A Great Adventure
“Playing safe” is a better programme than reckless foolhardiness, but it
is a poor programme as compared with the spirit of adventure. Without
adventure, based upon faith, humanity’s horizon would never have widened
out and new continents and new avenues for the expenditure of human
energy in great enterprises for the good of mankind would never have
been discovered. Satisfaction with present attainment means stagnation,
and it is better to reach out after the apparently unattainable than to
allow our God-given energies to suffer atrophy through disuse.
In our present study of the building of a great railway across Canada,
traversing vast unpeopled plains, and boring its way through what some
had declared to be impassable mountain barriers, it is a very
interesting thing to find the enterprise somewhat closely linked up with
a certain other organization that had been chartered in 1670, under the
title of “The Governor and Company of Adventurers of England trading
into Hudson Bay.” The big word in that title is the word “adventurers,”
and it applies both to the men who hazarded their capital and to the men
who fared forth from the Old Country into the unknown spaces of the new
continent on this side of the sea. This Hudson’s Bay Company not only
attracted attention to the new world that had still to be conquered, but
its able and resourceful employees in the North-West became distinct
elements in the progress of the country.
In this particular connection one Donald Alexander Smith (later Lord
Strathcona) who had come out from Scotland as a lad to Labrador, in the
service of the Company, had risen to be head of that Company in Canada
at the time of Confederation, and was a member of the House of Commons
for Winnipeg when the project of a transcontinental railway loomed up as
an actual possibility. Mr. Smith was a restlessly ambitious man, or he
would not have so risen, and there is no doubt in my mind (and I knew
him in his later years) that when the discussion arose he began to
cherish the hope of being an instrument in linking up the East and West
in some way by the much-discussed railway.
Since writing this I came across a letter, dated November, 1872, at
Stuart Lake, B.C., from the Hudson’s Bay Company factor then in charge
there, to the officer in charge at another post. This letter not only
shows that the Hudson’s Bay Company, instead of retarding the opening up
of the country by rail as some have affirmed, was actively assisting and
making possible the work of explorers and surveyors who were beginning
to blaze the way for the road. And it also shows that Mr. Donald A.
Smith was, even that far back, on his own behalf and on behalf of the
ancient fur-trading organization, contributing his quota in that
direction. Here is an extract in the letter from one Hudson’s Bay man to
another: “The bearer is a botanist belonging to the railway survey who
arrived here in company with an engineer, and who is the bearer of a
letter from Mr. Donald A. Smith to us men in the service to assist the
surveyors as far as possible. He also showed me a letter from Mr.
Sandford Fleming, authorizing the engineer who goes down the Skeena to
sign any bill of expenses he may have with the Hudson’s Bay Company and
it will be good. I have told him that you would forward him to Victoria
and push him through as quickly as possible. The engineer’s name is
something like Horetzkie.” The writer of that letter had caught the name
of the engineer all right. And it shows not only how these Hudson’s Bay
posts made the work of these and other explorers possible, but in this
particular case it links the name of Donald A. Smith with the new day
that was dawning.
I do not think that Mr. Smith was by any means the ablest of the men who
later formed the Canadian Pacific Railway Company Board. But he was
unquestionably the pivot on which the project turned, from its doubtful
success as a Government undertaking, to its becoming an accomplished
fact as a privately owned and operated concern.
And it happened on this wise. Mr. Smith had to travel frequently between
West and East, through St. Paul, Minnesota, on his way from Fort Garry
to Ottawa and Montreal, in connection with parliamentary and Company
business. In St. Paul he usually called on Mr. Norman W. Kitson, a
Canadian, formerly a Hudson’s Bay factor, and met along with him another
Canadian, James J. Hill, who was then in the coal business. Kitson and
Hill were both interested in transportation to the Red River country,
and were anxious to get a hold of a three-hundred-mile railway called
the St. Paul and Pacific, running from St. Paul to the Red River, and
later to westward, if it could be kept going. This road had fallen into
misfortune because grasshopper plagues and Indian troubles and massacres
had depopulated the territory through which it ran. So the Dutch
bondholders had thrown it into the hands of the receiver, and the bonds
were not saleable in the ordinary way. Hill and Kitson, who knew more
about the country than the Dutch bondholders, felt that the road could
be built up into a really valuable concern, and Smith thought the same.
