The Sun.
London, England, 1860-12-21 00:00:00

RAILIF Al INTELLIGENCE.

GRAND TRUNK OF CANADA.
The report of the London committee of bondholders in
this company states that the London directors, including
Messrs. Baring and Glyn, had personally assured the corn -
mittee that the judgment recently obtained against the
company's rolling stock was not intended to be used in any
manner hostile to the general interests of the claimants on
the line ; that it was specially designed to prevent effectu-
ally any interruption to the working of the line, which might
by possibility be occasioned by vindictive measures on the
part of small local creditors; and that, as far as could be
ascertained, the judgment would be entirely efficacious for
those ends. The committee attached at the present time
extreme importance to those assurances of the secured con-
tinuance of traffic over the entire mileage of the company.
The judgments obtained were for advances and other ordi-
nary contract debts, and to confer a legal power to seize the
rolling stock of the line. The committee conceive that a
sum of not less than £2,000,000 would be required to cover
the floating debts of the company in England and Canada at
the present time, including, say, £140,000 for overdue inte-
rest. Besides those liabilities already named, and for which
funds were required, still further funds would be needed to
provide the additional rolling stock, stations, and plant ne-
cessary to give the line a reasonable chance of competing for
traffic. The committee assumed as an estimate not likely
to exceed the truth that a sum of £2,500,000 in cash at least

would be required to discharge the existing debts of the line,
and to provide the requisite working stock. As to the working
expenses of the railway, the committee were quite convinced
that much information and a most searching inquiry were
necessary. Assuming that the working expenses were put
down at the high figure of £lO,OOO per week, it was obvious
that even the present traffic of X 16,500 per week, if maintained
for the next twelve months, would go far to re-establish the
credit and soundness of the undertaking. Such a traffic
ought to yield an available surplus of £330,000 per annum,
which would fully meet the £llO,OOO payable to leased
lines—the £187,000 interest on first and second preference
bonds—and afford a sum towards payment of interest on
the other bonds. If the working expenses could be reduced
to £9,000 a-week, this sum would assumeimportant dimen-
sions. There was the more reason to refer to this figure of
£16,000 traffic, inasmuch as it was perfectly notorious that
the Grand Trunk might have added several thousand
pounds sterling to its weekly returns if sufficient rolling
stock had been available to accommodate the demands for
freight. The committee refer to the numerous statements
which had reached them relative to the extreme inadequacy
of the payment by the Canadian Government to the Grand
Trunk for postal service. The committee believed that that
payment does not amount to £20,000 per annum, and that,
even according to the most moderate rates of payment for
similar service on other lines, the amount of the postal sub-
vention should be at least three or four times the sum now
paid. Suggestions had been made in several quarters that
one of the easiest and fairest means of obtaining present
financial relief for the company would be for the province
to consent to capitalisation on reasonable terms of the an-
nual amount of postal subsidy to which the company might
be shown to be justly entitled. They state that the Govern-
ment of Canada in the course of last month (November)
appointed a commission of three persons to investigate the
circumstances of the Grand Trunk line, and to report the
result prior to the meeting of the Canadian Parliament in
February next. The commission was composed of Mr.
Grant, manager of the Northern Railway ; Mr. Langton,

the Auditor-General of the province ; and Mr. Trudean, a
gentleman employed under the Board of Works. The com-
mittee was led to believe that the nomination of these three
gentlemen was a course which was regarded in Canada as
likely to lead to valuable results, and it would certainly be
the means of clearing up many questions at present misun-
derstood. The great object to be now accomplished was the
raising of £2,000,000 or £2,500,000 sterling for the purpose
of liquidating present debts, and placing the line in an effi-
cient condition for meeting the requirements of the traffic.
This committee felt strongly that the Grand Trunk Com-
pany had a right to look to the Canadian Government for
aid in this extreme difficulty—a right founded upon fair
and reasonable interpretation of the conditions and circum-
stances under which £10,000,000 of English capital had
been spent in conferring upon Canada the best and most
perfect system of railway transit to be found in North
America. The originul prospectus, issued early in 1853,
bore upon the face of it a statement that the two leading
London names in the direction wore there inserted as agents
of the province of Canada, and directors of the company,
on behalf of the Canadian Government. A traffic of £25
per mile per week was promised on the completed scheme
of say 1,000 miles, including the Victoria-bridge ; and in
support of this statement an official despatch, signed by
Lord Elgin, as Governor-General of the province, was made
part of the prospectus. In the several applications which
since 1853 had been made by the company to the Canadian
Government for facilities and for aid in prosecuting the
works, the moral responsibility of the province to the un-
dertaking had been uniformly urged as the basis of those
applications, and that moral responsibility had been in
effect admitted by the language of the public acts under
which assistance had been rendered to the company. And
as regarded that assistance, it was most material to bear in
mind that a sum at least equal to two-thirds of the whole
of the Canadian Government advances, had been, by ex-
press stipulation of the Legislature, expended upon lines
which no capitalist would have undertaken on merely mer-
cantile grounds. The real contributions of Canada there-
fare, instead of being £3,000,000 sterling, could not be
justly said to greatly exceed £1,000,000. The committee
were quite prepared to find that errors and extravagance
might be detected in some portions of the policy pursued
in the construction of the line. But these were misfortunes,
perhaps inseparable from the existence of so vast a work,
carried on in new and remote regions, and depending so
largely upon the adoption of methods and expedients
previously untried. The errors, however, whatever they
have been, have fallen on the share and bond holders.
The province had had the full benefit of the continuous
expenditure, through several years, of vast annual amounts,
and it had obtained secure possession of a line of railway
transit which, under any circumstances, must promote
iapidly and largely the growth of every element of wealth
and greatness. The committee were fully aware that
among a large section of the poople of Canada the Grand
Trunk line was regarded as a vast means of unfair influ-
ence wits/clod by one political party against another. It was
said that hitherto the line had failed to procure adequate
traffic because it had been managed not on political grounds,
as a concern intended to pay a dividend, but with extreme
negligence and wastefulness. In many quarters, where
apparently the best means of information existed, it was
alleged that under vigilant control, and dealt with purely as
a mercantile investment, the line even at present would
yield a revenue approaching in some important degree to its
annual obligations. Tho people of Canada had the fullest
right to insist upon the most skilful and most economical
management of the line; and their interests and the inte-
rests of the share and bond holders in England were in this
matter wholly identical. Tho committee wore assured by
the London directors that no obstacle raised by them should
impede the immediate introduction of reforms ascertained
to be necessary ; on the contrary, the London Board were
fully prepared, as stated in their last report of Oct. 27, 1860,
to give their best assistance towards the institution of a
" thoroughly searching investigation" in Canada, by means
of "one or two gentlemen well versed in railway manage-
ment," in whom the " shareholders and bondholders of
every denomination" would have confidence. The London
directors had reiterated the expression of this desire to the
committee, and had invited them to suggest suitable persons
to be entrusted with such a mission to Canada. The com-
mittee carefully deliberated on this subject, and theyarrived
at the conclusion that, considering the unfavourable season
of the year and other matters, it would not be desirable to
send out any English commission until after the approach-
ing meeting in London had been held. The committee were
quite convinced that it was indispensable to the future wel-
fare of the company that an efficient commission of inquiry
and investigation should, early in 1861, be sent to Canada
from this country, fully empowered by a vote of the share-
- holders to eXtilllillo thoropghly into the present condition