Northern Extension Railways Company.

Annual Meeting.

The annual meeting of the Northern Extension Railways Company for the year ending 31st December, 1873, was held at noon yesterday in the office of the Northern Railway Company. The Hon. Frank Smith occupied the chair, and there were also present Messrs. Noah Branhart, Vice-President; Jno. E. Foreman, Secretary; H.L. [Hime], John Turner, J.J. Vickers, George D'Arcy Boulton, Joseph Rourke, Collingwood township; and Robert Wilkes, M.P.

The Secretary read the notice calling the meeting, and then the annual report, which was as follows:—

1. The Directors have the honour to present their report of the transactions of the Company to 31st December, 1873.
2. The Company has no 54.84 miles of line completely finished and in operation, viz:—

   North Grey Branch— Collingwood to Meaford	20.50	miles
   Muskoka Branch— Barrie to Washago	34.84	"
   Total	54.84	miles

3. The second division of the Muskoka Branch, viz., from Orillia to Washago, was opened from traffic on the 18th of August, 1873, and its operation since that date has had a visible effect in promoting the business activity of the District.
4. The third division of that line, viz., from Washago to Gravenhurst, is now in course of construction, but the financial position of the Company admonishes the Directors to observe great caution in incurring liabilities beyond their immediate resources, and accordingly they are, for the present, concentrating the outlay chiefly on works between Washago and the Severn River, to which point they hope of open the line for traffic in July or August next.

With the exception of $12,500 from the village of Orillia, the Company has received no municipal aid whatever beyond Barrie, the townships of Oro, Orillia, Mara, and Rama, from which bonuses were reasonably expected, having failed to extend by assistance whatever, whilst the district of Muskoka seems to have receded from its engagement to contribute to the capital of the Company.

To add to these disappointments, the value of the Government subsidy has been seriously impaired by the great rise ini the cost of every element of construction since the date when the subsidy was granted; for, as a matter of fact, in regard to that portion of the line receiving Parliamentary aid at the rate of $2,000 (say £411 stg.) per mile, the whole sum of subsidy has been more than exhausted by the mere difference of cost in excess of the previous prices.

Whilst, therefore, the aggregate municipal assistance given to this company has been, mile for mile, far below that extended to any other new railway in which this city is interested, the value of the Government subsidy, in relation to the aggregate capital account, has, under the circumstances stated, been quite illusory, and the Directors cannot refrain from adding that the subsidy of $4,000 (£822 stg.) per mile for that portion of the line now under construction and wholly within the undeveloped District of Muskoka, is practically of but little assistance in promoting a work the cost of which will not be less than $19,700 per mile, whilst the public advantages to accrue from its construction may be stated as simply illimitable.

How far the Company by private enterprise and investment may be able to overcome these difficulties, and to achieve the construction so important a public work which such inadequate public aid, remains to be seen. No efforts of theirs to this end shall be spared, but they cannot conceal from themselves the probability of serious delays, and of the great commercial losses to the District and the country which may then result.

5. The Receipts of the Company on capital account have amounted to $1,244,444.00, and the outlay on all services has been $1,250,371.53. The details of this expenditure are herewith presented, together with the reports of the Auditors upon all the accounts of the Company and of the Chief Engineer in relation to the works.
6. The earning for the year 1873 of the Lines in operation have amounted to $60,222.61.

Under the terms of the lease to the Northern dated 10th April, 1872, 65 per cent. of those earnings belong to the lessees for working the lines, and the balance, 35 per cent., to this Company as lessors and proprietors.

These aggregate earnings, however, as in relation to the mileage now in operation, must not be accepted as an illustration of true traffic, seeing that portions of the line have only been finished and brought into working during a part of the year, and there is no doubt that they have been impaired by the non-completion of the system. The Directors accordingly see nothing in the past to weaken their faith in the ultimate revenues of the railway, which they believe will be fully up to the original estimates so soon as the waters of Lake Muskoka can be reached. At the same time they feel that the benefits of the undertaking have, as yet, chiefly accrued to the Northern Railway and the commerce of this city, a view entirely justified by the significant fact that whilst the gross earnings of the Extension lines have been $60,222.61, the traffic contributed by these branches to the main line reached the sum of $108,853.96 for the year 1873.

