The Sun.
London, England, 1867-04-19 00:00:00

GRAND TRUNK OF CANADA.

The half-yearly general meeting of this company
was held yesterday at the London Tavern ; Mr. E.
W. Watkin, M.P., in the chair.
Mr. J. M. GRANT, the secretary, having read the
notice convening the meeting, the report, an abstract
of which has appeared in The Sun, was taken as
read.

The CHAIRMAN, in moving the adoption of the
report, said that since the autumn meeting they had
gone through a period of difficulty and trial ; he
believed that the lessons experienced in the last 12
months would not be lost upon them, and he hoped
that a sounder and more satisfactory state of things
would take place in Canada. They had two distinct
invasions from the United States, so that various
Place- in Canada looked more like a great camp
than places of trade and industry. This state of
things bad affected the trade and commerce of the
country, and certain classes of receipts on the rail-
way had fallen off. The expenses of management
and working were also increased. Statements had
been quoted from a Canadian paper, in a leading
journal, reflecting on the condition of the perma-
nent way on the Grand Trunk in reference to an
accident that had occurred on the line near Quebec.
The statement in the Montreal paper was to a great
extent a pure fabrication, and the paper had to
apologise for that statement. The cause of the ac-
cident was a broken rail, which occurred in conse-
quence of a very severe frost. Steeled rails had
been laid down at that place as au experiment; un-
fortunately the steel laminated, which caused the
engine to go off the line, and the fireman was
killed. But it was entirely untrue that a verdict of
manslaughter had been given against the general
manager. With regard to the traffic receipts, in-
cluding those of the Buffalo and Champlain lines,
they amounted to £719,370, against £714,780 for
the corresponding half of 1865, showing an in-
crease of £4,590. Deducting the ordinary ex-
penses of £413,608, against £395,674, on which
there was an increase of £17,934, there was a
balance of £305,762, against a balance of £319,106
in the corresponding half of the preceding year,
showing a decrease in the balance of £13,344. The
proportion of renewals of the permanent way and
works debited to revenue was £72,393, against
£89,689 in the corresponding half of 1865, leaving
a net available balance of £233,370, against
1229,417. In the general receipts they would find
that £16,334 had been received for live stock in
the past half-year, against £36,012 in the corre-
sponding half of 1865, showing a falling off of
nearly 120,000. This arose from the termination
of the Reciprocity Treaty between Canada and
the United States. One great cause of the increase
in the working expenses was the exceedingly high
price of materials and labour. It was computed
by Mr. Hickson that the increase in the price of
materials in the United States had been 90 per cent.,
and in labour 60 per cent. They found that the
working of the Eastern Railway of Massachusetts,
which ran through part of the same locality as the
Grand Trunk, had risen from 51} per cent. in 1863
to 681 per cent. in 1866 ; and that on the Erie
Railway, which was well known, the working ex-
penses for 1866 amounted to 70 per cent. Ile
thought, however, that there would soon be a re-
duction in the price of materials, for be found that
on some of the English railways with which he
was connected there had recently been a consider-
able reduction in the price of materials required for
the working of railways. The price of iron rails
twelve months ago was £8 15s. per ton, they
could now be had for £6 ss. per ton, steel rails
that were £l7 a ton were now £l4 a ton, plates
that were now 13s. 6d. were now 10s. 6d., copper
materials that were twelve months ago 1255. 6d.
could now be had for 90s. 6d. Oil that was 4s. 9d.
a gallon could now be had for 3s. 9d. a gallon, and
so on for other articles of consumption. He
thought they might, therefore, hope for some reduc-
tion of expenses. They had lost £61,800 on
American currency, gold having ranged from 154 k
to 131 during the past half year, and the total loss
to the company under that head np to December
last was £290,384, and it %vas obvious that they were
perfectly helpless in that matter. Mr. Brydges, in his
report to the board, had explained how it was that
the company could not raise the rates on the through
traffic so as to cover the loss on the currency, as
had been suggested by some of the proprietors.
He had also shown that on the Pennsylvania Rail-
way the working expenses had increased from 73
per cent. in 1865 to a higher rate in 1866, on the
New York Central from 63} per cent. in 1861 to
751 in 1866. On the Michigan Central the work-
ing expenses since 1861 had nearly doubled ; on the
Eastern Massachusetts Railway from 51} in 1863
to 68}- per cent. in 1866. Under all the circum-
stances, he thought, in fairness to their officials in
Canada, that they could not have expected a better
result from the working of the railways, and it was
satisfactory to know that they had not suffered so
much loss in working as their neighbours. They
had renewed during the half-year 771 miles of rail-
way, and since 1862 they had expended £620,893
in the renewal of 698 miles of railway. They were
advised by Mr. Brydges to renew 135 miles of line
for £125,000 in the current year. They had also to
attend to the requisite renewals, not merely ou the
Grand Trunk proper, but also for the Champlain
and Buffalo and the American section to Portland.
They bad made a great many experiments in
Canada with steel-headed rails, steel rails, and iron
rails of various kinds, and they had come to the
conclusion that steel rai's were the very best for the
climate of Canada ; and with those they would have
very little breakage. It was estimated by Mr.
Brydges that with those rails laid down they would
save £150,000 in maintenance and renewals. Ile
was sorry to say that a great deal of the rails from
England had not been so good as they ought to be.
He feared there had been a great deal of specula-
tion in the last four or five years, which had inter-
fered with the steady progress of trade. He then
adverted to the deplorable state their property was
in when be joined the Board, and the progress that
had been made, increasing the net revenue from
£192,000 in the year 1861 to something like
£351,000 in 1866. They now arrived at the point
when it was necessary to increase the rolling-stock
by an outlay of about £200,000. If they were to
pay interest on all the classes of preference
bonds they must put their shoulders to the
wheel, and give Mr. Brydges the means
of earning the maximum amount of profits
which the country would afford. He hoped
they would by mutual efforts obtain such an
addition to their capital as would provide additional
engines, carriages and waggons, and improved works
and stations, to devclope the available resources of
the company. He proposed that they should consult
three or four of the largest holders of the different
kinds of securities inter which the capital of the com-
pany was divided, and see if some plan could be
devised for raising the requisite capital. The com-
pany had expended since 1862 on new rolling stock
£203,969 on new sidings, and other works £178,412,
and a further sum on wheels and duplicate parts of
engines, making together £413,000, leaving a bal-
ance of £47,000 still in hand out of the sum raised
on the equipment mortgage bonds which were issued
at 92. He then referred to the repeal of the Reci-
procity Treaty, and, he was happy to say that the
Unite! States' Commissioner had found that it
operate! unfavourably in the United States, and
under those circumstances he thought that in some
form or other the commercial relations between the
confederated provinces and the United States might
be restored. Ile also truated and hoped that friendly
relationa would man be establiAed between the
Great Western of Canada and Grand Trunk Rail-
way Companies on a permanent basis, mutually ad-
vantageous to both companies. (Hear, hear.)
Mr. BARING, M p., seconded the motion far the
adoption of the report.

