The Canadian Dominion: A Chronicle of Our Northern Neighbor

by Oscar D. Skelton

Mackenzie's insistence that Canada must take a larger share in the control of her foreign affairs was too advanced a stand for many of his more conservative countrymen. For others, he did not go far enough. The early seventies saw the rise of a short-lived movement in favor of Canadian independence. To many independence from England seemed the logical sequel to Confederation; and the rapid expansion of Canadian territory over half a continent stimulated national pride and national self-consciousness Opinion in England regarding Canadian independence was still more outspoken. There imperialism was at its lowest ebb. With scarcely an exception, English politicians, from Bright to Disraeli, were hostile or indifferent to connection with the colonies, which had now ceased to be a trade asset and had clearly become a military liability.

But no concrete problem arose to make the matter a political issue. In England a growing uneasiness over the protectionist policies and the colonial ambitions of her European rivals were soon to revive imperial sentiment. In Canada the ties of affection for the old land, as well as the inertia fostered by long years of colonial dependence, kept the independence movement from spreading far. For the time the rising national spirit found expression in economic rather than political channels. The protectionist movement which a few years later swept all Canada before it owed much of its strength to its claim to be the national policy.

But it was not imperial or foreign relations that dominated public interest in the seventies. Domestic politics were intensely absorbing and bitterly contested. Within five years there came about two sudden and sweeping reversals of power. Parties and Cabinets which had seemed firmly entrenched were dramatically overthrown by sudden changes in the personal factors and in the issues of the day. In the summer of 1872 the second general election for the Dominion was held. The Opposition had now gained in strength. The Government had ceased to be in any real sense a coalition, and most of the old Liberal rank and file were back in the party camp. They had found a vigorous leader in Alexander Mackenzie.

Mackenzie had come to Canada from Scotland in 1842 as a lad of twenty. He worked at his trade as a stonemason, educated himself by wide reading and constant debating, became a successful contractor and, after Confederation, had proved himself one of the most aggressive and uncompromising champions of Upper Canada Liberalism. In the first Dominion Parliament he tacitly came to be regarded as the leader of all the groups opposed to the Macdonald Administration. He was at the same time active in the Ontario Legislature since, for the first five years of Confederation, no law forbade membership in both federal and provincial Parliaments, and the short sessions of that blessed time made such double service feasible. Here he was aided by two other men of outstanding ability, Edward Blake and Oliver Mowat. Blake, the son of a well-to-do Irishman who had been active in the fight for responsible government, became Premier of Ontario in 1871 but retired in 1872 when a law abolishing dual representation made it necessary for him to choose between Toronto and Ottawa. His place was taken by Mowat, who for a quarter of a century gave the province thrifty, honest, and conservatively progressive government.

In spite of the growing forces opposed to him Macdonald triumphed once more in the election of 1872. Ontario fell away, but Quebec and the Maritime Provinces stood true. A Conservative majority of thirty or forty seemed to assure Macdonald another five-year lease of power. Yet within a year the Pacific Scandal had driven him from office and overwhelmed him in disgrace.

The Pacific Scandal occurred in connection with the financing of the railway which the Dominion Government had promised British Columbia, when that province entered Confederation in 1871, would be built through to the Pacific coast within ten years. The bargain was good politics but poor business. It was a rash undertaking for a people of three and a half millions, with a national revenue of less than twenty million dollars, to pledge itself to build a railway through the rocky wilderness north of Lake Superior, through the trackless plains and prairies of the middle west, and across the mountain ranges that barred the coast. Yet Macdonald had sufficient faith in the country, in himself, and in the happy accidents of time—a confidence that won him the nickname of "Old Tomorrow"—to give the pledge. Then came the question of ways and means. At first the Government planned to build the road. On second thoughts, however, it decided to follow the example set by the United States in the construction of the Union Pacific and Southern Pacific, and to entrust the work to a private company liberally subsidized with land and cash. Two companies were organized with a view to securing the contract, one a Montreal company under Sir Hugh Allan, the foremost Canadian man of business and the head of the Allan steamship fleet, and the other a Toronto company under D. L. Macpherson, who had been concerned in the building of the Grand Trunk. Their rivalry was intense. After the election of 1872 a strong compromise company was formed, with Allan at the head, and to this company the contract was awarded.