But they lacked the capital to acquire it.
Mr. Smith, on arrival in Montreal, told all this to his cousin, Mr.
George Stephen, another Scot, who had prospered well in business and was
President of the Bank of Montreal. Stephen (later Lord Mount Stephen)
was a man of unusual strength and vision. They talked it over with Mr.
R. B. Angus, also a Scot, and a very able business man, who was, at that
time, general manager of the same bank. Stephen and Angus agreed
generally with Smith, but they had not then seen the country and were
not of the kind to be rash. However, in 1877 Stephen and Angus had to be
in Chicago on banking business and, having a few days at their disposal,
decided to run up to St. Paul and see Hill and his country. They saw
both, as well as the railway, and were satisfied it had a big future.
The grasshoppers were disappearing, the Indians were all peaceful or
dead, and settlers would rush in to the rich areas. Stephen was a man of
swift action when he was satisfied, and so he hied himself away to
Amsterdam, got an option on the railway and came back with that option
in his pocket. The necessary money was raised, bonds were later on
floated, and Stephen, Hill, Angus, Smith (all Canadians), with John S.
Kennedy, of New York, took over the railway and the land-grant. We need
not follow the history of that St. Paul, Minneapolis and Manitoba
Railway (which later developed into “Jim” Hill’s Great Northern); but
everything seemed to come the way of the adventurous Canadians who had
risked much on it, and they became multi-millionaires in a surprisingly
short time.
It was to this group of men, who were doubtless ready to be approached,
that Sir John A. Macdonald, after having tried in vain in Europe,
turned, when even Sir Charles Tupper, who was never disposed to be
afraid of anybody or anything, called the Premier’s attention to the
prodigious task ahead if the Government itself attempted to build and
operate a railway across Canada from sea to sea. By these financial men
and a few more, as we shall see, the project that had terrified
Governments of both political shades was undertaken, and by them it was
ultimately, and after terrific struggle, carried to completion. Even Mr.
J. J. Hill came in at the outset, but, differing from the rest on the
policy of building over the North Shore of Lake Superior and thus having
an all-Canadian route, and finding it impossible to serve two masters in
two railways that would clash somewhat, he retired soon after the
Canadian Pacific Board was organized. But we are not to forget “Jim”
Hill, a Canadian abroad, for it was through him that the great
triumvirate, Stephen, Smith and Angus, got a taste for railroading and a
certain training therein which stood them and Canada in good stead in
the stormy days that lay ahead.
It was, in a sense, natural that the men we have mentioned should take
hold of the Canadian Pacific undertaking. Some of them, at least, knew
the great West-land by actual observation. The others would bank on the
statements of those who knew the country. Stephen was the most cautious
and so the least inclined to take risks in regard to such a colossal
enterprise. But once he entered upon it, we are probably safe in saying
that, though he had his hours of depression, he became the mainstay of
the Board in the dark storms of difficulty that were at times to settle
down on the project during the desperate days that were ahead. All
three, Stephen, Smith and Angus, hailed from the land where there is a
saying, “A stout heart to a stey bræ.” And these men and their
associates were to face, in every sense of the word, “steep hills” in
the financial world as well as in actual rock-ribbed obstacles to
railway building, greater than any contemplated by the originator of the
inspiring saying quoted above. There was to be a time, as we shall see
later, when Stephen’s famous cablegram to Smith, in the single Gælic
word “Craigellachie” (stand fast), would be needed as a ringing
admonition to men in Canada whose resources became so completely
exhausted that failure seemed practically inevitable.
In the meantime we have only reached the stage in our story where these
men, Stephen, Smith and Angus, reinforced by another highly capable,
careful and successful Montreal man, Mr. Duncan McIntyre, at the
threshold of the gigantic undertaking, were in consultation with the
Macdonald-Tupper administration at Ottawa on the subject. They all
sensed the almost overwhelming bigness of the task and, although they
were attracted by the challenge of its immensity, and were prepared to
accept that challenge, they all realized that they should try to secure
the co-operation of the world’s financial centres before they could even
hope for success. Hence we find, in the summer of 1880, Sir John
Macdonald, Sir Charles Tupper and John Henry Pope sailing for London, in
company with Stephen and McIntyre, to interest British capitalists.
