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March 31, lSGO.J llie .Leader ana tsamra...
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RAILWAY INVESTMENTS IN CANADA.* T HE sub...
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* Gv(i(tt Vostern Hallway of Canada i A ...
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* Sue lantsinoor'a lteport on the " QenQ...
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Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.
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March 31, Lsgo.J Llie .Leader Ana Tsamra...
March 31 , lSGO . J llie . Leader ana tsamraay * sinaiysi . oyu
Railway Investments In Canada.* T He Sub...
RAILWAY INVESTMENTS IN CANADA . * T HE subject of colonial and foreign railway management is . likel y soon to become one of great interest to a large number of persons in this country . Those on the American continent seem first to claim our attention . The aggregate amount of British capital invested in the bonds and shares of railways m the United States and Canada must be something very formidable—probably not less thafl one hundred millions sterling . How much of this amount consists of share , and how much of bonded or preference capital , we are unable to estimate , except in particular cases . In respect to the Canadian railways , we have more accurate data to go ivnonBoth classes of securities maily held hereand the lines seeuriLiea ¦«»*
. are n , upon , xsotii classes or arc uitumj uc « u "y" ! — " —~ **—~~ themselves are under English management . This circumstance , however , can scarcely be regarded as a recommendation to British investors .. " There has been too much mismanagement of this description of property at home to afford guarantees that greater judgment and economy , or more honesty , can be supposed to exist where the same class of men are sent to manage similar undertakings abroad . If suspicion can arise respecting the acts and policy of directors when the property to be managed lies , as it were , under the immediate supervision * f its owners , and having the everwatchMeye of the independent press of this country upon ' them , what grounds for apprehension must there be where none of these considerations can be brought to bear I
Nearly thirty years of railway management at home have served in some degree to accumulate a stock of experience which we are only just learning how to apply ; but who can estimate in pounds , shillings , and pence the cost of such experience ? How many thousands ol the less cautious or more confiding' members of society have bedn partially or wholly ruined by trusting to the specious reports of direebors , stockbrokers , and other interested parties ! Although the bulk of the proprietors may travel daily over the lines in . which their money has become locked up , how next to impossible lias it . been found to get anything like a correct insight into the details of their management ! . With regard to railway direction abroad , ib is only natural to expect frOin-. it a complication of the same evils complained ' of at home . Our great province of Canada is likely to atfbrd us the -first exemplification ofthe eoi-rectness of this assumption . We have , besides lendin" - the Province about twelve millions , which we consider a
good investment , advanced near twenty millions to build an unrivalled system of i ' ail ways from one end of Canada to the other . Whether " any considerable portion of this latter suYn will ever afford any return to those who have supplied it , seems almost problematical .. At any rate , it b ' ehoves the proprietors in Canadian railways to look sharp after their ' property . We learn-that the process ^ of foreclosure is very active at the present time iu the neighbouring States . The failure of companies to meet the interest on their bonded debt is affording active employment to courts and lawyers . Scarcely u week passes without decrees wijriiig- out , as if with a sponge , millions of dollars of share capital .
There is the Erie with its twelve millions , the Michigan Southern with , its six or seven millions , the Marietta and Cincinnati with five millions , and numerous others just undergoing the last , agonies of
extinction . Unless there is a great amendment in business—a material change in management and policy , the inexorable bond or preference shareholder will soon demand his pound of ilesh in Canada . On the present occasion the Great Western of Canada culls for our attention . This line forms a short cut across the western peninsula of the province , extending from the Falls of Niagara to Windsor , opposite JDefcrqit . A more particular description is not deemed requisite , as it is to be presumed that each proprietor lias informed The future business of
himself of the lopus in quo of his property . the line , when it was introduced into this , market , was predicated mainly upon its . being u link in a great chain of railway communication between New York and IJostrin , on the Atlimtic seaboard , inul the teeming- and almost fabulously growing West . It wuh also represented as certain to become a link in tho then projected Grand Trunk , which was to run from Hamilton'to Portland and Quebec , communicating 1 with Lake Ontario ab the former P lace . , . . .,. .. ' , it claimed to beand
As a link in tho ^ great American chain , was — correctly , no doubt—fifty or sixty miles shorter thsin the lines south of Lake Erie . Those ' railways ,. which were to form its immediate allies and connections—the New XovU and Michigan Cuiit . ruM . nius —were of easier gradients , and both passengers and IVo . ight could thus bo transported- cheaper and move rapidly than by any other routo . Add to these striking features tho roproKontation made tlmt tho lino from tho Falls of Niagara—two hundred and twenty-flight miles Io-m k —was not to cost over a million and a half of pounds , and no one ncod bo ' surprised thut tho capital was forthcoming to carry it into effect .
