The following text may have been generated by Optical Character Recognition, with varying degrees of accuracy. Reader beware!

| a a a a PORT PERRY STAR - Tuesday, July 1, 1997 - 13 Sketches of Scugog is a historical | column written by local resident and historian Paul Arculus and published in the Port Perry Star the first issue of each month. LJ [J LJ] The last two articles in this series out- lined the corruption and the scandals which accompanied the promotion, devel- opment and construction of Canada's rail- ways in the first two decades of Canada's existence as a nation. The June article detailed the scan- dalous actions of provincial and federal politicians, including Canada's first prime minister. The corruption and mismanage- ment involving the directors of the Port Whitby and Port Perry Railway were out- lined in the April article. The present article and those to follow will show how this problem con- tinued to plague the Port 3 Whitby and Port Perry Railway particularly during the last few months of the ini- tial construction phase. The news- papers of Oshawa, Whitby and Port Perry and Prince Albert are the main sources of information for this period. The Oshawa Vindicator of March 2, 1870 seemed to revel in the plight of the railway which had as its southern terminal, the _rival town of Whitby. The editor sum- marized the problems by stating, "The Port Whitby and Port Perry Railway Company is a most unfortunate Corporation. No sooner does it get itself out of one difficulty than it tumbles into a worse." "The article went on to detail some of the problems. Of prime concern was the fact that the town of Whitby refused to pay any installment of their commitment to - the line because the conditions of the con- tracts had not been met. The stock had still not been subscribed and the pro- mised work had not been completed. A major concern to the editor of the Oshawa newspaper was the fact that many of the directors of the railway had personal con- tracts with the railway. The writer felt that this disqualified them from being directors. Therefore, in his eyes, no legal board existed. Mr. Blake, a lawyer for the town of Whitby argued that the directors who held subcontracts (particularly Chester Draper who owned the Whitby harbour and Joseph Bigelow whose lum- ber mills had supplied the fencing and ties) should be sued for the profits. The article in the Oshawa Vindicator conclud- ed with the statement that "If the asser- tions of the Town Council are true...it is evident that the present company is at an end." The financial support promised by the municipalities continued to be a problem throughout the entire construction period of the railway. In addition to the reluctance of the municipalities to hand over the money, the un was exacerbated by the incompetence of the directors in manag- ing the affairs of the PW&PPR as well as Corruption and scandal building of Port Perry Railway their inexperience in railroad matters. Route Still Not Decided By late March even the route that the railway should take in Reach Township was still under discussion even though the route from Whitby to the Ridges was ready for rails. That same month, the Ontario Observer published a lengthy letter from the PW&PPR's civil engineer, William Sykes, who expressed his concerns about the route. His concern was over the fact that the Ridges rise to 825 feet above the level of Lake Ontario and the harbour at 'Whitby. Sykes calculated that if a straight line were built it would rise over 75 feet per mile for a 10 mile stretch, a difficult challenge for the best of locomo- tives of that period, and particularly the locomotives planned for the PW&PPR. Sykes pointed out that rather than have the line run directly through Manchester and then Prince Albert, a bet- ~ ter plan as far as gradient was concerned, would be to have one station between both communities and shared by them. \ His view was that the Port Perry station would be the lum- ber station and the Manchester- Prince Albert station for grain. The citizens of Manchester, themselves, eventually raised {| the money to pay for the sur- { vey of the revised railway route. John Shier was employed to make the survey and took a week to complete it. Railway Wrangling The Whitby Chronicle of March 24, 1870, gives an exam- ple of the wrangling which took place between the Railway and the various municipalities. Whitby had raised $50,000 in debentures to help finance the railway. The debentures had been raised in August of 1868, but the railway company was not officially organ- ized and able to draw on the money until September of 1869. The interest earned on that money in the - 1. The mayor of Whitby would not hand over the debentures because the Railway company insisted on the back interest and Holden had not been elected to the board. 2. The Railway company would not give up the back interest but would elect Holden when he had bought his qualifying shares. 3. Mr. Holden would not buy his qualifying shares until the ~ Railway board gave - f up its demand for fi back interest. 4. At the April 11 meeting the compa- ny tried to force the mayor to hand over the debentures but failed. 5. The company then threatened to take the mayor to Chancery court in order to force him to hand over the debentures. 