Governments could help to build roads, but could not ensure for them traffic. It took very few years to show that the interests of the public were not best served by scores of petty isolated roads, and that the interests of shareholders were not secured by the cut-throat competition which prevailed in certain areas. This competition was keenest between the roads which were intimately connected with the lines in the United States and dependent upon through traffic. The Grand Trunk had cut into the territory of the Great Western by acquiring the Buffalo and Lake Huron line, and the Canada Southern and the Great Western were disputing for every ton of freight between the Niagara and the Detroit. All were involved in the rate wars which marked this period inthe United States. In 1867 the Grand Trunk and the Great Western agreed to maintain rates, pool certain traffic receipts, refrain from competitive building, and co-operate in service. The agreement broke down; another was made in 1876, only to fail in turn. More effective measures had to be adopted.
The outstanding achievement of the period, however, was the building of the Intercolonial. It had been projected largely in order to make closer union between the provinces possible, but, as it turned out, it was Confederation that brought the Intercolonial, not the Intercolonial that brought Confederation.
After the breakdown of the negotiations in London in 1852, each province had turned to its own tasks. But each in building its own roads had provided possible links in the future Intercolonial chain. In Canada the Grand Trunk ran to a point 120 miles east of Quebec; in New Brunswick, St John was connected with both the east and west boundaries of the province; in Nova Scotia, a road ran north from Halifax as far as Truro. A gap of nearly five hundred miles between Rivière du Loup and Truro remained. To bridge this wilderness seemed beyond theprivate or public resources of the divided provinces. Unanimous on one point only, they once more turned to the British government. In 1857 and 1858 dispatches and deputations sought aid, but sought it in vain. When the Civil War broke out in the United States, official British sympathy was given to the South, and theTrentaffair showed how near Britain and the North were to war, a war which would at once have exposed the isolated colonies to American attack. The military argument for closer connection then took on new weight with the British government, and it proposed, to a joint delegation in 1861, to revert to its offer of ten years earlier—to guarantee a colonial loan for a railway by an approved route. The colonies opposed the demand for a sinking fund, and again agreement was postponed. In 1863 Canada suggested that, as the British government had made an approved route an essential condition, a definite survey and selection should be undertaken forthwith. It was agreed that a commission of three engineers should be selected, one nominated by Canada, one by New Brunswick and Nova Scotia, and one by Great Britain. Canada nominated Sandford Fleming, a distinguished Scottish-Canadianengineer, who had been connected with the Northern and other Upper Canada enterprises. The other authorities paid him the compliment of naming him as their representative also, to facilitate the work. During the progress of the survey negotiations for the union of the provinces had begun, and when Confederation came about in 1867, the building of the Intercolonial at the common expense of the Dominion, with an imperial guarantee to the extent of £3,000,000, was one of the conditions of union. The old difficulty as to the route through New Brunswick was still to be settled. Again western and southern New Brunswick struggled against the north and against far east Quebec; again Halifax and St John found plausible arguments to uphold their respective interests. Finally, the views of Sir George Cartier and Peter Mitchell triumphed in the Cabinet councils, and in March 1868 the engineer-in-chief advised the selection of the roundabout Bay of Chaleurs route—roughly 'Major Robinson's line'—ostensibly because safer from American attack, nearer possible steamship connection with Europe, and no worse, if no better, than the other routes in potentialities of local traffic.
The construction was entrusted in December1868 to a commission of four; six years later the minister of Public Works took over direct control. Sandford Fleming remained engineer-in-chief for the building as well as for the survey. Tenders were submitted for the construction of the whole road, but the government decided to award the contract in small sections. The road was not completed as speedily as had been expected. Difficulties arose, expected and unexpected—cuttings in heavy rock, sliding clay banks, extensive swamps, lack of rock bottom for heavy bridges. Contractor after contractor found that he had underestimated the task, and went bankrupt or threw up the contract. Sometimes the contract was relet, sometimes the government completed it by day work. At last, on July 1, 1876, nine years after Confederation, the five hundred miles between Truro and Rivière du Loup were opened for traffic throughout. In the meantime the Dominion had taken over the Nova Scotia, New Brunswick, and Prince Edward Island government roads. In 1876 there were in all 950 miles of railway under the control of the Dominion government, as against 4268 miles of private lines.
