THE INVESTIGATION IN CANADA. On the arrival in Canada of the Accountants, IMcssrs. J. and A. Young, delegated by the Committee, I at once allonled tlicni every possible facility in conducting their inquiry, and c.x[)ressed my readiness to >r\\c tliem every information in my power upon all points; and thosi- irontlcmen, before they lei't Canada, voluntarily, and in the most cordial nuuuicr, acknowledged the frankness with, which I had throughout treated them, and tlic great llu-ility which had been thereby afforded to their investi- gations. Tliey added that ihcy should make it a point to state thi. very pro- minently in their Report. As no mention of this is to be found, 1 can only conclude that the Couunittec had made up their minds to exclude every Jiing which cotdd by any possibility lead to the inference that any one now connected with the Company had ever done any one single thing m the slightest degree deserving of approval or connnendation. I may mention that no statement of the nature of the charges it was intended to make against mc was over furnished, so that 1 might have an opportunity of affording explanations before the charges were publicly made. I was from time to time examined at great length by one or other of the Accountants, no previous intimation being givcTi to mc of the subjects upon which I was to give evidence; and thus 1 had fre.tuently to recall to my recollection matters which had been disposed of years before, which had to a great extent, been obliterated by the subso.iucnt alfairs to which I had had to "attend, and this after the Accountants had only just risen from a close examination of all the facts ; thus giving them a perfect knowledge of all dates anil figures. 50 Lclto' from C. J. Bnjihjos, Esq. ^lTI••^nls A !>liortli:inil writer was present on all occasions takinpr down all that passcil. Tlie.»c exaininiitions were always private, ami contined to ono of the Accountiints, inyseil', and tiio sliortliand writer. A larije part of tlic evidence that I gave was suhsetinently shown to inc, and 1 rt';id it over, niakin;; tlic needful corrtetions, alllioii;;li in some oases ureat rolui'tance was manifested to permit of my making any eorrectitms. A portion of my evidence 1 have never seta since it was taken down by tlic shonliand writer. No copy of any of it hiu ever been supplied to inc, nor had I any opportunity of taking a copy. All examinations in Cauiula were taken in tiic same private manner that I have alreaily out a laxity of tliat proper discipline whieii can only result in great detriment to the interost-i of tlie C'omi)any ; and a number of persons who, at various tiinen, and for good reasons, had been diseliarged fron> the Company's service, with otiiers who were notorit)Usly hostile to tiiu ilanagement, were also examined in a similar private manner — no one being lu-esent to cross-examine them on the jmn of the Comfjany ; no statcmcat of tiie nat ire .f their evidence has ever been communicated to nio, or an opportunity aiVorded of even reading the impi fations which their [>itlful spite or fancied grievances doubtless led tliem to ai'.vauce. None of the evidence which I gave 1ms been published, and I think I may fairly complain that charges should be made against me without the Committee having the common fairness ti> pul)lish my explanatinns, wliich, in those instances where I had an ojiportunity ol' ex[)hiii!ing, distinctly disprove the accusations themselves. Witli these remarks on the mode in which the incpiiry was conducted, I will now proceed to deal with the various charges maile against me. The Committee have, in their endeavour to fix me with every kind of blame, entirely ignored the important fact that wiien I went to (Janadii the entire Board of Directors of tiie Company were residents ot' that country, and had administered its alliiirs for four years previously ; that regular meet- ings of the Board were held every week; that all the operations of the (,"ompuny were under liieir control and directions; and that I did not and could not take any iujportant measure witliout lirst obtaining their authority and consent. ^\ hy tlie Conuuittee should thus conveniently ignore the existence ol' a Board of Directors, consisting of eleven mendK.'rs, and seek to make nic, as one of that body, alone rcsponsiljle for everything that \v;us done, it is easy to understand. Tiie Siiareholdcrs will naturally ohscrv'! tlie anlinns of statements attempted to be founded upon such a remarkable omission of a iiKjst important fact, \i\<\ the Sliareholders will at once see that when the Board has adopted any recommendation 1 made, that tiie act becomes theirs, for whicii, as a whole, not me individually, they are resp(jnsible. I was only one member of the Board ; if my views and sug- gestions in their opinion were not .sound, they would not have been adopted, and if my acts and ])rocecdings had not been in eoiil'ormity with their views ami instructions, tliey had at any time the pt)wer of removing me from the oHice wliicli I held. Till! statements made by the Committee are ot'tcn couched in sucdi general terms that it is almost impossible to deal with them; but where eubsx'ipieiitly mentioned in detail, they will be replied to. Lollcr from C. J. Brytlgea, Eaq. 67 CONTRACTS, AlltNl. .\ The r.oanl in (jiiiiulii in 18.^2, before my iippointnicnt, Imd iiuulo an nrran<;cnient with wmie of tiie contractors to haitcu tlie eonipletion of the Line, Jiajini^ tlu'ni hy niontiily instahnents a Hum of 27,. ')()()/. in all. The eontractd which were thus to he ha-stincd liau l)een let In 18-18 ; four years before tiie work was eommenccd, and liuxit three years before any Englisli capital had been Hnhscrii)ed to the undertakin;j;. AViien the works were ordered to be l)ef;nn, tlie eliaracler of them was entirely altered from what hail been eontemplated when tiie contracts were let. The spccilication of works to be executed was prejiared and ajiproved by persons wlio hud had no experience in railways, or in any other works of inaj;nitude. The descrip- tion of masonry was made much more oxjiensive ; the structure of the bridj;;es, culverts, \e. was made much stronger and better; and the whole character of tiie work greatly improved in every respect. Tlic woi'k being executed bore no rehition whatever to that set out in the contracts ; the Company had been unable to supi)Iy the -untractors with tlie rails and other materials as stipulated in the contracts; and towards the end of bS,"i2 and beginning of 1S,'>;!, a most extraordinary advance took place in the price of labour, land, materials, and everything else in Canada. It was just at this juncture that I reached Canada. The engineer of the Com|iany, Mr. Clark, shortly after my arrival, e;dled attention to these Contracts, and pointed out the jiosition in which the Company was placed. The whole matter was at once brought luider the notice of the I'oard, and the best legal advice sought upon it. This resulted in the dis- covery that the works eontemphited in the contract diirered so entirely iroin those actually being executed, there were in reality no contracts in cxL-itence, — 'Irii^ the contractors could and indeed 'vcrc ascertained to be preparing to d •■ jaymcnt for the work executed at what they could jirove to be ! ..'. r and proper v.aluc. They had so far received the jiayments m:'de to them under protest, as n:erely on account, and had evidence to prove (what was not denied) tliat the engineer, j\Ir. ('lark, had admitted that the estimates were too low. The lawyers then advised that either entirely new arrangements must be niatle, which should cover all the points then in dispute, or tlu; Comjiany must submit to must expensive and harassing lawsuits with almost everything against them, from the loose condition in which the original contracts were found to be framed. The lioard upon this decided to endeavour to arrive at an amicable solution of the dilliculties ; iuul after several months of discussion new contracts were agreed upon, the prices to be paiil under wliicli were all settled by ]\Ir. Clark, the engiiiccr, and which were lower than those paid idiout the same time by the other railway companies then commencing to construct their lines in Canada. The 1 (),()<)(>/. already paid by way of bonus formed a great difliculty in the negotiations, but it was at length taken into consideration in settling the prices to be paid for the dliferent descriptions of work. Till engineer, Afr. Clark, in his published licport of -Ith June, lS,j.3, annexed to the Directors' l{e[)ort, after explaining in detail some of the dilli- culties which had arisen about these contracts, thus expressed his opinion upon the arrangements which luid been made, viz. : — 58 Lrftt'f Jhmi C. J. IJ)\i/ntiro K.i.sti'ni Divisinn, ami " a poi'tion of tlio Ccntfal and Wcsti'rn Divisi.iiiH, tlic pricoH to Ik' paiil for luaHOiiry have " 1)0011 I'st.ibli^'iiHl, ami tiui 'I iMsilii-atioii h'» itiIiu'imI ami .iiraii.i'Ml ax, on tln^ coniipli'lion of " tlu< contract-', till' woi'k oaii \f tni'asiirwl up ami ipiantitifs afi'rrtaim'il with no niiichi •' oiTtiiinty as to loavo no ri'iixonalilf ^'rouinl of complaint in any (piai'tcr, mid tliun avoiiliii},' " vexatious, cxpt-nHivf, ami intcrniinalilo litijjaiions, paralyziii},' to tlio oiicryioM nf the •' t'oiiipaiiy and ilr.'pjy injnriouH to tlio lu-st intcn'Mt.s of tlic Slianlioldi-rM, " Alllioiiijli 1 (111 not I'liliy concur in all the ilctaiN of thcsn arnin^'cnH'iitH, 1 am fully " of opinion thcv will [imvc as a whole highly a.lv,uitai,'cous to tlii> Company." Ami ill llii' llircctdr.s' lu'imrt tn tlic SliarcIioliK rs of .liiiif, I'^.j.'!, tlic l?o:inl, wliicli tlu'ii iiiohidcil tin" I'n-'ilciit-' of tlio New ^ uik Cciitral iiml Mii'liii,';iii ('ciiti-al Kiiihvayn, Imfli (ilulioiii liad ii ilorp liitcrost, ii lari;i' Sliaro- jiolik'rs, in tlio cennoniical coiistnictiuii dI' tliis Uaiiway, oavo tlicir (K'lilicrato opiiii'in iiimii tlic inattrr in tlio toUowiiio; laii_i^iia;j;o : - " 'I'liis ollicoi' (the cn.'iiii'i'r, Mi', Clarkl, wil!. the aid of our ^^anaJ,'inL; Director, liiis " arraiiicd most inipotant and fi\ouriiI)!e ch;v:i,"'s hoth in the system on which our " coiiti.icts arc iiased, aiel in the prarticiil prosecution of the woi'k."' 'I'lu; two iiayiiients oi' ."i.