The Grand Trunk Railway was a railway system that operated in the Canadian provinces of Quebec and Ontario, and in the American states of Connecticut, Maine, Michigan, Massachusetts, New Hampshire, and Vermont. The Grand Trunk Railway’s main line ran from Portland, Maine to Montreal, and then from Montreal to Sarnia, Ontario, where it joined its western subsidiary.
The company was incorporated on November 10, 1852, as the Grand Trunk Railway Company of Canada to build a railway line between Montreal and Toronto. The railway was operated from headquarters in Montreal, Quebec, with corporate headquarters at 4 Warwick House Street, London, England.
The Grand Trunk Railway was one of the main factors that pushed British North America towards Confederation. The end of the American Civil War saw British North America on the verge of uniting in a single federation, and the Railway was well-positioned to take advantage of increased population and economic growth. By 1867, it had become the largest railroad system in the world by accumulating more than 2,055 km (1,277 miles) of track.
Loans for expansion
By the early twentieth century, the Grand Trunk Railway wanted to expand in Western Canada. In 1903, it entered into an agreement with the Canadian government to build a third railway system from the Atlantic to the Pacific. The Railway built and operated (with federal assistance) the Grand Trunk Pacific Railway from Winnipeg, Manitoba to Prince Rupert, British Columbia. The routing of these systems was extremely speculative and very expensive. To meet the costs of construction, the London banking house of N M Rothschild & Sons issued £3m Capital 3% First Mortgage Sterling bonds for the Grand Trunk Pacific Railway Company in 1905, with a further bond issue in 1909 of £2m 3% First Mortgage Sterling Bonds. Construction started in 1905, and the Grand Trunk Pacific Railway opened to traffic in 1914.
However, with the enormous cost of building the Grand Trunk Pacific Railway, the limited financial returns being realised, and competition from shipping and American railways, the Railway was never profitable. Nearing bankruptcy in 1919, the entire system was nationalised, and in 1923 the government merged the Grand Trunk, the Grand Trunk Pacific, the Canadian Northern and the National Transcontinental lines into the new Canadian National Railways.