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 L3,000,000 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 L20,000 a year for this purpose
and the imperial government, L60,000. 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.

{NEGOTIATIONS IN ENGLAND}

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 b