The imperfect means of communication between the Maritime Provinces and Canada had long been recognized as a great evil, and very soon after the introduction of railways into England a line of railway was projected to run from St. Andrews, in New Brunswick, to Quebec. The transfer of a considerable tract of territory, which had been believed to be in New Brunswick, to the state of Maine, under the terms of the Ashburton Treaty, gave a check to this enterprise, and financial difficulties afterwards prevented its accomplishment. A more promising scheme was that of a railway from Halifax to Quebec, and this so far received the approval of the British government that an officer of engineers, Major Robinson, was, in 1847, detailed to conduct a survey of the proposed line. As this gentleman was influenced by purely military considerations, his line was carried as far from the United States boundary as possible, and consequently by a very long and circuitous route. During the session of 1852, Attorney-General Street introduced a series of resolutions in the New Brunswick legislature favouring the building of the Intercolonial Railway jointly by Canada, New Brunswick and Nova Scotia, according to terms which had been agreed upon by the delegates of each. This arrangement was that the Intercolonial Railway should be built through the valley of the St. John. These resolutions were carried by a large majority. During the recess, Mr. Chandler, as the representative of New Brunswick, and Mr. Hincks, the representative of Canada, went to London to endeavour to obtain from the British government financial aid to build the Intercolonial Railway. This was refused on the ground that such a work had to be one of military necessity. Further efforts were made in 1855, and again in 1858, to influence the British government in favour of this railway, but without result; the answer of Downing Street being that the heavy expenditure involved in the Crimean War prevented the government from assisting in the construction of public works, such as the Intercolonial Railway, however desirable in themselves.

The effort to secure the construction of the Intercolonial Railway was renewed in 1861. At a meeting of delegates representing Canada, Nova Scotia and New Brunswick, which was held at Quebec on September 30th, it was resolved that the three governments should renew the offers made to the imperial government in 1858 with reference to the Intercolonial Railway, and that the route to be adopted be decided by the imperial government. The Hon. Mr. Tilley, who was at this Quebec meeting, was sent to England as a delegate to confer with the imperial government with regard to the railway, while Nova Scotia was represented by the Hon. Joseph Howe, and Canada, by the Hon. P. M. Vankoughnet. The delegates reached England in November and placed themselves in communication with the Duke of Newcastle, who was then colonial secretary, and they also had interviews with the prime minister, Lord Palmerston, the chancellor of the exchequer, the secretary of war, and the president of the board of trade. While in England, the seizure of the commissioners of the southern confederacy, Messrs. Mason and Slidell, by Commodore Wilkes, on board the British mail steamer Trent, produced a crisis in the relations between Great Britain and the United States which seemed likely to lead to a war, and greatly strengthened the position of the delegates, who were able to point out the difficulty involved in defending Canada without a railway to the sea. They presented their views to the colonial secretary in a very ably written state paper, which should have convinced those to whom it was addressed that the railway was an absolute necessity. The delegates estimated the cost of the railway at £3,000,000 sterling, and they asked the imperial government to join in a guarantee of four per cent. interest on this sum, each of the provinces to guarantee £20,000 a year for this purpose and the imperial government, £60,000. This proposal was rejected by the British government, but it offered "an imperial guarantee of interest towards enabling them to raise by public loan, at a moderate rate, the requisite funds for constructing the railway." The British government, therefore, would do nothing for this great work except to indorse the bonds of the provinces to a limited extent, for it was stated in the Duke of Newcastle's letter to the delegates that "the nature and extent of the guarantee must be determined by the particulars of any scheme which the provincial governments may be disposed to found on the present proposal and on the kind of security which they would offer."

Delegates representing the three provinces met in Quebec in September, 1862, to consider this offer, New Brunswick being represented by Messrs. Tilley, Steeves and Mitchell. The delegates from the Maritime Provinces declared their willingness to propose to their respective governments to accept the proposition of the Duke of Newcastle if Canada would bear one-half of the expense of the railway instead of one-third. The Canadian government offered to assume five-twelfths of the liability for the construction and working of the Intercolonial, and to this the delegates for New Brunswick and Nova Scotia had to agree. This imposed a very serious burthen on two provinces, which, between them, had only six hundred thousand inhabitants, and their willingness to assume it shows the interest they took in this great work.

In pursuance of an arrangement made at this Quebec meeting, delegates from the three provinces went to England to arrange the terms of the guarantee with the British government; the Hon. Mr. Tilley represented New Brunswick, and the Hon. Joseph Howe, Nova Scotia. Mr. Gladstone, who was then chancellor of the exchequer, insisted on a sinking fund being provided, which was to be a first charge on the revenues of the several provinces. This sinking fund was objected to by the colonial delegates, but the only modification in its terms which they were able to obtain was that the sinking fund was not to take precedence of any existing liability. Before leaving England, Messrs. Tilley and Howe prepared and submitted a memorandum to the Duke of Newcastle in which they expressed a hope that Mr. Gladstone might be induced to reconsider the matter of the sinking fund, and that it would not be insisted on. The Canadian delegates left England without an acceptance of the terms proposed by Mr. Gladstone, and without a formal rejection of them. Previous to the meeting of the Canadian parliament, Tilley proceeded to Quebec to urge upon the Canadian government the preparation of the necessary bills to carry out the agreement entered into for the construction of this great railway. He reported to the lieutenant-governor on his return that the government of Canada, for reasons stated, could not then undertake to pass the legislation required, which they greatly regretted, but that they had not abandoned the arrangements for the construction of the railway. The Canadian government's declaration in the course of the session that they had abandoned this important enterprise was, accordingly, a source of great surprise and regret. The governments of New Brunswick and Nova Scotia passed the necessary legislation at the next session, but the government of Canada took no further step in the matter until the confederation negotiations were commenced in 1864.