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Atlantic, Quebec and Western Railway and the Atlantic and Lake Superior Railway Reporting marks: ALSR, CN

The Atlantic, Quebec and Western Railway was part of a tangled web of railways in the Gaspé that came about thanks to the efforts of the infamous Charles Newhouse Armstrong.

Armstrong, a promoter and contractor, who was involved in the Baie des Chaleurs scandal (which had the distinction of bringing down several senior politicians including Premier Honoré Mercier), had a dubious reputation at best. He owned assorted bits and pieces of railways which he was continuously trying to string together to form a single main line. Very few of those small sections were useful or profitable. Nonetheless Armstrong knew how capitalize on subsidies, inflate the value of his rather questionable properties, and spin a good yarn to sophisticated investors.

This particular scheme involved a proposal to head east from Algoma in western Ontario, across the Ottawa Valley, and then over the St. Lawrence River travelling north from Montreal to Quebec City. From there he hoped to obtain running rights over the Intercolonial Railway (IRC) to Matapédia. Then he planned to extend the Baie des Chaleurs Railway from Caplan to Baie de Gaspé where he proposed to build expansive terminals that he claimed could compete with the best anywhere in North America.

Armstrong was able to attract interest in his proposal by telling his backers (under a veil of secrecy of course) that the federal government, in addition to guaranteeing subsidies of $3,200 per mile, had also agreed to guarantee up to $5,000 per mile on construction bonds, covering both the principal and interest. Interested parties included the Hon. J.R. Thibaudeau, J.N. Greenshields and the Hon. A. Desjardins (founder of the Desjardins Group) all men of high political and financial standing. The project was further sanctified after receiving the blessings of Sir Sandford Fleming. The biggest prize was the Galindez brothers, Juan and Joquin. The brothers were a pair of Anglo-Spanish bankers with vast Mediterranean holdings who had somehow managed to acquire a Gaspé mineral property which they were apparently interested in promoting.

Armstrong began in 1893 by incorporating the Atlantic and Lake Superior Railway (ALSR). The railway was capitalized at $10,000,000 with a quarter subscribed and 2.5% paid. He then obtained authority to issue $20,000,000 in construction bonds. Then the project, like most fantasy-driven Armstrong endeavours, began to fall apart in typical hallmark fashion. Leases and running rights either could not be obtained or were frightfully expensive, cost estimates for construction in northern Ontario were way above preliminary plans plus there was no financing available for bridge construction in Montreal. In the end Armstrong was left with only two properties which comprised seven miles (11.25 km) in the Ottawa Valley and 80 miles (128.75 km) of the Baie des Chaleurs Railway for a combined total value of $72,500.

Construction on the ALSR plodded along. After four years the 20-mile (32.2 km) section from Caplan to Paspebiac was finally completed. The IRC undertook to operate the section for six months before throwing in the towel with the determination that it was not cost effective. Then Thibaudeau tried to use his political connections by arranging a meeting with Prime Minister Laurier to seek further aid. Turned out Armstrong's reputation had finally gelled at the highest levels of government. Instead of financial assistance, Laurier made his distaste for Armstrong well known and kicked the project to the curb. A further bond issue in London was dropped and in 1900 the existing bondholders appointed the Hon. J.P.B. Casgrain as receiver. Armstrong then used a regulatory maneuver to have both railways declared separate properties, thus enabling him to retain ownership of the Baie des Chaleurs Railway and wash his hands of the ALSR.

In 1901 a new player entered the scene. A.W. Carpenter, an Englishman, was a principal of the Charing Cross Bank in London which owned timber and mineral claims in the Gaspé. Specifically those included The Gaspe Lumber and Trading Company and Saw Mills, shares in the New Canadian Company and assorted real estate holdings. In order to provide rail access to those properties, Carpenter formed the Atlantic, Quebec and Western Railway (AQWR) which was chartered to build from Causapscal to the Baie de Gaspé. The AQWR would have caused big headaches for the partially constructed ALSR. Sounding cries of alarm, local politicians put their muscles to work forcing Carpenter to complete the ALSR as a condition to obtaining the charter. Essentially both railways would now be competing with one another.

If this weren't complicated enough, the time was suddenly ripe for the aforementioned Galindez brothers to make a dramatic and unexpected reappearance. In April 2003 they incorporated the Quebec Oriental Railway Company (QOR) which had the authority to acquire both the ALSR and Baie de Chaleurs railways. In May 1909, after using a complicated series of financial maneuvers, the QOR gained full control of both railways.

In the meantime construction on the AQWR continued. Unfortunately by October 1910, the Charing Cross Bank was insolvent. Although the bank owned all the common stock of the AQWR, the value was not listed. Fifty miles (80.4 km) of track were opened earlier that year with the remaining 50 miles completed and opened in July 1912. With the outlet at Matapédia (which the AQWR desperately needed) under ownership by the ALSR, the ALSR was calling all the shots.

The two railways operated as joint ventures and shared a joint timetable until 1929. The QOR maintained a steady profit for 16 years. The AQWR, which carried much less traffic, managed to hold its own but only reported a surplus twice. In 1929 both railways sold their combined trackage to CN for a total of $3,500,000.

The line remained under CN ownership until 1998. Since then ownership has changed hands several times. Unfortunately maintenance was sorely lacking, forcing VIA Rail to discontinue passenger services in 2013. The stations in Matapedia and Port Daniel, although currently unused, both have historical designation.

In 2015 the provincial government took over and began operating the line. In May 2017, the government made a commitment to restore the line in order to provide infrastructure improvements to the cement industry. First up will be the section from Matapédia to Caplan, followed by the section from Caplan to Port Daniel. The long term goal is the restoration of passenger service which is still several years in the future.