(l::.'i/. woro iiiclinled in tlie price of the now I'on- tract-. to lio jiaiil in Hen oj' tin, liaianeo of the 'J?,")!!!)/, proxiileil the work* were ready lor openinfj on 1st Xuvemher, is.':',, and as tliey won ready, tlio ainoiuits were paid liy u niianimotis rosolntinii ol' tlie I'loard. It niii-i he here slated tliat in May. Is.'il, the I'oard in ('aii.ada was strenu'lheiied \>y tiie a]i[ uiiitiiieiit, on the part ol' tlio En;^li.-Ii Shareholders, of Mr, W. Luiiosdoii, wild, in the niunth ot' .Iniie of that year, as \'iee- I're^idcnt, and as a salarleil nieinher of the I'oaid. devotod his whole tiino to the allairri of the Company Mr. T.oiij:-don, at the time of his appoint- nieiit, was a Dinetor of the Midland Kailwny (Iumpany, ami had had CM)ii.-i!."4, thi.'ro has always heeii. with a short interruption in l^-'li-7. a inemher of the I'oard in ( 'anada, sent iVoni Knglan.d, specially to look after the aceoiints of the ('om])aiiy. Tlie st'ttleiiieiit ol' I'arweil ;iml ( 'o.'s contract wa.s made .some time after ^Fr. lioiiosdon joined the I'loard. Mr. ("lark made up their final estimate: they were dis.satisfied with it, and sent in a statement of claims anionntliii: to an airt^ropito of almiit 7-."ill'/. This was referred (o Mr. Clark, who certified a further .-inn. Inyoml iiis previous linal estimate, of upwards df O.oini/. ; and the formi'r ono'ineer gave a ccrtifioato for some oxtra.s porformod under his siiperiiiteiiilent'e and liy his orders, aiiionntiuL^ to ahout S,(iiKf/. Tiie matter was then referred to !i Committee of Directors to report upon, the re-ii!t of wliicli was that tlie I'.nard, on l>!th .Inly, |S,'^.|, d(>cidod to aeee]/! an oiler niado liy Farwell and Co. to close all niatteis in dispute for a Slim uf L'n,()(l(l/. (wiiicli Iiielmled the two lieforc-naincd sums of 0,(1(11)/. and S, (1(111/ , as in their opinion a far nnne jmlicimis oonrso than to enter upon a law.-iiit or roi'ereiieo on claims amount inir to 7:2,()i"i/. Mr, Ileid's sio;natiire to any of the itinis comiio:-in;^ the settlement was a more matter of form, after the lioaiil had decided ujion it, and it was of no oonseqnence whether he gave a certilioate or not. The other sums mentioned wore ]>aid in settling other eontraets under .■similar elreumstanee.-^ to those already explained. Leltcv from C. J. JJn/tffffn, Esq. 69 oi'KNIXfl or TItK LINK. AliTNMV. The T/iiic wiis opiMinl ill an uiiflnlsluMl stutc, i\n !« iimi lm.-i liccn the practiee with every ntlicr KullwMy in Amoricn find (Imiada. All tlio eoiitruets were franied cm a selicdiiie oi' luice-' for wtnk ac'tiially done, not lor a Innip fiUMi or lor sonuicli per mile ; the |i;i> nicnts were all made Iiy nii|ilyin'j; the .-(•h(y tin; JMi^lish Siiareholder.'^ togot tliu Line open as early as pos>ilile, so as to stop payiiii^ interest out of capital : they pie.-scd this the more as the reports of the eu;rincer in 1 ^.'i2 had promised the opcninu; of the Line in the summer of IS."i;!. 'I'he two Anii'ricau railways on e;ii'!i -idc of us pres-ed lor the openimr of a tluoUL;h route without delay : ill,' ri ijuinMiicnts of pulilie convi'u li i.uec in .\meriea has al:-o aiways forced to he o|iciied as soon as the rails are laiil ; and thus there must alwavs he a very vast pro[iortiou of tlie cost of a line expended after it is opened. 'i'he practice is entii'cly the ojiposite of that adopted in ilugland. A very hu\L;e portion of the sum spent since the Line wna openid is for stations, sidinjjjs, and rolling stock. TIk." numher of enniues on tlu' I..ino when It was first oi)enctl was onh- twenty ; there arc; now ei^iity-eifiht. .\t theoiieninj^jof the Line tlu're weri' very W'w sidings ; on the main Line alone there are now n|)wards of thiity-seveu miles, and so ol evcrvthuiLr else. includin:' station-imi Idinu: s, wareuouses, wharves, nieeliamea 1 buih ui' tool: nuienmcrv, siijnal teh ill, A( Tl statements made liv the CommltftJe as to tl le opening o the Line ace, jUie eontam several \ery miportant errors ol lacl. in tlu; lust pia^ a promise had heen piiMicly made to the Shareholders, in the ]{e[)ort from the IJoard in 1S.")2, that the Line would he opi'ued thriuie'hout in Auu'iist, IS,"),'!; and .Mr. Ciaik. in his Report of , June, IS,^.",, althoUL;ii not coulirudng the promisi' previously made, stated that the 1/me would he o|icne(l throuLihout hy the close of the yiar IS,")."!. The IJoard were strongly of opinion that to attemjtt to open a long line of --!• miles at once, in the middle of winter, in a new country, where no railway had iirevimisly existed, and with a staff which must of necessity he almost entirely unused to railway works, would he a most improper and dangerous proceeding. I'hey there- fore decided, if jiossihle, to ojjen it in sections, so as to get the staff into something like systematic working before the through tratlic came uj)oii them. <><> Lcltoi' ft'oiti C. J. Jh'i/ihjcs, Esq. Arpi'NDix, It was ;u'Oor(lin<;Iy opcin'il lus rollows:— \'\ inilo.-i In '111 Siis|iensioii Uriilj^c to Hamilton, on lOtli Xovt'iiilitr, l^'i.']. T'i milts iVtMii ll:iiollti)ii to (iOiiiloii, (in '1\A Itoccmltcr, lN.'i;t, 1 10 mill'.-* t'mm LiuuIdh to Wiiul-or, mi "JTlli .laiiiiar), ls."i|., OOj) It i.-^ tiiu- tliiil Mr. C'l.uk (rwiipprovid of tlio comso |)ro[iii.i('il liy ||ii> Iluanl bocaUirc III) wislunl to liavo llu: liiiie o|iiMitMl at oih'l' tlin>ii;,'lniiit ; lunrc lie titronjily olijci'tuil to the opening of only tin- Ka-toni I>ivi.-*i(in of 1.5 miles on ItUli Novi'Uibir, lS."i.'i, Imt lu' wa- a con.-i'iitin^ parly to llic opcniiif; of the otlur -t'Ctioiirt, iiltliou^Ii llio ('oiiiniittL'c Inoaiily ac-ort that lie '■ ^tl■ollgly protos'tcd " aL,'ain»t the opening of the whole Line. Tlic reasoiift which indneeil the Iloanl to tlillir with Mr Clark have lu'iii statinl. ami were I'lilly known to tlie Coniiiiittii", altlioii^'h they have not had the eandour to Mientioii tiuin. Itel'ore, however, opening the 4.'! miles iti i|uesfion, tlie Hoard took the opinion of an eminent and indejieiident enj^inecr, who ri'iiiirted tn tlnni, in writiiij:-, tliat the Line mi^Iit he run with safety, whieh the resnlt fnlly justified. The staleincnt tiiat " ,«h.irtly afterwards the culvert at Twelve Mile Creek gave way," is md eorreet, — it iiroke down two months before the Line Wiw opened, owing to the engineers having grossly l)liindered in preparing the i'onndations. Mr. Clark's fears that it might give way still more were not realized, as it never moved after it lirst .-ank, two months before the ojiening of the Line. L.\NI) rrUCHASHS. The Committee refer to the A<'C(niiitant's IJeport in regard to the outlay for land, and to what they say U])on this siilijeot I will now reply. How far tile opinion of Aeeountants i.s to be taken as et^nelutiivc upon the (luestion of how much land should be taken at stations for railway purposes, or as to what was its market value at the time the purchases Were maili', the Shareholders can form their own opinions. Every one who understands the (juestion practically will agree with me wluu I state that the principle is a sound and well recognised one, that railways are much better olf every wlure and tliis must be more especially true in a new country) by ii:iving loo much, instead of too little land at stations. It is a common eomiilaint that railways have in the course of years suifercil most seriously W^nw not taking care to have jilenty of land iit stations. J believe there is hardly an instance of a Railway Company having in the first instance secured land enough for station purposes at important points. If the Coiiiinittec had not withheld the evidence in their [lossession upon this point, showing the reasons which induced and the circuinstauccs under which the purchases they allude to were made, the Shareholders would then have had before them the [ii-actical views of the parties who are responsible for the purchases, as well as the vague insinuations d(;alt in Iiy the Accountants. The only two cases meiilioned by the Accountants, with wi'.ich I had anything to do, were in the purchase of additional land at the Suspension Bridge Terminus, and at the London Station. Lrtlt')' from C J. lin/dfjcs, I'!h(i, «1 Wlu-n I arrived in Ciiiimlii I iiuiinl that nt the Sunponnion Jlridj^e ter- apiindix. iniiUH, tile iiiit't ini|ioi'tniit lui the Line, and wliere tlie lar{,'e«t trurtic woiilil hiivo to lio conducted, the ('()in|mny only |io««ef(*eil a niirrow strip of land, very little nmre than cudicii nl I'ur the track of the Kailway. The New York Central {'uni|iany, on the other wide of the Hrid^-ie, were in the name position, ant they at onee jmrehaKed a tract ofiand, conipri.^in^ a large nuniher of acres. I advised the Hoard to d«i the «anio, um a j;reat advance was then takin>i place in the price of land, connctiiicnt upon the huildiii;^ of a town at thit* spot. 1 he ground on liotli aides of the Hridge is so Hituatcd that excavations luivc to lie liiade to make it available for railway |inr|to8cs, Tiiere is every reason to hclicve that lielure Kmu a eonsideralile part of what the Aeeounfants call surjiliis lands, will he retiuired for cattle-yards, workshojis, »!tc. The purchase made in l^.Jd, at Suspension IJridge, as well as the others, were made by onh'r of the Canadian Board, after full deliheration, ns a means towards carrying (jut. in the most economical manner, certain works reipiired hy thi^ then rapidly increasing tratHc, and for reasons connected with the policy of the Company, whi<'ti at that time were considered of great importance. The other land ]inrehase is at London. Here also the Company posscfsed land entirely in!idi'i[iiate for such an important station. London is about the centre of the Line— there engines are changed- and the trains therefore stop some time. It is thus the most convenient place for large ilining-nwms, and rcfjuires ainph' room. It is also the terminus of the Sarnia Line, The (irand Trunk branch from Stratlonl terminates here, and also the London and I'ort Stanley liailway. When the station was first constructed, it was so erainped, that there was not room to acconnuodale the number of passengers that for the first few years crowded the trains ; the width of the Company's property was so narrow, that there was only room for two lines of rails, thus l)reventing the po-.