During the Session the Act respecting the Quebec and Lake St. John Railway Company was amended so as to authorize the Company to issue "prior lien" bonds to the amount of £200,000, secured upon the whole of its railways from Quebec to Roberval and Chicoutimi, for the purpose of improving its system--including the terminus at Quebec, the road-bed, track and bridges-and for payment of certain debts outstanding and mortgages current. It was also authorized to issue first mortgage bonds to the amount of £390,000 sterling for the purpose of redeeming and replacing similar bonds to the value of £780,000 which were in default through non-payment of interest due on and since July 1, 1899. For the difference in these sums authority was given to issue "income bonds" to the amount of £468,000 bearing interest at a rate not exceeding 6 per cent. out of surplus net revenues and after payment of the prior lien and first mortgage bonds interest. By another Act the Quebec Central Railway was given power to construct a line from Scott's Station in Beauce County to a point on the St. Lawrence River in the vicinity of the new Quebec Bridge-such branch line being about 30 miles in length and passing through the Counties of Beauce, Dorchester and Levis. Permission was accorded to issue bonds, but they were limited to a total issue of $20,000 a mile. Power was also given by another Act to create certain securities in exchange for its present income bonds. The incorporation of the Quebec and James Bay Railway Company was an important matter. It was proposed on February 28th, passed the House on March 25th, and was accepted by the Council. The Provisional Directors were the Hon. R. R. Dobell, M.P., the Hon. J. A. Paquet, Senator of Canada, the Hon. P. Garneau, M.L.C., Mr. J. G. Scott, Mr. Wm. Price, Mr. John T. Ross, Mr. Gaspard Le Moine and Mr. B. A. Scott. The charter was for the purpose of constructing, equipping and operating a railway from Quebec, or Roberval, on the Quebec and St. John Railway, to a deep water harbour on James Bay at the mouth of the River Nottoway. Power was also given to do dredging and to build, own and navigate steamboats, steamships and ice-breakers on James and Hudson's Bays and other waters reached or touched by the railway or its connecting lines. It was claimed that such construction would be of much public advantage and help in the opening up, settlement and development of the great northern region, while also proving an important feeder to the Intercolonial Railway. The Company was given power to amalgamate with the Quebec and St. John Line and to construct a branch from some point on that road to the Saguenay River. The capital stock was to be $1,000,000, and British subjects and aliens were to have exactly similar privileges in control of the road as shareholders or officers. Power was given to issue mortgage bonds to the extent of $20,000 per mile, and they were to be a first and preferential claim upon the property and rolling stock of the Company. After amalgamation with the Quebec and St. John road, similar powers were accorded in connection with such additional mileage. The Atlantic, Quebec and Western Railway Company was also incorporated to construct a line of railway across the interior of Gaspé and with a view to opening up to colonization, for a distance of some hundred miles, an uninhabited region of immense natural resources. Large powers were given to the Company, the capital stock was to be $1,000,000 and the road was to be constructed within five years. The Wolfe, Megantic and Lotbinière Line was asked for and incorporated by a number of merchants_and farmers, and was intended to be constructed and operated from Lime Ridge in the County of Wolfe through Megantic, Lotbinière and Levis Counties, by way of the valley of the River Thames, to the site of the proposed bridge on the St. Lawrence near Quebec. The capital stock was $1,000,000, and the railway was to be completed in six years. On August 30th, it was announced in the Montreal Star that a syndicate of Montreal capitalists, including Messrs. S. H. Ewing, A. F. Gault, Samuel Finley and Hanson Brothers, had obtained control of the Pontiac and Pacific Junction Railway, the Ottawa, Northern and Western Railway, the Hull Electric Railway and the Ottawa Interprovincial Bridge, at figures aggregating $5,000,000. The lines were to be amalgamated as the Ottawa, Northern and Western Railway Company and, under the terms of the charters thus acquired, would have the right to build a railway from Ottawa to Sault Ste. Marie and another to James Bay. Various Dominion and Provincial subsidies would also be available. The South way in Nova Scotia The members of the Halifax Board of Trade, the Mayor and City Council of Halifax, and a number of prominent citizens, waited on the Premier and his Government, on March 15, 1901, to urge the construction of a railway from Halifax to Yarmouth. Under the terms of a Resolution, passed by the Board of Trade, the delegation desired to impress upon the Government the important commercial relations which existed between Halifax and the western parts of the Province; the interest of the city in the development of transportation facilities throughout the Counties of Lunenburg, Queen's, Shelburne and