The romance of the Canadian Pacific Railway

by R. G. MacBeth

It should be remembered, to begin with, that the principal men in the Company, Stephen, Smith and Angus, were men of practically independent means before they entered on railroading with Hill in St. Paul. In their association with Hill, owing to causes set forth in a preceding chapter, they had become very wealthy in a short time and hence did not have to take up any further work of the kind. Of worldly goods they had enough and to spare and might have reasonably, from their own standpoint, have continued the even tenor of their ways in their ordinary and familiar occupations in Canada. But Sir John Macdonald, as soon as he knew that their wealth had become great, and that they would be looking for new avenues for investment, approached them with an appeal to undertake the completion of the Canadian Pacific Railway. It was the biggest railway construction project in the world, and the proposal to build the road, except by slow stages, was characterized, not only by prominent public men, but by some well-known experts, as sheer madness. Stephen, as we have seen, was not disposed to go into such a huge undertaking at all. There was no mercenary reason why this already successful trio should make this hazardous attempt. However, the appeal of patriotic duty to their country, as well as the fascination of immensity in task, finally drew these Canadian men into the enterprise. And once they took up the matter it is well-known and can now be told that they put not only themselves, but all they had, into the determination to carry it through to a successful issue. Hence they deserved the commendation of the country and not the condemnation, for their gallantry.

Twice the Company had to apply to the Government for either loan or guarantee of bonds and during the months when these matters were hanging in the balance, the founders of the Company and the General Manager and Purchasing Agent, as well as other responsible officials, passed through what can be truly called, agonizing experiences. To these experiences they gave utterance at times. It is anticipating somewhat and disregarding sequence for the moment, but during those years we have it on the word of friends that Stephen returned one evening to the Russel House after a vain effort to get Sir John A. Macdonald to say that he would recommend that a loan should be made. Stephen, upon whom, as President, there was unusual strain, threw himself into a chair in the rotunda and when an acquaintance passing the time of day said, “How are you?” Stephen, without looking up, replied “I feel like a ruined man.” One day he shed tears in the office of Mr. Collingwood Schreiber, not because he cared for himself, but because it looked as if the whole great project of the Canadian Pacific was going to a crash that would block the future of Canada for a time at least. On another night Mr. Stephen, after a hopeless sort of interview with the Government, came down the Russel House stair grip in hand and told Senator Frank Smith, a gallant friend of the railway, that he was going to Montreal to make a personal assignment of all he possessed. Even the redoubtable Van Horne wired frantically one day that the pay car could not go out because there was nothing in it! On another day he said to Mr. Schreiber at Ottawa, “If the Government does not help us we are finished.” And shortly afterwards, meeting Sir John Macdonald in the corridor, he said, “Sir John, we are dangling over the pit of hell and ruin.” On another occasion, when the Directors were in session, the Chairman said, “Gentlemen, it looks as if we had to burst——” But Donald A. Smith looked hard at him and said, “It may be that we must succumb, but that must not be as long as we individually have a dollar.” And it is related that he went out and raised on his personal security enough to meet pressing accounts which Shaughnessy said had to be paid at once.

My impression is that Donald A. Smith, with that craggy head and beetling brow of his, was the most doggedly determined Director of them all, though less able as a financier and diplomatist than Stephen, to whom, generally speaking, those who know the history of the road quite properly give endless credit for his masterly work as President of the Company. After writing the preceding sentence, I came across the following statement by Sir Charles Tupper, who himself did so much to carry the great project through. He said in 1897: “The Canadian Pacific Railway would have no existence to-day, notwithstanding all the Government did to support the undertaking, had it not been for the indomitable pluck and energy and determination, both financially and in every other respect, of Sir Donald Smith.”

I can quite understand some reader putting in a question here, as to how it was that men of such ability, after having estimated the cost of constructing the Canadian Pacific, found themselves at the end of their resources within two years of their taking the contract. It is not enough to say, although it was true, that there was an immense amount of unexpected expenditure in battering the way through the Laurentian rocks on the North Shore of Lake Superior, and in boring a road through the mountains of British Columbia. There were other causes for the hard circumstances that came upon the railway. The chief reasons for the financial difficulties of the Railway Company, beyond what has been already indicated, lay in the facts that, succeeding the boom inflation in the West in 1881, there came a very serious depression all over the country. On account of this, immigration fell far short of what was expected. In consequence, both freight and passenger traffic was very scanty. The Railway Company, for the same reasons, could not realize anything worth while on its land, which was for the first ten years a drag on the Company rather than an asset, as can be readily ascertained by a study of the question. Thus the two main sources of expected revenue failed to materialize. In addition, the threatening discontent of the half-breed population which culminated in the Riel outbreak, further discouraged the incoming of settlers. Resolutions, passed unwisely at conventions in Manitoba, warning immigrants not to come until there were other railways linking up with the States, being used by immigration agents for other countries, created a bad impression as to the Canadian West. And because investors abroad were also influenced against the Canadian Pacific at the financial centres of London and New York, by certain rival railway interests, the assets of the Canadian road could not be turned into money. In this connection it is well to recall again the bitter “Disallowance” agitation carried on against the Canadian Pacific, chiefly in Manitoba, all through the construction period. There was persistent effort made by that Province to charter local railways, mainly linking up with the United States systems, despite the clause in the Canadian Pacific contract with the Government to the contrary. The charters granted by Manitoba were promptly disallowed by the Dominion Government, mainly, first, because of the contract with the Canadian Pacific, second, because money could not be raised to build the main line of the Canadian Pacific if the productive areas along that road should be tapped by rival roads, and, third, because it was contended that the East had made tremendous sacrifices to build the road and that on that account Western traffic ought to go over the North Shore to build up the Eastern part of Canada, rather than go southward to build up a foreign country.