-lbility of having any sidings, ami when two trains met there, which was a lrc(|uent occurrence, priventing entirely the passage of goods trains. It in fact became such a perfect bUick that the traflic, which was then largely o:i the increase, could not lie worked with either safety or di'spatcli. 'i'lii.' I5oard therefore decided to construct a proper station, and afford siillieient room for siilings and for the sate and speedy passing of trains. When the station \vas completed, it was found that wooden buil(''v(!'s on the ground ni'xt it had been constrmted, which, if they caught fur, '• aid greatly endanger the station. A fire did artu;dl} occur, and the station, which hud cost u|>wards of .^,(H)(l/., wa.s in great danger of being destroyed About that time also, arrangements had been nuulc wit'i the Grand Trunk ('om[iany l»y which they were to run into our Lor. lo'. Station, and to liave a (^Mtain amount of space allowed them for baggage, lamp-rooms, and other necessary conveniences. It was therefore determined to buy additional land, proper steps being first taken to ascertain its fair value. Those inquiries resulted in the conviction that the price paid was by no means high, as is indeed proved by the evidence furnished by the Accountants themselves from some of the most respectable i)eople in liondon. As this is a (piestion upon which the practical opinions of those actually engaged in the conduct of railway working are of more •. 'due than those of accountants, I asked the ^lauagcr of the Grand Trunk Railway Company (52 Letter from C. J. Bryilges, Esq. ArrKNDix. ti) <;ivc me his opinion as to the propriety of the piirchatic. The i'ollowing is Ills opinion : — "GUANII TUrXK KAII.WAY OV CANADA, ■' (iKNKIlAI. MaNAIIK.h's OFFU'E, " MiiNTiir.Ai., 17^/i (kioher, 18t!0. " My DKAii Siu.^I mil jHTfcctlv familiar witli i\w pri'iuisi's fniiipri.siiij,' your pivsHoiigor " .stiition ftt Loiiiloii, niul liavo not tiio slightost hositiitioii in .siuing, tluit liiid I Imon in " your position, I wouM liavo niatlo the purcliaso of tho fifty-tivu ffct of land ai all that was done was fully approved by them. Tlie fjuestion as to tlie Steamers on Lake Ontario is set out, so as to make me alone responsil)Ic for that measure ; and again the C'onmiittec entirely ignores tiie existence of the Board in Canada. The establishment of a lino of Steamers on Lake Ontario in connexion with the liailway was settled months before I set foot in Canada. It was, indeed, determined upon eiuly in lS">-2, when a traflio agreement was made with the American Railway (.'umpanies, at the time they subscribed for Shares in our Coni])any. The Michigan Central, Michigan Soutlicrn, and New York Central Kailway (companies were all at that time building large Steiuners to run on tlie Lakes in connexion with their Lines, and all believed it would prove a very important adjunct to the traflie in the hot sunuuer months. Tlie Companies named all spent nuieh larger sums upon tiieir stiNuners than we did. Kxpe- rience has proved that the views entertaiiu'd by all partii^s in 1S.">2-.'! wen; not sound ; but nobody found this out till too late. AA iiy, therefore, try to saddle the whole rcsponsiliility of this upon me? 1 did not propose the resolution in June, IH.j;?. It was unanimously adopted as the formal act of carrying out a previous determination. The expenditure was always undcjr the control of the directors. In the Accounts for the half-year to ."ilst July, \^'>\, the expenditure on the steamers had amounted to nearly ")0,Ol)(l/., and the lU'port of the Board, apjiroved by the Shareholders, stated that a furllier sum of .'},'),0(I0/. would be required. If the Accounts are not in a satisfactory state, it was the duty of the then Accountant, and no one else, to see that they were so. The following extracts from the Keport of the Michigan Central Com- ])any in June, lS,"),'i, siiow how universal was then the feeling that steamers would |)rove most important adjuncts to the traflie of the railways which touched the griat Lakes: — " Tlio coiiHtiuoliiin dl' liiii;ir stcaiiiliniits to niii U]ioii t/iiki' I'rio, in (•oiiiu'xiiui with tho •■ Viii'ioiis liui'H of iMilroiiils Innliiii; to that, wntrf, lias rfiiiU'i\>il it lu'Ci'ssai-y lor this " l^miiuuiy ti) iiii]iiiivo the iharacti r of its Nuith Shuic Line, ami tiu'v iiavo willi ivhahlo " itssiiciati's uti(h'ilailst .Inly, lS.")(i, ami the ".irticulars of their .sile were given in tlie Report for the half-year ending .Ust January, IS.")7, and approved by tho Shareholders. 64 Letter from C. J. Brydges, Esq. apprndix accounts for isr)4. Ill rogard to the Accounts for tlio half-year cndiiiii .list July, 1354, it is sufficient for iiic to say that I left Canada for Enghuul ahout the niiildlo of July. anJ did not get back until tlio middle of yoptenihcr, or abt)ut a fortnight before the meeting of Shareholders was htdd at whieh tiio half-year's accounts were submitted and approved, and I brougiit with me the accounts of the London Oflioc. I had very little to do in the matter. Tlie Accountant then in the .■icrvico of the Company iiad no knowledge of railway accounts, — he was (juitc at sea in dealing with tlie various departmental ap[)ropriations, — time pressed, — the meeting of Shareholders was at hand, and if Mr. Baker and myself liad not given as much time as possible in assisting in the closing ol' tiie half-year's aecouiits. they would not have been ready for months, and then in an incorrect and uniiitelligil)le state, owing to the inefficiency of the then Accountant. We neither of us had anything to do witli passing the entries tlu'ough the books. Mr, Longsdou also gave mueli assistance in the jireparation of the accounts, and fully approved of them, as did also tlie JJoard, to wliom they were sul)- mittcd, and after full consideration they were ordered to be printed on Septeinl)er I'l', 1S.')4. Two Auditors appointed by the Sliareholdcrs cxaminc to HInI .luly, K^.Vt, iiinl luuc miuh }ilanure " (// Ar-(//_y alilt' to tcslij)/ In tliiir arri(rai\i/." 'I'd attenijit at tiiis distance of time, and in the absence of the books, to enter into anotlier e.xamination of those accounts, is of course out of the question ; but in regard to what the Accoimtants say as to the cliurging of IT.i'iIlV j.'.v. S,/. from the Mechanical account to Capital, I have only to say tliat that sum is the expense of working the engines and cars employed in cnistructiiig ami balliisting the Line lioth before any jiart of it was opened and up to .'list July, 1>'.")4. That this was a perfectly pro[)er charge against Capital there cininut be the sliglitest doubt; and 1 tliink the dt^cided error which the Accountants have made in this instance may hv. fairly taken as a sample of their remarks as to the otherr-. I'vcry jiroper charge, as far as I know, was made against revenue, and ''u' working expenses are riot less than was to be exitccfed, seeing that SO per cent of the gross traffic was for pa>»cnLfcrs. and that the engines and cars being new i'e(iuircd but little outlay. SALAUY AND COMMLSSION. The Committee's next charge against me is as to the salary and commission which has been paid to me. They say that I was appointed Managing Director on KJth February, 1S.>'J: this is wrong; I was appointed in Londcm in November, IS.l'i. They mention the salary which I receive in currency instead of in sterling money, I suppo-c to make the figures look as large as possiljle. ISIy present Letter from C. J. Brydgea, Esq. 66 Buliiry from tliis Company is 1,600/. sterling per annum, sterling being one- Appendix. fifth Icfs tlmu currency. In tlic n)iitter of the commission puiil to mo, the Connnitice have again totally ignored the existence of the Board in Canada. The agreement made with me, and which was sealed with the Corporate Seal of the Company, contains the following clause: — "All lulililiouiil .sum or uUowani-o of two Imiulrod and fifty pounds of lawful money •' .ifor«suid for and in ro.tjioct of ovoiy ono pound currency pur centum per annum " of dividend or boinis which tho Company may actually pay to their Shareholders, " iir ichirh (he mi rfW/1/.i ir/mr/cil lo thi- Shmrliuldfrs in fsjifrt of {hut i/vur mii/hf. rmihlr thorn " to pill/ orer and ahore tin; rate of eiijlil iniiiiiiln /nr cfiitinn, and in that proportion fur and in " respect of every portion of a one pound currency per centum per annum of dividend aud " bonus." The published accounts for four half-years report that the Company had earned higher dividends than eight per cent. ; and tiie Finance Conunittee, on 8th April, ISoO, first taking the opinion of the Company's solicitor upon the matter, passed a minute setting fo>.th the nature of the agreement with mo, and directing that in accordance therewith I be paid the sum of 406/. Tts. currency, and this was confirmed by u full Board meeting on 11th April, 1856. The subsequent payment was ordered in precisely the same way. The statement, therefore, that I ordered these payments to be made is entirely false. They were ordered to be paid by the Board after proper examination, and were in strict conformity with the terms of my engagement. DETROIT AND MILWAUKEE LOANS. I will now proceed to refer to the Loans to the Detroit and Milwaukee Hallway Company. Not long after I arrived in Canada, my attention was called by those largely interested in this Company, to the benefit which might accrue to our own Line from the traffic of the Northern part of the State of Michigan. Amongst others, Mr. Samuel Laing, ^I.P., who was then a large shareholder, wrote nie, amongst other matters, to this eflcct, on lOtli Feb. 1851;, in which letter he stated that he did so after " several important discussions with our "leading Sliareholdcrs" in England, and because he thought it " very desirable to " put me confidentially into full possession of the views generally entertained." When the Grand Trunk Company was first formed, it had the control of a line occupying very nearly the same ground iis that now covered by the present Detroit and Milwaukee Hallway. My instructions were to watch that district, and to see how far it could be made availalile to our tratiic, and eonse«iuently to the exclusion of the Grand Trunk. The importance of this matter became greatly enhanced when additional lines were conuneneed to run fiom Chicago to the Sea Board, passing south of (.anada through Pennsylvania. It was clear that such lines must, when opened, divert some of the traffic we tiien enjoyed, and it became, therefore, a matter of vital policy to seek alliances which would strengthen our hold ou the traffic of the Western States of America. It was also always considered of urgent importance that this Company should not remain entirely dependent upon any one connecting line, but possess an alternative route. The New York Central Company and the Michigan Central Companies when they subscribed towards tho construction a 66 Letter from C. J. Brydgett, Esq. Appendix, of this Railway in 1S52, naturally sought to bind us exclusively to thcniaclvcs, ami to make our line a mere appendage to their interests, to be used solely as they might deem most advantageous to themselves. Sound policy dicta'^ed that this Company should not be confined by any such trannuel!