Yarmouth; the fact that "the building of a through line between Halifax and Yarmouth is a Provincial necessity, and that the work ought to be pushed on to completion with all possible despatch." Speeches were made by Mayor Hamilton, Mr. George S. Campbell, Ald. G. E. Faulkner, and others. Mr. Campbell, who was the chief spokesman of the deputation, took the ground that as recent projects and contracts in this connection had lapsed, the Government were now free to adopt a new and active policy, and that the people of Halifax, for business reasons, thoroughly believed in the undertaking. The Premier replied that the Government had decided to take vigourous action in the matter, and intimated that the wish of the deputation would probably be granted. A few days later a measure was introduced into the Assembly, and on March 28th the Hon. Mr. Murray spoke at some length upon the occasion of its second reading. He believed that the time had arrived when the public of the Province had come to the conclusion that every reasonable aid should be given to this project. The road would traverse one of the finest sections of Nova Scotia, and extend facilities to a large and populous portion of the country which had hitherto been neglected. During many years past, he explained, attempts had been made to give railway communication to the Counties of Queen's and Shelburne, but the Companies had failed and the subsidies been rendered more or less useless. Some fifty miles of road had, however, been constructed between Yarmouth and Barrington, and nearly $200,000 had been spent in North Queen's. The present proposal was a considerable extension of these schemes mentioned, and the subsidy greater. It was a question, indeed, whether the Province, up to this time, would have been justified in assuming any greater financial responsibility than the $3,200 a mile ordinary subsidy which had been found so distinctly insufficient. The growth of industrial activity, the increase in the revenue, and the receipt of $671,000 from Ottawa, had, however, changed the situation and rendered action possible. The measure which he was now presenting to the House provided that the Governor-in-Council might lend to the contractor, for such a period as the Government might determine, in cash or in Provincial debentures, a sum not exceeding $10,000 for each mile of railway built by the contractor, and that the re-payment of any moneys so advanced should be secured by a first mortgage upon the franchise of the contractor, its line of railway, land, buildings, rolling stock, etc. This mortgage was to pay interest at a rate not exceeding 3 per cent. per annum, and a sinking fund of one-half per cent. per annum. The payment of this interest and sinking fund was to be a first charge upon all the receipts and revenues of the road and, upon default of payment, the Government might take possession of, or sell, the railway and property. The mortgage might also be discharged upon payment of the amount lent by the Government, less the sum of $3,200 for each mile built, and of any amount paid as a sinking fund. The Premier went on to explain that the great difficulty in floating such an enterprise as this, in Nova Scotia, was the procuring of the capital. The bonds had to be floated at a minimum rate of 5 per cent., and they were usually placed on the market at about 85. The Company, therefore, would, under ordinary circumstances, have to pay 6 per cent. interest, and it was the object at present to prevent this by placing the credit of the Province behind the project. With the Dominion subsidy and arrangements, stated as above, the Company would have $13,500 per mile available, and have 4 per cent. interest to pay on its borrowed capital. Other sections of the agreement gave the Government control of the rates for carriage passengers and freight. Another allowed the Government to appoint two persons as Directors of the Company, while the last two portions of the contract provided that the contractor should not sell, transfer, assign, lease, or otherwise dispose of the Railway without consent of the Governor-in-Council. Violation of this clause would enable the Government to take possession of the road, or otherwise regulate the matter. The contractor or Company was also forbidden engaging in any other business, such as buying other lines, or steamship lines, or constructing hotels, etc., without the consent of the Government-thus making the security safer and the project more certain of energetic and steady progress. The Government had taken power to purchase the 50 miles already constructed, and he hoped the new Company would take some steps to acquire this line. He stated that considerable discussion had taken place between himself and various railway men during the last year or two upon this subject, and the terms offered in this measure were a minimum of what was asked. They might even have to go a little further in the matter. "He hoped that this would not be the case, but he wanted to warn Hon. members that the Government had determined upon this policy, and that they thought it time that 80,000 people, among the best and most prosperous of the population, who had waited long, weary years for railway accommodation, should at last be placed in the same