[1] Ontario in 1871 offered subsidies ranging from two to four thousand dollars a mile for colonization roads to the north; Quebec in 1869 offered money and later land; New Brunswick in 1864 gave $10,000 a mile to various roads, besides taking $300,000 in stock in the European; while Nova Scotia aided the Annapolis extension. Municipal aid was even more lavish in proportion: Toronto gave $350,000 to the Toronto, Grey and Bruce, $150,000 to the Nipissing road, $100,000 to the Northern, and $350,000 to the Credit Valley. Hamilton backed the Hamilton and North-Western by $200,000, London gave the London, Huron and Bruce $150,000, and generous Kingston gave to the Kingston and Pembroke over $300,000. Counties like Elgin and Simcoe, Grey, and Frontenac offered from $150,000 to $300,000, while from townships alone the Wellington, Grey and Bruce received $680,000. Montreal and Quebec each helped the North Shore by a gift of a million dollars; Ottawa county's $200,000 and the parish of Canrobert's $1000 were equally sought; while to a lesser degree the Maritime Provinces showed the same tendency.
Across Continent in 1841—Early Stages—The Survey—The Allan Project—Mackenzie's Policy—Macdonald's Policy
On March 3, 1841, Sir George Simpson, governor-in-chief of the Hudson's Bay Company's domains, left London on a journey round the world. All the resources of a powerful and well-organized corporation were at his disposal, and his own reputation for rapid travelling gave assurance that on the actual journey not an hour would be lost. A fortnight's sail brought him from Liverpool to Halifax, and thence he journeyed by steamer to Boston, by rail to Nashua, by coach to Concord, and by sleigh to Montreal. The portage railway from St John to Laprairie was on his route, but it was not open in winter.
From Montreal Sir George and his party set out on May 4 in two light thirty-foot canoes, each carrying a crew of twelve or fourteen men. At top speed they worked their way up the Ottawa and the Mattawa out to Lake Nipissing,and down the French River into Georgian Bay. They camped every night at sunset, and rose each morning at one. Their tireless Canadian and Iroquois voyageurs worked eighteen hours a day, paddling swiftly through smooth water, wading through shallows, or towing the canoes through the lesser rapids, or portaging once to a dozen times a day round the more difficult ones. Each voyageur was ready to shoulder his 180 pounds, strapped to his forehead, or to ferry passengers ashore on his back. They reached Sault Ste Marie on May 16, only to find Lake Superior still frozen. They picked their way very slowly through the opening rifts along the shore, made the Company's post at Fort William in eleven days, exchanged their large canoes for smaller craft, and paddled and portaged through the endless network of river and lake to Fort Garry, which they reached on June 10, thirty-eight days out from Montreal.
Sir George Simpson. From a print in the John Ross Robertson Collection, Toronto Public LibrarySir George Simpson.From a print in the John Ross Robertson Collection,Toronto Public Library
Sir George Simpson. From a print in the John Ross Robertson Collection, Toronto Public LibrarySir George Simpson.From a print in the John Ross Robertson Collection,Toronto Public Library
From Fort Garry a fresh start was made on July 3, on horseback, with baggage sent ahead in lumbering Red River carts. Past Fort Ellice and Fort Carlton, they pushed on with fresh supplies of horses at the topmost speed that the limitations of their convoy of carts would permit. Band after band of PlainsIndians, adorned with war-paint and scalp-locks, crossed their trail, but mosquito and sand-fly proved more troublesome. The travellers passed a band of emigrants making slowly for the Columbia, and everywhere found countless herds of buffalo. In three weeks from Fort Garry they reached Fort Edmonton. Here forty-five fresh horses were in readiness for riding, pack-horses took the place of carts, and the journey was continued to the south-west. The Rockies were crossed through Kootenay Pass, and at last—after many a halt to find straying horses, and after continuous annoyance from mosquitoes and venomous insects 'which in size and appearance might have been mistaken for a cross between the bulldog and the house-fly'—Fort Colville on the Columbia was reached on August 18. Their long horseback ride was over. Favoured by wonderfully fine weather, in the saddle eleven to twelve hours a day, they had made their way through open prairie and rolling plain, tangled thicket and burning forest and rushing river, and had covered the two thousand miles from Fort Garry in six weeks and five days. From Fort Colville they reached the waters of the Pacific at Fort Vancouver (Washington) in another six days. Thecontinent had been crossed in twelve weeks of actual travelling.
Sir George Simpson's journey stood as the record for many a year. For a generation after his day the scattered travellers from Red River westward were compelled to rely on saddle-horse and plains cart and canoe. From Montreal and Toronto the railway could be utilized as far as Collingwood, and thence the steamer to Port Arthur. Then for a time the government opened up a summer route to the Red River, beginning it in 1869 and maintaining it until 1876. The Dawson route, as it was called, included forty-five miles of wagon-road from Port Arthur to Lake Shebandowan, then over three hundred miles of water travel, with a dozen portages, and again ninety-five miles of wagon-road from the Lake of the Woods to Fort Garry.[1] In 1870 it took ninety-five days to transport troops from Toronto to Fort Garry over this route. Such makeshifts could not serve for long. South of theborder the railway was rapidly pushing westward, and in the new nation of the north, as well, its time had come.