^, but, on the contrary, whilst continuing to cultivate most friondly relations with its existing allies, tliat it should seek to extend the sources of its traffic. It was with such views that as early as 1853, tlio Detroit and Mil- waukee Railway was looked to as an ally that ought not to be allowed to fall into the hands of a rival. Since that time it has been gradually more and more identified with Great Western interests, and many Shareholders of • lia Company recog- nizing its value, took an interest in its completion, ar 1 ' •• their assistance, considerable sums were raised upon its Bonds in 1.*-" I, ' ne amount then subscribed was not suflicient to finif'h and equip the Luie, and in the suuuner of 1857 the approach of the terrible commercial panic of that year reduced all the incomplete, and many of the opened railways of America, to a state of bankruptcy. In August of 1S57 I was directed by the London Board to proceed to England, to confer with them upon several important matters relating to tho aft'airs of the Com])any. For tho reasons which I have already stated, I was of opinion that the Detroit and Alilwaukec Line was of great importance to this Company, and would prove of vast benefit to its traffic. I am strongly confirmed in that ou.nion now. I freely admit that we all took a more sanguine view than sub- sequent events have for the present justified ; but it was then imi)ossible to foresee that America was to be prostrated by a succession of deficient harvests, and the trade of the country brouglit almost to a dead lock. The Detroit and Milwaukee Company was then in difficulties, — it must obtain assistance from some source, — it was known that the Grand Trunk Coiiiiiany were making arrangements to make Detroit their western terminus, and tliat they would seek to secure the control of all the avenues bringing western traffic to that point. After having done so much to aid the construc- tion of tlie Detroit and IMilwaukec, and to secure its control, it would have been niot't improper to permit it "t that juncture to slip out of our hands. It was under these convietion.s that I fully concurred with the Board, and the great body of our Shareholders, in believing that it was a matter of great importance to aid the Detroit and Milwaukee in its then extremity. Of course the great object with all parties then was to secure an additional stream of traffic, and notwithstanding all the drawbacks we have had to contend with, tlie traffic of the Detroit and Milwaukee Line now brings an additional business to the Great Western Line, which yields a large return on the amount of the Loans, and which there is every reason to believe will not only be greater in future, but that the revenue of the Detroit and Milwaukee itself will so improve, aa to enable it ultimately to pay interest upon the Loan beside. It must not be forgotten either, in considering this question, that for an outlay of 2.")0,()()0?. we have secured absolute control of a Line of Railway 185 miles in length, running through a growing and thriving country, and by its connexions west of Lake Michigan, securing to us the great bftlk of tho through traffic of the States of Wisconsin, Iowa, and Minnesota, the population of which has more than doubled in the last ten years. Zeller from C. J. Brydges, Esq. 67 The (Statement made by the Comoiittec, tliftt I received a letter from Mr. Aitenwx. Trowbridji^c, announcing a difl'orent Htate of financial attUira to what had originally been reported, and that such letter was considered three days before the meeting of Sharelioldersi on iStli October, 1 sr)7, is not correct. The facts are these. Ik-fore leaving Canada early in September, l^i57, 1 went to Detroit with Mr. Robert Kaye, one of the present Committee, and being tlien just about proceeding to Kiighind, 1 was desirous of obtaining tlie latest inl'ornnition relating to the Detroit and Alilwaukec Company. I accordingly wrote out a string of questions, and recjuestcd Mr. Trowbridge to reply to them. He promised to do so at the earliest possible date, but I had left before it was ready. I reached London about the 21st of September, when I for the first time heard of the proposition for a loan to the Detroit and Milwaukee Company. The half-yearly Report of the Directors to July 31, 18o7, reconnncnding a loan of 1.5(>,()()U/., was issued to the proprietors, on (September iU), IS.'i?. Mr. Sibley, wlio was in America wiien I lett, arrived in England two or three days before the meeting (it is impossible to say precisely how many days), and brought witli him the letter from Mr. Trowbridge, dated from Detroit 2l3t September, 1X57, being the replies to the inquiries left with him. iSIr. Sibley handed in tliat letter with a large packet of papers as the Hoard was sitting, and it was placed upon the Board table. It and the other papers were very voluminous, and aa the Meeting was close at hand, involving a great pressure of business and corresjiondeuce, all matters that could be delayed were put on one side until after the Meeting, and amongst others the packet of papers that had been received from Mr. Sibley. There is documentary evidence, whiA\ was shown to the Accountants, to prove that this long statement of accounts from jNIr. Trowbridge was never looked into until tlic lOtli October, lbr)7, or two days afier tlie meeting, tluit being the earliest moment at wliieb time could be found for the investigation of the j)ai)crs. These facts are all in the evidence given by me, and are corroborated by tlie Secretary, ilr. IJaker, and were of course before the Committee when they drew up the paragraph of their Report in question. Mr. Trowbridge's statement disclosed a state of finances at variance with that made in the letter, dated 7th September, I Hbl, from Mr. Walker and ilr. Stewart to the IJoard in London. A careful examination, however, showed that a large amount of the debts could be postponed for a long period of time, that the works could be carrieil on with very small cash payments, and that the loan of 150,0()(»/. if judiciously expended, would secure the opening of the Line, which was the object had in view, when it was determined to grant it. After very great deliberation it was decided, before I left London, to go on and complete the Line, provided I found, when I got to Americ;, that I could, in conjunction with Mr. Reynolds, who had just been appointed Financial Director of this Company, make such arrangements with the creditors as would set free the Rails and other materials required to finish the Line, and leave sufficient funds to carry on the works required for its completion. We did succeed in making the necessary arrangements, and were enabled to open the Line with the means at our disposal. Your minutes prove conclusively that before I left England positive instructions were given to me, strictly defining what course I was to take, and leaving to me the discretion of carrying out the views of the Board, provided I could do so within the limits which they hod prescribed. 68 Letter fiViH C. J. Bvydyes, Esq. ArPKNDix The dincrct'u n wn? as tc boiiif*; tiblc to make such arrangements with tlie securcil croclitors ns ^vouM <;nablt; tlie Lint t- be opened with the means at our dispottal. Tlicae arnti.pemeiits were cuncludid on even more favourable tenna than was expected when I left Hnyhind. Tlie letters addressed to me, prior to the 18th December, 1H57, all dis- tinctly reiterated the instructions which I bad received betmo I left. Immediately on landing at New York 1 met the two largest creditors and arranged witii them iis to the iwstpMiement of their debts in the manner desired by the Board. I then went on to Canada, and without Jtilay procecd'vl, in oonjimction with Mr. Reynolds, with the duty entrusted to us relative to the Detroit and Milwaukee Company's debts, and to tin; rigiil scrutiny of their IJooks. On the :!8tli December, 1857, wo addressed own first joint Report to the English Board, detailing the result of our efTorts to postj)onc the 'lel)ts, cxplaUicd the nature of the security we should get, and gave a ])rogrannuc of the manner in which the loan of 15t>,0l)U/ would be expended under llu arrangements we had madi:. I then returned tu New ^'ork and completed all the arrangements of every kind with the secured creditors. When I returned to Hnn ilt.m on January 0th, 18')8, I received Mr. Baker's letter of the 18ih Jeeemh', i-, 1S")7, twelve days aft.r we had sent off our Report stating the sttjM whd; we bad taken, md the arrange- ments made, under the instructions of the LSourd, ior postponing the debts of tlie Company. Upon receiving the reports from U!i, the ''wigiish Board imanimously con- firmed al! that we had do'ie as fulhlling ' the requirements of the resolution ot tlie General Meeting of Shareholders ou 8th October, 1857," and passed a vote of thaiKS to us far the manner in which wc had carried out the duty assigned to us, And a coiiti'ination of the viewa under which the Board acted in 18,j7, is to bo found in ihe following extracts from a letter, dated 28th .lanuary, 1858, addressed to vim by ^Ir. Govan, one of the Directors in London: — "I shall not attempt to c( nvoy to you, in this note, the intense pleasure which the " reading of these ilocuiueiits afforded me. You ami Keynolda 1. ivo accomplished tlie task *' etitru.sted to you '>y the Hoard in a manner wiiioii does you both infiuito credit, and I " cannut but hi-k n\-'n it as other than a mo.st providential circumstance that tlio advices " (is Dt'C. ls.")7), which might have prevented your a. 