position as the people of other portions of the Province." Mr. C. S. Wilcox followed on behalf of the Opposition. The objects to be attained by the measure commended themselves, he thought, to the whole people, although the second clause, by giving the Government power to build the road under the plan outlined, or, if that failed, under some other arrangement, seemed to cancel the implied contract to a great extent. But he did not wish to offer a word of criticism, or to hamper the project in any way at this stage. The plan was strongly approved by the Liberal press of the Province. The South Shore Railway, as it was popularly termed, was expected to open up a splendid fishing, lumbering and agricultural country, and give access to some of the best summer resorts in North America. The Railway itself would be 170 miles long, and the Government grant would amount to nearly $2,000,000. The Toronto Globe, in reviewing the proposal, declared it the best ever made in Canada for the construction of a railway. The local Opposition press, however, took a different view. While admitting the desirability of such a railway, the Halifax Mail, of March 25th, argued at length that the measure before the House did not bind the Government in its terms; that the taking of the mortgage was optional; that the Government was really taking power to borrow money which, so far as the Bill was concerned, they could give away and exact nothing in return therefor. The second clause, in referring to the mortgage part of the schedule, stated that the Government "may vary such terms and conditions, and add other terms and conditions thereto," and this, it was claimed, made the whole project an open one, with absolute power in the hands of the Government. Objection was also made to clause 6, which provided for the transfer of the constructed portion of the Railway, and made provision for the new Company assuming its privileges, franchises and powers, without reference to its liabilities. The measure passed the Legislature in due course and became law, and on September 1st it was announced that a contract had been signed with Messrs. Mackenzie and Mann, of Toronto, for the construction of the Railway from Halifax to Barrington, with a branch from New Germany to Caledonia Corner-a total distance of about 200 miles. Including the Provincial arrangement, as already outlined, and the Dominion subsidy ($3,200 a mile and twice that sum under certain conditions which would no doubt be met) the Contractors were to receive $19,900 a mile or about $3,980,000 of a total subsidy. The Contractors were not to issue any securities on the road, for the purpose of raising funds, and the Government announced a first mortgage on the property. The name specified by the Contractors was the Halifax & South-Western Railway Company. The contract named the terms as proposed by the Premier in the Legislature and granted $3,500 a mile additional. The Railway was to be completed by December 31, 1903, and at the end of forty years. the amount lent by the Government was to be repaid in full. The Halifax Chronicle of September 3rd, in perusing and reviewing the arrangement, thought there could be no possible difficulty about this or the payment of the interest. To meet the latter the road would only have to earn $85,050 per annum, or $400 a mile. The rich country traversed should make its earnings many times such a sum. It gave every promise of being "a splendid investment for the Province." The subject did not rest at this point in public discussion. The Opposition papers took up a statement, or inference from a statement, by Mr. F. B. Wade, K.C., M.P., to the effect that the Government had exceeded in the contract the power granted them by the Legislature and argued that there was, therefore, no contract. The Windsor Tribune of October 18th summarized other objections to the contract. "It involves an expenditure of too much money; it provides too little security for the payment of the interest to the Province; it binds the Company to nothing more than the construction of the line for which more than sufficient subsidies have been provided; it may place the burden of an unprofitable line upon our people." The approach of the Provincial elections intensified the criticism, and the Opposition papers declared that the whole project was simply a scheme to win the electorate of the counties crossed by the Railway. The Government, however, asked the Province to approve the contract, and the people did so in the most pronounced manner at the elections which followed. Railway Interests of New Brunswick On March 5th the Hon. Mr. Tweedie introduced a measure in the New Brunswick Legislature for the construction of a line rail in the Counties of Queen's and Sudbury, running from the terminus of the Central Railway at Chipman to a point opposite Fredericton on the St. John River. The object was to enable the large areas of coal in those localities to be developed. The Government undertook to guarantee the principal and interest of the first mortgage bonds of any company authorized to construct such a line-the amount not to exceed 55 per cent. of the actual cost of the Company's railway, rolling stock and plant, and to be limited to $250,000. The rate of interest was not to |