Canadian Pacific Railway, 1914
A marked feature of the Canadian Pacific policy from the beginning was the endeavour to control subsidiary or allied activities, and thus gain well-rounded independence. Its steamship lines came to girdle half the world. On the Pacific, service to Hong-Kong and Yokohama had begun in 1892 and to Australia in 1893, while a service on the coast from Seattle to the far north, and on the lakes of central British Columbia, followed. The Great Lakes fleet was still earlier in being. In 1903 the purchase of fourteen Elder-Dempster vessels ranging from five to eight thousand tons gave a whole North Atlantic fleet for seven millions, or the cost of a single Lusitania. It was soon increased by larger and faster boats. A line to Trieste, to secure a share of the immigration traffic from Eastern Europe, led to prolonged complications with the Austrian government early in 1914, on account of the hostility of German rivals. Hotels followed steamships, some eight or ten being erected at strategic points from St Andrews to Victoria. Departing from the usual American practice, the company owned and operated its own sleeping-cars, and maintained its own express and telegraph companies. Its car-shops provided much of its rolling stock. Grain elevators were built at terminal points. In the later years a systematic policy of developing its western lands was adopted. A special department of Natural Resources was established, irrigation works were begun on a huge scale in the tract of three million acres between Calgary and Medicine Hat, and ready-made farms were provided or loans made to selected settlers.
The method of financing these countless enterprises was equally striking. Instead of increasing the proportion of bonded indebtedness, as was customary, the company sought additional capital chiefly by the sale of common stock. This procedure was possible because of the speculative value of the stock, based primarily on the growth of traffic, and of the value of the western lands still unsold: the dividend rose steadily to ten per cent in 1912, and the practice which prevailed until 1909 of issuing the stock at par gave holders valuable rights. In the latter year 125 was charged for the shares allotted, in 1912 150, and in 1913 175. As a result of the earlier policy an unnecessarily high price was paid for new capital, but fixed charges were kept low, and no great system was as safe from foreclosure. In 1914 the total assets of the company were valued at over $800,000,000.
Fifth in mileage among the railway systems of Canada is the group of fragments connected with the Great Northern Railway of the United States. James J. Hill had not been least among the members of the original Canadian Pacific Syndicate, but differences with his colleagues led to his retirement in 1883. Thenceforward he devoted himself entirely to the building up of the St Paul, Minneapolis and Manitoba, the railway acquired from the Dutch bondholders. Under the name of the Great Northern it had been extended by 1893 from Lake Superior to Puget Sound, and continued to grow steadily until, twenty years later, it controlled nearly eight thousand miles. The Great Northern was remarkable in at least three respects. Except for the original grants for the Minnesota lines, it was built through to the coast without a dollar or an acre of subsidy from the state. Its capitalization was kept close to the actual cost of the road and its fixed charges were low. It took the lead among American roads in an aggressive and enlightened endeavour to build up the country through which it ran, not only by flexible rate charges, but by a direct campaign of education among the farmers and other shippers on its route.
The mineral wealth of southern British Columbia and the farming wealth of the western plains turned Hill's attention toward Canada once more about the beginning of the twentieth century. In British Columbia the progress of the Great Northern invasion was slow. The character of the country made construction difficult, and the Canadian Pacific, appealing to national prejudices, fought every inch of the way. But Mr Hill pressed on. The coal-fields of the Crow's Nest Pass, in which he acquired a controlling interest, were made accessible by a road from the south, and a series of lines branching from Spokane entered the Boundary mining region. Winding in and out across the border the road continued westward to Vancouver. Fortunately duplication was in large part avoided; by arrangements with the Canadian Pacific, the Canadian Northern, and the Northern Pacific, the difficult country south of the Fraser was pierced by common lines, and common terminal facilities were secured. Meanwhile, in 1906 and 1907, more ambitious schemes were announced—the building of north and south lines through Brandon and Regina, and the construction of an east and west line from Winnipeg to the Pacific. In ten years, it was officially forecasted, the Great Northern would have as extensive a system in Canada as in the United States. What was more startling, Mr Hill denounced 'spoon-feeding,' and did not ask for a cent of subsidy. The building of the Grand Trunk Pacific and the Canadian Northern postponed indefinitely these larger plans. Actual operations were confined to the construction of branches running northward in Manitoba, to Brandon, Morden, and Portage la Prairie, and the acquisition, jointly with the Northern Pacific, of a lease of the Canadian Northern line from Pembina to Winnipeg, under the name of the Midland, and of terminals in Winnipeg. Meanwhile, as the map shows, branches from the main Great Northern line nosed up to the border at nearly a dozen other places.
The activities, real and projected, of the Great Northern in Canada brought up acutely the question of the interrelations of Canadian and American roads. To some these activities appeared evidences of an infamous plot to drain Canadian traffic southward to United States ports and roads: to others they seemed to be philanthropic endeavours to rescue Western Canada from the clutches of monopoly. They were not, however, due to either political intrigue or knight-errantry, but to the same desire for profit which had led the Canadian Pacific to build up its great system in the western states. Other things being at all equal, it was of course desirable that Canadian traffic should follow Canadian territory to Canadian ports; it was to this end that uncounted millions had been spent. Yet patriotism had a seamy reverse side of political buncombe. Every hint of outside competition in the preserves of railway or industrial corporations in Canada was denounced in interested quarters as dangerous and empire-smashing, while the counter-incursions into the territory of the United States were ignored or regarded as merely normal business enterprise.