'ting as you have done, diil imf riarh " //'/« /(// tifler >j(iii had xiicrcinfiillt/ hrou(jhi to a micluxin i the niisxiuii which wr had iiixtriicted you " Vi iiri'umidinh. " In addition to the rccord.s of the lioard'H approbation of your conduct, containccl in " the miuutcH of our la.st meeting, I beg the acceptance by Mr. Reynold.^ and yourself of " my most cordial and hearty thanks for the great service you have rendered to both " Companio.s on the present emergency. " 1 have ju.st read over tiio above remarks to Mr. CuUen, and he instructs mo to .say " that he entirely coucuin in every word I have writteu." The Accountants saw this letter, as well as ail the other documents, and they are referred to in my evidence. The Committee have thus, in order to found a charge against the Board and myself, deliberately misstated facts, and the dates of letters, whilst they had fully before them the information which proves that the charge they make is false. I distinctly deny, in the most emphatic and unequivocal manner, that the payments which were made to the Directors and myself had the slightest Lellcr fi'MH C. J. JJrt/iJgcs, Esq. 60 ciFect In inducing a Jetcrnriniition to proceed with the h)an. TIic (luc-ition of Aitbndix. proceeding witli the loan hud been suttletl bel'ore I lul't Enghind, and long before the Detroit and Milwaukee Iloard voted these sums. The payment made to nic was a voluntary act on the part of the Detroit and Milwaukee Hoard, of which I knew nothing until after all our arrange- ments were satisfactorily completed. All these arrangements met with the full concurrence of my colleague, IMr. Kcynolds. Some of theui, indeed, had been concluded as p<(on as I landed in New York, and before I had met any of the Directors of the Detroit and Milwaukee Company. Tiic latter said, wiiat W.1: perfectly true, tliat for several years I had been enga[;ed in assisting them in ti'.e prosecution of their enterprise. I had, before any part of their Line was opC!! till- liimkH iiiid utlliii's (if till' Dciroit mid Milwiiiiki'i' C'limimiiy. Tlic (iiiiit W'l'-tci'ii ('omii;iiiy uw lioiul, and not Sliari'iiuldci> of tin- ntiuT ; and til till" I'xtriit of li ss tlian (iiu'->cvi'ntli ol' tlic ontiro capital >>*' tlic ('iiinininy I and cutainly no Acciiuntaiit.'* I'liipKiycd liy the (Iri'at Western (.'iiiniumy could lia\c any ihj/i/ to examine tlic bonks ol' uiu)tlier ('()iii[iany. ill a I'.iici^ii I'oimtry and owned liy an entirely distinct set ul' SliarelioKlers. 1 was at the time Iteeiiver of tlic ("oiniiaiiy. and an aiiplleatinn tt> llic C'lHirt ul' Cliaiieerv i'nr |iermis>i(iii to lei strannci's examine into mattci> which uiie then iuiiici;dly iK'I'ore lluiii v.cd, havi' resnhed in an order ol' the Court to nii" nut to iiennit any such examination whatever to be made. Si di-iroiis wa- I, ho\ve\er, t'lat tverythiii;.; shunld be freely thrown oi)en to the Accoiiiitaiils, that I i,'ave them the iitiuo.-t possiiile lutitiidc tu I'xaniine into cverylhinj; comieefed with the Detroit and Milwaukee ('niii |)an\ . :ind Mr. Voiin:^ personally told me that he had been treated by me with the ntmiist frankness and candour. Having imw I'liliy explained this matter, I iiave only to leave this, and tin: other ehaiiio made against me, to the decision of the Shareholder!!. SAItNlA ijxi:. The Committee state that u sum of l.j,(iiM)/. was paid in settling tiie . ontiacts for the eonstruetion of this Line. 'I'he amount paid was Kt.UOO/. sterling, with the full ajiproval of the IJoardr both in luigland and in Canada, 'i'lic extra bills niiderid by the contractors were, after much oxamination. referred to arbitratinii. and after several months' laliour the matter was eom- ]ironiised, under legal ad\iec, by the payment of the sum nained in full of ail demands. FHK1-: PASSKS, v^c. The Committei' call attention to the i.ssiie of Free Passes. I'pon thir- point everything has been done by this Company to limit their issue as nmcli as possible; but this question never can be put upon an entirely ju'oper footing unless concert of action Is adopted l)y all Kailway Companies. No one I/ine can afiin'd to pursue a policy in this mutter unless those competing with it will do the same; and lam speaking the views of the Hoard as well as (»f myself, when I say, that we shall greatly rejoice it' any measures can be adopted to diminish the undoiil)tcd evils of the jiresent .system. The (Jommittee also speak of the .system of colleeting tickets on the trains by the conductors. This is tuiother matter which cannot be entirely altered, except by concert of action amongst the difbrent I/ines; and, indeed this is distinctly stated by the Accountiuits at page 22, where they say : — " Till' Clieat Western Company liiivo, we bolicvc, niiulo coiisiilcniblo ofTni'ts to dis- ■' coutiimc tills sy.stem ; but from what we loarii, any restriction.^ in tiii.s diruotlon should be juiliclijiisly iipjillfd, as the freedom in tliis rcsjioct tliiougbotit tho State.s creates a " prtJLulice against tbo.se Linea w'jere the same liberty does not o.xint." letter J'roiH C. J. BrijitcfOH, Zay/. 71 CONCLUSION. I I i;i\i' iKiw I'lilly ri'iilicil tn :ill till' clinrni-i wliicli tlic Cdiiiiiiittec Iir.vc AriKsru. iiiiiili,' a^iiiii t iiic, cxtondiiiir over it jicfidd of npwiiids (il'cinlil vciir.i. Diiriii;:; that time I liavc cnili'iivdiiicil to do wliat my jiid^uicnt told iiic was for till' lust iiitcnxts of tlic ('('iii|paiiy. 1 do not di.-iio to conli'iid that I liavc Hot made nii.»tak(s, luokiiiL; at tin: usults hy thy lii;Iit of asccrtainfd cxiK'riciu'e. I'lit cNciy iiii])ai lial lllllll wil at once admit tliat it is ai 1 ca-v matter to jiidj^c ciiri'cclly alkr tlio cvciif, iuit far more dilliciilt to ducidL- at tlid niomeiit wlu'ii action lias to lie taken. 'I'lie Iiistory of every llailwav (.'omiiaiiy in tlio world, or, indeed, of any lari;e industrial or ('(immcreial enterprise, would sliow, in an exaniiirttion into its atliiir- \ cars alter tliey liad lieen tNJUcludeil, lliat nineli liad liei'ii done wliieii it would liave lieen hitter ti> lia\e lift alone, and inneli not done wliieli after results sliowed nii'-;lit liave lueii advantageous. And so it is of this Company. A j^reat deal of the hostility whieh has lieen displayeil against nu; arises from the deeiileil eonrse whirli I tool; in IS.'ill in previ ntinij; this (Jonijianv from heiiiL; fori'ed into the eonstriiction of the memoiaiile Southern Line. If tliat attempt had suceeeded this Company would now have In en irretrievably ruined. I stood alone in Canada in frn-stratlnj; the great efforts made, by those then in the lioard, to eommit this Company to an outlay, and a eonrse of policy, whieh the result has proved would, if adopted, have hieii utter ruin. For my conduet on that occasion, I received a special vote of thanks from the Siiaioholders at the meeting in I'-ngland on 1 lili Oetoher, ]S,"(i. I was warned at the lime I took tlie ^land I liid, tli;it 1 .-huuid he jiursucd with the greatest hostility l)y those [jromoting the Southern liine, and they have not failed to pour into the ears of tiie Connnittee every .-lander whieh could he invented against me. And many of the charges now made against mc are a mere repetitio!i of those wdiich have been nnide by Mr. 11. 15. Willson in pamphlets whieh lie has liubli.shed relating to this Company. He wrote an anonymous pamphlet in October, 1S5!), which I replied to at tlie meeting in Kngland on the 'ith of that month, on which occasidn 1 again received a unanimous vote of confidence from the Shareholders. Mr. Willson then placed himself in eunuminication with the Committee formed in Xovember, 1S.")!I, by ^Ir. Chatteris — came from Canada expressly for the imriiose, was in constant intercourse with them, and was jjresent iit some of their meetings, lie imblished another iiamiihlet shortly before the meeting on 4th April, IHOO, at wdiich the Committee of Investigation was appointed, containing a repetition and enlargement of the charges he had previously made against me. To that p.imphlet I replied in detail, coiiies of my reply being circulated amongst many of the Shareholders. ilr. Willson was present at the meeting on Ith A[iril, 18G0, and returned to Canada shortly after the appointment of the Committee. On the arrival of the Accountants he placed himself in communication with them, addressed mimcrous letters to them, some of which he subsequently published, took, as lie himself states, much labour in [ireparing information for them, and appeared before them in the character of a hostile witness. In the published copies of his letters to the Accountants, passages occur 72 Let I Of from C J. Bri/dgcs, Esq. Aw'ENiox wlilrh tlirow much li^lit upon the inoilc in which the iiic^ulry orij'iniitcd und was coiuhu'ti'il. IIo luvounts for tlio puMioiitlon of Iiis immphlct of March, 18(10, by siiynii^ th;it th..' chiirjji-s ngiiuist tho inaiiiii:tMiieiil " were :*umiiie(l up hy me in '■ till- form in wliii'h you find thci\i in my pamphlet /'(/ onh r to nfonl thv '■ jiriijin'itiirs an .H in C'anmla ? Tliu dual Wcbtirn i« Uio »'iily I/me which lias r. julaily ami proiiipliy paid all its pidriLritiiil char-eH lor i»lac>*t, &c. It is L. -lily one whidi has rvcr eanicil an.l paia u ilivi.lcnil upon its Shares. It I the only one whieli has ils lapital aecount praelieaily . losi .1 ; it i. ihc only one which 1ms not at the present nionient a large ih.ating ilehl; il i« the only one xvhich has ,;ver remitleil to Englanil the amounts re.iuired to imy interest on its hoii.h'.l ilcl.t, an.l iliviilcntls upon its Shares; and its workin- expenses, in proportion to its reeeii.ts, are h)wer than those of any other Line in Canada. The average dividend paid by thi.- Coiniiany during the last seven years has been at the'rate of 4;,' per eeut. i.er annum ; a rate that will compare not unfavourably even with railways in I'-ngland. Audit is alter 1 have been mainly instrumental in placing this C'omiuuiy in a position so vastly sui-erior to that of any other Canadian Kailway, that the Committee of Investigation pronounce me unworthy of confidence, upon the cvidet*ee of discharged servants, and speculators whose schemes 1 have frustrated, but which evidence the Counnitlec have not ventured to i-ublish. 