Mr. M'KINLEY was opposed fo any partof the cost
of renewals being charged against capital. It was
plain that the extensive renewals should come to an
etid before they cou'd pay interest on the preference
stocks ; and according to the report of Mr. Brydges
the fails would have to be renewed in nine years,
and at the rate proposed it would take 113- years to
renew the whole of the rails. The 614 miles already
renewed had cost at the rate of £l,OOO a mile. U

they were to renew 172 miles per annum, the renewals
would cost £172,000 a year, instead of £125,000 a
year, during the three next years, as proposed by
Mr. Brydges. They had no right to debit anything
to capital for renewals. They were authorised under
the arrangement Act to renew the rails and rolling
stock out of revenue, and he hoped the directors
would not be so foolish as to pay away this half-
year £55,000 for interest on the first preference
stock, as it would be very easy for him to get an
injunction to prevent them.
Capt. TYLER, R.E., said he had a very large stake
in the concern, and felt greatly disappointed that
promises made at former meetings of the company
had not been realised. Ile estimated from the ac-
counts that the working expenses, including re-
newals, were in fact between 82 and 83 per cent. of
the receipts, while the profits were between 47 and
18 per cent. They were told on a former occasion
that those extraordinary renewals would cease by
this time, and that the net earnings would be avail-
able for dividends on the first and second preference
stocks ; and as the profits increased the interest
would be paid on the 3d and 4th preference stocks,
but now it appeared that they were to go on paying
for renewals £125,000 a year. lie was sorry to
perceive that steel rails were recommended for the
renewal of a line having so small a traffic per mile
as the Grand Trunk. In addition to £125,000 for
renewals it was proposed they should expend
£200,000 in the next two years for additional roll-
ing stock, making a charge of £225,000 a year for
those two items; with a view to provide for the ad-
ditional traffic of the International Railway, which
had net yet been commenced. (Laughter.) They
had excellent men on the board, and he had no
doubt that Mr. Brydges was doing the best he could
for the company, but it appeared to him that the
through traffic did not pay, especially when they
deducted the loss on the greenbacks. He moved,
as an amendment, that the meeting be adjourned to
that day four or six weeks ; and that in the mean-
time they be informed as to the exact position of
the whole line, and as to the rates and fares charged
on it.