Ever after the coming of the locomotive, it needed only imagination and a map to see all British North America clamped by an iron band. Engineers like Bonnycastle and Synge and Carmichael-Smyth wrote of the possibility in the forties. Politicians found in the theme matter for admirable after-dinner perorations—colonial governors like Harvey in 1847, colonial secretaries like Lytton and Carnarvon in the fifties, and colonial premiers like Joseph Howe, who declared in Halifax in 1851: 'I believe that many in this room will live to hear the whistle of the steam-engine in the passes of the Rocky Mountains, and to make the journey from Halifax to the Pacific in five or six days.' Promoters were not lacking. In 1851 Allan Macdonnell of Toronto sought a charter and a subsidy for a road to the Pacific, and the Canadian authorities, indeclining, expressed their opinion that the scheme was not visionary and their hope that some day Great Britain and the United States might undertake it jointly. Seven years later the same promoter secured a charter for the Northwest Transportation, Navigation, and Railway Company, to operate between Lake Superior and the Fraser river, but could get no backing; four years previously John Young, A. N. Morin, A. T. Galt, and John A. Poor had petitioned in vain for a similar charter. Then in 1862, on behalf of the Red River Settlement, Sandford Fleming prepared an elaborate memorial on the subject. Edwin Watkin, of the Grand Trunk, negotiated with the Hudson's Bay Company for right of way and other facilities, but the project proved too vast for his resources.
Sir Sandford Fleming. From a photograph by TopleySir Sandford Fleming.From a photograph by Topley
Sir Sandford Fleming. From a photograph by TopleySir Sandford Fleming.From a photograph by Topley
Two things were needed before dreams on paper could become facts in steel—national unity and international rivalry. Years before Confederation, such far-seeing Canadians as William M'Dougall and George Brown had pressed for the annexation of the British territories beyond the Lakes. After Confederation, all speed was made to buy out the sovereign rights of the Hudson's Bay Company. Then came the first Riel Rebellion, tobring home the need of a western road, as theTrentaffair had brought home the need of the Intercolonial. The decisive political factor came into play in 1870, when British Columbia entered the federation. Its less than ten thousand white inhabitants—deeming themselves citizens of no mean country, and kept to their demands by the urging of an indefatigable Englishman, Alfred Waddington—made the construction of an overland railway an indispensable condition of union, and Sir John Macdonald courageously accepted their terms.
The other factor, international rivalry, exercised its influence about the same time. In the United States the railway had rapidly pushed westward, but had halted before the deserts and the mountains lying between the Mississippi and the Pacific. The rivalry of pro-slavery and anti-slavery parties in Congress long brought to deadlock all plans of public aid to either southern or northern route. Then the Civil War broke the deadlock: the need of binding the West to the side of the North created a strong public demand for a Pacific road, and Congress, so stimulated, and further lubricated by the payment, as is proven, of at least $476,000 in bribes, gave lavish loansand grants of land. The Central Pacific, working from Sacramento, and the Union Pacific, starting from Omaha, met near Ogden in Utah in 1869—or rather here the rails met, for the rival companies, eager to earn the high subsidy given for mountain construction, had actually graded two hundred superfluous miles in parallel lines. In 1871 the Southern Pacific and the Texas Pacific were fighting for subsidies, and Jay Cooke was promoting the Northern Pacific. The young Dominion was stirred by ambition to emulate its powerful neighbour.
These factors, then, brought the question of a railway to the Pacific on Canadian soil within the range of practical politics. Important questions remained to be settled. During the parliamentary session of 1871 the government of Sir John Macdonald decided that the road should be built by a company, not by the state, that it should be aided by liberal subsidies in cash and in land, and, to meet British Columbia's insistent terms, that it should be begun within two, and completed within ten, years. The Opposition protested that this latter provision was uncalled for and would bankrupt the Dominion, but the government carried its point, though it was forced to hedgelater by a stipulation—not included in the formal resolutions—that the annual expenditure should be such as not to press unduly upon the Dominion's resources.
The first task was to survey the vast wilderness between the Ottawa valley and the Pacific, and to find, if possible, a feasible route. So able an explorer and engineer as Captain Palliser, appointed by the British government to report upon the country west of the Lakes, had declared in 1863, after four years of careful labour in the field, that, thanks to the choice of the 49th parallel as Canada's boundary, there was no possibility of ever building a transcontinental railway exclusively through British territory. The man chosen for the task of achieving this impossibility was Sandford Fleming. Appointed engineer-in-chief in 1871, he was for nine years in charge of the surveys, though for half that time his duties on the Intercolonial absorbed much of his energy. Mr Fleming possessed an unusual gift of literary style, and his reports upon the work of his staff gave the people of Canada a very clear idea of the difficulties to be encountered. His friend, the Rev. George M. Grant, who accompanied him in a rapid reconnaissance in 1872, gave, in his bookOcean to Ocean, a vivid and heartening record of the realities and the promise that he saw.
