ure gave Galt an opening for another brilliant
stroke of railway strategy. A company had recently been chartered to
build a road from Toronto to Guelph and Sarnia, and the firm of Gzowski
and Co., of which Galt was a member, had secured the contract. Galt,
acting with Alexander Gillespie, a prominent London financier who was
the agent of the Toronto, Guelph and Sarnia Railway, now proposed to
substitute this line as the westward extension. Everybody was in an
amalgamating mood, and the bargain went through. All contracts
previously made were taken over by the amalgamated company, and the
{78} investing public was told that all uncertainty as to the total
amount was thus removed--as it emphatically was, for the time.

A glowing prospectus was drawn up. The amalgamated road would be the
most comprehensive railway system in the world, comprising 1112 miles,
stretching from Portland and eventually from Halifax (by both the
northern and the southern route) to Lake Huron. The whole future
traffic between west and east must therefore pass over the Grand Trunk,
as both geographical conditions and legislative enactment prevented it
from injurious competition. 'Commencing at the debouchere [_sic_] of
the three longest lakes in the world,' the prospectus continued, 'it
pours the accumulating traffic in one unbroken line throughout the
entire length of Canada into the St Lawrence at Montreal and Quebec, on
which it rests on the north, while on the south it reaches the
magnificent harbours of Portland and St John on the ocean.' It was
backed by government guarantee and Canadian investment, and its
execution was in the hands of the most eminent contractors. The total
capital was fixed at L9,500,000 sterling. The revenue was estimated at
nearly L1,500,000 a year, which, with working expenses at forty {79}
per cent of revenue, and debenture interest and L60,000 for lease of
the Atlantic and St Lawrence Railway deducted, would leave L550,000 or
11 1/2 per cent on the share capital.

On the advice of Baring and Glyn only half the capital was issued at
first. This decision proved a serious mistake. In 1853, when the
company was floated, money was abundant and cheap; the shares and bonds
issued were over-subscribed twenty times, and were quoted at a premium
before allotment. Scarcely was the issue made when war with Russia
loomed up, and money rose from three to seven or eight per cent. Never
again was it possible for the Gr