1 have the honour to be, Yuur moat obedient Servant, C. J. 1UIYD(JES, , ., ,,<■., Muiui'iiiij Diratur. l.nMjijN, IM/i March, ISi.l. Al-PI MMJ II. lIAMIT/rON AM) TOUONTO. J.F.TTKR fnw, (lEOlUJK AVVTIIES. Ks(,. Co\TnA(Toi,. To thr l)|l!i:i TiiKS (////,• (lltKAT W'l'.SlT.KN KviI.WW dl' (VwAHA. UridArr, March l-'M, Hiii Gkntlkmkn, The Cnnimittco of Invpsti'ratlon into tlu> afVnirs of your Coiniiniiy have reported to tlieir Sliureliolilers upon eerfniii mntters in wliioli I nni interested, and an to which I ain desirous of replyinjr. which T tliink it liest fn do tlirough you. Hamilton and Toronto llaihro)/. The Committee liavc s'tated that the Board of ISfi.j " settled with " Mr. Wythes, hy paying liini upwards of 2O,0(i()/.. to whieli, tlic Committee " think, he was not entitled." It matters very little to mo what " the Committee think" on such a subject. I eonsitlered, at the time, and consider still, that I was entitled to a very nnich larger sum than the 2(),()t)0/. whidi I received for extras. Tliiit 20, ()()()/. was paid to me for piu'chases of land for a douhle Line (the original ci>ntraet having heen only for a single liine) ; for su[)erior works required hy Mr. Brydges to those originally contemplated , for the cost of changes made under the contract, and for additionsd interest paid by me to Sliareholders. The whole amount which 1 K^ecivcd for extras was only a little more than G per cent, over the contract price ; an amount for extras which every one acciuainted witli the sulycct will acknowledge to be very small. My contract for the supply of rolling stock and stations was only 28,000/. or about "00/. per mile ; a sum utterly insufficient for the purpose, esjieeially considering the great increase of population and traffic, and the l)etter class of station accommodation refpiircd, lieyond what was originally contemplated by your J-^ngineer. The stations were ultimately built and the rolling stock provided by the (Company itself, T hamling over the amounts of the estimate for those oljjects out of the contract moneys. Tiie extra expeiuliture upon tlie Line was oocasioncd, not oidy by the insufficiency of the estimates in such matters as these, but by the extension of the liiiie through a very valualde pro|)crty in the city of Toronto, for nearly a mile and a half beyond the point to which my contract extended, in order to form a junction with the Grand Trunk Lino. The works upon the Hamilton and Toronto Railway will bear comparison Letter from George Wi/thoH, Enq. 76 with any Line in (!iuiat«t liin(! I'M r nKido in ('anada. Tho lnv('>li;,'atinn Cunnnitlw alni) iv|iiiit, witli ri'^ind to fliin Ifailway, that • Mr. Lain;; liaii entered into a partnerxliiit agnenicnt with Mr Wytlies' I'dc the eonHtrui-tion of the I/iiic. I wan a|i|ilii'd to to lucunie the eontiiu'tor I'ur tin' fonr lor a contractor to submit his arrani;emcnts to third partii's. The Line, so far as my sliare of the works was concerned, was handed over by meat the price aureed, and my share of tlie I'ontiaet was duiv executed. There was, therefore, no "deception," as the I'ommitti'c allege, tiliier upon yon or any otiur [larties, and no jiarty was prejudiecil by this sub-contract. ^\'ith rej;ard to tiic Shares, ainountiii;; to 8''>l)'"<,l">tl, which the ("oinuiittee aver to have been handed over tome, and to have been " clctir profit,"' the fact is, that these Shares were lodj^ed willi me as a security and guarantee l()r my ailvances to a foreign t'ompiuiy, and al^oto give mo ii voting power to protect my IJonds against lv\tensioiis and Amalgamations, and also subject to an aceou'.it on the completion of tlie Line. That account has now been taken, and r^2ll!t,(')(li> of the Siiares sigrced to be returned to tlie ('otupany. I am, therefore, only the holder of about .Stia.OdO of Sliares (which the ('ommittee, at page S of their Keport, declare to bo il' "no vai.ik'") ; although I still hold .S.'.Sd.lKMI (d'thc Company's Iknids, wbieii I took to (iiid the Company in funds, and which are now at ."JH percent. (liM'onnt, with little or no sale evi n at that ligure. This will ^ilow that 1 have made no " profits'' from the Lin.', but, on the contrary, a loss to the extent of at lea.-meni>, whicli wi.' bad no jiower to avert. As you are aware, their rails „erc seized l)y creditors at New ^'ork, ami that and oilier properly had, of ciuirse, to be redeemed out of capital raised for works and stock. W'itl.' all this, of eoin-se, 1 had no concern. My |iart of the contract was faithfully executed, and the money whicli passed through my hands was duly vested in the Li nc. Li'ftcrs from George Wylhes, Esq. 77 Adi'tinci' of }[oii(i/ from Fnc TauhI S/inns. Aitlntpix. T\w Coinmittoi; in tlieir llo|)()rt under tlie lioiuling of "Free Liuul Shiirca,'" stiitc tlcit I *' npiillcil to the (ireut ^^'e.y eredilors, liad given bills, s^ome of which became due in .Inly, iS.')7. To meet these bills, the Agents of the Detroit and Milwaukee pressed the Directors of the (neat Western Comiiany to make them an advance in anticiiiation of the money expected to be derived from the Kree Land Shares, but this application you deemed it proper to refuse. The Agents thenapiilied to me to advance them l'(),(H)()/. to enable them to meet these bills and save their credit, which I did, and they agreed to deposit Detroit and Milwaukee lionds us security with the Great Western Company, who ultimately consented to pay me over the amounts derived from the Land Shares as they accrued, in discharge of this advance. The (!,0(t()/. was the first instalment of this payment ; 9,01)0 was afterwards paid me in several sums, and as the Free Land Shares were not taken by the public to any extent, I liad great difliculty in obtaining the balance; indeed, I did not get my money repaid mc for upwards of two years. I cannot imderstand how the Conuuittec can infer or impute that 1 received any benefit i'rom this transaction, which consisted of an advance of capital by me to save the ci nlit of the Company, aiul which terminalcd iu uiy recovering my capital with extreme difficulty. I am, Gkntlemkn, Yours truly, G FORGE WYTIIFS. To til" DiUKCTOUS oflhr GllEAT WtlSTEHN RaII.WAY (/CaNADA CoMPANY. KkuiaTK, .Wnuinlni- 'JO, It^OO. Gi;nti,1'.mk.n,— TIaving heard from the late iMr. Peter Huchannn that the Conunittee of Investigation of the Great Western Railway of t"anada Com- pany are prosecuting so'.ne in(piiries relative to my contract for the construction ,.f tiie Hamilton and Toronto Hailway.and understanding that some (luestions have been raised by them, though without any communication with nu', I beg to say (in order to prevent any misapprehension a-< to my position as respects such contract^ that I am perfectly wiUinu' to open the whole of my accounts (or the construction of that railway, an.l to refer the same to arbitration in the usual nnuuuM-, as providc.l tor in my contract, and I will undertake to refund whatever the arbitrators may decide I have been overpaid, if anytiiing, provided your Coojpany will on their part un.h'rtake to pay me such -urn, if any, as the arbitrator may determine that 1 am fairly entitled to receive iu excess of the moneys I have received. I aui,(»i:NTu:Mi'^.\, Yours truly, (JFORGF WYTIIHS, 78 Letter from Robert GUI, Esq. ApI'FXPIX. LiriTKU FROM liOBP:KT GILL, ESQ. PuEsinENT. LowDox, March l^lli, ISfil. To the R0AI!I> (/ DlHKCTOUS of the GkKAT WesTEKN UaH.WAY COMI'ANY. Gkn'Ti.ksikn, — I was appointcJ a member of the Committee of Knglish Sliivreholders of tlio Great Western Railway Company of (Jaiiada, at a General Meeting held in London, in April lsr)4. Tiie other menil)ers of the Com- mittee were ^Ir. S. Lainjj, ^LT., Mr. J. Baird, M.P., Mr. J. B. Smith, iNI.P., Mr. (i. Harris, Mr. (\ Makins, and tiie late Mr. Peter Bnoluman. Tlie Cunnnittec was appointed for the purpose of eondiictinj^j negotiations with otiier Companies, of corresponding with the Directors in Canada, and L't'neraliy ol" watching the interests of the P^nglish Shareholders, and reporting to tiiein from time to time iijion matters reciuiring their decision. 1 was elected an Knglish Director of the Company in October 1S,54, but I objected to 1)0 considered simply a Director by courtesy, having no power vY uutliority attaching to the position, and at my instance, in ^lay IS.'jo, an Act was obtained of the Canadian Legislature giving English Directors the power of voting by proxy at the meetings of the Board in Canada. Mr. Laing disciualified as a Siiaroholder in March IH')'), before the power to vote by proxy was secured, and upwards of nine months before the settlement was made with Mr. Wythes, wliich was only arrived at after a protracted correspondence, and a lung negotiation. It is not true, that "' after having discpialilied, Mr. Laing accompanied " Mr. Wytlies to the Board Meetings, and ailvucated Mr. Wythes' claims," as tiie Committee of Investigation have asserted, but he came to the Hoard to give us intormation relative to the Hamilton and Toronto Railway Company, whicii, troiii tiie fact, of llie miijcjrity of the (ireat Western Board knowing nothing of its early history, we were much in waiit of. I am. Gentiemen, Your obedient Servant, (Signed) ROBERT (;1LL .jt^uii^t^ Letter from J. B. Smith, Esq. M.P. 79 JuETn^li from J. B. SJIITH, P:sq. M.P. to the Directors. Al'l'KNDlX 105, Wkstbourne Tebb,vce, March 7, IStil, To the DlKECTORS (j/'ort of tlic Committee of Investijiiitioii of the Great Western liivilway Company of Canada, relating to the period when I had the lionour of aeting as Chairman of the Company in Knghmd, viz. Nov. (Uh, 1855 (and whieh oHice I resigned 5th August, 1850), several misre[)resentatioiid of facts, I request you will furnish nic witli the means of eorreeting them. This is due to myself, as well as to the gentlemen who acted with me at the IJoard, none of wiiom compose the existing Hoard, with tiie exception of Mr. Gill. I attended a meeting of the (^ommittce of Investigation at their request, but not having any previous intimation of the points on which they desired information, 1 was unable to speak of transactions occurring four or five years ago with the precision wlilch I should otlierwise have been able to do. Had I also been informed of the presence of a shorthand writer, my evidence would have been of u less desultory character than it was. I know not whether it bo the intention of the Committee to publish such evidenci!, without taking the usual course, of sending a printed copy to the examinee for correction. 