Since the Intercolonial Railway's preferred route was the most direct east-west line possible, the Spring Hill and Parrsborough Coal and Railway Company (Limited) was incorporated in 1872 as a mining and railway company to link from a mine at Springhill south to the port of Parrsboro on the Bay of Fundy from which coal could be shipped to destinations in southern Nova Scotia and along the eastern seaboard of North America. The same investors also created the Pugwash and Spring Hill Railway Company, which received a charter to build a line north to the Northumberland Strait port of Pugwash from which coal could be shipped to northern Nova Scotia, Prince Edward Island, eastern New Brunswick and Quebec. Both railway lines were promised a subsidy that year by the provincial government for their construction.