Sir Francis Hincks.
From a portrait in the Dominion Archives
Howe steadily maintained the policy of state ownership, but had unusual difficulty in carrying Nova Scotia with him. The great English contracting firm of Peto, Brassey, Betts and Jackson, whose operations in the other provinces will be discussed at greater length, offered to find the necessary capital if given the contracts on their own terms. Many Nova Scotians were dazzled by the promises of the agents of this firm, and Howe in 1853 was forced to agree to their proposals. The contractors found themselves unable to make good their promises, in face of panics on the stock market in England, and in the following year Howe's original policy was sanctioned. He himself retired from political life for a time in order to carry through, as one of the railway commissioners, the policy he had steadfastly urged.
It was on June 13, 1854, that the first sod was turned for the construction of the Nova Scotia Railway, and a beginning made at last. The road was to run from Halifax to Truro, with a branch to Windsor. Progress was slow, but by 1858 the ninety-three miles planned had been completed. Then came a halt, when reality succeeded the glowing visions of the prospectus, the service proved poor, and the returns low. Nine years later an extension from Truro to Pictou was constructed. This gave Nova Scotia at Confederation in 1867 145 miles of railroad in all, built at a cost of $44,000 a mile, and connecting Halifax with the Bay of Fundy and the Gulf of St Lawrence. The gauge adopted was five feet six, and the Nova Scotia road led the way in Canada in using coal for fuel.
New Brunswick had a more chequered experience. After the collapse of the Halifax and Quebec project, her efforts were confined to the road running north from St Andrews and to the European and North American.
The possibilities of St Andrews as an ocean terminus had been severely hampered by the thrusting in of the Maine-wedge between New Brunswick and Quebec, but still the town struggled on. In 1847 shares in the railway had been placed both in England and in the province, and the legislature guaranteed the interest on debentures and also granted a land subsidy. Still, the money came in slowly. Operations were time and again suspended, contract after contract was made, and reorganizations were effected. In 1858 the road had reached Canterbury, and four years later its temporary terminus at Richmond; in 1866 a branch to St Stephen was opened, and in 1868 an extension to Woodstock, making 126 miles all told, costing about $20,000 a mile. At Confederation only a third of the distance between St Andrews and Rivière du Loup on the St Lawrence had been completed, and the road was in a receiver's hands.
The European and North American also had its troubles. Maine proved unable to build its section. In 1852 the New Brunswick government made a contract with the English firm already referred to, under the style of Peto, Betts, Jackson and Brassey, for the construction of a line from Maine to Nova Scotia, at $32,500 a mile. The province agreed to subscribe $6000 stock and lend $9400 in bonds per mile; the contractors were to find the rest of the money in England. This they failed to do. The firm was dissolved in 1856, and the government took over the road, completing it from St John to Shediac, 108 miles, in 1860. The western half was not begun until August 1867.
To return to the upper provinces. By 1851 the St Lawrence, the Great Western, and the Northern were under way, and more ambitious schemes proposed. The Guarantee Act of 1849, which was the first phase of Hincks's policy, assuring public aid for the second half of any road at least seventy-five miles in length, was proving inadequate, and the government was considering an extension of its policy. At this juncture the golden news arrived of Howe's success in securing the £7,000,000 loan at bargain rates. All hesitation was removed. No doubt was felt that the roads would pay, once they were built; the only difficulty had been to find the money to build them. And now £7,000,000 was available—£4,000,000 of it for Canada, at probably 3 1/2 per cent. Paper computations soon proved that £4,000,000 would suffice not only to build Canada's third of the Quebec-Halifax route, but to build a trunk line from Quebec or Montreal through to Hamilton, whence the Great Western ran to Windsor on the frontier opposite Detroit.
At once a struggle began for the control of this fund. The Montreal merchants who had bought experience in building the St Lawrence and Atlantic, John Young, Luther Holton, and D. L. Macpherson, with A. T. Galt of Sherbrooke, were first in the field, and pressed for a charter to build from Montreal to Kingston, intending later to extend this road to Toronto. Then the most noted firm of contractors in railway history, Peto, Brassey, Betts and Jackson (the forms of the firm name varied), who had built one-third of the railways of Britain, and also roads in France and Spain and Italy and Prussia and India, were attracted to this fresh field by Howe's campaign in England. They sent an agent to Toronto in 1851 to offer to construct all the roads needed, and to find all the capital required, with partial government guarantees. Hincks, with whom the decision lay, was eminently an opportunist. In 1849 he had argued against government ownership; now he argued for it. Yet he did not close the door against retreat. The new Act, passed in April 1852, marked the second or Grand Trunk phase of his gradually shaping policy. Besides providing for the Canadian share of the Halifax to Quebec road, the Act contemplated three alternative methods of continuing this Trunk line westward. The province was to build it if the guaranteed loan could be stretched far enough; failing this, the province, together with such municipalities as wished, could undertake the extension; should both modes fail, private companies might be given the privilege, with a provincial guarantee of half the cost, covering both principal and interest. No roads except those forming part of the Trunk line and the three already under way were to be aided. The Montreal and Kingston Railway, in which Holton, Galt, and Macpherson were prime movers, was chartered, and also the Kingston and Toronto, but in both charters a suspending clause was included preventing the charters from taking effect until special proclamation was made—after the other plans had failed.
The next move was to arrange terms with the other provinces and secure the promised Imperial guarantee. How Hincks and Chandler's mission failed has already been told. Hincks then made another sharp curve and decided for company control. Before leaving Canada he had made up his mind that the construction should be entrusted to British contractors, and was authorized to negotiate with the Brassey firm. Now that the Imperial guarantee had faded away, capital was needed more than contractors. The Brasseys promised both, offering, if given the contract, to organize a company in England which would provide all the capital not guaranteed by the province.
This seductive offer was to prove the main cause of the financial embarrassment of the Grand Trunk. It involved at the outset a dubious connection between company and contractor, and also for two generations an attempt to manage a great railway at a range of three thousand miles. So fatal did it prove that in later years each party to it endeavoured to throw the responsibility for the initiative on the other, and enemies of Hincks declared that he, as well as Lord Elgin, the governor-general, had been bribed to wreck the negotiations with the British government in order to take up with Brassey. Whether or not Hincks was first to resume negotiations in London, it was the contractors who had already taken the initiative in America, sending a representative to Toronto, and taking part in the elections of 1851 in Nova Scotia against Howe. It is clear also that the British government was unwilling to consider anything but the unacceptable Major Robinson line. Hincks was justified in looking elsewhere for capital, but he was not justified in binding himself to one firm of contractors, however eminent.