6. A group of concerned citizens stated that they would seek a writ to prevent the company from selling the debentures. By the time the mid May meeting of the railway board was held, Whitby still hadn't paid the first debenture because the conditions had not been met. Holden maintained that he had been denied access to the company accounts yet Major and Bigelow had demanded payment of the debenture before meeting the conditions. . Bigelow said no one was willing to resign to make room for Holden and "it was a pretty hard matter to allow such a man as Mr. Holden to have a seat on the board." Bigelow also refused to give up claims to the interest. Bigelow and Edward Major walked out of the meeting. By the next day, it was obvious that someone had applied some pressure, as room was made for Holden on the board. - settle the handing over of the debentures plague The next day Bigelow and the company secretary came to the Whitby council with two documents, one with the company seal, the other without. The latter con- tained a bylaw electing Holden even though he had not yet qualified. The Mayor thought that such a docu- ment, without the company seal, was a ruse. James Holden arrived at the' council meeting and said that in fairness to Bigelow he had A to admit that he had not \ bought his shares because he learned the other condi- tion would not be met and so did not see any point in joining the board until the company gave up its claim for back interest. - The Observer reported on the 21st of April that the Reach council had received a petition from 116 ratepayers. It said that the PW&PPR agreed to change the route to cross the gravel road (present day Highway 12) not less than 50 rods north of the IVth line and the company was "to erect a good Station House and Freight Sheds at the said crossing; also to have a flag station with a siding where the line crosses the west road on the ridges." It also stated that the people of Prince Albert could have their station where the said line crosses Simcoe Street South of the village, if Reach handed over the $10,000 granted for the building of a branch to Uxbridge. This. would require an amended bylaw and a ratepayers' vote. Finally, on the threat of a lawsuit by the Railway company, on Thursday, April 28 the Whitby Council had voted to instruct Mayor Gerrie to hand over the debentures. Then there was a meeting to on Monday morning, May 3, under threat of an injunction by the Railway company. There was no quorum for this meeting. It was called again in the evening and again adjourned. Tuesday morning intervening 14 months ra became the subject of an ongoing dispute with both sides laying claim to the accrued interest. The next week, the Chronicle reported on the Town Council meeting at which a motion to hand over $30,000 in deben- tures was passed with a condition that two coun- cillors be appointed to sit on the Railway Company's board. There was no comment on the issue of the interest. The Ontario Observer of April 14 noted that Whitby still had not paid its debenture because the conditions had not yet been met. The Whitby Council had proposed that Councillors McMillan and Holden be their representative on the railway board. Holden was a director of the Dominion Bank. This was the same James Holden who had started publish- . ing the first newspaper in Reach, the Ontario Observer, in Prince Albert in 1857. He sold the Observer in May 1863 and moved back to Whitby to become involved in local politics and banking. On April 20, 1870, the Oshawa Vindicator offered a report on the con- tinuing confusion entitled "The Railway Muddle." The article, in summary, stated: Holden began to make arrangements to purchase the $3,000 worth of shares necessary for a seat on the board. On the same afternoon, at 2 o'clock Joseph Bigelow arrived at Whitby demanding to pick up the debentures? After a long and heated discussion the Mayor of Whitby, James H. Gerrie, agreed to hand over the debentures if Bigelow would give him a receipt in full, thus giving up any claim to back interest. Bigelow indignantly said they could not - give up one cent of back interest. In earli- er negotiations, the company had reduced its demands by agreeing to accept only half the interest. a meeting finally authorized the Mayor to hand over the debentures. An editorial in the Whitby Chronicle of May 26, claimed on assurances from Dumble the contractor, that half the gradient was completed and that the train would be run- ning by Aug. 15. As we shall see in future articles, the first train did not reach Port Perry until November 9, 1871 more than 1 year after the promised date. Regular daily service from Port Perry to Whitby did not begin until June 1, 1872. Next month: Still in 1870, the debate over debentures and financing continues amid revelations of more scandals. Top Right: James Holden, publisher of the first | newspaper in Reach Township in 1857, sold the paper in 1863 and moved to Whitby to become involved in the Port Whitby and Port Perry Railway. Left: Joseph Bigelow, Port Perry's most prominent businessman from 1851 to the 1880s, was. president of the Railway during its construction, Bottom: Port Perry waterfront and train yard circa 1874.Man at left is thought to be Edward Major, who led the construction phase; at center James Austin, president of the Dominion Bank who bought the railway in 1873; and oi fone is probably Ben Sweet, engineer of the w urning locomotive known as "Scugog" seen behind them on the turntable in front of the shed. |