Negociations as to the Intercolonial Railway; and North-West Transit and Telegraph, 1861 to 1864.

It was in September, 1861, that I visited Frederickton and Halifax on the question of the Intercolonial Railway, travelling by way of Riviere du Loup, Lake Temiscouata, Little Falls, Woodstock, round by St. Andrews, Canterbury, Frederickton, St. John, Shediac, and Truro to Halifax. Later in the autumn, representatives from New Brunswick and Nova Scotia visited Quebec and Montreal, and it was generally agreed that deputations from Canada and from the two Maritime Provinces should proceed to England. These deputations were, from Canada the Hon. Mr. Van Koughnet, from New Brunswick the Hon. Mr. Tilley, and from Nova Scotia the Hon. Joseph Howe. It was impossible to choose a more influential delegation: men earnest in the cause they came to advocate; politicians of tried metal; men of great influence in the colonies they represented.

I arrived in England from Canada in the beginning of November, 1861, and at once telegraphed to the Duke, and on my way to London, at his request, I visited him at Clumber, and made my report of progress, which appeared to be highly satisfactory. The only difficulty, as to the Intercolonial, appeared to rest in Mr. Gladstone's "peculiar views about subsidies, grants, and guarantees out of the funds, or on the security, of the State." But the Duke said, he must "labour to show the Chancellor of the Exchequer that this was no new proposal; that, in fact, the Provinces had been led to believe that if they would find the money, the State would guarantee the interest under proper precaution, as the State had guaranteed the capital for the Canadian canals, every shilling expended on which had been honourably repaid." In fact, "this work was not a mere local work, but satisfied military and other Imperial conditions." The end of this, and many other, interviews, at the Colonial Office and at the Duke's residences, was complete concurrence in the following programme:—(I) the Intercolonial guarantee must be carried by the Duke; (2) measures must be taken to start Pacific transit, in the first instance, and as a pioneer work, by roads and telegraphs; (3) Confederation must be pushed on; and (4) that the difficulties arising from the position of the Hudson's Bay Company must be gravely considered with a view to some solution.

Mr. Van Koughnet, accompanied by Mrs. Van Koughnet, was, unfortunately, wrecked off Anticosti, in the Allan steamer "North Briton." Happily every one, after a time of great peril, was landed in safety, while losing personal baggage and almost everything else. At a critical moment Sir Allen McNab, who was on board the ship, also on his way to England, when the vessel was expected to go down, said to Van Koughnet, "Come with me and bring your wife, and we will go down together, away from this crowd of frightened people"—alluding to the mass of steerage passengers jostling about in panic.

On the 11th November Mr. Howe and Mrs. Howe, and Mr. Tilley arrived: and I took the delegates to the Duke's house in London on the 14th. The Duke received these delegates with very great cordiality. He had made, already, an appointment with Lord Palmerston, the Prime Minister, and had spoken to Mr. Gladstone. So, armed with a letter from the Duke, we went on to Cambridge House. We were shown into a room overlooking the court-yard, and had not long to wait for the veteran minister. He came, as usual, with his grey—not white—hair brushed up at the sides, his surtout buttoned up to his satin neck-tie, or, more correctly, "breast- plate," which had a jewelled pin in the midst of its amplitude. He said, the Duke had told him our business, which was very important, not only for the interests we represented, but for the Empire, and especially so at a time when the "fires were alight" across the British border.

Mr. Howe very ably and concisely stated the case. No subsidy wanted, simply a guarantee on perfect security. Precedent for such guarantees, which had always been punctually and fully met. Previous promises of previous Governments—sanction of such statesmen as Lord Grey, Lord Derby, and Bulwer Lytton. Peculiar need of the work at this time; and so on.

Palmerston listened attentively, did not interrupt; did not while Howe, and afterwards Tilley, were speaking, stop either, by asking a single question; but when they had concluded, he repeated and summed up the case in far fewer words than had been used to state it: and in a manner which gave a new force to it all. He then spoke of the various treaties with the United States. He spoke of the giving up of the fine Aroostook district, now part of the State of Maine, and with some heat said, that "the Ashburton Treaty was the most foolish treaty ever made." He replied to the argument about the past commitment of other Governments, by describing it as "not possessing much attraction for an existing Government." Here Howe made him laugh much, by saying, "At least, my Lord, it might have an influence with your conscientious Chancellor of the Exchequer."

After a good many questions and answers affecting the state of the Provinces, the facilities and difficulties of moving troops in winter, the conveyance of the mails, future closer relations of commerce between the Provinces, and, especially, the state of things in the United States,—he asked us to "Go and see Gladstone." We "might say he had suggested it."

Then he shook hands, with a swinging jollity, with each of us, saw us to the door, and, finally, wished us "success." There might have been no "Trent" affair pending, to look at him.

Some delay took place before we could see Mr. Gladstone. But we finally accomplished the interview with him at his fine house in Carlton House Terrace, on the 23rd November. After waiting some while, following, as we did, about a dozen previous waiters on the Chancellor, we were shown into Mr. Gladstone's working room, or den. The room was very untidy. Placards, papers, letters, newspapers, magazines, and blue boots on the table, chairs, bookshelves, and the floor. It looked, altogether, as if the window had been left open, and the contents of a miscellaneous newspaper, book, and parliamentary paper shop had been blown into the apartment. Mr. Gladstone, himself, looked bored and worried. Though perfectly civil, he had the expression of a man on his guard against a canvasser or a dun. He might be thinking of the "Trent" affair. We stated our errand, and as I had, as arranged, to say something, I used the argument of probable saving in the Atlantic mail subsidies, by the creation of land routes, &c. He brushed that aside by the sharp remark, "Those subsidies are unsound, and they will not be renewed." He then spoke of the objectionable features of all these "helps to other people who might help themselves." He did not seem to mind the argument, that assuming this work to be of Imperial as well as of Provincial importance, unless aid,—costless to England, or, at the highest, a very remote risk, and not in any sense a subsidy,—were given, the work could not proceed at all. He struck me to be a man who thought spending money, or taking risks, however slight, a kind of crime. That, in fact, it was better to trust to Providence in important questions, and keep the national pocket tightly buttoned. We got little out of him, save an insight into the difficulty to be overcome. And yet he had been a party to the Crimean War. On the final discussion, in the House, on the vote for the Intercolonial guarantee, on the 28th March, 1867, Mr. Gladstone concluded his speech by declaring, "I believe the present guarantee does depend upon motives of policy belonging to a very high order, and intimately and inseparably associated with most just, most enlightened views of the true interests of the Empire." Thus we had sown the seed not in vain, and the counsel of the Duke was not forgotten.

