Only two years later the Grand Trunk Railway leased most of the lines in the area as part of a major expansion plan, and purchased them outright in 1893.

The competition had started with the 1834 announcements of plans to run a railway from Cobourg to Peterborough, at that time a rapidly developing industrial town.

Cobourg responded by rapidly building a plank road near their original railway route, which was completed by the end of the year.

With the route to Peterborough now being served by Cobourg, and their original plans having seen no development for six years, business interests in Port Hope looked further north for potential markets.

They eventually selected the town of Lindsay due to its connection to the recently announced Trent-Severn Waterway, with a further expansion to the shores of Lake Simcoe.

The line did not reach its planned terminus in Beaverton until 1 January 1871, and that same year the Millbrook Branch pushed north out of Peterborough to Lakefield, giving it access to the middle-area of the Trent waterway on Katchewanooka Lake.

The Midland was financially strapped, could not afford to pay Shanly for the extras, and seized the contract back in February 1873.

The first Midland Railway manager D’Arcy E. Boulton of Cobourg, Ontario was replaced by Adolf Hugel of Pittsburgh.

In recognition of his efforts to improve the line, the British bondholders agreed in 1874 to lower the rate on their investments, and not to cash the interest coupons.

Net earnings and the ability to pay interest on the fixed debt declined sharply after 1875, the Midland was insolvent and the ownership of the line essentially passed to the bondholders.

George Albertus Cox, a prosperous insurance agent for Canada Life and several times Mayor of Peterborough, took over as President of the MR in August 1878.

An Act enabling the merger came into force on Saturday April 1, 1882 and on that day the first official trains of the new Midland Railway of Canada travelled the system.