Cobourg Peterborough Railway - 6
The idea of a railway had already fallen through once, and by 1850 - in a terrible foreboding for the future even the apparently fool-proof Plank Road had practically disintegrated because of the ice and snow. Cobourg residents must have been at their wits end.
Now, however, the economic climate came to Cobourg's aid. The long depression that began in the late 1830s was over. Further, the new Canadian government had passed two significant laws: the Guarantee Act and the Municipal Fund Act.
The first allowed municipalities to spend money freely on railroads using government backing to protect them against losses. The second act provided money to municipalities for local public improvement programs. Even better, the new Municipal Act, which created a new municipal structure for town and city governments also allowed town governments to act on behalf of their citizens as investors in private schemes for local improvement. Under this new municipal restructuring, Cobourg got its first elected Mayor, Ebeneezer Perry.
So too, immigration reached unprecedented levels and the repeal of the old Navigation Acts, which had governed the colonies' economic relations with Britain for centuries, opened the United States to unrestricted trade. It was boom times indeed: Or so it seemed.
In the fall of 1850 a certain Andrew Jeffrey was appointed head of a committee to begin studying a Cobourg-Peterborough railway link. The immediate cause was the possibility of connecting Cobourg to a proposed railway running from Prescott on the St. Lawrence through Peterborough and over to Lake Huron.
By 1851 the project had found its great booster in D'Arcy P. Boulton (right), whom we last met riding with his uncle Peter Robinson to scout out the site for Robinson's new settlement at Peterborough in 1824. Boulton was now a well established lawyer in Cobourg, with his beautiful house, The Lawn, at the corner of Queen and D'Arcy Streets.
D'Arcy began his campaign for the new railroad with a boosterish piece in the Cobourg Star, proclaiming that he was ready to go to the capital (Quebec, at this point) and press for a charter for the new Cobourg and Peterborough Railway. He followed this up with more letters to the Star in which he explained the advantages to be derived from such a road, and ended by declaring that though this was not the time to go into details, he would eventually explain all and that he had no doubt that "in less than three years, we shall ride on the rail car to the music of the whistle, from hence through Baltimore and Keene to Peterborough."
Public meetings through 1852 resulted in agreement on the part of the townspeople that it was appropriate for the town council to invest public money in the scheme, and the town subsequently subscribed for 25,000 pounds worth of stock.
Meanwhile, D'Arcy and the others on the committee set out for Quebec to begin the process of petitioning the government for their charter. There they encountered the formidable Samuel Zimmerman, the biggest Canadian railroad booster of the day. [See footnote.]
Zirmmerman's tactics are described by J.K. Johnson in the Dictionary of Canadian Biography:
"His talismanic wand so operated on the minds of men, whether members of the Legislature, speculating engineers, or railway contractors, that they could only revel in golden dreams, or swim in a sea of champagne; and in this mesmerized state, Zimmerman did what he pleased with them."
Zimmerman (left - more here) was originally from the States and had made his first money working on the Welland Canal, where he gained a reputation as a superb contractor.
While working on the Great Western Railway in 1853, Zimmerman was promised a bonus of 17,500 pounds if the work was finished on time. It wasn't; but he got 11,250 pounds anyway, even though the line was so unfinished that the engine carrying a group of dignitaries fell off the track due to the rails being loose.
He also profited greatly from the fact that the contract allowed him to charge extra for difficulties encountered during construction, which difficulties were agreed upon by the Chief Engineer - who happened to be his personal friend R.G. Benedict (who was later dismissed for grossly overestimating the cost of the project).
Zimmerman had the habit of promising delegate/guests to his suite in Quebec that if he got the contract, he could ensure that their charter was guaranteed and that their municipalities could borrow with impunity as the government would certainly back them. On Nov. 10, 1852 the charter of the Cobourg and Peterborough Rail Road Company was given Royal Assent and the delegates returned to Cobourg. There they opened negotiations with contractors to begin building the line. They first engaged Samuel Keefer who estimated the cost at 125,000 pounds, but indicated that he was not at liberty to accept the job. Next Ira Spaulding, an engineer who later worked with Zimmerman on the Great Western, submitted a new, upwardly revised, estimate - taking principally into account a new estimate of the cost of the Rice Lake bridge.
The committee then tendered the project to various contractors, though, in the end oddly enough, Zimmerman came away with the contract on Jan. 15, 1853, after a certain "in camera" discussion with the board. He kept Spaulding as chief engineer. He agreed to build the railway to Peterborough with the bridge over Rice Lake, in running order with depots, sheds, watering utilities, and a full complement of cars and locomotives. All this for 151,000 pounds, and Zimmerman threw 1,000 pounds of his own as good will. But he was also to be reimbursed for any deviations necessary in the route, at a set rate for earth to be moved etc. Except in case of a really serious deviation, in which case he would get more than the set rate. The person to evaluate the necessity for any deviation was to be his old pal Spaulding.
[More on Fund-raising below.]
Finally, the railway seemed launched and three weeks later the first sod was turned.
Short Bio of Samuel Zimmerman (from Bank of Canada Publications and Research but information since removed)
There is a touch of irony in this [bank] note. The trains shown on the note not only refer to the business of the bank's president and principal shareholder, Samuel Zimmerman, but they also indicate the manner of his death.
Samuel Zimmerman was one of the richest men in the province of Canada during the 1850s. An American, he immigrated to Canada in 1842 and within a short time had amassed a fortune as a railway contractor, building for the Great Western, the Woodstock and Lake Erie, and the Erie and Ontario lines. He also built lake steamers, owned a hotel, and founded his own bank, appropriately named the Zimmerman Bank. On the night of 12 March 1857, Zimmerman was killed when the train on which he was travelling from Toronto to Hamilton derailed and fell into the Desjardins Canal. At his funeral, he was lauded for his accomplishments and connections, but it has been suggested that he used less than ethical means to achieve his goals.
This view is supported by what we know of the Zimmerman Bank. Less than half of its capital of $1,000,000 was ever paid up, and the Receiver General of the day used public funds to prop up the bank. As it turned out, both the bank and Zimmerman were in debt to the Bank of Upper Canada for more than $500,000. The bank continued to operate after Zimmerman's death, but eventually its charter was sold to an entrepreneur from Chicago who renamed the bank and used it to issue notes that he had no intention of redeeming.
This note is part of the third and last issue of the Zimmerman Bank. No notes of this group are known to have been issued legitimately. Many of these notes bear fraudulent dates and signatures, as does this one.
This note is part of the National Currency Collection, Bank of Canada.
Photography by James Zagon.
Written by Colin Caldwell
At several points in the project, money was raised from investors who believed in the likely success of the venture and invested in "bonds". One such fund-raisng occurred in 1854. The bonds were for 100 pounds each with coupons for payment every 6 months. There were 1000 such bonds issued for a total of 100,000 pounds. Needless to say, most of the interest was never paid and the bonds never redeemed so there are bonds still out there with all coupons intact.
At right is a photo of one such bond courtesy of Susan Wilson.
Click to enlarge.
Part 6 is on this page and an index is below.