Mr. Van Koughnet arrived on the 26th November. On the 27th I took him to see the Duke, and we had a long conference.

Finally, it was decided to send in a memorial to the Duke to lay before the Cabinet. Howe prepared it. It was most ably drawn, like all the State papers of that distinguished man, and it was sent in to the Colonial Office on the 2nd December, 1861. Thus, all had been done that could then be done by the delegation. We had to rely upon the Duke. Our difficulty was with Mr. Gladstone.

In the time of waiting, Howe, Tilley, and I, attended meetings at Bristol, Manchester, Liverpool, Oldham, Ashton, and other places, endeavouring, with no small success, to make the Intercolonial Railway a public question.

But the delays; the "pillar to post"; the want of knowledge of permanent officials, whose geography, even, I found very defective, made our efforts irksome, and now and then, apparently, hopeless.

But an event had startled England, like a thunderclap in a summer sky. On the 8th of November, 1861, Captain Wilkes, of the United States ship "San Jacinta," took the Southern States envoys—Messrs. Slidel and Mason—and two others, forcibly from the deck of a British mail ship, "The Trent." The country was all on fire. Palmerston showed fight, and the Guards and other troops, and arms and stores to the value of more than a million sterling, were sent out to Canada. The delegates were sent for to the War Office, and, as desired, I accompanied them. At the time all seemed to hang in the balance. The powers had joined England in protest, and our ambassador was instructed by despatch, per ship —for the submarine wires were not at work—to leave Washington in seven days if satisfaction were not given.

At the War Office we met Mr. Cornewall Lewis, Minister for War, a man erudite and accomplished, who had lived on public employments nearly all his life, but who hardly knew the difference between the two ends of a ramrod. He asked, in long sentences, the questions which Palmerston had put shortly and in the pith; all sorts of queries as to winter transport in the Provinces, the disposition for fight of the people, and so on. Then it was demanded, What we had to suggest? Van Koughnet, who writhed under the tone adopted, bluntly said, "Why, to fight it out, of course; we in Canada will have to bear the first brunt. But we cannot fight with jack-knives; and there are no arms in the country. You have failed to keep any store at all." This led to a deliberate note being taken by the Under Secretary, the present Marquis of Ripon. Other details followed, and then, finally, we were asked if we had anything more to propose? To which I answered "Yes; send out a man who may be truly regarded as a general." This was received with silence and open mouths. The fact was, the soldier in command in Canada was General Fenwick Williams, a most gallant man, who, in a siege, would eat his boots before he would give in: but was not the man who could so manoeuvre small bodies of men as to keep in check, in forests and on plains, large masses of the enemy. When we left, Captain Gallon came running after us, and said, "I am so glad you said that, we all feel as you do here"—(the War Office).

Although the Government of the United States retreated from an undefendable position, wisely and with dignity, by surrendering their prisoners, who, delivered over to a British man-of-war, landed in England on the 29th January, 1862,—still it was decided to keep the troops in the Provinces, to reinforce them, to add to the armaments, and to adequately arm strategic points alongside the American frontier. And, as President of the Grand Trunk, I was asked to go out to Canada to aid and direct transport across the country.

In the meantime—whether the cause was the "Trent" affair, or pre- occupation on the part of the Duke, or neglect of permanent officials, or their bad habit at that time of regarding Colonists as inferior persons—our delegates and their wives felt hurt at the social neglect which they experienced. And I agreed in the truth of their complaints so much, that I formally addressed the Duke on the 31st December. He acknowledged the neglect, apologised for it, and thereafter, until the day of their departure, the delegates, and Mrs. Howe and Mrs. Van Koughnet, were received in high circles, and were especially invited to Clumber.

To sum up, I left England for Canada, in "The Asia," on the 1st February, 1862, landing at New York, where my son and Messrs. Brydges and Hickson met me—and after a deal of hard work on the part of every officer and man on the Grand Trunk, and no small anxiety, labour, responsibility, and exposure to storms and climate, inflicted upon myself, Mr. Brydges, Mr. Hickson, and the whole staff, Quartermaster- General Mackenzie sent us a handsome acknowledgment of our semi- military services. But the authorities at home did not condescend to recognize our existence or our labours.

The late Sir Philip Rose gave me the greatest assistance with Mr.
Disraeli, Sir E. Bulwer Lytton, and all the great party whose
confidence he possessed. The following letter, addressed to him by Sir
E. Bulwer Lytton, will be read with great interest:—

"BUXTON, DERBYSHIRE,
"April 27, 1862.

