It was observed that as far as possible the new ministers in the Cabinet formed by Macdonald were taken from the ranks of his old colleagues, from those who had suffered with him on account of the 'Pacific Scandal.' Sir George Cartier was dead, but Tilley and Tupper, Langevin, Pope, Campbell, Aikins, O'Connor, and others of the 'Old Guard' not hitherto of Cabinet rank, became members of the new Administration, which was destined to last for thirteen years.

Lord Dufferin's term of office as governor-general was about to expire. One of his last acts before leaving Canada was to send for Macdonald to form the new Ministry. Sir John's relations with Lord Dufferin had always been pleasant, though I think he considered the governor-general a bit of a humbug. Speaking to me one day of men's liking for flattery, Sir John said that 'almost anybody will take almost any amount of it,' but he thought that Lord Dufferin transgressed even those wide limits. 'He laid it on with a trowel.' Sir John added that Lord Dufferin was proud of his classical acquirements. He once delivered an address in Greek at the University of Toronto. A newspaper subsequently spoke of 'His Excellency's perfect command of the language.' 'I wonder who told the reporter that,' said a colleague to the chief. 'I did,' replied Sir John. 'But you do not know Greek.' 'No,' replied Sir John, 'but I know men.'

Lord Dufferin's successor in the office of governor-general was the Duke of Argyll, at that time Marquess of Lorne, who spent five interesting and, as the duke himself said more than once, pleasant years in the Dominion. The personal relations between him and the prime minister were always of the most agreeable description. The story, published in Sir Richard Cartwright's Reminiscences, that Sir John Macdonald was guilty on one occasion of rudeness to his royal consort the Princess Louise is without a particle of foundation. It was categorically denied by Her Royal Highness, and characterized as 'rubbish' by the duke in a cable to the Montreal Star. I have now arrived at the stage in this narrative when I have personal knowledge of everything upon which I write. I was Sir John Macdonald's private secretary during the latter half of Lord Lorne's term of office, and I positively assert that the relations between Government House and Earnscliffe were of the most friendly character during the whole period. Had there been the slightest truth in the story, it is incredible that such relations should have existed.

The policy of protection which Sir John had offered to the people in 1878 was brought into effect during the session of 1879. So completely was his promise fulfilled that the Liberal leader, Mackenzie, declared that Sir John had 'gone the whole hog.' George Brown made a similar admission.[[17]] Sir John Macdonald, it may be said, always carried out his promises. I never knew him to fail. He was guarded in making them, but if he gave an unconditional promise he was sure to implement it, no matter at what inconvenience to himself. I have seen this illustrated again and again. The late Sir Richard Cartwright—no very friendly witness—observed in recent times, in his own characteristic fashion: 'I will say this for that old scoundrel John A. Macdonald, that if he once gave you his word, you could rely upon it.'

Sir John had not been long in power when death removed the most implacable of his foes. On May 9, 1880, died George Brown, struck down in his office by the bullet of an assassin. This shocking occurrence, which was due to the act of a discharged printer, had no relation to public affairs.

The fiscal policy having been settled, Sir John Macdonald again turned his attention to the problem of a railway to the Pacific. The Liberal Government, on the ground that the agreement with British Columbia to build the road within ten years was impossible of fulfilment, had not considered Canada bound by it, but had decided to build the railway, not by means of a private company, but as a government work, and to construct it gradually in sections as the progress of settlement and the state of the public treasury might warrant. Sir John Macdonald rejected this piecemeal policy, and resolved to carry out the original scheme of a great national highway across the continent, to be built as rapidly as possible so as to open up quickly the resources of the Great West.

In the summer of 1880, accompanied by three of his colleagues—Tupper, Pope, and Macpherson—Macdonald visited England for the purpose of inducing capitalists to take hold of the enterprise. After much negotiation they were successful, and on September 14, 1880, an agreement for the construction of the Canadian Pacific Railway was signed in London. The company was to receive $25,000,000 and 25,000,000 acres of land in alternate blocks on each side of the railway running from Winnipeg to Jasper House at the Rockies. The line was to be completed by May 1, 1891, and the company was to deposit one million dollars as evidencing its ability to carry out the bargain. The contract was finally executed at Ottawa on October 21, 1880. Parliament was then summoned in order to ratify what the Government had done.

The contract was fiercely opposed. The Opposition denounced the terms as extravagant, as beyond the resources of the country, and as certain to involve financial disaster. Blake affirmed that the road would never pay for the grease for the wheels of the engines that would pass over it, and appealed to his fellow-members not to throw the hard-earned money of the people of Canada 'down the gorges of British Columbia.' A rival company was hurriedly got up which offered to build the railway on much more moderate terms. The bona fides of this opposition company or 'syndicate' was much doubted, and, in any event, the proposal came too late. The Government was bound to stand by its bargain, which was defended with great power by Sir John Macdonald, Sir Charles Tupper, and others. At length, by a vote of 128 to 49, the House of Commons ratified the contract, which passed the Senate a few days later, and became incorporated in an Act of Parliament assented to on February 15, 1881.

Then began a period of railway construction hitherto unparalleled. At the date of the signing of the contract the only portions of the main line built were 152 miles from Fort William westward (the track was laid, but the line was not completed) and 112 miles from Keewatin to Selkirk—that is 264 miles. Mackenzie had declared the building of the road within ten years to be a physical impossibility for Canada. He even went so far as to affirm that the whole resources of the British Empire could not construct the railway in ten years.[[18]] As a matter of fact, it was built by Canada in less than five years. On November 7, 1885, Donald Smith drove the last spike at Craigellachie, twenty-eight miles west of Revelstoke, British Columbia; and on the 24th of the following July, just fifteen years (including the five lost years of the Mackenzie régime) after the engagement with British Columbia was made, Sir John Macdonald arrived at Port Moody in the car in which he had left Ottawa a few days before.

This marvellous feat was not accomplished without great exertions, much anxiety, and the exercise of the highest arts of statesmanship. The opposition to the granting of the charter had been so keen, the arguments against the whole scheme had been so powerfully set forth, that the company found they could not sell their lands, nor obtain, in any other way, the money needed to carry forward the work. The Government was obliged to come to the rescue, and, in the session of 1884, to grant a loan of $22,500,000 to the company. On December 1, 1883, Sir John Macdonald sent this telegram to Sir Charles Tupper, who only a few months before had gone over to London to fill the position of high commissioner: 'Pacific in trouble, you should be here.' Next morning the characteristic reply was received: 'Sailing on Thursday.' Sir Charles was as good as his word. With admirable courage, energy, and resolution he fought the measure of relief through parliament, and for a time at least all was well. But only for a time. Early in the year 1885 we find Mr Stephen, the president of the company, writing Sir John Macdonald: