preference capital stock was
provided for, and this was not issued. The interest of the independent
shareholder was thus negligible. The money required was secured by the
issue of bonds and debenture loans guaranteed by the government or the
Grand Trunk. Up to 1914, in connection with the western section, the
government had guaranteed the company's bonds to the amount of over
eighty millions, had lent twenty-five millions for ten years at four
per cent, and had made or promised a cash gift of twenty-three
millions. On the eastern section, the company was subsidized by the
use for seven years of the road, rent free, equivalent to thirty-four
millions. It was a vast outlay, though not as difficult for the
country to bear as one-third the amount would have been a generation
earlier. The unique and consoling feature, so far as posterity was
concerned, was that the bulk {215} of the government expenditure was
provided out of surplus current revenue, so that for the future the net
income to be received from rental would much more than balance interest
on borrowings.

Once the contract was ratified by parliament and by the Grand Trunk,
and the new company had been formally organized with Mr Hays as
president and Mr Frank Morse, and later Mr Chamberlin, formerly of the
Canada Atlantic, as general manager, the work of surveying and
determining the route began. On the government section political
difficulties were met in New Brunswick, from the advocates of a route
down the St John to the city at its mouth, and engineering difficulties
of many forms in the long trail through the northern wilderness. The
bridge which was being constructed by an independent company across the
St Lawrence at Quebec collapsed in 1907, with great loss of life, and
the delay in completing the second bridge made it necessary to depend
upon car-ferries for some time. On the western section a good route
through the prairies was decided upon, not without vigorous protest
from the Canadian Pacific because of the close paralleling of its line.
After repeated surveys of the {216} Peace, Pine, Wapiti, and Yellowhead
Passes, the last was chosen, and a line was settled upon down the
Fraser and Skeena valleys, passing through two million acres of fertile
land. Remarkably low grades were secured; in fact, as favourable as on
the prairie section. Kaien Island, 550 miles north of Vancouver, was
chosen as the terminus, rather than Port Simpson as original