"MY DEAR SIR,

"I am much flattered by your wish, and that of our Colonial friends; but I fear that I must decline the important and honourable task to which you invite me: partly from a valid personal reason; partly on political grounds. With regard to the first, I am here for a course of the Baths, in hopes to get rid of a troublesome lumbago, which has harassed me all the winter, and appears to have been epidemical from the number of victims it has cramped and racked this wet season. And I fear I shall not be able to get away till the middle of May, unless it be for some special vote. But apart from this consideration, I doubt whether it would be prudent for any member of Lord Derby's late Government, with the support of those leaders who might very soon form another administration, to urge upon Parliament any new pecuniary burthen, nay, any new loan, in the face of a deficit. Would not this really play into Gladstone's hands, and furnish him with a plausible retaliation in case of attack on the side in which he is most vulnerable, viz., the dealing with a deficit as if it were a surplus? And again, would it be quite prudent in the coming Conservative Chancellor of the Exchequer and his future colleagues to commit themselves to a measure they might find it inconvenient to carry out when in power?

"These are doubts that occur to me; and would be well weighed by Mr. Disraeli—who might, perhaps, agree with me, that, on the whole, it would be better that this very important question should be brought before the House by some one not in the late Cabinet—some great merchant, perhaps—some one, in short, who could not be supposed to compromise or commit the future administrative policy of the party.

"I remain, however, of the same opinion, that aid to intercolonial communication can be defended on Imperial grounds—and would in itself, if not opposed on purely fiscal reasons, be a wise as well as generous policy.

"I regret much that my absence from town prevents, my seeing Mr. Watkin and profiting by the information, he could give me. I fear he will have left London before I return to it. But I should be very glad if he would write to me and acquaint me with the exact state of the case at present—and the exact wishes and requests of the Colonists.

"Is it a renewal of the former proposition or what? 'The whole question of intercolonial communication' is a vast one. But I suppose practically it would limit itself before Parliament to the Railway before submitted to us—according to the pamphlet you sent me.

"Believe me,
"Yours very truly and obliged,
"E. B. LYTTON."

The following letter was addressed to me:—

"BUXTON, "May 3,1862.

"DEAR SIR,

"Allow me to thank you cordially for a letter, which cannot but be extremely gratifying to my feelings. Certainly my first object when I had the honour to preside at the Colonial Office was to attach all parts of that vast Empire which our Colonies comprise to the Mother Country, by all the ties of mutual interests and reciprocal affection.

"The importance of the Railway line between Halifax and Quebec must be transparent to every clear-sighted politician. And had I remained in office, I should have urged upon my colleagues—I do not doubt successfully—the justice and expediency, both for Imperial interests, commercial and military, and for the vindication of the Imperial good faith which seems to me indisputably pledged to it, some efficient aid, or guarantees the completion of the line. I should willingly have undertaken the responsibility of recommending that aid to Parliament; and I do not think the House of Commons would have refused it when proposed with the authority of Government. In that case the Railway by this time would have been nearly, if not wholly, completed.

"Traffic begets traffic; railways lead on to railways; and a line once formed to Quebec, it would not be long before the resources of British Columbia would, if properly directed and developed, suffice to commence the Railway that must ultimately connect the Atlantic and Pacific. That once accomplished, the destinies of British North America seem to me assured.

"I shall rejoice to hear that the present Government make a proposal which the Provinces accept. Some time, I conclude, must elapse before their decision can be known; and in that case the question can scarcely come before Parliament this Session. A mode of aid accepted by the Colonies would have my most favourable consideration; and, I cannot doubt, my hearty support, whatever might be the administration that proposed it.

"Yours truly obliged,
E. B. LYTTON."

The Canadian Parliament met, early in March, 1862, at Quebec; in bitter winter and snow storms. We took down all the members who chose to go, by a special through train, in charge of Mr. Brydges,—desiring to show them that, poor and unfortunate as the Grand Trunk might be, we could carry "M.P.Ps." safely and quickly, as we had carried soldiers, and guns, and stores, to the satisfaction of the military authorities. The train made a famous journey. In a few days I followed in company with the Honourable John Ross, and was several days on the road—in constant fight with snowdrifts—in getting to Point Levi. Then came the canoe crossing of the St. Lawrence, an enterprise startling, no doubt, as a first experience, though safe, if tedious. We were put in a canoe, really a disembowelled tree, and this was dragged, like a sledge, by a horse down to the margin of the river, where it was launched amongst floating ice, going up, down, and across the stream and its eddies. Our canoe men coming to a big piece of ice, perhaps 20 feet square, jumped out, dragged our canoe over the obstruction, and then launched it again. When getting jammed between the floating ice, they got on the sides of our boat, and working it up and down, like pumping the old fire engine, they liberated us. Sometimes we went up stream, sometimes down—all points of the compass—but, after an hour's struggle, we gained the wharf at Quebec, safe and sound. But a while after I certainly was exercised. It was important that Mr. Brydges should go back to Montreal, and my son went with him. I watched their crossing the river from the "Platform," in a clear, grey, winter afternoon. They were two hours in crossing the river, a mile or two in width, in a straight line. At one time, I almost despaired, for they had drifted down almost into the Bay; but, by the pluck and hard work of their men, they kept, in this tacking backwards and forwards, and up and down, gradually making their way, till they landed, a long way below the right point, however, and we exchanged handkerchief signals—and all was well.

In the interval between this and my last visit, Lord Monck had been appointed Governor-General in place of Sir Edmund Head, retiring. In talking with the Duke about this appointment, he said, "I offered the position to five men previously, and they refused it." I replied, "Did your Grace offer it to Lord Lawrence, now at home?" The Duke put down his pen, turned from one side of his chair to the other, looked down and looked up, and at last said, "Upon my honour, I never thought of that. What a good appointment it would have been!" Be that as it may, Lord Monck made an excellent Governor in very difficult times. Canada, and the great cause of Confederation, owe him a deep debt of gratitude.

