Battling for Life
We can say at once, in explanation of the financial struggles before
mentioned, that the Canadian Pacific Railway was constructed to a finish
across Canada in a period of monetary storm and stress. Leaving out of
count the early years when the successive Governments were building
short stretches here and there, in a way so leisurely that no financial
difficulties occurred, beyond the ordinary impecuniosity which haunts
all Governments, the period from 1881 to 1885 was pre-eminently a
difficult time. During those years everybody was having what men on the
prairies call “hard sledding”—an expression taken from the experience
of travel with sleighs when the thaw has left bare patches on the
plains. On those patches the sleigh runners catch with a disheartening
tenacity and impede progress. At such junctures it is fortunate if there
are several men travelling together, because by “doubling up” their
teams, they can get over the otherwise impossible gap. Life is full of
opportunities for mutual helpfulness, and the great railway which now
spans the continent and bridges the oceans found itself more than once,
in the construction period above mentioned, at the end of its resources
and had to call on the Dominion Government for temporary assistance. It
was a case where “doubling up” became necessary if the hard places were
to be traversed. We are not sure that the Government was as willing and
ready to assist as the ordinary good-natured and open-hearted teamster
used to be on the prairie. But even a Government, which should be
cautious because it handles trust funds for the people, may be brought
to see when an unforeseen expenditure can be and must be made, in the
interests of the people themselves. In this particular case of the
Dominion Government and the Canadian Pacific Railway the Government
would not and did not at any time give even a temporary loan till it had
made the most exhaustive investigation into the whole problem. There are
some facts so outstanding that even a superficial investigation could
find, without much delay, why the Company required and deserved
temporary assistance by way of loan during the construction period in a
trying era.
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.”
This relief gave the Company a new lease of life and the work, which had
never slackened, even though men had to wait for their pay, was forced
ahead by the aggressive Van Horne, while Shaughnessy handled every
dollar with such consummate skill that it seemed to do the work of two.
But the terrific expenditure in construction on the North Shore and
through the mountains, caused the twenty odd millions to melt like snow
before the sun. Smashing the rocks and levelling up the chasms on the
North Shore and finding a sure foundation in shaking and almost
bottomless morasses which sucked down material like an insatiable
undertow, all meant enormous unforeseen expenditure. The Company would
not allow any careless work and, if necessary, the contractors would
stay at one spot for months till the road-bed was absolutely secure. Van
Horne was rushing to complete the railway, but he was too thorough a
railroader to sacrifice security to speed in construction. Expense was
of no consequence. He was going to “get the work done right and send in
the bills to Stephen and Shaughnessy.”
Just at the juncture when the railway seemed in imminent danger of
coming to a sudden halt because its coffers were again bare, and the
Government was afraid that the country would not stand for any more
assistance to be given to what some thought was a wild commercial
venture, an event occurred which threw the Canadian Pacific into the
limelight as an undertaking of immense Imperial value. That event was
the Riel Rebellion, which Van Horne had foreseen as a possibility and
concerning which he had warned the powers at Ottawa when he told them
that if it did occur, he would carry troops from the East to the
prairies in the space of a few days. Sir John Macdonald and the
Government, with a strange pertinacity, born of the mysterious red
tapeism of Regina officialdom, refused to think such an event possible.
However, it came with sudden and deadly emphasis when at Duck Lake, in
March, 1885, on the North Saskatchewan, a small force of civilians and
police suffered heavily in a sort of rebel ambuscade. Fifteen years
before, this same Riel had, at Fort Garry, run amuck, and then it had
taken six months for the soldiers under Col. Wolseley, coming by land
and water, to reach the scene. Now, in 1885, with the Lakes frozen and
no chance of going through the United States with armed men, the whole
middle West might be swept by the carnage of semi-savage rebels on the
war path. The time had come for Van Horne to play a winning card, and he
played it. The Government made frantic appeal to him because months
before he had intimated his willingness to help in such an event. But
before their appeal was actually known to the general public, Van Horne
had trains ready with steam up at the centres in the East where troops
would make their points of departure. He knew that there were gaps on
the North Shore and that there would be hardships, but to reduce these
to a minimum he stipulated that he and Shaughnessy and the Railway
Company officials should have complete control of both transportation
and commissariat. He always believed, for he had proven it by many a
test, that when men were well fed with nourishing food and stimulated
for special effort with strong black coffee, they could do and endure
greatly. And so he would not leave the soldiers to the tender mercies of
inexperienced quarter masters with meagre supplies on the bleak North
Shore of Lake Superior.
In one or two places the soldiers had to march along the shore-ice on
the lake. In other places they were taken by teams and sleighs, or else
on flat cars over some hastily laid track. They had what might well be
called a hard time over part of the way, but soldiers do not expect
luxury on active service, and they got through in fewer days to Winnipeg
than it had taken of months to accomplish in Wolseley’s expedition,
years before. From Winnipeg the troops, with their Western comrades,
were distributed by rail and trail over the plains as far as the
mountains, and the rebellion was soon quelled. From that day the most
fiery opponents of the North Shore section of the Railway, the chief
point of critical attack, found their calling gone and had to subside.
Some of them would still oppose the whole system through force of habit,
but the extraordinary and unexpected service rendered by the Railway in
a crisis time would make it comparatively easy for even a cautious
Government to give temporary help to the Company, with the consent and
approval of the grateful Canadian people. Not only so, but the Canadian
Pacific Railway had thus suddenly become of such significance and value
as an all-British route across the North American continent, that men in
the Old Land who believed in the continuance of the Empire, realized as
never before that a new factor in Imperialism had come into history.