1 am. Gentlemen, your obedient Servant, J. li. SMITH. RKPOUT (IF TlIK OOMMITTKK OV lNVKSTIiiATk)N. A. " The consiilei'iUiou of tliuso oliiiiiis (viz. the claims of Wylhcs iiiulcr tlio Ila- niiltuii iiiid Toronto contriiit) by llie f.ondoii Directors of tlie Groat Western Coniiiiuiy, cunimonceil in the early ])art of \.tir. Wytlies' claims, it a|qieared to the Knglish I'oard that there were only two course.-i open to them, vi/., either to compromise the claims, or to leave tliosi; claims to the !irliitr.ition of Mr. Hobert c^tephen.son, us lirovid'il in Wytlies' contract. Tlie I'loard were of o[rmioii that it w.as most e\peJieiit, ill the lirst instance, to atteiiqit the former course, and that a settlement could be arranf;;ed with more fieility lietweeii parties ,(UiO/. viz. — For additional land for a double instead of a single line . . ilO,000 One year's interest paid to llauiilton and Toronto Sharo- holders, Mr. Wythes having paid three years' interest and only contracted to pay two years' interest 13,000 Interest on rolling stock and stations 2,500 Superiority of the Hamilton and Toronto works over those of the Croat Western of Canada. C0,000 Total . . ^85,000 82 Letter from J. B. Smith, Ilsq. M.P. .Vri'UNi'ix. KErOUT OK TIIK ((tMMITTKK I'K INVKsTUiATldN. KKri.Y. It ia clear, tliat tlio Coniinittoo of In- vcstii^atioii must, or mii/lil to liuvo known of the above sfiitonicnt. Mow cl.su could thi'y liavo cxaniinoil Mr. I.aiug (sru ques- tion 'JliO in their Iteport) ujiou the exaet iij;ures, eoinprisin;^ tiie above items, cou- taineil in Mr. Wylhes" statement of liis claims t F. "And diiriui;- tln' iiroi,'ress of tlio set- F. Having lieard, that Mr. Lainp; had tlement Mr. l.aiiii:. altlioiii.'li no Ion-era been interested in the Hamilton and 'I'li- DiiH-etor. nor even a Slian'holder. aeconi- ronto contract witii Mr.Wyllies. I objected li;inied Mr.Wvihes to tlie Board meetin;_'s, to id:, taking any part in the discussion of ••ind. as the Comndttee ar.' inl'.irnicd. that (juestion. Mr. Lain-- aeknowled^jcd. advocated his claims. tiiat !».■ had formerly had an interest in the contract, but tiiat it had ei';i.>eii. .Mter tliis time, iiowever, he never, as .i liireetor, took any jiart in these tliseus- s'.ons, but dis(iualified. Wiicn Mr. Laing ceased to lie a Direc- tor, he came l)efore the IJoanl in a new (•iiitvarior ; and if, on any oceasicjn. lie ae- comjianied Mr. Wythes. which is doidit- ful, tiiei'e could be no objection to his doini.' so; he did not advocate Wythes' claims. 'I. "'riir (.'rrat \Vester;i 1 'ireetors sub.se- (I, It was necessary to liiiisii tiie I ■■ j, qucntly expended upwards of Td.O'")/. in and boin;j;joined,oiioneside, willi tliedrcit hnishing the work, making a total cost to Western at Hamilton, it w;is incomplete the Sliareiiolders of 'JO.'ITl'A .'i,.-. over and until it was joined wiili ilie (.Irand Trunk, .•diove the contract price of ■'t'J^Ji'Ui/. fur and other iJailways, at Toronto, whieli ii whieli Mr. Wythes had undertaken to ajipeared, from the contract, Mr. Wythes finioli and complete the Line." had not midertaken to do, aial henrr the increased expenditure incurred, in extrud- ing the lliiilway about a mile and a half into tiie city of Toronto, and ]iroviding the ri<]uisite stations, am! rolling stock, lieyoii-l the limited iju.antity originally (irovided for. J. 1!. S.MITH. III. DETROIT AND MILWAUKEE. 13, KiNd's AiiMs Yahn, MooiiiiATi: Strkit, juhi wh, nr,c,. Dear Sih,— Belicvinj,^ I am now able to rcmovi; nil the doul.f.s whieli A.pkndix. |.i evented tlie .sucee.« of the api.licatioii oC the Detroit and Milwaukee Conioaiiy to the dreat Western lor asi^'istaneo to eompletc their liinc, I wi^h again to bring the matter before yonr Hoard. Our Line was opened to ()\vas?o, "S miles, on the l#t inst. The traffic for the montli of Aiiril averaged per week |.er mile 17/. :U cnrr ney ; and for May, 21/. currency ; the returns for June are not yet received, but will be nearly ecjual to May. West of Owas-io the Line is graded, bridges and culverts made, and the iron purchased, and now being laitl, for a tlistancc of '-^5 nfdes. We have now an ..Ifer from Mr. Ueorgv Wythe.s, of Kelgate, who is well known to your P.oard, to build and complete the balance of the Line and receive his pay, one half in ca^h and one half iu the shares of the Company at par. If we nud^e this contract, it secures the completion of our Line at an early day, and within our estimate of (;,.")<»()/. per mile. Uut to do this, it is necessary for us to place 2.> >,<)()(»/. of onr bonds. Under these circumstances, as all doubts as to the cost and early com- pleti.m ol our road will be removed, and because 1 believe the interests of your Line and our own will be best sub.served by a cordial co-operation, I am willing, on behalf of our Company, to carry out the trafHe arrangement here- tofore made, if you will place the above amount ol' our bond.4 at par. This can easily be done by your lioard saying, citlier to your Sliare- holders or the i)ub1ic, tliat as, under the traffic arrangement made with us, sufficient receipts of our Line to pay the interest on these bonds will come into your hands, you will bc^ responsible for the payment of the same as it tails due. If we conclude this contract with Mr. Wythes, our Line will be opened to Ada, M(t miles from Detroit, this year, and the remainder early in the year 1S,57. 1 need not say to you that time is very important to us. "Will you be kind enough to lay this letter before your Board, and say to them, I am very anxious to receive an answer, at the earliest moment j)0.«ible. I am, very respectfully, Yours, &c. (Signed) H. N. WALKER, .. ,. 1. t. . Pre-iident, Jic. Tv 15. Bake'i, l^.ny, ScfnUvij. 81 Detroit (out Milwaukee. — Letters. lUiilATr, Julij l(3//(, 1S30. AiTUM Ik. Deau Sill, — I licg lo inform you I sluill not bu able to atteiiil tliu nicctiiiLr to lie hcKl to-morrow ; Imt 11' I bluiuKl, I i-iimuit ^ay iiiorL- relative to till.' construction ol" the Detroit and Milwaukee Railway tlian rci)eat what I have already statrd, viz. that I am willing to enter into a contract to complete that Line lor ."ii >( ),< i( )0/. ; payment to he made half in ca^-h, am! the other half in the shares of that Company, and 1 would also take r)ii,n(iii/. of bonds. I consider that the scouring the traffic of this Line is an advantageous opportunity to the (ireut Western Company which they may never see again, and induces luc to make the above otfcr, or I should much rather be without the contract, if any other party will take it on .-ame terms. 1 am, &c. (Signed) tiEOKUE WYTIIES, //(./• J. T. 1VITSI)N. To C. I'.AKKB, t;sg. Tni; (iiu:.\T Wi:sti:kn II\ii.wav cif Canaua, 'JP, Ae.iriN I'uiAn.s, I.ondok, Awjual ■',', 1S.")15. Gentlemen, — For the purpose of carrying into effect our Contract with .Mr, ^Vythcs, we request, out of the moneys paid into the London Joint-Stoek liank on our l>onds, that you will pay for the rails, fish plates, and bolts, amounting to about seventy thousand pounds, and will pay the residue, being about thirteen tliousand pounds jicr month, commencing the ^Sth of Sci)teml)er next, and upon the eighth of each month following. These payments should be made to Mr. Wytlies, whose rcceii)t will be a .•juflicient discharge. We are, respectfully yours, (Signed) II. W\ W.\LKKK, Pris'uhnl uf Oil Ititruit and Atilwiuik't Ooiiii'iiiiii. Tu K. Gill, Ksq. aii'l \. Bkattie, ly, Auntiii Friari. LosDON, iSe^i(f»i6er 6, 1850. Dear Sirs, — Referring to the annexed letter of Mr. II. W. Walk(;r, 1 have lo rcijuest you will cause the monthly payment of thirteen thousand pounds (13,(JUU/.) to be made to my credit at the Commercial Hank, London. I am, dear Sirs, Yours truly, (Signcdj GEORGE WYTIIES. To Messiis. lloDBRT Gli.r. anil A. lU.AniB, Gnal Wtakrii Ua'dway of Vauad'(. IV. STORES. 'tv thr PiiEsinr.NT awl Diufatous of ihc Guhat Westiihx R.vir.WAV ok Canada. Moni.i;v'a IIotim., Ciimiing Ciioss, CiKNTM'.MKN, — Hcforo iiiy departure for Ciinada I have felt it a duty to \i the meniory ol' my late I)rollier, Mr. I'eter Hiieliaiian, wlio aeted as London Agent under a power of attorney from tlio Directors in Canada, and to Mr. Samuel Laing in his absence, to address Sir C'iiarlcs Wood the letter of whicli I send you a copy. And I now write you to express niv hope that, in your ulHcial reply to the Report of the Connnittee of Investigation, you will not omit to do Buchanan, Harris & Co. of Ijiverjiool, Isaac Buchanan i Co. New York, and Harris, Law & Co. Montreal, the justice to explain that, although some diiferencc of opinion now exists on tlie subject of their charges for services to the Company, which a former lioard paid, the present IJoard have never meant to insinuate that the firms in question charged more tlian at the time they considered just and fair, or woidd again be willing to do the same service for in siniilar circumstances. I may mention that when, to our great surprise, we heard of our charges being called in (juestion (although our accounts, which were rendered on the sailing of each ship, had never been objct'ed to, and for years had always been regularly paid), we brought tiie subject before various shipping houses in Liverpool of the highest standing, uho it the time were cognisant of the harassing nature of our services (the names of whom you can have at any time by applying to I'eter Buchanan & Co. Glasgow), who idl concurred that we hail not been overpaid. The business was not one of our seeking, being to the I'rcatest possible extent disagreeable and resp:.nsible, and such as we would not have undertaken tor any other railway, or even for the Great Western Hallway, had not Mr. Peter Buchanan been London Agent for the Company. But in the circumstauces (and as being the only house with establish- ments at all the different ports of sliipping and unloading), wc did not feel justified in refusing the agency at the critical moment of the opening of the Railway, when no reclamations on insurers or forwarders could have compen- sated the Railway for its rails and rolling machinery being lost or delayed. Indeed the work to be done now by an agent bears no comparison with that which we had to do at the opening of the Railway, for, as you are aware, the rolling stock is now manufactured in Canada and the United States, which HO S/orffi, Apppndin wuk formerly rctjulrcd to be importi'd fVoni Kngland, tlir difliciilt nnd dan- <;orous s'liipiilii.: ;iTid uiiloadiriE: of whioli v/civ aI\V!iy« at tlic risk of tlic uliippoffl ; wliili* even tlio ((irrcupondciK^e witli and personal appliciitionn to slilpowncrB in every part of (Jroat Britain were sueli as eotild not have been foreseen, as tlic lidMs of tlu' ves!