I found unexpected difficulties about Grand Trunk affairs. The Government were afraid of their own shadows. Instead of bringing in the Grand Trunk Relief Bill as a Government measure, as we had expected, they, in spite of remonstrance from Mr. Gait, confided it to a private member, and such was the, unexplained, opposition that I verily believe had the Cartier-Macdonald Government remained in power the Bill, though entirely in the nature of a private Bill, affecting the public in every sense of indirect advantage, would have been thrown out. The newspapers throughout the two Provinces, with half-a dozen honorable exceptions, were vile and vicious, as trans-Atlantic newspapers especially can be. I was full of unexpected anxiety. The Government tactics were Fabian; and on the 5th April they decided to adjourn the House to the 23rd. So I went home in the "China" from New York on the 9th April with my son; saw the Duke of Newcastle, discussed the situation; saw the opening of the Great Exhibition of 1862 on the 1st May, and a few days afterwards sailed, with Lady Watkin, in the old Cunarder, the "Niagara;" arriving at Boston after a long and difficult passage, and then travelling on to Quebec. But, on the 20th May, an event occurred—caused, it seemed to me, as a looker on, through want of tact—which ended in the resignation of the Government. The circumstances were these. Under pressure from home, administered through the new. Governor-General, the Ministry had brought forward measures of defence. They proposed to raise and equip, at the cost of Canada, 50,000 men. They proceeded, if my memory serves me, by the introduction of a Bill, and that Bill was rejected by a very small majority (61 to 54), composed of Sandfield Macdonald and a few others, described as "Ishmaelites." Upon that vote Mr. Cartier at once resigned, as I thought in too much haste. I met him as he walked away from the Parliament House in the afternoon, and expressed regret. He said, with set teeth, clenched fist, and sparkling eyes, "Ah! Well, I have saved the honour of my country against those 'Grits' and 'Rouges;' traitres, traitres." Mr. J. A. Macdonald, afterwards, took the matter very quietly, merely remarking that the slightest tact might have prevented the occurrence. So I thought.

The question was, Who was to succeed? In the ordinary course Mr. Foley, the assumed leader of the Opposition, would have been sent for. It was the opinion of the Honorable John Ross that he ought to have been. But the Governor, considering, I suppose, that the scanty majority was led by Sandfield Macdonald, sent for him. All sides believed that it would be a ministry of a month. But this astute descendant of Highlanders managed to stay in for nearly two years: two years of no good: two years of plausible postponement of all that the Duke had been so loyally working for in the interest of Canada. Personally, I had no reason to complain as regarded Grand Trunk legislation. Sandfield Macdonald promised to carry our Bill, and he honourably fulfilled his promise. The Bill passed; Lady Watkin and I sailed from Boston for England on the 7th June.

But the refusal of the Canadian Parliament to vote money for defence had created a very bad impression in England. England had made large sacrifices in filling Canada with troops and stores, at a critical time—and it was naturally said, in many quarters, "Are these people cowards? Are they longing for another rule?" Sir E. Bulwer Lytton, when Mr. Rose and I called upon him at his lodgings, in St. James's Place, during my short stay in London, said, "I do not see what we can do. Had Canada helped us at all, we could have succeeded. Now every one will say, What is the use of helping such people?" And Mr. Disraeli said, in the House, answering a statement that the vote of the Canadian Parliament did not represent the feeling of the people: "I decline to assume that the vote of a popular assembly is not the vote of those they represent." All this was awkward. But I resolved I would never give in. So I went to Canada again in the autumn of 1862.

Mr. Joseph Howe came from Halifax to Canada to meet me. He did all he could to induce Sandfield Macdonald to settle the long out-standing postal claim on Canada of the Grand Trunk; but in vain. He never would settle it, just and honest as it was. Mr. Howe tried to induce the Government to take up the Intercolonial question where we had left it in the previous autumn: and in this he so far succeeded that it was agreed a delegation from Canada should meet delegations from Nova Scotia and New Brunswick before the end of this year—1862—in London. Messrs. Howland and Sicotte were the Canadian delegates; Mr. Howe for Nova Scotia, and Mr. Tilley for New Brunswick. We set to work to carry both the Intercolonial guarantee, and the Pacific transit scheme, the moment these gentlemen arrived in England.

Meeting Messrs. Rowland and Sicotte at their hotel, in Jermyn Street, on the 2nd December, 1862, and discussing matters all round, they certainly led me, unsuspectingly, to believe they had the same desire to carry the Intercolonial as that entertained by Messrs. Howe and Tilley; and further, that if a road and telegraph project could be carried on the broad lines laid down in so many discussions, their arrangements on both questions would be cordially welcomed and approved by their colleagues. I very soon found out, however, that they were "riding to orders," and those orders, no doubt, being interpreted, were: "Refuse nothing, discuss everything, but do nothing."

On the 8th December we met the Canadian delegates at the bank of Messrs. Glyn, in Lombard Street, and we drew up a proposal, which these gentlemen corrected. We adopted their corrections and sent in the paper, as an agreed paper, to the Duke.

Two days afterwards, for better assurance, we received the following memorandum:—

"With a view of better enabling the gentlemen whom they met yesterday at 67, Lombard Street, to take immediate measures to form a Company for the object of carrying out the construction of a telegraph line, and of a road to establish frequent and easy communication between Canada and the Pacific, and to facilitate the carrying of mails, passengers, and traffic, the undersigned have the honour to state, that they are of opinion that the Canadian Government will agree to give a guarantee of interest at the rate of four per cent, upon one-third of the sum expended, provided the whole sum does not exceed five hundred thousand pounds, and provided also that the same guarantee of interest will be secured upon the other two-thirds of the expenditure by Imperial or Columbian contributions.

"If a Company composed of men of the standing and wealth of those they had the pleasure to meet is formed for the above purposes, under such conditions as will secure the interests of all parties interested, and the accomplishment of the objects they have in view, such an organization will be highly favourable to the settlements of an immense territory, and, if properly administered, may prove to be also of great advantage to the trade of England.