This railway was seen to be, not only a commercial transportation
company which traversed a portion of an overseas Dominion, but a great
link in the chain of an Empire that girdled the earth. It would no
longer be ignored in the financial circles of London, where the centre
of Empire stood.
Meanwhile, right on through the rebellion, the work was being pushed
ahead in the mountains, although it was not generally known then that
the Company at first had boldly thrust its spear-head against the
embattled hills without very definite knowledge of how it was to get
through beyond the Rockies. The Kicking-Horse Pass showed the way, along
its flashing, frothing river, through the Rockies, but for some time
there was doubt about how the Selkirk Range was to be pierced. So
anxious was the Company about this problem that Mr. Sandford Fleming,
the famous engineer, was summoned by cable from the Old Country to look
into the situation. He journeyed by train to Calgary and went by trail
through the Kicking Horse, but just then Major Rogers, a hard-bitten,
adventurous man, acting on some information given by Walter Moberly
years before, discovered the famous pass called Rogers’ Pass to this
day. Rogers was an American engineer who, with his son Albert (after
whom Albert Canyon was called by Principal Grant of Queen’s University,
Secretary to Sandford Fleming on his journeys), had explored amid much
hardships to find a pass through the Selkirks. When he did find it, the
Company was so pleased that a bonus cheque for $5,000 was sent to
Rogers. A few months afterwards Van Horne met Rogers and reminded him
that he had never cashed the cheque. Rogers, who was well educated, but
rough at times in temper and language, evidently had abundant sentiment
withal. For he replied, “Do you think I would cash that cheque? I was
not out there for money, but to have a hand in a big project. No, sir, I
have that cheque framed in my brother’s house in Waterville, Minnesota,
where my nephews and nieces can see it as a token of some work their old
uncle did in his time.”
Contractors who became famous later on in various ways were at work on
the mountain section. The work on the prairies had been child’s play
compared to it. A good old Scotch elder who came in to see me at the
Coast twenty years ago was amazed at the enormous task that had been
accomplished. In political life in Manitoba he had attacked what people
called “the ruinous expenditure” on the road. But he said to me then, in
1903, in Vancouver: “Now that I have seen it I wonder that men ever
undertook the work at any price, and so far as I am concerned I am
through with criticism of the expenditure on construction.” And then the
good man added, “The fact is that if the good Lord had not bored through
the mountains with rivers, there is not enough money in the Empire to
build to the Coast.” There was much in what this honest man said that
day.
The expenditure was almost incredible. Where the rivers ran, there was,
for miles on end, the necessity for cutting into the solid rock to get
room for the road-bed and trains. There were miles of snowsheds to be
built, and tunnels through solid rock almost without number. Up the
mountain sides there were built various devices to protect the road and
make it safe from slides and avalanches. Rivers were deflected from
their channels and retaining walls were built. When I first passed over
the road, not many years after it was opened, there seemed to be leagues
of trestles, now filled in or replaced by steel or tunnels. Everywhere
there was need for the ceaseless flow of millions of money. But Van
Horne, who knew all about the business, saw that nothing was left undone
to make the road beyond criticism. And so well was the work done that
once, shortly after the road was completed, Van Horne, who was taking
some arbitrators over the mountains to value the government construction
section, had the engineer run over fifty miles an hour to show these
gentlemen “that the Company section was a real railroad even if the
government sections were not.”
It was no wonder that with the vast expenditure indicated by the above
paragraphs the Directors saw that they must raise some more millions or
perish.
Accordingly, in 1885, when the Riel Rebellion, by reason of the service
rendered by the Canadian Pacific Railway in transportation of troops,
had been quelled, Stephen approached the Dominion Government again for
assistance. The rebellion services of the railway had solidified the
Government support in the House, which was then in session, and had
pretty well silenced the Opposition. The assets of the Railway were
already subject to a lien for the former loan, but the Government,
besides a few minor concessions, finally allowed the Directors to issue
$35,000,000 stock, of which it was to guarantee $20,000,000, the rest to
be issued by the Railway Directors. Stephen went to London, not very
hopefully, to sell this bond issue. The Directors in Canada waited
anxiously to hear the result, for the bankruptcy of the road and of the
Directors (though they cared less for that) was only hours away if
Stephen’s mission failed. Sir Charles Tupper, then High Commissioner for
Canada in London, that steadfast friend of the road, had done some most
effective preparatory work with the famous banking house of the Barings,
of which Lord Revelstoke was the head. Stephen had scarcely begun his
explanation of the situation when Lord Revelstoke broke in and said, “We
have been looking into the whole matter already. We are satisfied with
the outlook in Canada and the future of the Canadian Pacific Railway,
and will take over the whole issue of your stock at ninety-one.” Stephen
was overjoyed, because the question of the solvency of the great railway
was settled for all time. He sent an exultant cable at once to Canada.
Mr. Angus and Mr. Van Horne were in the Board Room in Montreal when it
was delivered. They read it with a sort of glad surprise too deep for
words. They were matter-of-fact men, but they shook hands with some
emotion. Then they threw some of the chairs about and danced around the
room. The relief to the tension had come and they had to relax somehow.
They were human.
They knew in that hour that the road would be completed. And out along
the line in the great mountains there would be a station called
Revelstoke. And where the steel met from the East and the West, there
would be another station named “Craigellachie,” after the Gælic
cablegram meaning “stand fast,” which Stephen, as we have already
recorded, had sent to his cousin, Donald A. Smith (Strathcona), in the
dark days some years before. The name would remind succeeding
generations of the men whose steadfastness was like unto that of
Craigellachie, the unshaken rock in the old glen of Strathspey.