Wo oimnot stop to trace tho history of its early management , nor would it bo road at this turfb . Tho question for inquiry now in , how has a work , posmoBBing such transcendent merits m points of location and'Connections , failed to realize the hopes and 'predictions of its firnt patrons P lit is not oui' province to enter into details . A Committee of Inquiry lms boon dojmmded by a portion of the shareholders , and -has been conoeded by tho directors for appointment at
the semiannual meeting , to be held at the . ' London Tavern on "Wednesday next . To them will belong the task of entering into all the acts and policy of those who are responsible for the present state of tliing-a . The making up a dividend , partly out of the remission by the Canadian Government of the interest oh its loan to the Company , and partly by economizing the construction account , until the wooden bridges and permanent way have become unsafe * can scarcely be regarded by the proprietors as satir-factorj ' . * From the information we have before us * . and which challenges inquiry , it would seem that the chief cause of the depreciation of the Canada Great Western property is to be found in the amplification of the same policy that has so greatly diluted , nearly all English railway investments , namely , the expenditure of large sums in the construction of non-paying branches and extensions , under the mistaken notion that they were to become important " feeders . "
In the case of this line ,, the proprietors , it would seem , have not only thrown away in this manner nearly a million sterling , or thirty per cent , of their share capital , upon wholly . unproductive undertakines . but they have excited the hostility of their best allies , the Michigan and New York Central Railroad Companies . . At the inception of the Great Western of Canada , these Companies , regarding their own success and prosperity to foe closely identified with the Canadian line , subscribed for and paid up eight , hundred thousand dollars of its capital ; Three seats were provided for the American directors at the Hamilton Board , two of which were filled by the presidents of the two Central Companies . This circumstance ^ ave additional confidence to the English -public , who were shortly
afterwards appealed to , and wliose subscriptions soon led to'the sending out of a managing director . As each English contribution of money to the concern added fresh strength to this gentleman ' s-. position , 'he very quickly engrossed to himself the entire management of the line . The American gentlemen became alarmed at his extravagance and want : of discretion , to say nothing of his inexperience , for lie had never held a pos'iti : n at home above an assistant secretaryship in a London office . They therefore came to the conclusion to sell out the investment which-they' had induced their companies to make in the undertaking , so soon as an : opportunity presented itself . This occurred -shortl y after the opening of the line in 185 L .
From the retirement , of these gentlemen up to the present time , each year has added more or less to the capital aocount , " until it has risen from its original estimate of a million and a half to h ' ve mil * , lions—of which two millions is bonded debt . Meantime-, a growing hostility- has been the result of the withdrawal of the American directors . This was caused by the . in ' anife ' sts . policy of , the Great ; Western manager to do all in his power to divert business from the two great connecting lines , which , it is asserted , give , the Canadian Company fully one half , and that , too , the best paying half of its business . _ ..