It had been decided, in order to hold the balance even between Montreal and Toronto, to make the proposed Pacific road begin at some angle of Lake Nipissing. From that point nearly to the Red River there stretched a thousand miles of woodland, rugged and rock-strewn, covered by a network of countless lakes and rivers, interspersed with seemingly bottomless swamps or muskegs—a wilderness which no white man had ever passed through from end to end. Then came the level prairie and a great rolling plain rising to the south-west in three successive steppes, and cut by deep watercourses. But it was the third or mountain section which presented the most serious engineering difficulties. Four hundred miles from the Pacific coast, and roughly parallel, ran the towering Rocky Mountains, some of whose peaks rose fifteen thousand feet. Beyond stretched a vast plateau, three or four thousand feet above sea-level, intersected by rivers which had cut deep chasms or, to the northward, wide sheltered valleys. Between this plateau and the coast the Cascades interposed, rivalling the Rockies in height andrising sheer from the ocean, which thrust in deep fiord channels. At the head of some one of these fiords must be found the western terminus.
Fleming Route and the TranscontinentalsFleming Route and the Transcontinentals
Fleming Route and the TranscontinentalsFleming Route and the Transcontinentals
Early in the survey a practicable route was found throughout. Striking across the wilderness from Lake Nipissing to Lake Superior at the river Pic, the line might skirt the shore of the lake to Fort William, or it might run northerly through what is now known as the clay belt, with Fort William and the lake made accessible by a branch. Continuing westward to the Red River at Selkirk, with Winnipeg on a branch line to the south, the projected line crossed Lake Manitoba at the Narrows, and then struck out northwesterly, through what was then termed the 'Fertile Belt,' till the Yellowhead Pass was reached. Here the Rockies could be easily pierced; but once through the engineer was faced by the huge flanking range of the Cariboo Mountains, in which repeated explorations failed to find a gap. But at the foot of the towering barrier lay a remarkable deep-set valley four hundred miles in length, in which northwestward ran the Fraser and southeastward the Canoe and the Columbia. By following the Fraser to its great southward bend, and then strikingwest, a terminus on Bute or Dean Inlet might be reached, while the valley of the Canoe and the Albreda would give access to the North Thompson as far as Kamloops, whence the road might run down the Thompson and the lower Fraser to Burrard Inlet. The latter route, on the whole, was preferred.
While this route was feasible, the mountain portion promised to be extremely expensive. This factor, together with the uncertainty of government policy and the desire of Victoria to have the road built to Bute Inlet and thence, by a bridge across Valdes Strait, carried down to Esquimalt, made it necessary to seek untiringly, year after year, for alternative routes. The only important change made, however, until after 1880, was the deflection of the line south of Lake Manitoba to serve existing settlements.
Who was to build the road? It would be a tremendous task for either the government or the private capitalists of a nation of four million people. The United States had not begun its Pacific roads till it had over thirty millions of people, and wealth and experience to correspond. It was estimated that the Canadian road would cost $100,000,000, and it was certain that the engineering difficultieswould be staggering. In Canada few roads had paid the shareholders, and though some had profited the contractors, the new enterprise meant such a plunge in the dark that contractors and promoters alike hesitated. In the United States, however, the Pacific roads had proved gold-mines for their promoters. The land-grants were valuable, and the privilege of granting contracts to dummy construction companies controlled by themselves and thus reaping larger profits was still greater.
It was not to be wondered at, therefore, that the first offer came from American capitalists. Alfred Waddington, enthusiast rather than practical promoter, sought at Ottawa a charter for the road he had done so much to secure, but his bill went no further than a first reading. At Ottawa he was met by G. W. M'Mullen, a Canadian residing in Chicago, who was visiting the Dominion on a canal deputation. M'Mullen became interested, and with his Chicago partners endeavoured to enlist the aid of the men behind the Northern Pacific—Jay Cooke, General Cass, W. B. Ogden, T. A. Scott, and others.[2]M'Mullen soon found that Waddington had exaggerated his influence, and that the government was not yet prepared to discuss terms. Sir Francis Hincks, stormy petrel of railway building, whom Sir John Macdonald had just made his finance minister, suggested to Sir Hugh Allan of Montreal that he should get into touch with these Americans and provide the substantial Canadian interest which was essential.