The Canadian Pacific, in self defence, would not yield to the granting of rival charters, and the Dominion Government said they would keep faith according to the terms of the contract. But Manitoba would not be appeased and made many attempts, even to violence, to break the “monopoly” clause. I recall passing on a Canadian Pacific train to Southern Manitoba, and seeing large forces of men at a point where a road from the south was striving to cross the Canadian railway. A Canadian Pacific locomotive on a switch hastily constructed, barred the way and some 200 men stood beside it to prevent the crossing. The agitation checked immigration, and produced altogether a condition exceedingly harmful to the West for a time. But the Canadian Pacific was clearly within its rights and this was part of its battle for life during that period.

One cannot remember that fiery era without recalling how fortunate it was for the Canadian Pacific Railway that its Western representative was William Whyte, a princely type of man, whose courage, imperturbable coolness and inflexible determination made him a tower of strength. People might fight the railway, but no one of right mind could dislike William Whyte, whose high character and immense personal popularity with all classes, including especially all employees of the road, made him unassailable. Leaving much of the administration of his office to men like the genuine, and diplomatic, “Jim” Manson, Whyte (who was knighted later for his services to the Empire) gave much time to the “disallowance” problem, and to preventing open trouble as far as possible. But there was general satisfaction when Manitoba, under the continued work of men like John Norquay, Thomas Greenway and Joseph Martin, in the local Government of Manitoba, persuaded the Dominion authorities to cancel the “Monopoly” clause by giving the Canadian Pacific compensation. The whole agitation, however sincere, had greatly hampered the development of the country, and crippled very considerably the efforts of the Canadian Pacific in a confessedly difficult period of wide-spread depression.

Some railways in the wealthy country to the south were, for various reasons, going into the hands of the receivers during the construction period of the Canadian Pacific. So that, despite the consummate ability of the Canadian Pacific financiers, it is small wonder that the Company saw bankruptcy looming up ahead. Even Stephen and Shaughnessy could not make bricks without straw. And all the time Van Horne was driving ahead with construction at top speed. He knew the situation, but declared that any stoppage or even slackening up would lead to the Company being pounced on by creditors, who would wind it up. His view was that the whole undertaking must be kept alive as a hopeful, going enterprise, and that its position would improve immensely when it, refusing to acknowledge defeat, spanned the continent to the Western seas. Even then, Van Horne, as after events proved, had his eye on trade with the Orient as a great feeder to the road. So he went ahead, and let the others find the money, though at times he took a hand, in his trenchant way, in letting the Government know what he thought of the whole situation.

It was late in 1883 when the Canadian Pacific, which had been keeping the facts before the Government at Ottawa, made formal application for a loan of twenty-two and a-half millions to ward off failure. The situation was desperate, but the Government, which had a lively recollection of the fight put up against the original contract, was afraid to risk defeat by granting the request. The security offered for the loan was to all appearance ample, as it included a lien on the Company’s main line, the branch lines in Manitoba, and the unpledged land grant. In addition they gave the astonishing pledge that they would clip five years off the contract term and finish the road in 1886. Sir John Macdonald, who always kept his hand on the public pulse, knew that people in the East were being persuaded by the Parliamentary Opposition that the West was being developed at the expense of the East. Men in his own cabinet and many of his supporters in the House, were being infected with that idea, despite all efforts to make them see that, in the long run, the development of the West would be an immense gain to the East. Sir John, with the prospect of a divided cabinet, possible defection amongst his own followers in the House, as well as the bitter attitude of the Opposition and the likelihood of a revolt in the country against the granting of the loan, was indisposed to yield. Things looked black for the Canadian Pacific. Stephen was utterly discouraged after interviews with Sir John, and it was on one of those occasions that he was giving up and leaving Ottawa for Montreal when Senator Frank Smith prevailed on him to wait over till they would have a midnight interview with Sir John. Even that interview seemed fruitless till Mr. John Henry Pope went to Sir John and told him that if the loan was not granted, the Canadian Pacific would go to the wall, the Conservative party would go with it, and all Canada would be in a panic. Sir John did not want to smash Canada nor the Conservative party, and he explained that he was personally in favour of the loan and would try to get his Cabinet and party united in an effort to put it through the House. This was enough for Mr. Pope, who knew Sir John’s powers, and at two o’clock in the morning Pope returned to the well-nigh despairing Stephen and the rest, and uttered simply the tonic words, “Well, he will do it.”

In the meantime Sir Charles Tupper, who, while still holding the portfolio of Minister of Railways, was in London as High Commissioner for Canada, had been cabled for to come to the rescue. He left for Ottawa at once and, on arrival in Canada, found everybody at their wits’ end. He got Mr. Miall, the expert Government accountant, and Mr. Collingwood Schreiber, the highly respected and able Government engineer, to work on the Railway Company’s books in Montreal. They reported everything satisfactory, and Mr. Schreiber, whose word went a long way, recommended the granting of the loan.

But there was still the task of getting the Cabinet united on the subject, and the caucus of the Government members in the House into a favourable and unanimous attitude. Fortunately for the Government and the Canadian Pacific and the country at large, the Cabinet had in its number the rare personalities of the magnetic and diplomatic Sir John Macdonald and the formidable, fearless Sir Charles Tupper, who made a sort of irresistible combination. Sir John could sway by the conciliatory eloquence and the appealing personal touches which held the devoted allegiance of his party to the “old Chieftain” through many extraordinary vicissitudes in his long career. Sir Charles could marshal arguments with the consummate forensic power of which he was a master, and thus became a veritable regiment of storm troops to carry his points and reach his objective. These two men solidified their own party and, despite a fierce resistance from their opponents in the House, the Bill authorizing the loan was carried, as Sir Charles said, “at the point of the bayonet.”