Mr. E. J. lIERAPATII seconded the amendment.
He would like to know how they made out that the
new rails would only last eight or nine years, as it
was known that good iron rails had lasted on some
of the English lines for 20 years. He perfectly
agreed with Capt. Tyler that steel rails were not
required for traffic on the Grand Trunk line. He
wouldlike to know how it was that the Grand Trunk
Company had lost £61,500 by greenbacks, against
£58,000 in corresponding half last year, while the
Great Western of Canada Company only lost £48,000
against £73,000 in the same half of the preced-
ing year. He was not pleased with the management
of their affairs in Canada, and he hoped that a much
better system of management would soon be adopted.
Mr. CREAK considered that the present report
was the most unfavourable he had seen for a long
time. He objected to paying one class of preference
holders before another ; they should all be treated
alike. They had paid £320,000 in dividends since
1862, and now it appeared they wanted £375,000
for renewals during the next three years. He de-
cidedly objected to paying any dividends until the
whole of the renewals were completed. They could
now purchase iron 25 per cent. cheaper than it was
12 months ago, and it was evident they could not
make a better investment than in the materials for
the renewal of the remainder of their lines. They
were told three years ago that £70,000 a year would
be ample for renewing their line, but they had ex-
pended during that time £340,000, instead of the
£210,000 then estimated, so that they could not place
much reliance on such estimates. They had renewed
690 miles of way, and there now remained 687 miles
to renew. He wished to have more detailed accounts,
and he hoped they would have proper information
as to the whole of those questions at the adjourned
meeting.

Mr. MERCER said the directors were perfectly jus-
tified in charging /25,000 of the renewals for
heavier rails to capital out of a total outlay of
£97,000 for renewals in the past half-year. L re-
laying the line with 801 b. rails to the yard instead of
601 b. rails, they had a right to charge the additional
cost of the 201 b. material to capital.
Mr. ADAMS estimated that if they were to cut off
the whole of the through traffic and confine them-
selves to the local traffic, they would avoicl the loss
by greenbacks, and be just as well off as they were
now. He was glad to boar testimony to the admir-
able manner in which the Great Western of Canada
was managed. He could see no alvantage in the
steel rails except to give some a large contract to
supply them.

Mr. STOKES thought they should all pull together,
place the line in first-rate order, provide the requi-
site rolling stock, and help Mr. Budges to develope
all traffic that would pay them. They could now
purchase iron aL a low rate, and he believed it was
possible to roll out rails with steel on the top and
bottom welded on a good iron body, at a cost of £2
per ton more than iron rails. That would answer
admirably, last a long time, and not be liable to
break in that severe climate.
Mr. BRIDGES stated, in reply to questions, that
the articles against their company which appeared
in some of the Toronto papers were contrary to the
facts. He had known the Grand Trunk Railway
for at least five years, and he could assure them that
the condition of the railway was vastly superior now
to what it was some years ago. As to the renewal
of the line, the whole length of the railway was
1,377 miles, of which 877 miles were main line and
500 miles in branches. The original U rail was a
very defective one ; 698 miles of the line ha I been
relaid. On the main line they had 614 miles of
good T iron rails laid, leaving 262 miles to be re-
laid with new rails. As to the renewals of the re-
mainder, they would be continued on the main line
till completed, and then they would deal with the
other lines. Nothing was more fallacious than com-
parisons of the percentage of working expenses or
of the cost per train mile. They could not raise the
fares for the through traffic, as it would drive it
away from them to the American lines. It was not
likely that the loss on the currency would continue
so high as at present ; when the country resumed
cash payments the loss on the currency would gra-
dually decrease until it dis tppmre I. With regard
to the loss on the currency being more on the Grand
Trunk than on the Great Western, it arose from a
falling off in the through traffic on the Great Wes-
tern of £55,000 in the past half-year, and from the
fact that the through traffic only passed over 230
miles of the Great Western, while it passed over 800
or 900 miles of the Grand Trunk Railway, so that
the latter received a larger amount from that traffic,
and, consequently, lost more by the discount on
the currency. He hoped he might ask the
shareholders for their confidence in the execu-
tive, as they had been subjected to Fenian
raids, the attacks of Canadian newspapers, and had
other disagreeable matters to contend with, and if
they were not well supported by the shareholders it
would have an injurious effect on the company in
Canada. As to the life of the rails, he thought it
might be extended from 8 to 9 years on the main
line to perhaps 111 years over the whole of the
1,377 miles.

The CHAIRMAN having replied to the various
ob-
servations, the amendment was negatived by a large
majority, and the report was adopted, there being
four dissentients. The meeting was then made
special, and the retiring directors were unanimously
re-elected.
On the motion of the CHAIRMAN, a resolution was
adopted to the effect that the directors be requested
to consider whether any and what arraugements
could he made with advantage to the company in
regard to the general capital account, and the posi-
tion of the postal and military bonds, reporting to
an adjourned meeting to be held at that place on
the 30th May next, and that the board be requested
to confer on those important subjects with some of
the largest holders of each class of bonds and stocks.
The proceedings concluded with a vote of thanks
to the Chairman and directors, and also their gene-
ral manager in Canada.