Upon this point your Directors regret to say that they have found it their duty to protest against the inadequate train and car service which the lessees give to the Extension lines, as being an infraction of the terms of the lease, and that since that Company became lessees of the extensions, already involving an additional length of 55 miles of railway to be operated, and since they undertook to stock and work this extra mileage, no sensible additions have been made to its outfit of engines and rolling stock. This is clearly unjust to this Company, injurious to its traffic, and a bar to the commercial development of the district, and whilst they desire to maintain the friendly relations so necessary to the interests of both Companies, they would fail in their duty were they to hesitate in directing attention to this serious impediment to success—an impediment not only involving loss to both Companies, but even larger injury to the public interests of the commerce of this city, to promote which was the main objective this Company had in view when it engaged in the undertaking.

7. In the last annual report the Directors stated that they had received official intimation of an intention on the part of the Northern Railway Company to change the gauge of its line, involving therein the change of the branches.

To this your Directors expressed their cordial concurrence, believing that the sooner the change is made the better for every interest.

They recur to the subject now only because the Grand Trunk Railway having since changed its gauge, and the prospects of the railway construction to the northward having since taken practical form, it is self-evident that these lines cannot be maintained in isolation, that the change must sooner or later be made, and that it is clearly in the interest of economy to make it whilst a portion of the lines are yet under construction, and before the rolling stock necessary to work them has been provided.

All of which is respectfully submitted.

Frank Smith,
President.

Jno. E. Foreman,
Secretary.

On motion of the President, seconded by Mr. Barnhart, the report was received and adopted.

Mr. Turner moved, That in view of the statements of the report just adopted, the Directors for the ensuing year be requested to continue their efforts to secure more complete train and car services by the lessees on the lines of this Company, and failing therein, then to take such corrective measures as may arrest continued injury to the traffic and revenues of the lines. He said that he entirely concurred in the friendly sentiments expressed in the report just adopted with reference to the continuance of the friendly relations which had hitherto existed between this Company and the Northern Railway Company of Canada. Of course, every stockholder was perfectly aware that the two Companies were quite distinct—that this Company ad no interest in the Northern Railway other than that the former were lessors of their roads to the Northern Railway Company. The report of this Company referred, however, to a very important matter which was likely to affect this stock of the Northern Railway, inasmuch as the car service during the past year had not been sufficient to accommodate the freight traffic on the Northern Extension Railways; and he quite concurred in the clause which had been inserted in the report to the effect that the Northern Extension Railway Company had a claim against the Northern Railway Company on that account. Objections had been taken by may persons to the leasing of these roads to the Northern Railway Company. If there was any ground for these objections it was to be found in this report, which showed that while the gross earnings of the Northern Extension Railways during the past year amounted to $60,222.61, the traffic brought on to the Northern Railway by them amounted to $108,853.96, so that the revenue which accrued to the Northern from the connection of the Northern Extension Railways with it had been more than 90 per cent. above what those branches had themselves received. The public of Toronto and of the section of country served by the Northern Railway could not ignore nor overlook the fact that the rolling stock of that road was inadequate to doing of its own work and of that of the extensions at the same time. They all regretted that the rolling stock of the Northern Railway was not sufficient to do its own work, but as stockholders of the Northern extensions they had more particularly just ground for complaint that such was the fact, and he thought, without desiring to use harsh language, that there should be no hesitation in putting the matter plainly, that it would be their duty, unless the Northern Railway Company could make such arrangements as would enable them to carry the freight of the Northern Extension Railway's, this Company would be perfectly justified in asking the Northern to give them 35 cents for every dollar's worth of freight offered by their branches which it would be able to carry if there were a sufficiency of rolling stock. He though every person interested in the Northern and in the Northern Extensions should know the character of the roadway of the latter. The Northern Railway Company insisted on these roads being built in a certain way, and competent railway judges had declared the standard of the Extensions to be higher than that of any other road in the Dominion. The result had been that the Company had found great difficulty in completing the road to Gravenhurst, its objective point, and he held that they had a just claim on the Legislature for an increased subsidy. This road was costing the Company about $20,000 per mile; he held, therefore, that they were entitled to expect of the Northern that they would put such rolling stock on it as would accommodate the traffic. He hoped as a citizen of Toronto, in common with others, that the Northern would be able to get such an arrangement of their capital account as would enable them to do the traffic not only of their own road but of the Northern Extensions, also, for the benefit of the city of Toronto and of the country tributary to it.

The motion, which was seconded by Mr. Vickers, was then put and carried.

Moved by Mr. Vickers, seconded by Mr. Rourke,

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