During the first period of Canadian railway expansion following the Crimean war wheat in Ontario went up to two dollars a bushel. Real estate in towns like Whitby and Ingersoll rose to the fabulous price of $300 per foot frontage—the selling value of land on Jasper Avenue, Edmonton’s greatest thoroughfare, when the Canadian Northern approached from the East, and the capital of the infant Alberta had been set up there. Van Horne’s faith in the empty West was based on the fertility of its soil and the certainty that the United States would soon fill sufficiently to create a demand for more northern lands. But that expectation would be fulfilled—or its fulfilment accelerated—when shrewd men would induce capital to flow into the virgin terrain. The C.P.R. had the tremendous task of pioneering with steel across the Canadian plains. The northern areas of Manitoba, Saskatchewan and Alberta awaited an equal, indeed, a more daring enterprise. Mackenzie and Mann were the all-Canadian instrumentalities for the adventure. They must obtain capital through London.
Representation there was a vital concern, seeing that it was not proposed to hand control of the great enterprise to directors who knew no more of Canada than was known by the English administration of the Grand Trunk. Absent treatment was no part of the creed of the two boldest Canadians of their time. The financial representative was found in a man of extraordinary mentality and financial genius, Mr. R. M. Horne-Payne. His services to Canada are really registered in the creation of vast agricultural regions out of solitude, and in the firm establishing of communities, from quiet hamlets to rushing cities, where the highest amenities of civilization have succeeded the wandering buffalo, and have substituted the sawmill for the towering pine.
The final reliance for Canadian railway expansion was of course, the comparatively small British investor. But, with so many opportunities to place money all over the world, this multitudinous host could not be depended on to produce, at a day or two’s notice all the money that was required to build a thousand miles of track from Pembroke to Port Arthur. Rushes to gold and silver camps have no counterpart in railway building spread over many years. To windward of the small investor, there must, therefore, be anchorages in the deeps of underwriting.
The railway requires, say, fifteen million dollars for a certain range of construction. Experience has shown that the wide advertising of an issue in the British money market usually brings at once subscriptions of from thirty to forty per cent. of the money required. Great financial houses must be found to guarantee purchase of the whole issue; they, in turn, retailing the securities as the demand for them continues. The retired colonel, who takes five hundred pounds’ worth of Government-guaranteed debenture stock on to-day’s advertising, will be ready for more at midsummer, when he gets what he wants from his broker—and that is how issues are absorbed, when they are not all snapped up as soon as they are offered.
A. J. MITCHELL
([P. 170])
R. M. HORNE-PAYNE