298 THE ROYAL SOCIETY OF CANADA 



the government and the public in the ability of these early railroads 

 not only to pay heavy interest on their bonds and a generous dividend 

 on their capital stock, but to afford a substantial annual contribution 

 towards a sinking fund to redeem their bonded indebtedness. 



Owing to the very success which attended the offers of assistance 

 on the part of the Government, it was found necessary to modify the 

 offer of financial assistance and to confine it to a trunk line, at first 

 from Quebec to Toronto, but ultimately extended from Rivière du 

 Loup on the East to the St. Clair River on the West. This change 

 was provided for in the new act of 1851, making provision for the 

 establishment of a central trunk line. At the same time, since the 

 Great Western Railway and the Northern Railway had already taken 

 advantage of the Act of 1849, the promised assistance was continued 

 in their cases. 



In accordance with the new conditions of 1851, Mr. Hincks had 

 arranged, during a visit to Britain, with the noted English railway 

 contracting firm of Messrs. Peto, Brassey, Betts and Jackson, that 

 their company should undertake to finance and construct the through 

 trunk line. The province was to guarantee £3000, or $15,000, per 

 mile on the cost of construction. On this basis the Grand Trunk 

 Railway of Canada was chartered during the session of 1852-3. Im- 

 mediately afterwards it provided for connection with a winter ocean 

 port by leasing for 999 years the section of the Atlantic and St. Law- 

 rence Railroad from the Canadian frontier to Portland. This was 

 to be connected with the Trunk System from Quebec by a line from 

 Island Pond to Richmond. 



The prospectus of the Grand Trunk Railway was issued in April, 

 1853. From a financial standpoint it was undoubtedly a work of art. 

 The Grand Trunk Railroad was presented as an undertaking of national 

 importance, with the Canadian Provincial Treasury as its chief partner. 

 A member of the Canadian Government, the Hon. John Ross, was 

 elected President of the Company ; and five other prominent members 

 of the Government, including Mr. Hincks, were on the Canadian 

 Board of Directors; while the heads of the two noted firms of Baring 

 Brothers and Glyn Mills and Company, the financial agents of the 

 Canadian Government, were prominent on the London Board of the 

 Railway. The line was to be constructed on a basis of efficiency 

 quite unknown in America, and on this ground American experience 

 as to the cost of operation and maintenance was ignored. Anticipated 

 profits were calculated on a basis of 11^ per cent on the capital stock. 

 As a result of this carefully planned flotation, the stocks and bonds of 

 the new railway went off quite readily for a time. Canada was thus 