"London, 10 Decr. 1862.
"L. V. SICOTTE,
"W. P. HOWLAND.
"To MM.
Glyn,
Benson,
Chapman,
Newmarsh,
Watkin,
&c. &c. &c."

A few days afterwards these Canadian delegates started an objection. The Imperial Government merely gave land and did not take one-third of the proposed guarantee, and the following further memorandum was sent to me:—

"Although little disposed to believe that Her Majesty's Government will not accede to the proposal of co-operation they have made in relation to the opening of communication from Canada to the Pacific, the undersigned have the honour to state, in answer to the letter of Mr. Watkin of the 17th instant, that in their opinion the Government of Canada will grant to a Company organised as proposed in the papers already exchanged, a guarantee of interest, even on one-half of the capital stated in these documents, should the Imperial Government refuse to contribute any portion of this guaranteed sum of interest.

"In answer to another demand made in the same letter, the undersigned must state that the guarantee of the Canadian Government of this payment of interest ought to secure the moneys required at the rate of four per cent, and that they will not advise and press with their colleagues a higher rate of interest as the basis of the arrangement.

"London, 20 December, 1862.
"L. V. SICOTTE,
"W. P. ROWLAND.

"ED. WATKIN, Esq., London."

So much, and so far, for the Pacific affair. But in the Intercolonial discussion there was an undercurrent. The only points left for discussion with the Duke and Mr. Gladstone were the question of survey, which was easily settled, and the question of a sinking fund for the loan to be made on the credit of Great Britain. At first Mr. Gladstone insisted on such a short term of repayment, and therefore so heavy a put-by, that his terms took away the pecuniary value of the guarantee itself: that is to say, that what the Colonies would have annually to pay, would have amounted to more than the annual sum for which they could have borrowed the money themselves. I suggested a longer term, and also, that the interest on the annual put-by, to accumulate, should be altered so as to alleviate the burden. In answer to a letter written with the assistance of Messrs. Howe and Tilley, I received the following from the Duke:—

"CLUMBER, "8 Decr. 1862.

"MY DEAR SIR,

"I am sorry to say your letter confirms the impression I have entertained from my first interview with the Canadian delegates—an impression strengthened by each subsequent meeting—that Mr. Sicotte is a traitor to the cause he has come over to advocate. I am unable to make out whether he is playing false on his own account or by order of his colleagues; but I cannot say I have any reason to associate Mr. Howland with the want of faith in any dealings with me.

"You can have no idea how I have been compelled to forbear and to fence with Mr. S. to prevent his breaking off upon every possible occasion and upon any almost impossible pretext. His whole aim has been to find some excuse for throwing up the railroad and saying it was the act of the Imperial Government. As for Mr. Gladstone being 'all powerful,' he knows that in the financial details alone Mr. G. interferes, and I presume Mr. Rowland would tell him that this is the duty of a Finance Minister.

"Nothing struck me more than Mr. S.'s objection to your being present at our meetings. When you did 'drop in' I felt obliged to say nothing about it till your card was brought, and on that occasion I particularly remarked that his usual obstructiveness was suspended.

"The one point now in dispute between the delegates and the Treasury is really of no importance to either party. I hope and expect that Mr. G. will give way; but I suspect if he does Mr. S. will be (by no means for the first time) much disappointed.

"Have you seen a remarkable letter in the 'Standard' of the 6th, signed 'A British Canadian,' commenting upon Mr. Sicotte going over to Paris and dictating to the editor of 'La France' an article upon a despatch of mine to Canada on the subject of the Militia? The article in 'La France' can only come from a member of the present Canadian Government.

"Do not at present get up any new deputation or go to Lord Palmerston. Considering Mr. G.'s strong opposition to the whole scheme on principle, I cannot say I think he has shown any desire to thwart by obstacles in details a measure upon which his views have been overruled, and it would be ungracious to show distrust where none at present has been merited. I may differ with him on some points; but he has certainly conceded more to me than I to him, and I could be no party to attempting to supersede his proper functions of the financial watch-dog!

"I am anxious not to be brought up to town unnecessarily, for I am conscious that I want comparative rest, and that my health is not very fit for the commencement of a Session; but whenever you are passing between London and Manchester I shall always be happy to see you, and glad if you can stay a day or two—only invite yourself.

"Yours very sincerely,
"NEWCASTLE."

The next day I had the following:—

"CLUMBER, "9 Decr. 1862.

"MY DEAR SIR,

"It is no easy matter to give any advice as to what should be done, especially as I do not know whether Mr. Gladstone is still in London, though I rather imagine he has left for Hawarden.

"If Mr. Sicotte were anywhere but here (where he never ought to have been), I should advise Messrs. Howe and Tilley to see Mr. Gladstone, perhaps with you; but I can neither recommend them to see him with or without Mr. Sicotte, so long as he is here.

"As I wrote to you yesterday, the business ought to have been closed three days ago, for though I think. Mr. Gladstone's stipulation wrong, it ought not to have been allowed to interfere with a final arrangement.

"I agree with you that the new phrase about an 'uncovered loan' is not very intelligible, but I put the same interpretation upon it that you do.

"I am not without hope that whilst I am writing some 'leeway' may have been recovered through Sir F. Rogers and Mr. Anderson, but, as the best thing I can do, I propose this:

"I ought to go down to Surrey, to attend Mrs. Hope's funeral on Thursday morning, but being far from well, I was inclined to excuse myself from so long a railway journey, which I find injurious, but my decision is altered by your difficulty. I will be at Thomas' Hotel to- morrow night at 10 o'clock, if you can meet me at that time, and if you like to appoint Howe and Tilley a quarter of an hour later, I will see them and discuss what we ought to do.