Sir Hugh Allan was then the foremost business man in Canada. He was head of the great Allan steamship line, and had become interested in railways shortly before, when rumours of the intention of the Grand Trunk to establish a rival steamship line to GreatBritain had led him to assist in promoting the North Shore from Quebec westward, to compete with the Grand Trunk and ensure traffic for his steamers. He now opened negotiations with the American capitalists through M'Mullen, came to terms, and then sought associates in Canada. Here difficulties arose: Ontario objected that Allan's control would mean a Quebec rather than an Ontario terminus, and that the Northern Pacific directors with whom he was associated were simply conspiring to get control of the Canadian road, in order to delay its construction and prevent it becoming a rival to their own northerly route. Sir George Cartier, too, powerful in the Cabinet and salaried solicitor of the Grand Trunk, was a stumbling-block; he declared himself emphatically opposed to control by any 'sacrée compagnie américaine.' But Sir Hugh, believing much in money and little in men, resolved to buy his way through. He soon started a backfire in Quebec which brought Cartier to terms. Ontario rivalry was harder to control: D. L. Macpherson and other Toronto men organized the Interoceanic Railway Company to oppose Allan's Canada Pacific Company. Both companies sought charters and aid. Allanpretended to drop his American associates; Macpherson charged that the connection still existed. The government endeavoured to bring about an amalgamation, with Allan as president, and, failing this, to organize a new company. In the meantime Allan was spending money so freely that even his New York associates were astounded. The Dominion elections were held in August 1872, and Macdonald, Cartier, and Langevin drew heavily on Allan's funds, $162,500 in all, with a promise from Cartier that 'any amount which you or your Company shall advance for that purpose shall be re-couped to you.' After the election a new company, the Canadian Pacific, was organized, with representative men from each province as directors; and the new board, of its own motion, it was declared, elected Allan president. To this company the government granted a charter, promised a subsidy of thirty million dollars and fifty million acres of land, but insisted upon excluding the American interests. Allan acquiesced, and, repaying the advances made, informed New York that negotiations were ended. M'Mullen and his associates, angry at this treatment, conveyed rumours to Opposition leaders, and finally Allan's confidentialcorrespondence, stolen by a clerk in the office of J. J. C. Abbott, Allan's solicitor, was made public.[3] The fat was in the fire.
With the political controversy which followed we are not here concerned. In Sir John Macdonald's defence it could be said, that though Allan's money was taken nospecial favours were shown in the contract made; and that all that Allan secured by the government's victory was the certainty that the railway project would not be postponed or dropped altogether, and that he would be given control. Sir Hugh Allan had said with much force: 'The plans I propose are in themselves the best for the interests of the Dominion, and in urging them on the public I am really doing a most patriotic action.' Undoubtedly Sir John Macdonald sincerely held a similar opinion.
The Allan Company gave up its charter, unable to raise capital in face of financial depression and political upheaval. The Liberal party, led by Alexander Mackenzie, and swept into power by a wave of popular indignation, first endeavoured to induce other capitalists to take up the work. But the government's offers of $10,000 in cash and of 20,000 acres of land for each mile, plus an undetermined guarantee, had no takers in the years of depression that followed. Mackenzie then decided that the government shoulditself build the road. He planned to build at first only the indispensable sections, using the waterways wherever possible, and hoped, but in vain, to secure British Columbia's consent to an extension of the time set for completion. His first step was to subsidize the Canada Central, which ran from Ottawa via Carleton Place to Pembroke, to extend its line as far as Lake Nipissing, in order to connect with the proposed eastern terminus of the Pacific road, and to award a contract (it was afterwards cancelled) for a branch from this junction point to Georgian Bay. Passing by for the time the country north of Lake Superior, he next let contracts for the greater part of the distance between Fort William and Selkirk and for a road from Selkirk to Emerson, on the Manitoba border. Here connection was to be made with an American line, the St Paul and Pacific, of which more will be heard presently.
When Mackenzie left office in 1878 the work of location or construction was well advanced in all three sections. For two years the new administration of Sir John Macdonald carried on the same policy of government construction at a moderate pace. The work in hand was continued and the gaps in the roadbetween Port Arthur and Selkirk were put under contract. The line was made to pass through Winnipeg—instead of striking west from Selkirk, as the engineers had previously advised, and thus side-tracking the ambitious city growing up around old Fort Garry. Contracts were let for two hundred miles of the extension westward from Winnipeg. Two seasons passed before the new government could make up its mind as to the British Columbia section. Late in 1879 it decided to adhere to the route chosen under the Mackenzie administration, through the Yellowhead Pass, down the Thompson and the Fraser to Port Moody on Burrard Inlet. The difficult section from Yale, the head of navigation on the Fraser, to Savona's Ferry, near Kamloops, was shortly afterwards placed under contract.