When Parliament met in 1872, a Liberal member, L. S. Huntington, made the charge that Allan had really been acting on behalf of certain American capitalists and that he had made lavish contributions to the Government campaign fund in the recent election. In the course of the summer these charges were fully substantiated. Allan was proved by his own correspondence, stolen from his solicitor's office, to have spent over $350,000, largely advanced by his American allies, in buying the favor of newspapers and politicians. Nearly half of this amount had been contributed to the Conservative campaign fund, with the knowledge and at the instance of Cartier and Macdonald. Macdonald, while unable to disprove the charges, urged that there was no connection between the contributions and the granting of the charter. But his defense was not heeded. A wave of indignation swept the country; his own supporters in Parliament fell away; and in November, 1873, he resigned. Mackenzie, who was summoned to form a new Ministry, dissolved Parliament and was sustained by a majority of two to one.

Mackenzie gave the country honest and efficient administration. Among his most important achievements were the reform of elections by the introduction of the secret ballot and the requirement that elections should be held on a single day instead of being spread over weeks, a measure of local option in controlling the liquor traffic, and the establishment of a Canadian Supreme Court and the Royal Military College—the Canadian West Point. But fate and his own limitations were against him. He was too absorbed in the details of administration to have time for the work of a party leader. In his policy of constructing the Canadian Pacific as a government road, after Allan had resigned his charter, he manifested a caution and a slowness that brought British Columbia to the verge of secession. But it was chiefly the world-wide depression that began in his first year of office, 1873, which proved his undoing. Trade was stagnant, bankruptcies multiplied, and acute suffering occurred among the poor in the larger cities. Mackenzie had no solution to offer except patience and economy; and the Opposition were freer to frame an enticing policy. The country was turning toward a high tariff as the solution of its ills. Protection had not hitherto been a party issue in Canada, and it was still uncertain which party would take it up. Finally Mackenzie, who was an ardent free trader, and the Nova Scotia wing of his party triumphed over the protectionists in their own ranks and made a low tariff the party platform. Macdonald, who had been prepared to take up free trade if Mackenzie adopted protection, now boldly urged the high tariff panacea. The promise of work and wages for all, the appeal to national spirit made by the arguments of self-sufficiency and fully rounded development, the desire to retaliate against the United States, which was still deaf to any plea for more liberal trade relations, swept the country. The Conservative minority of over sixty was converted into a still greater majority in the general election of 1878, and the leader whom all men five years before had considered doomed, returned to power, never to lose it while life lasted.

The first task of the new Government, in which Tupper was Macdonald's chief supporter, was to carry out its high tariff pledges. "Tell us how much protection you want, gentlemen," said Macdonald to a group of Ontario manufacturers, "and we'll give you what you need." In the new tariff needs were rated almost as high as wants. Particularly on textiles, sugar, and iron and steel products, duties were raised far beyond the old levels and stimulated investment just as the world-wide depression which had lasted since 1873 passed away. Canada shared in the recovery and gave the credit to the well-advertised political patent medicine taken just before the turn for the better came. For years the National Policy or "N.P.," as its supporters termed it, had all the vogue of a popular tonic.

The next task of the Government was to carry through in earnest the building of the railway to the Pacific. For over a year Macdonald persisted in Mackenzie's policy of government construction but with the same slow and unsatisfactory results. Then an opportunity came to enlist the services of a private syndicate. Four Canadians, Donald A. Smith, a former Hudson's Bay Company factor, George Stephen, a leading merchant and banker of Montreal, James J. Hill and Norman W. Kittson, owners of a small line of boats on the Red River, had joined forces to revive a bankrupt Minnesota railway.* They had succeeded beyond all parallel, and the reconstructed road, which later developed into the Great Northern, made them all rich overnight. This success whetted their appetite for further western railway building and further millions of rich western acres in subsidies. They met Macdonald and Tupper half way. By the bargain completed in 1881 the Canadian Pacific Railway Company undertook to build and operate the road from the Ottawa Valley to the Pacific coast, in return for the gift of the completed portions of the road (on which the Government spent over $37,000,000), a subsidy of $25,000,000 in cash, 25,000,000 selected acres of prairie land, exemption from taxes, exemption from regulation of rates until ten per cent was earned, and a promise on the part of the Dominion to charter no western lines connecting with the United States for twenty years. The terms were lavish and were fiercely denounced by the Opposition, now under the leadership of Edward Blake. But the people were too eager for railway expansion to criticize the terms. The Government was returned to power in 1882 and the contract held.