British Columbia threatened to withdraw from Confederation, and Premier Walkem petitioned the Queen for relief from these delays. Then Prime Minister Alexander Mackenzie and Walkem agreed to accept arbitration of the dispute by the Earl of Carnarvon, the Colonial Secretary. His award, given 17 November 1874, gave an extension of time for the construction and required that a railway be built from Esquimalt to Nanaimo. Despite the promises of both parties to be bound by his ruling, the federal government bill approving the award failed in the Senate. British Columbians were indignant, and withdrawal from Confederation was raised again. The father of Canadian Confederation Sir John A. Macdonald in the House of Commons in 1881 gave a speech on the CPR and criticized Alexander Mackenzie for tinkering with the preconditions of British Columbia and Vancouver Island uniting with Canada. The old chieftain said, "Both the Government of which I was the head and the Government of which he was the head were bound by the original resolutions." Macdonald said, "It was admitted that it was a sacred obligation; it was admitted that there was a treaty made with British Columbia, with the people and the Government of British Columbia, and not only was it an agreement and a solemn bargain made between Canada and British Columbia, but it was formally sanctioned by Her Majesty's Government. It was a matter of Colonial policy and Imperial policy in England that the road should be constructed." Land grants Coal Baron Robert Dunsmuir Robert Dunsmuir, the Nanaimo coal baron and a member of the provincial legislature, was interested in owning the railway project and in the province's coal reserves. The fact that Dunsmuir was a member of the provincial government making the deal aroused some suspicion about corruption. Dunsmuir and three partners (Charles Crocker, Collis P. Huntington and Leland Stanford of California) incorporated the Esquimalt & Nanaimo Railway (less formally the E&N Railway), with Dunsmuir president and owner of one half of the shares. The company estimated that it would cost $1.5 million to construct. Dunsmuir planned to integrate the railway with the systems being built in Washington and Oregon, with a ferry link from Victoria. The first Prime Minister gave British Columbia the choice of Dunsmuir or Lewis M. Clement of San Francisco, Chief Engineer of the Western Division of the Atlantic and Pacific Railroad, for the contract. Dunsmuir travelled to Ottawa in