The ten years' time allotted for the construction of the Canadian Pacific was nearly gone and there was little completed work to show. Hard times, depression in the railway world, changes of government and political upheavals, disputes as to route and terminus, had delayed construction. The building of the link north of Lake Superior, necessary for all-rail connection between East and West on Canadian territory, had been indefinitely postponed.Something had been done, it is true. Manitoba was being linked up with the East by a road south to Minnesota and by another line to the head of Lake Superior, and a start had been made in British Columbia. Some day, under some administration, the gaps would be filled up and the promise to British Columbia would be redeemed.
Suddenly, in June 1880, Sir John Macdonald, speaking at Bath, made the announcement that a group of capitalists had offered to build the road, on terms which would ensure that in the end it would not cost Canada a single farthing. Four months later a contract was signed in Ottawa by which the Canadian Pacific Syndicate undertook to build and operate the whole road. An entirely new turn had been given to the situation, and the most important chapter in Canada's railway annals, if not in her national life, had been begun.
[1] 'Lord Strathcona may still remember the man who came into his office at Winnipeg and said: "Look at me; ain't I a healthy sight? I've come by the government water route from Thunder Bay, and it's taken me twenty-five days to do it. During that time I've been half-starved on victuals I wouldn't give a swampy Indian. The water used to pour into my bunk at nights, and the boat was so leaky that every bit of baggage I've got is water-logged and ruined. I've broke my arm and sprained my ankle helping to carry half a dozen trunks over a dozen portages, and when I refused to take a paddle on one of the boats, an Ottawa Irishman told me to go to hell, and said that if I gave him any more of my damned chat he'd let me get off and walk to Winnipeg."'—W. L. Grant inGeographical Journal, October 1911, p. 365.
[2] The Northern Pacific was at many stages in its history closely connected with Canadian affairs. It had originally been projected in New England: the first proposal was to use the Central Vermont and a Canadian road to be built or acquired as the eastern links, then, crossing into Michigan, the railway was to strike northwestward to the Pacific. When control fell into the hands of New York and Philadelphia interests, these plans were dropped, but later the new management negotiated with Governor Archibald of Manitoba, as well as with Sir John Macdonald, to endeavour to put through an international road, the first section running through Canada to Sault Ste Marie, the second through Michigan and Minnesota, the third through the Canadian plains, and the fourth through the Rockies to the sea on American territory. Nothing came of the negotiations, though it may be noted that the Canadian Pacific to-day has carried out precisely this plan, in addition to its all-Canadian line.
[3] This correspondence will be found in the Journals of the House of Commons, vol. vii, 1873. In no other documents available to the public has the connection between politics and railway promoting in Canada been made so evident. The following are a few brief extracts from letters addressed by Sir Hugh Allan to various American associates during 1872:
Thinking that as I had taken up the project there must be something very good in it, a very formidable opposition was organized in Toronto, which for want of a better took as their cry 'No foreign influence; no Yankee dictation; no Northern Pacific to choke off our Canadian Pacific,' and others equally sensible.... I was forced to drop ostensibly from our organization every American name, and put in reliable people on this side in place of them.... Mr M'Mullen was desirous of securing the inferior members of the Government, and entered into engagements of which I did not approve, as I thought it was only a waste of powder and shot. On a calm view of the situation I satisfied myself that the decision of the question must ultimately be in the hands of one man, and that man was Sir George E. Cartier, the leader of the French party, which held the balance of power between the other factions.... It was evident that some means must be adopted to bring the influence of this compact body of men to bear in our favour, and as soon as I made up my mind what to do, I did not lose a moment in following it up. A railroad from Montreal to Ottawa, through the French country, north of the Ottawa river, has long been desired by the French inhabitants; but Cartier, who is a salaried solicitor of the Grand Trunk road, to which this would be an opposition, has interposed difficulties, and by his influence prevented it being built.... The plans I propose are in themselves the best for the interests of the Dominion, and in urging them on the public I am really doing a most patriotic action. But even in that view, means must be used to influence the public, and I employed several young French lawyers to write it up in their own newspapers. I subscribed a controlling influence in the stock, and proceeded to subsidize the newspapers themselves, both editors and proprietors. I went to the country through which the road would pass, and called on many of the inhabitants. I visited the priests and made friends of them, and I employed agents to go among the principal people and talk it up. I then began to hold public meetings, and attended to them myself, making frequent speeches in French to them, showing them where their true interests lay ... and I formed a committee to influence the members of the Legislature. This succeeded so well that in a short time it had 27 out of 45 on whom I could rely, and the electors of the ward in this city, which Cartier himself represents, notified him that unless the contract for the Pacific Railway was given in the interests of Lower Canada he need not present himself for re-election....