Englishmen are generally willing to take a “sporting chance” and plunge
into an adventurous scheme. But this project of building a railway
across the continent through Canada’s far stretches of thinly populated
country, with the gigantic engineering problems of the rock region on
the North Shore of Lake Superior and the apparently impenetrable barrier
of the mountains in British Columbia, was too large an order for the
most courageous of London’s money magnates. It is doubtless a good thing
for Canada that the delegation had to return from London empty-handed.
Projects and business concerns owned and operated by long-range
directors and shareholders have never been a huge success in Canada,
unless practically conducted by local advisory boards, and railways are
no exception to that rule. More important still, this fruitless search
for financial assistance put Canadians on their mettle by throwing them
back on their own resources at the outset, and thus developing the
strength and the endeavour which a big undertaking always brings if
bravely attempted. It was a good training in national athleticism, and
the young Dominion that had to wrestle with difficulties at the
beginning developed astonishing strength and initiative power. Later on,
when, within a few months of the last spike on the road, the youthful
giant had reached the limit of resource, and was in danger of falling
short, British capital was to come in to help to a triumphant finish.
But the time was not yet.
The delegation to London returned to Ottawa in 1880, and the Government
signed a contract with George Stephen, Duncan McIntyre, of Montreal;
James J. Hill, of St. Paul; John S. Kennedy, of New York, and four
outside this continent, Cohen, Renach & Company, of Paris, and Morton,
Rose & Company, of London, though in the latter case it was really the
New York firm of Morton, Bliss & Company that went into the
organization. It is interesting from a psychological standpoint to find
that the name of Donald A. Smith, one of the big three, was not in this
original contract. Ever since the day when Mr. Smith had cast his vote
in the House of Commons, in 1873, against Sir John Macdonald in the
matter of the “Pacific Scandal,” as Macdonald’s opponents called it, or
the “Pacific Slander,” as Sir Charles Tupper designated the affair,
there was, to put it mildly, a coolness between Smith and Sir John. For
these two to be in the conferences that would often arise between the
Canadian Pacific directors and the Government, would throw a wet blanket
on the meetings. Later on these two became punctiliously friendly, and
even though Mr. Smith’s name was not visibly in this original Canadian
Pacific Railway Company, every one knew (including the keen-minded Sir
John) that he was actually in it for all he was worth.
The contract terms sound generous enough if we could only keep out of
our minds the tremendous extent of the undertaking and the endless risks
taken by the new company, in view of the fact that the real cost of the
railway from ocean to ocean was almost a haphazard conjecture. Up to the
date of the signing of the contract the way through the mountains of
British Columbia was unsettled, and the character of the work on the
North Shore of Lake Superior was practically unknown. That North Shore
problem had frightened Sir Henry Tyler, President of the Grand Trunk, in
London, from going into the Canadian Pacific scheme, partly because that
eternal wilderness had no prospect of local traffic compared with a line
south of the Boundary, but partly also because the interminable miles of
rock to be built through looked too formidable to be attacked. Take it
all round, the terms of the contract signed in Ottawa may have looked
too generous to the man on the street. But only men of courage who
visioned the far future would have set their names to a covenant to
build thousands of miles of a railway which not only some public men,
but some experts also openly declared would “never pay for the axle
grease.”
Briefly stated, the Government agreed to give the new syndicate the
seven hundred miles of railway already built or under contract to be
built by the Government, together with twenty-five millions in money and
twenty-five millions of acres of selected land in the West. In addition,
the syndicate was promised exemption from import duties on all material
brought in for construction, from taxes on land for twenty years after
Crown patents were issued, as well as freedom from taxes on stock and
other property for all time, together with exemption from regulation of
rates till ten per cent. had been earned on capital invested. To guard
against premature competition by roads connecting with the States, the
Government agreed that for twenty years no charter would be granted to
any railway south of the Canadian Pacific Railway from any point at or
near the Canadian Pacific Railway except such as should run south-west
or westward of south-west; nor to within fifteen miles of the
Boundary-Line.