' :, The building of the Sarnia branch , which terminates at the foot of Lake Huron , was the first grand blunder in this way . That might huvft passed without exciting any jealousy on the part , of the Michigan' Central Company , because the managers of that Company saw that a line terminating on Ir . ik " Huron , which is closed up half the year by ice , nnd . Svhioh during navigation could not he ' expected to draw away business from its own western' sources of traffic , would only injure those who supplied the ' -money to build it . In fact , they simply regarded the expenditure of foiir or five hundred thousand pounds upon it as so much money thrown away , and which only concerned those who foujid it . '
Even when the Detroit and Milwaukie line , which runs across the State of Michigan in a parallel course with the Central line of that State , was first " projected , the directors of the Central Company were favourably disposed towards the oiiterpri . se . They considered it as calculated to developo the material resources of thja , State j and relying 1 upon the strength of their own position , as . forming tho shortest railway route , unbroken by lake navigation , to the west , they were pleased to see the Detroit and Milwauldo line undertaken , by Kiiglish capilalists . It could not at this time have entered any sane mini ' s head that the ( . Jreut Western Company would ever attempt , as they have since done , to assume the ' proprietorshi p o * this Detroit and Milwaukie line . The eu ' eet of this state of things is thus narrated in one of the pamphlets before us : — " Tho cause of this want of harmony will bo found in the unfortunate policy of tho dirvobora , which hits led to tho tulcintf up and working ; of tho Dnfriv . lt . mill Milwiiukie . as Dart and niirccl of the Great Wosturn lino , The
more thoroughly to identify tho two companies , tho directors , or a portion of them , ' both in liJngluml and Uauoda , have accepted HeatH at the Dufcrpit Hoard , and thv Oreat Western nmuatfiUK director hua bocoma . ita president . In furtherance ] of thin plan , tho two lijiiKliwh directors in Canada , an already stated , hnvo become poraonally interested , ( it is to bo nnsumod with th approbation of thoir co-directors ) , in the Htonmora forming the oouuuytlvn uoross I-iiiko Michigan between Grand lltvvoii and Milwauklo . , "It will thua bo aoun that wWUat it was tho true policy of tint ureac WoHtorn Company to do nothing to damugo tho ititt-ivs . tu of thuir great Jontral ib haa
Amorlcim allies ( tho Now York and Mioliik'im ( CoiupaniuM ) , boooine tho direct ) interest of the Cimdinu m /*» nifforH ty divert iroin tho " MiolnlKon Ouutral Jane and ovw the 1 ) -trolt itud Mllwuukie , all tho truffle in tliulr power , in order to « ivo oiuploymont t <» thair Hammers . Tliis very clearly expluin . s how ho promising u property luin been reduced to tho brink of ruin by want of judgment in tho iiimiiitfumont . If iho propriotora whouJtl ii « d , upon jufjuiry , thut the Cue La which wo hftvo hud before thorn are well founded , it seoniHobvious that tho sooner they rotrau . c . tlieii' stops tho bottei . A return to tho original policy will , to hojdo oxtfiit , I'utriovo tlie value of thuir invoHtmont , though it can nover l > ri > if , 1 ) - « "jJ « tho hundvcdn of thounandH ho r « ok-
* Gv(I(Tt Vostern Hallway Of Canada I A ...
* Gv ( i ( tt Vostern Hallway of Canada i A fvtv Facts roUtth'o to its Present JPosifilmi and Manctffemont . Bflinghum Wilson , ' Grout IFoatont Railway of Canada-1 ThUi <)« not nonoraili / hmton in Mif / lawi } or tho true JL > olio , i / of tbo Company . I 5 y II . Bowlsuy Wxi . 1 . SON , Esq ., of Hamilton , Canada .
* Sue Lantsinoor'a Lteport On The " Qenq...
* Sue lantsinoor ' a lteport on the " QenQnil Condition of Works , " page 25 of JUlx-eotorH' Itopprt .
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Citation
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Leader (1850-1860), March 31, 1860, page 13, in the Nineteenth-Century Serials Edition (2008; 2018) ncse2.kdl.kcl.ac.uk/periodicals/l/issues/cld_31031860/page/13/
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