< voueUers from the Government, but the correctness of the charges are easily ch">ked by reference to the J'rovincial Tariff of Customs. And as to our not having as yet taken at;y legal measures to recover the ■ iiall -sum (."{SU.) still owing to our Liverpool firm, we have not considered this worth our while. You nuist be aware that the Railway Company has Tio legal existence in England, and that had we brought an action in Canada, we siiould have had to produce frt^ni this country all our voucihers and witnesses at an expense probably greater than the amount to be sued for. I have the honour to be, Gentle.men, Your obedient, humljlc Servant, ISAAC RUCIIANAN. I CORRKSI^ONDENCK WITH TITi: COMMITTEE OF INVKSTKiA riON. No. I. 1(1, ToKKNiioi'iir. Y\nv, T.ondos. ;o.-(. %, 1810, Siu,— There arc several matters upon which it U dosirablc to receive Vitkndix. explanations from you, and wc beg to request that you nil! fav., ,v us with an early rpp^'n^'ne"* to meet the Committee of Invc^ti-U..* at the (Company's offices. \Vc shall feel obliged by your naming a day dui convenient to yourself. Wc are, Sec. cek if (Signed) COLEMAN, TURQUAND, YOUNGS, & CO. UODEIIT OlLI., Ksq. (Mimanofllu llreat We>iter,i liaihwj Comptooj oj Canada I. ■mdo.x. No. II. Gbeat Westehn Uailwat of Canapa, QREsirAU Hodsk, Ochber 31, 1860. Dear Siiis,— In reply to your letter of the 25th inst. requesting the attendance of the Chairman before the Committee of Investigation, I am desired to inform you that ho has laid it before the Board of Directors. They instruct mc to say that every facility has been afforded to the Committee to inquire into the past management of this Company, of which the acts of the Directors form a part, and are before the Committee m their written proceedings. , «- i ♦!,„ If any infonnation is required which these proceedings do not afford, the Board are most ready to furnish it. in the form of a reply to any written (luestions the Committee may lay before them. But they do not think it would be consistent with what .s due to their own position or character to allow the individual members of the Board to be subjected to a loose interrogatory. 1 am, Deau Sms, Your obedient Servant, (Signed) Messrs. Cole-man, Tlbijland, Yolnus, &: Co. IC, 7'uti/iAoiiSC Yard, I'.V. BRACKSTONE BAKER, Secretary.] , >.KS' IMAGE EVALUATION TEST TARGET (MT-S) ^o 1.0 LI u 114 "^ III lAO i muLii^ ^ 6" » Photographic Sciences Corporation 23 WIST MAIN STRUT WIUTIR,N.Y. USSO (716) •72-4503 v\ i& v^^ v\ 88 Con'cspomJciiec Api'KNPIX. No. III. 10, ToKENliorsi: Vaimi, Li-ndon, Xuirmbrr 1, 1860. Deau Sib,— In reply to your letter of yesterday's date, wo are requested to inquire whether the Committee of Investigation are to understand that your Chairman (Mr. Gill) refuses to appear before them to give information, and to answer such questions as they may consider necessary. Wc need scarcely remark that in consequence of Mr. Gill's early connexion with the Company, there arc matters in relation to which the Committee wish to receive information and explanations from him, of which the other members of the present Board can have, officially, no knowledge. Wc have to request the favour of an early reply, as these delays interfere with the completion of the Report. We arc, Dear Sir, Yours truly, (Signed) COLEMAN, TURQUAND, YOUNGS, & CO. BnACKSTONE Baker, Esq. Sccrcturi/ nf the Omit Wattm Ilaifwnii of Caiiatla. s No. IV. GiiEAT Wesiehn Kailway of Canada, OnE-SHAM House, yorember 5, 1860. Dear Sirs,— I am desired by the Chairman (Mr. Gill) to acknowledge the receipt of your letter to mo of 1st instant. I am instructed to repeat, that Mr. Gill is ready to afford you (in answer to any specific questions in writing) every information respecting matters on which you suppose he has special knowledge; but, with full respect for the Committee, the Board have decided to decline consenting to any individual member being subjected by you, on behalf of the Committee, to a long, loose, private interrogatory without any defined object. I am to add that the Board meet on Wednesday next, at 12 o'clock, should the Committee wish to have an interview with them. (Signed) SlEssiis. Coleman, Tihqiand, Vounqs & Co, 10, Tolmhuu.^ Yard, E.U. I am, Dear Sirs, yours truly, BRACKSTONE BAKER, Secretanj Correspondence. 89 \ No. V. Iti, Tokenuou.se Yahd, November 6, I860. _ Dkau Sir,-\Vc 1..1V0 t.) acknowledge tl.o receipt of your letter of the Ap.,.^,,, .>th instant, and are rcjuc^ted to rei.ly that the Committee of Invcsfi-.atio,. appointed by the Shareholders, regard it as a refusal on the part of Mr" Gill the Chairman of tiie Company, to meet them. We are, Dear Sih, yours truly, (Signed) COLEMAN, TURQUAND, YOUNGS, & CO BllACKSTONE BaKEH, KsQ. fiteretary of the Great Western Uadaay of Canad.t, Gmham Uouse. No. VJ. GnEAT WesTKUN JtAII.WAY OF CvNABA, OnMllAM HoUSE, E.C. London, February 28, 1801. Dear Sirs,— 1 am directed by the Board to re(iuest you will now return to this Office the books, vouciiers, and papers relating to tiie affairs of the Company, in pursuance of your letter to me of 21st November, i860. I am, Dear Sirs, yours truly, (Signed) BKACKSTONE BAKEK, Mkssus. Coi.eman, Ti:ii(jOAND, YouNiis & Co. Stcreturu 16, TokenhouH Yard. No. VII. Great Western Railway of Canada. 10, Tokenuou.se Vahd, K.C. London, Fchr.mru 25, 1861 Dear Sir,— We have been requested to submit your letter of the iU instant to a meeting of the Committee, to be held on the 27th instant. We are, Dear Sir, yours truly, (Signed) COLEMAN, TIJRQUAND, YOUNGS, & CO. Brackstone Hakeh, Kmq. Stwetary, Great Wentcrn Uailimij of Cunada. Vli-, Grcsham Home, li.V. No. VIII. London, Februun/ 28, 1861 Dear SiR,-Your letter of the 23d instant, addressed to Messrs. Coleman, Turquand,loungs, and Co. re.juesting the return of all books papers, &c. has been laid before the Committee, and I am requested to inforni you, that atter due consideration, the Committee have decided to request Messrs. Coleman and Co. to retain possession of those documents. Should the Directors require inspection, they will be freely open to them for that purpose. 90 Corvespondcnce. Appendix. Tlio (yOininittcc fcol satisfied that tlic course they propose cannot incon- venience the Directors, or yourself, anil that it will meet with the approval of the Shareholders. I am, Deah Sir, Youra truly, (Signed) II. H. CANNAN. K. IUkkii. Ksq. ftcntarii. Greni \\\»tcrn Kail way of Caiidihi. » No. IX. QitKAT WEsTEnif Kau.wav of Canapa, GiiKsiiAM HorsE, K,C. T.nNlioN, ^fi. Can of }tia^i:<. CoUmnn. Tiiniiuiiul ,{• C". 16, Toktnhoittte Yanl |Cnpy referred to.l No. X. Gur.AT Westfu.n Uaii.wav, ([vMii.ton, (.'anaha West, Dear Sir, —Referring to our c(jnversation tlii^ morning, aiul to the full powers eonferred by the Sliareholders on tlie gentlemen composing the Com- mittee of Investigation, and Iiy them deiegateil tons; and liaving regard to the e.vpe?is»! and inexpediency of protracting our stay liere i)cyond the time when wc siiall have completed the local examinations which can only be condui!tcd in this country, we i)eg to incjuire wliethcr you have any ulijcctioii to (lur taking with us to tiic London Ollict; such hooks and [japers as wc may dceu) absolutely necessary to enal)le us to complete our inves- tigation ? We are. Dear Sin, ^'oura truly, For Partners and self, (Signed) ,101 IN YOUNG. I'. .1. lliiVDuEb, Ksq. Manaijiiuj Oinctur 0/ (/nut Wmlirn Railinii/ if Canmhi. Cot*t'espondence. 91 [Copy referred to, J No. XI. i\WAt Wektbiin Railway, Manaqinq Dirbctor'n Office, Au(IHst 25, 1860. Deah Sih,-I am in receipt ol'your letter of tins day's date, roferrin- to Apppndix. our conversation this morning, in regard to your taking with you to the London Office of this Company certain hooka and paper:^ necessary to lie examined by you in completing the inquiry confided to you, and I beg to say, that, looking to the full powers confided by the Shareliolders of this Company to the Committee of Investigation, and by them to you, I will agree to tlie course you propose. You will, of course, give me a full receipt for all the books and papers you require to take, and undertake to give them all up again to the Directors of this Company in London. I am. Dear Sir, .Idii.N YoiNo, Ksq. Yours faithfully, (Signed) C. J. r.RYDGES, Mitiiagimj Dinctor. [(.'ofiy refeireil td.] No. XII. Hi, ToKENiioi'sE Yard, K.C. l.oNlio.v, A'orcmlier 21, 1860, Dear Sin,— In reply to your letter of yestcnlay's date, the books and vouchers referred to liy Mr. Keynolds will bo returned to the Company here in accordance witii tho arrangement made with Mr. Brydges, as soon as the Committee have completed their lieport. Wo are, Dear Sir, Your obedient Servants, fSigned) COLEMAN, TURQUAND, YOUNGS & CO. U. Dakeii, Ksq. .">V (■/■{?« iv/. (Iniit W'ltiid'ii Ilitihi'U)/ 0/' Ctinada, (ireshum House. rip' 92 Correspondence. APPBNDIX. No. XIII. LoNUON, March A, 1861. Dear Sib,— In reply to your letter of the 2(1 instant, I beg to say, that tlio Committee, in the exercise of their discretion, and of the "full powers" Liitrusted to them by the Shareholders, have resolved that the books and papers shall for the present remain in the possession of Messrs. Coleman and Co. In the first place, the Committee will require lurthei reference to them and in the second place, had their powers been less ami)le than they are. 1 should, under the circumstances, have taken upon myself the responsibility of impounding all documents until the pleasure of the Shareholders should be ascertained. I am, Dear Sir, (Signed) BUAOKSTONK BaKKU, EsQ. Serretary, Unat W'tfiern RaUn-aij vf Vanaila Yours truly, H. H. CAN NAN, chairman of the Vummitlee nf /iiirj/i.^afm". ■■«■'■ i