"I feel very confident we can yet set matters right, if we can only prevent Mr. Sicotte upsetting the coach.

"I cannot see you on Thursday, as, being in London, I must go by the 9 a.m. train to attend the funeral at Deep Dene, and I may be late in returning to town in the evening.

"I am, yours sincerely,
"NEWCASTLE."

Memorandum from my diary of 10th December, 1862.

"To the Duke (of Newcastle), at 10 p.m.—(Thomas Hotel), by request. Saw Howe (representing Nova Scotia), and Tilley (representing New Brunswick)after. Very satisfactory. Duke said Gladstone had expressed strong approval of Pacific, &c. affair—and had added, 'that it was one of the grandest affairs ever conceived, and he hoped it would be completed in Duke's time—and it should have his hearty support.' Good."

Messrs. Sicotte and Rowland suddenly went home, and we appeared to be at a dead lock. After several letters and suggestions, the Duke sent me this letter:—

"CLUMBER, "6 Jany. 1863.

"MY DEAR SIR,

"I have received several letters from you without sending any answer; but I must confess I am so disheartened about the result of all the trouble I have taken with the 'delegates,' that I do not know how to proceed, or, rather, I do not see the possibility of proceeding at all.

"At the last interview I had with the Canadian delegates, everything was considered settled to their satisfaction, except the one point of a sinking fund, and even that was admitted by all but Mr. Sicotte to be met by Mr. Gladstone's consent, that the money should be invested in Colonial securities. Thus matters stood until the day the Canadians embarked, when (avoiding an interview with Sir F. Rogers, and everybody else) they sent me in a paper, couched in terms offensive to the British Government, and complaining of every single provision in the conditions—evidently got up to carry out Mr. Sicotte's pre- arranged plan of upsetting the whole scheme, and throwing the blame on the Imperial Government.

"Unless this miserable creature and his colleagues are turned out of office on the first day of the Session, it is manifest that the measure will be sold for party purposes; and in that case I shall be unwilling to play into their hands, by giving them the N. W. Transit Scheme.

"I cannot be in town till after the 19th. I will see you then, if you wish it, or any day next week if, on your way to or from Manchester, it were convenient to you to dine and sleep here. I shall most likely be alone.

"I do not understand your alarm about a clause in the Treasury Minute. I know of no provision which impedes legislation this Session, except that requiring a previous survey, which I more than once discussed with you, and which I thought you agreed could easily be met.

"When you are in London Sir F. Rogers can show you Messrs. Sicotte and
Rowland's extraordinary paper, if you wish to see it.

"I am, my dear Sir,
"Yours sincerely,
"NEWCASTLE."

Sir Frederick Rogers showed me the "extraordinary paper" of Messrs. Sicotte and Howland, and yet Mr. Howland, on his return, favoured me with the following letter:—

"QUEBEC, "3_rd April_, 1863.

"MY DEAR SIR,

"The pressure of public business has prevented me from sending an earlier reply to your valued favour of the 26th February. In reference to the tariff of charges of your Company, you must be aware that it is not legal, unless approved by the Governor and Council. I am not aware of the circumstances stated by you, but presume, that if the Provincial Secretary called for your tariff, it was because it had not received the sanction of the Government; however, I feel safe in saying, that in the exercise of that power the Government would not be actuated by any feeling other than that of performing a public duty.

"Mr. Sicotte and myself were treated with the greatest consideration and kindness by His Grace the Duke of Newcastle, and I deeply regret that the action which we felt it necessary to take, in the performance of a public duty, should have produced any unpleasant feeling on the part of his Grace: however important the Intercolonial railroad may be, the opening up of the N. W. Territory would increase its value, and, in fact, afford much stronger grounds for its construction than exists at present, and the immediate result of opening up that territory would, in my opinion, be productive of much greater good to the people of England and Canada than would result from the construction of the Intercolonial railroad.

"I send by post the report of Mr. Taylor to the United States Government, upon the N. W. Territory of B.A., by which you will perceive, that they attach much greater importance to the future of that country than the people of England or Canada have hitherto shown. The description given of the climate appears to have been compiled from reliable data, and affords the clearest information upon that point that has as yet come before the public: I regret not having another copy to send His Grace the Duke of Newcastle; if he has not received one, will you be kind enough to send him this.

"Mr. Sandford Fleming (who is an engineer of high character and ability) is now here, as a delegate from the people of Red River, in charge of a memorial on their behalf to the Governments of Canada and England: this memorial is accompanied with a very clear statement of the condition and prospects of the country, and a report upon the proposed communication to be made through it. I am now getting the documents printed, and when done I will send you a copy, and one will be forwarded by His Excellency to the Duke.

"Mr. Fleming and myself are preparing some suggestions for you, in reference to the purchase of the rights of the Hudson's Bay Company, with a view to show in what manner it could be carried out, and afford security that the country should be opened for settlement, and at the same time afford an inducement to the parties who might become the purchasers. It would truly be a great project, and if the Company would come down in their pretensions to what their possessory rights are really worth, it could be carried out, and result in great good to the country, and offer great inducement to those who might engage in it.

"I am much pressed with work, and somewhat better in health.

"Yours faithfully,
"WM. P. HOWLAND.

"EDW. WATKIN, Esq.,
"21, Old Broad Street, London."

And if further proof were wanting that these gentlemen deserved the previously-quoted strictures of the Duke, always bearing in mind the trouble, responsibility and expense incurred, mainly at their instance, upon the Pacific project, the following gives it:—

"No. 1107. SECRETARY'S OFFICE, QUEBEC, "1_st Augt_. 1863.

"SIR,

"I have the honour to inform you that your letter of the 27th ultimo, addressed to the Hon. John S. Macdonald, has been transferred to this Department.