The policy adopted has been quite successful, the strong French influence I succeeded in obtaining has proved sufficient to control the elections, and as soon as the Government realized this fact, which they were unwilling to admit and slow to see, they opened negotiations with me.... Yesterday we entered into an agreement, by which the Government bound itself to form a Company of Canadians, only according to my wishes. That this Company will make me President, and that I and my friends will get a majority of the stock, and that the contract for building the railroad will be given to this Company, in terms of the Act of Parliament. Americans are to be carefully excluded in the fear that they will sell it to the Union [sic] Pacific, but I fancy we can get over that some way or other. This position has not been attained without large payments of money. I have already paid over $200,000, and will have at least $100,000 more to pay.
Railways of Canada, 1880Railways of Canada, 1880
Railways of Canada, 1880Railways of Canada, 1880
The Minnesota Venture—Canadian Pacific Syndicate—The Contract—Political Opposition—Terms of the Contract—Organizing the Company—Financing—Construction
In the months and years that followed, no men were so much in the mind and speech of the Canadian public as the members of the new syndicate. The leading members were a remarkable group of men. Probably never in the history of railway building, not even in the case of the 'Big Four' who built the Central Pacific—Huntingdon, Stanford, Crocker, and Hopkins—had the call of the railway brought together in a single enterprise men of such outstanding individuality, of such ability and persistence, and destined for success so notable.
The Canadian Pacific was not their first joint enterprise. It was the direct outcome of a daring venture in connection with a bankrupt Minnesota railway, which had brought them wealth beyond their wildest dreams, and had definitely turned their thoughts to railway work.
Early in the settlement of the northwesternstates the need of railways, and of state aid to railways, was widely realized. In 1857 Congress gave the territory of Minnesota a large grant of public lands to use in bonusing railway building, and in the same year the legislature of the territory incorporated a company, the Minnesota and Pacific, to build from Stillwater through St Paul and St Anthony's Falls (Minneapolis) to Red River points. The state gave the new company millions of acres of land and a cash subsidy, municipalities offered bonuses, and a small amount of stock was subscribed locally. Five years passed, and not a mile had been completed. The company, looted into insolvency by fraudulent construction company contracts, was reorganized as the St Paul and Pacific, heir to the old company's assets but not to its liabilities, and a beginning was made once more. Trusting Dutch bondholders lent over twenty millions, and by 1871 the road reached Breckenridge on the Red River, two hundred and seventeen miles from St Paul. Again a halt came. Russell Sage and his associates in control had once more looted the treasury. The Dutch bondholders, through their agent, John S. Kennedy, a New York banker, applied for a receiver, and in 1873 one Jesse P. Farley wasappointed by the court. It seemed that the angry settlers might whistle in vain for their road.
In St Paul at that time there lived two Canadians who saw the opportunity. The elder, Norman W. Kittson, had been Hudson Bay agent and head of a transportation company on the Red River. The younger, James J. Hill, an Ontario farm-boy who had gone west while still in his teens, owned a coal and wood yard in St Paul, and had a share in the transportation company. Neither had the capital or the financial connection required to take hold of the bankrupt company, but they kept on thinking of it day and night. Soon a third man joined their ranks, Donald A. Smith. A Highland lad who had come to Canada at eighteen, Donald Smith had spent a generation in the service of the Hudson's Bay Company, mainly in the dreary wilds of Labrador and on the shores of Hudson Bay. When in 1871 he became chief commissioner of the organization he had served so long and so well, it seemed to most men that he was definitely settled in his life work and probably near the height of his career. But Fate knew, and Donald Smith knew, that his career was only beginning. Coming down from the northeach year by the Red River to St Paul, on his way east, he talked over the railway situation with Hill and Kittson. The more they talked the greater grew their faith in the country and the railroad. It was a faith, however, that few in the moneyed East shared with them. It had been the smashing of the rival road, the Northern Pacific, in 1873, that had given the signal for the brief panic and the long depression of the seventies. The Minnesota road itself had twice become bankrupt. The legislature would undoubtedly soon declare the land-grant forfeited, unless the construction promised was completed. To fill the cup, in the middle seventies Minnesota and the neighbouring lands were visited by unprecedented swarms of grasshoppers or Rocky Mountain locusts. Swarming down from the plateau lands of the Rockies in columns miles high, covering the ground from horizon to horizon, they swept resistlessly forward, devouring every green thing in their way. When they had passed, hundreds of deserted shacks stood silent witnesses to the settlers' despair.
