The history of the Newfoundland railway can be divided into five periods. The construction period (1881-1897) was succeeded by: operation by the Reid family (1898-1923); the Government of Newfoundland (1923-1949); Canadian National Railways (1949-1978); and TerraTransport (1978-1988).
The first North American railway commenced operations in 1828, and the first Canadian short line in 1836. A second boom in railway construction began after the American Civil War (1861-64) and Canadian Confederation in 1867. The Newfoundland railway was first proposed in this era, that in which the great North American trans-continentals were built as engines of development and nation-builders.
Canadian engineer Sanford Fleming approached the Newfoundland government, and in 1868 sponsored a preliminary railway survey across the southern interior. In 1875 the government commissioned a survey for a direct route across the centre of the Island. But it was not until William V. Whiteway became Premier in 1878 that a decision was taken to proceed.
In 1880 a committee of the legislature recommended a narrow-gauge railway from St. John's 340 miles west to Halls Bay. The contract was awarded to a group of investors headed by New York lawyer A.L. Blackman and construction commenced in August 1881. Over three years the Newfoundland Railway Company built a line 57 miles to what is now Whitbourne, before going into receivership. The bondholders continued construction of a 27 mile "branch" to Harbour Grace, completed in October 1884. A second branch, to Placentia, was built as a public work 1886-88. Thereafter a new Whiteway government sought a private contractor to complete the trans-insular line.
In June 1890 a Scots-Canadian contractor, Robert G. Reid (initially in partnership with George Middleton), agreed to build and equip the railway to Halls Bay, for $15,600 per mile. Under Reid's direction construction proceeded apace. By late 1892 grading approached the Exploits River, virtually the half-way point - for now the government proposed to continue to Port aux Basques by diverting the line from Halls Bay to Grand Lake across the Topsail. In May 1893 Reid signed an extension for the remaining 285 miles, as well as a 10-year operating contract for what was now known as the Newfoundland Northern and Western Railway, for grants of 5000 acres per mile operated.
1894-97 saw steady progress across the central and western interior. The first through passenger train ran 28-29 June 1898, connecting with Reid's new Gulf steamship, the Bruce, at Port aux Basques. Earlier that year, in anticipation of the end of construction, a new Conservative government headed by James S. Winter negotiated with the Reid family to take over the Harbour Grace railway and unify railway operations and also for an extended system operating contract. The resulting document, known as the Railway Contract of '98, was a quite extraordinary melding of Newfoundland's prospects with the ambitions of William and Harry Reid, sons of R.G. Reid.
The Reids agreed to continue operating the line for 50 years in return for outright ownership at the end, as well as further lands grants. They further agreed to purchase the government drydock and telegraph, and to provide and operate eight coastal steamships at an annual subsidy. The contract soon encountered political opposition and in 1901 a new government headed by Robert Bond forced the Reids to accept modification in exchange for assignment of the contract to the limited liability Reid Newfoundland Company.
For the next 22 years the Company was in an extraordinary position in the Newfoundland economy. The Reids and their lands were key to developing the forests for sawmilling and pulp and paper. But the pace of development could not overtake annual operating losses and the Reids chafed at the intransigence of Bond's Liberal party. Offers to sell the line outright were refused and R.G. Reid died in 1908 recommending that his heirs liquidate their Newfoundland interests.
But it was also in 1908 that the Reid brothers took heart in the founding of a new political party, the People's Party of Sir Edward P. Morris. Securing a majority with Reid backing in 1909, the Morris government let a new contract for a network of branch railways. Although popular politically, the branch lines were uneconomic from the first, adding 375 miles of trackage but little traffic. The suspension of construction with the Great War and a pronounced post-War slump had the effect of raising the Railway Question again with increased urgency.
In 1920 Harry Reid informed the government that the Company could not continue. For two years the line came under a joint Reid-government commission. But in the spring of 1922 Reid tried to force the government to take over, shutting down the line for a week in May. Meanwhile, the Reid lands were key to the proposed "Humber Deal," for a new pulp and paper mill at Corner Brook. With the Railway Settlement Act of 1923 the government cancelled the operating contract. Legislation for the Humber Deal followed soon after.
Initially styled the Newfoundland Government Railway, the line was known as the Newfoundland Railway from 1926 to 1949. Operations were directed by general manager Herbert J. Russell, who began a program of gradual improvements only to be hamstrung by the onset of the Great Depression. Three of the branch lines were closed in 1931 and under the Commission of Government (after 1934) expenditures continued to be watched very closely.
Yet beginning in 1936, with the construction of an airbase at Gander in anticipation of the coming War, the Newfoundland railway became a vital strategic asset. During World War II the line further proved its worth, as other military bases were built at Argentia, St. John's, and Gander.
War's end found the railways plant and personnel in a run-down state. As Newfoundland's future form of government was being discussed so was the fate of the railway, with Confederation advocates pointing to Canadian National Railways as holding the solution to the long-term problem of the railway as a necessary but structurally unprofitable public service.
Canadian National Railways Ownership
In 1949, under the Terms of Union, the railway as well as connecting coastal and marine services were taken over by C.N. and a certain level of service seemed assured. Initially there were sweeping capital improvements, improved pay scales, and a rapid increase in the amount of freight carried. Under a program of dieselization there was a complete turnover of motive power 1953-59, followed by substantial re-railing, and a new Gulf ferry.
But the transportation boom in the new province was also reflected in a growing trend towards road transport. The Trans-Canada Highway spanned the Island by 1965, and in 1968 C.N. replaced passenger trains with a bus service. By the mid-1970s C.N. was also diverting freight to highways nationally, and employee and public uncertainty was rife. In 1977 a joint federal-provincial commission was appointed to look into the entire Newfoundland transportation system. The Sullivan Commission reported in 1978 to public outcry over its acceptance that the railway would be abandoned within ten years.
And indeed that was what happened, despite the initial reaction to the outcry through formation of a Newfoundland Transportation Division (TerraTransport) within C.N. The remaining branch lines were closed in 1984, and in 1988 the two levels of government agreed on compensation to the tune of $800 million for highway improvement. The last train ran in June of 1988, with rails of the main line being taken up by November 1990.