"I am now directed to state, in reply to the inquiry therein made, that the details of the scheme for the promotion of telegraphic and postal communication across the Continent of British North America have not, as yet, been placed before the Provincial Government in such a definite shape as to enable them to determine the course which it may be advisable to take in relation to that important undertaking.

"The Government will, however, be prepared, whenever a sufficiently matured scheme shall be submitted for their consideration, to give the subject their most earnest attention.

"I have the honour to be, Sir,
"Your most obedient Servant,
"E. A. MEREDITH,
"Assistant Secretary."

"EDWD. W. WATKIN, Esq.,
"Montreal"

Two days after the Duke's last letter, came the following:—

"KELHAM, NEWARK, "8 Jany. 1863.

"MY DEAR MR. WATKIN,

"Since your letter of the 6th (received to-day), you will partly have learnt why I could not answer some of your private letters, but as regards the official letter respecting the Western project, I think you will see that I cannot answer it without consulting my colleagues. I cannot grant a subsidy, and on the other hand I should be unwilling to refuse it. The proposal that part of the subsidy should be Imperial necessarily entails delay. I do not think I can possibly send an answer till after the next Cabinet.

"I shall be sorry to miss Mr. J. A. Macdonald. The only chance of seeing him would be if he could dine and sleep a night at Clumber on his way to Liverpool. Unfortunately I must be all day on the 16th at Newark on County business. Could he come on the afternoon, of 15th without inconvenience?

"I am, yours very sincerely,
"NEWCASTLE."

And farther letters in the order given.

"CLUMBER, "15 Jany. 1863.

"MY DEAR MR. WATKIN,

"I have written officially to the Admiralty respecting the formation of a Naval Station at Esquimault, but I will now write privately to the Duke of Somerset and ask for an early answer.

"Mr. Macdonald came last night, and I was delighted to see him a new and healthy man. I had an interesting conversation with him, but fully expecting he would stay till to-morrow reserved several things for to- day. It was not till breakfast was over that I knew he was returning in five minutes. As, however, his return to Canada is postponed for a week, I shall see him in London.

"I am, yours very sincerely,
"NEWCASTLE."

"CLUMBER,
"26 Jan.

"Your letter received just as I am starting for London. I remain there, and can see Mr. Cameron in town any day. I was in London last week, and saw Mr. Macdonald. Mr. Cameron was Mr. Malcolm Cameron, a man whose worth was undoubted.

"Yours, &c.,
"N."

"DOWNING STREET,
"20 Feby. 1863.

"MY DEAR MR. WATKIN,

"It has not been till to-day that I could have given you any answer respecting the proposed subsidy to the N. W. Transit.

"I think a short verbal communication would be more satisfactory than explanation by letter.

"Can you call here to-morrow about 2.30, or, if more convenient, at
Thomas' Hotel—between 11 and 1.

"Yours very sincerely,
"NEWCASTLE."

"DOWNING STREET,
"27 March, 1863.

"MY DEAR SIR,

"I do not on the first blush of your proposal see any great difficulty in agreeing to it,—if indeed the Imperial Government is in absolute possession of the tract of country you speak of.

"I have requested Sir F. Rogers to look into this and see you if you like to call upon him when you come to town.

"I leave London to-morrow morning for, I hope, a fortnight.

"I am, yours sincerely,
"NEWCASTLE."

This letter of the 27th March, 1863, was in reply to a letter from me:—

"ROSE HILL, NORTHEN,
"March 27th, 1863.

"MY LORD DUKE,

"In looking over the maps very carefully prior to sending in the documents proposed to be transmitted through your Grace, I find that it is very probable—from the desirability of carrying a telegraph through a wooded country, and avoiding the plains, where buffaloes often move about in square miles of extent—that we may go through the Imperial territory for a more or less considerable distance. It therefore strikes me, that what I have before suggested, as to the desirability of Imperial assistance, may not be reconciled with Mr. Gladstone's desire to avoid an Imperial contribution of money. I therefore suggest to your Grace, that the Imperial Government should agree to give a grant of land of some reasonable extent, also that portion of the territory lying between the Hudson's Bay territory and British Columbia which belongs to the Crown, provided a telegraphic and road communication passes through any portion of that territory.

"If this meets your Grace's views, would it not be better that the fact of the Imperial Government having made this concession should be recited in the preamble of the proposed Bill which we are to send to Canada, and that thus invited to the scheme by a contribution of land, power to purchase or control should be directly given by a clause to the Crown? If your Grace will give me your views upon this at once, I will have the documents prepared accordingly, and transmitted without delay.

"'Minesota' has given about two millions of acres in aid of works to extend their rail and water communications in the direction of Red River.

"I have to thank your Grace for sending me Mr. Foley's report, and, also, copy of the Minutes of Council as to the Intercolonial and the western project.

"The territory I allude to is hunted over by the Hudson's Bay Company, and forms, mainly, a portion of what they call the Athabasca district."

It was matter of deep regret to me that the Government of the day would not accept any share of the pecuniary responsibility of adding to the compactness of the Empire, by connecting the two oceans by telegraph and by road. The despatch which I copy—dated Downing Street, 5 March, 1863—distinctly says, in its third paragraph, "Her Majesty's Government are of opinion that they cannot apply to Parliament to sanction any share in the proposed subsidy by this country."

"DOWNING STREET, "5_th March_, 1863.

"SIR,

"I am directed by the Duke of Newcastle to acknowledge the receipt of your letter of the 27th of December, and to express his Grace's regret that so long, though quite unavoidable, a delay should have occurred in replying to it.

"I am now desired to make to you the following communication:—

"Her Majesty's Government are of opinion that they cannot apply to Parliament to sanction any share in the proposed subsidy by this country; and though they take great interest in the project contemplated with so much public spirit by the gentlemen represented by you for carrying a telegraphic and postal communication from the confines of Canada to the Pacific, they do not concur in the opinion of the Canadian delegates that the work is of such special 'Imperial importance' as to induce them to introduce for the first time the principle of subsidizing or guaranteeing telegraphic lines on land.

