The Railway Builders: A Chronicle of Overland HighwaysSkelton, Oscar D. (Oscar Douglas)
History
The Railway Builders: A Chronicle of Overland Highways
Skelton, Oscar D. (Oscar Douglas)
Pacific railroads; Railroads -- Canada -- History
From the outset difficulties undreamed of had developed. Money was
hard to get and early traffic returns were disappointing, so that the
company found it almost impossible to secure the balance of the capital
required. The road from Montreal to Portland was found to require
heavy expenditure to bring it up to the standard. The contractors, for
their part, were embarrassed by the company's shortage of funds and by
the great rise in the prices of land, materials, and labour. Their own
activities, the Reciprocity Treaty of 1854 with the United States, the
Crimean War, had combined to bring on a period of inflated prices such
as Canada was not to experience {81} again for half a century. With
wheat at two dollars a bushel, and 'land selling by the inch,' even
liberal margins of profit on contracts vanished.[2]
In these straits the company turned to the government for aid. It had
many supporters in the House. No one could deny the benefits which its
operations had conferred upon the province. The government guarantee
of interest and the government nomination of a part of the board of
directors were plausibly held to involve responsibility for the
solvency of the company. It was not surprising, therefore, that for a
decade after 1855 scarcely a year passed without a bill to amend the
terms {82} of the Grand Trunk agreement. One year it was an additional
guarantee, another a temporary loan, again a postponement, and again a
still further postponement of the government's lien. It soon came to
be recognized that the money which had been advanced under the
guarantee provisions must be considered a gift, not a loan, though to
this day the amount nominally due still figures as an asset on the
Dominion government's books. Incidentally, the embarrassing government
directors were dispensed with in 1857.
The Grand Trunk was complete from Lake Huron to the Atlantic in 1860.
In the ten years that followed, working expenses varied from
fifty-eight to eighty-five per cent of the gross receipts, instead of
the forty per cent which the prospectus had foreshadowed; not a cent of
dividend was paid on ordinary shares--nor has been to this day.
Public-domain text, read in full here on John Shaqi.
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