Politics and Loans Created for the North Shore Railroad, MacDonald Papers

Macdonald, John A.

(i) Chapleau to Macdonald, March 7, 1885.

[This concerns the negotiations for either the Government or the C.P.R. to purchase the North Shore Railway. ] I cannot help telling you that unless we arrive soon at some conclusion in this matter the proposed movement of the Quebec Government might seriously interfere with the votes of the Province of Quebec members. I mean the demand that the 960,000 dollars be paid back to the province. If a motion to that effect was made in the House there would be a stampede of our friends and you remember that I was myself in favour of that last year.

(ii) George Stephen (C.P.R.) to Macdonald, May 24, 1885.

With reference to the efforts which the people of the Province and City of Quebec are making to procure the extension of the Canadian Pacific Railway to the city and harbour of Quebec, I beg to state on behalf of this Company that if a measure providing for the rearrangement of its finances of the character indicated by the resolutions now before the House of Commons or of any modification thereof that may be adopted as being better calculated to accomplish the object in view should become law during the present session of Parliament and in time to enable the Company to meet its outstanding obligations as they, become due, and further to enable it to proceed without interruption with the work of completing and equipping the main line through to the Pacific ocean during the present year, on these conditions unaided by the proposed cash subsidy this company will be prepared to purchase control of the North Shore Line on such terms and conditions as the Government itself shall consider to be fair and reasonable having due regard to the earning capacity of the property and also to the extreme danger of this company in its present position undertaking any new obligations having the appearance of diminishing the ability of the company to provide for those it has already incurred both to the Government and to the public.

(iii) Stephen to Macdonald.

Under separate cover I have sent you the official letter in re the North Shore matter which you wanted. I hope it is explicit enough and will answer its purpose. Once more let me say a word about the balance of the loan over and above twenty million dollars which we are to pity in cash from the sale of the bonds. I am more convinced than ever that a great mistake will be made which we shall all regret before the year is out if you do not accept lands in payment of this balance. The relief from the interest obligations on that balance will set the Company on its feet and make its thirty-five million dollars a sure and rapid sale and you getting your twenty million dollars back in money long before 1891 and at once getting rid of all danger of our coming back to Parliament for help. Tilley’s objection does not apply now. The North-West rising compels some additional taxation this session and the small amount additional which this requires can easily be provided for at the same time and I am certain it would `go down’ in the House better than the present proposal. Let me then beg of you to revert to your original plan and take the land out and out for the 9,880,912 dollar balance of the loan. I am sure it is the right thing to do for all concerned. It is folly imposing additional burdens on the CPR as is proposed in the North Shore matter and expecting the Company to carry them without doing anything to increase the carrying power of the Company. Practically all the relief the Company gets from the Government under the resolutions is a temporary loan for a year of five million dollars and for this the Company is asked to incur for all time a heavy annual obligation (loss). Do, pray, think this over. I assure you that all I care for in urging the matter is to avoid failure and the necessity of having to come again to the Government.

(iv) Stephen to Macdonald, September 17, 1885.

. . . I sat up last night with Abbott, Van Horne ’ Smith and Pope trying to smooth over the obstacles in the way of the North Shore settlement but it is almost next to impossible to do anything with Hickson [Grand Trunk] in the unreasonable frame of mind he seems to be in and the determination he shows to catch us in some way. We are most anxious to get rid of the affair and have no disposition to stand on trifles, but we must not sacrifice the interests of the CPR Company any further than we have agreed to do. Between ourselves the transaction as regards our Company is one I feel I ought not to go into anyway. It can be fixed; it is a, bad bargain for the CPR Company.