"Her Majesty's Government are further of opinion that without a submarine Transatlantic telegraph the proposed line in America will be of comparatively small value to the Imperial Government, and that whenever a scheme of the former kind is renewed, it is almost certain that this country must be called upon to bear a much larger charge for it than that which it is now proposed to devolve upon the British Colonies in respect of the land-telegraph and communication.

"As Canada has offered to bear one-half of the proposed guarantee, the Duke of Newcastle is prepared to recommend, and his Grace has no doubt of ready acquiescence, that British Columbia and Vancouver Island shall pay the sum of L10,000 per annum, as their share of L20,000 (being at the rate of L4 per cent, on a capital of L500,000), to commence when the line is in working order.

"It will, however, be necessary, before any proposal is made officially to the Colonies, that the Duke of Newcastle should receive further details. It is requisite that his Grace should be informed what provision will be proposed as to the duration of this subsidy; what conditions as to the right of purchasing the line, and to what authorities that right should belong; and on what terms the whole arrangement may be revised in the event of the Hudson's Bay Company coming to any agreement for the sale of their territory.

"There will doubtless be other provisions which the Colonies will expect.

"I am, Sir, your obedient Servant,
"T. F. ELLIOT.
"E. W. WATKIN, Esq."

I close this narrative of the Pacific Transit Scheme with the despatch of the 1st May, 1863, which summarises the proposals made and generally concurred in. These long discussions were not abortive, for they led up to the great question of the buying out of the Hudson's Bay Company, without which neither successful Confederation, nor its child the Canadian Pacific Railway, would have been achieved in this generation.

"DOWNING STREET, "1_st May_, 1863.

"SIR,

"I am directed by the Duke of Newcastle to state that he has had much satisfaction in receiving your letter of the 28th ultimo, enclosing the heads of a proposal for establishing telegraphic and postal communication between Lake Superior and New Westminster, through the agency of the Atlantic and Pacific Transit and Telegraph Company. These proposals call for some observations from his Grace.

"New Westminster is named as the Pacific terminus of the road and telegraph. His Grace takes for granted that if the Imperial Government and that of British Columbia should find on further inquiry that some other point on the coast would supply a more convenient terminus, the Company would be ready to adopt it.

"Article 1.—His Grace sees no objection to the grant of land contemplated in this Article, but the 'rights' stipulated for are so indeterminate that without further explanation they could scarcely be promised in the shape in which they are asked. He anticipates, however, no practical difficulty on this head.

"Nos. 1 and 2.—The Duke of Newcastle, on the part of British Columbia and Vancouver Island, sees no objection to the maximum rate of guarantee proposed by the Company, provided that the liability of the Colonies is clearly limited to 12,500_l_. per annum. Nor does he think it unfair that the Government guarantee should cover periods of temporary interruption from causes of an exceptional character, and over which the Company has no control.

"But he thinks it indispensable that the Colonies should be sufficiently secured against having to pay, for any lengthened period, an annual sum of 12,500_l_. without receiving the corresponding benefit, that is to say, the benefit of direct telegraphic communication between the seat of government in Canada and the coast of the Pacific.

"It must, therefore, be understood that the commencement of the undertaking must depend on the willingness of the Canadian Government and Legislature to complete telegraphic communication from the seat of government to the point on Lake Superior at which the Company will take it up. Nor could his Grace strongly urge on the Colonies of Vancouver Island and British Columbia the large annual guarantee which this project contemplates, unless there were good reason to expect that the kindred enterprise of connecting Halifax and Montreal by railway would be promptly and vigorously proceeded with. It will also be requisite to secure by formal agreements that the guarantee shall cease, and the grants of land for railway purposes revert to the grantors, in case of the permanent abandonment of the undertaking, of which abandonment some unambiguous test should be prescribed, such as the suspension of through communication for a stated period.

"The Duke of Newcastle does not object to five years as the maximum period for the completion of the undertaking—and he thinks it fair to exclude from that period, or from the period of suspension above mentioned, any time during which any part of the line should be in occupation of a foreign enemy. But injuries from the outbreaks of Indian tribes and other casualties, which are inherent in the nature of the undertaking, must be taken as part of the risks which fall on the conductors of the enterprise, by whose resource and foresight alone they can be averted.

"His Grace apprehends that the Crown land contemplated in Article 3, is the territory lying between the eastern boundary of British Columbia and the territory purporting to be granted to the Hudson Bay Company by their charter. His Grace must clearly explain that Her Majesty's Government do not undertake, in performance of this article of the agreement, to go to the expense of settling any questions of disputed boundary, but only to grant land to which the Crown title is clear.

"With regard to the 7th Article, the Duke of Newcastle could not hold out to the Company the prospect of protection by any military or police force in the uninhabited districts through which their line would pass —but he would consider favourably any proposal for investing the officers of the Company with such magisterial or other powers as might conduce to the preservation of order and the security of the Company's operations.

"With reference to the 9th and concluding Article, the Duke of Newcastle would not willingly undertake the responsible functions proposed to him, but he will agree to do so if by those means he can in any degree facilitate the project, and if he finds that the Colonies concur in the proposal.

"Subject to these observations, and to such questions of detail as further consideration may elicit, the Duke of Newcastle cordially approves of the Company's proposals, and is prepared to sanction the grants of land contemplated in the 3rd Article. He intends to communicate the scheme, with a copy of this letter, to the Governor- General of Canada, and the Governor of Vancouver Island, recommending the project to their attentive consideration.

"I am, Sir, your obedient Servant,
"C. FORTESCUE.
"E. W. WATKIN, Esq."