In Winnipeg, in my student days in the 80’s, I recall hearing many
rather stormy discussions over this contract at public meetings, because
the West was particularly affected. The two things most strenuously
opposed, as being too generous to the Canadian Pacific Railway Company,
were the grant of land, which was said to be too large, and the section
which prevented competing lines being built to the south. Neither of
these objections ever seemed to me very reasonable. The land grant
looked large; but land was worth very little before the railway came in
to make it valuable. In my boyhood I knew that some of the land along
the Red and Assiniboine Rivers (and there is no better land anywhere)
was sold for fifty cents an acre. If the twenty-five millions of acres
given to the railway were valued at pre-railway prices the amount would
not be great. When the railway was built the price of land went up with
a rush, but it must be borne in mind that it cost the Company millions
to bring the railway in, to make the land worth while. And it should
also be remembered that the railway made other people’s land as valuable
as its own, although the increase to the other people did not cost them
anything beyond their ordinary taxes. In any case the land went up when
the railway came in, but the railway did not come in by magic. It is
interesting to recall in this connection that Sumner, a famous statesman
in the American Republic, once advocated giving half of one of the great
agricultural States in the West to any one who would build a railway
through it, as it was of little use till a railway would enter. What
some people in Canada, who denounced the Government for giving
twenty-five millions of acres, might have said if the Canadian Pacific
Railway had been offered one-half of the Middle West, would probably be
too incoherent to print.
We may read later something of the cyclonic protests made in my native
Province of Manitoba against the section of the contract which denied to
any others the right to build railways south of the Canadian Pacific
into the States; but, like many other movements, the one against this
temporary monopolistic clause was, to say the least, lacking in proper
perspective. The Canadian Pacific Railway Company, to enable Canada to
keep faith with British Columbia and thus hold Confederation together,
was struggling to build two thousand miles of road over a territory
where there was little prospect for years of a paying traffic. It is
hard to see that it would have been just, without adequate compensation
to the Canadian Pacific, to allow other railways to hamstring the
transcontinental by building in the only region where there was
population enough to give a railway some reasonably remunerative
business.
A rather peculiar thing was that no one objected to the cash subsidy
except those who attacked the whole business from end to end, as ruinous
to the young Dominion. Reasonable onlookers, however, who knew something
of the tremendous cost of construction over certain sections, thought
the syndicate was mad to tackle it at almost any price. Later on these
reasonable people found justification for their view in the fact that
construction was costing in some sections half-a-million a mile—though
even they would have gasped if they knew that in after years a single
tunnel in the mountains was to cost over eight millions to construct.
There were some who considered that the free gift to the company of
several hundred miles of railway, built by the Government over a term of
years, was too generous. But Canadian Pacific Railway experts in 1889
testified before an Interstate Commerce Inquiry, and said that parts of
the Government sections were unwisely located, and the cost of joining
up with these unwisely located sections was so great that the amount the
sections were supposed to represent should be heavily discounted. It is
possible that experts will always differ over this big contract of 1880
which, for years, furnished offensive and defensive political orators
with abundant ammunition in party conflicts.
As I write these paragraphs regarding the famous contract between the
Canadian Government and the pioneer railway across Canada, I have before
me the Dominion Statute of 1881 in which the contract is incorporated.
It has some rather illuminating clauses, of which I here quote a few. In
the section of the Act in which the Company is required to complete the
work by the year 1891, and the section in which the Government is
required to complete and hand over certain portions of the railway then
under contract, both parties are safeguarded by the words “unless
prevented by the act of God, the Queen’s enemies, intestine
disturbances, epidemics, floods or other causes beyond control.” That
was sufficiently comprehensive to guard against any contingency. There
is a very interesting statement at the conclusion of section 7 of the
Act, where, after saying that the road built by the company and the
portions built by the Government when completed, shall become the
absolute property of the Company, the Act goes on to say: _And the
Company shall thereafter and for ever efficiently maintain, work and run
the Canadian Pacific Railway_. I think the testimony of all is that the
Company is living up to that contract, since its amazing efficiency is
the admiration of the world. But the words “for ever” indicate with
unconscious frankness that the Government had grown weary of Government
construction, ownership and operation of such an immense project, and
was devoutly thankful to hand it over for all time to a responsible
private organization.
The contract which we have been thus studying had to run the gauntlet
through Parliament, and we shall follow its course there and the new
programme of railway building by the new Company in the ensuing chapter.