Lord Strathcona. From a photograph by Lafayette, LondonLord Strathcona.From a photograph by Lafayette, London
Lord Strathcona. From a photograph by Lafayette, LondonLord Strathcona.From a photograph by Lafayette, London
It was in 1876 that the further allies needed came from the East. Thirty years earlier George Stephen, a younger cousin of Donald Smith, had left his Highland hills to seek hisfortune in London, and after a short apprenticeship there had gone still farther afield, joining an uncle in Montreal. He rose rapidly to a foremost place in the wholesale trade of Montreal; selling led him into manufacturing, and manufacturing into financial activities. In 1876 he became president of the Bank of Montreal. Associated with him in the same bank was still another shrewd, forth-faring Scot, Richard B. Angus, who had risen steadily in its service until appointed to succeed E. H. King as general manager in 1869.
A lawsuit in connection with the bank's affairs took both Stephen and Angus to Chicago in 1876. A week's adjournment left them with unwonted leisure. A toss of a coin sent them to St Paul rather than to St Louis to spend the week. Smith had already spoken of the project while in Montreal, but at that distance caution had prevailed. Now Stephen, who had never before seen the prairie, was immensely taken with the rich, deep soil he saw before him. He knew from reading and experience that grasshopper plagues did not last for ever. He decided, therefore, to join in the attempt to get control of the Minnesota road and its land-grant, and the famous group was complete.
Once George Stephen had made up his mind, little time was ever lost. He sailed for Europe and interviewed the Amsterdam committee in charge of the Dutch bondholders' interests, Messrs Chouet, Weetjin and Kirkhoven. They despaired of ever seeing their money back, and were weary of being assessed by the receiver for funds to keep the road together. Stephen left Amsterdam with an option in his pocket, given for the sum of one guilder, agreeing to sell him the Dutch bonds for something like the amount of the unpaid interest, and agreeing, further, to wait until six months after reorganization for part of the payment. The next step was to provide the cash required for immediate necessities. About $300,000 was put up by the members of the group.[1] Money was borrowed from the Bank of Montreal, $280,000 in the first advance, and something under $700,000 in all, as Stephen stated to inquiring shareholders at the bank's annual meeting in 1880. Money was advanced to the receiver to complete the most necessary extensions, those required to save the land-grant and that necessary to reach the Canadianborder to join the government road being built south from Winnipeg. The threatened forfeiture of the land-grant was thus averted for a time. Then the bonds were purchased for $6,780,000, the floating obligations and part of the stock were bought up, and the mortgage which secured the bonds was foreclosed. The assets were bought by the new company organized for the purpose, the St Paul, Minneapolis and Manitoba, of which George Stephen was president, R. B. Angus vice-president, and James J. Hill general manager. Thus in June 1879 the whole system, comprising six hundred and sixty-seven miles of railway, of which five hundred and sixty-five were completed, and the land-grant of two and a half million acres, came into the possession of the little group.[2]
The after fortunes of the road, which ten years later expanded into the Great Northern of to-day, do not concern us here. It is only necessary to recount that the harvest reapedby the adventurers[3] put the tales of El Dorado to shame. A few days after control of the railway had been assured, the grasshoppers had risen in flight, and Minnesota knew them no more. Settlers swarmed in, the railroad platforms were jammed with land-seekers, and between the land-buyers of to-day and the wheat-shippers of to-morrow the owners of the once discredited railway saw their coffers fill to overflowing. In 1879 they divided among themselves the whole fifteen millions of stock issued, floating sixteen millions of bonds for extension and equipment. For three years they took no dividends, letting the profits go to further building. Then in 1882 another $2,000,000 stock was issued, and in 1883 a deferred dividend came in the shape of a $9,000,000 issue of bonds, or, rather, the stockholders sold to themselves a $10,000,000 issue for ten cents on the dollar. Aside entirely from interest and dividends, the stockholders of the Great Northern in the seventeen years following 1889 were presented with over $300,000,000 of interest-bearing securities.All the railway annals of the United States cannot present a duplicate of the startling success attained by these four or five Canadians and their associates.[4]
These were the men to whom the Canadian government turned when the minister of Railways, Sir Charles Tupper, urged them to unload upon a private company the burden of completing the road to the Pacific. 'Catch them before they invest their profits,' was the advice of Sir John's most intimate adviser, that shrewd Eastern Townships politician, John Henry Pope. Probably they came half-way. They knew the West as well as any men, and with their road built to the Canadian boundary and with a traffic arrangement beyond to Winnipeg, they were already in the field. Of all the group Stephen was most reluctant to undertake the new enterprise, but he was assured by his associates that the burdens of management would be shared by all. The government had also approached Duncan M'Intyre, a Montreal capitalist who controlled the Canada Central, running from Brockville by way of Ottawa to Pembroke,and under construction from that point to Callender, the eastern end of the Canadian Pacific main line. He was more than willing to link up this railway with the larger project, and the group was formed.