CHAPTER XII

SUNDRY DEVELOPMENTS

The Canadian Pacific--The Great Northern--International

Connections--Government Roads--The Intercolonial--On to Hudson

Bay--Opening up New Ontario

All the restless activity upon the part of its older and its younger

rival did not rob the Canadian Pacific of the place it had held in the

life and interest of the Canadian people. With a confident assurance

based on the extent and the strategic location of its lines, the

imperial richness of its endowment, and the proved efficiency of its

management, it pressed steadily forward until it became the world's

foremost transportation system.

The unbroken success and the magnitude of the operations of the

Canadian Pacific in this period are almost without precedent in railway

annals. By 1914 it had under its control more than eighteen thousand

miles of railway, or more than six times the length of the original

transcontinental line. It gave employment directly to ninety thousand

men, whose monthly pay-roll reached five million dollars, and

indirectly maintained many more, {221} justifying the boast of its

president in 1907 that directly or indirectly one-twelfth of the people

of Canada received their income from the Canadian Pacific. In 1913

alone, the supreme year of Canadian railway expansion, the Canadian

Pacific appropriated for new construction and betterments, equipment,

terminal facilities, steamships and hotels, shops and elevators, nearly

one hundred million dollars, or more than the original cost of the

road. It touched the life of the nation at every conceivable point.

From Atlantic to Pacific there was scarcely a town of any importance

that was not reached by its lines. But its position was not merely

national. It controlled over five thousand miles of railways in the

United States, taking rank amongst the foremost systems of the

Republic. Its steamship lines stretched more than half-way round the

world, and in Liverpool and Trieste, Hong-Kong and Yokohama and Sydney,

the red-and-white house flag of the Canadian Pacific made the company

and the country known.

The management of the Canadian Pacific showed stability and continuity.

It trained up in its own ranks the men for its highest posts. Sir

George Stephen, later Lord Mount {222} Stephen, on resigning the

presidency in 1888, had been succeeded by Mr, afterwards Sir, William

C. Van Horne. As general manager, and then for eleven years as

president, Van Horne carried the road through its most difficult

period. In spite of failure of crops, low prices, and the slow

trickling in of settlers, he kept aglow his own faith in the West and

communicated it to others. Indomitable courage, tenacity of purpose,

breadth of vision, mastery of organization and detail marked him as one

of the great railroad builders of the century. Even when he retired

from the presidency, becoming for another twelve years chairman of the

board of directors, it was only to find new outlets for his energy in

building pulp and paper mills in Quebec and railways in Cuba; for

though, unlike many millionaires, he had not narrowed into his own

business groove, and could paint a picture as well as buy one, the call

to action never failed to stir him.

When Van Horne came to the Canadian Pacific in 1882, he brought with

him the man destined to be his successor, Thomas G. Shaughnessy, a

young Irish-American still under thirty, who had been engaged in

railway work since he was sixteen. Appointed {223} general purchasing

agent, he rose rapidly, becoming president in 1899 and chairman of the

board in 1911. Sir Thomas Shaughnessy maintained the progressive

policy and the honourable record of straightforward management which

has distinguished the Canadian Pacific--a railway singularly free from

the questionable manipulations which have brought so many great

American systems to bankruptcy. Other men left their impress on the

road: men like Sir William Whyte, for over twenty years in charge of

the western lines, David M'Nicoll, and George M. Bosworth and many

others, gave most effective service.

After the first hurried staking out of the claim was over, by 1890, the

Canadian Pacific refrained from further expansion until about 1898:

between these years only three hundred miles were added to the system.

Then reviving prosperity and the activity of rival roads led to a new

period of expansion. The additions made in this time can best be

realized by a glance at the map (opposite next page). The most

important may be noted briefly, beginning at the Pacific coast.

On Vancouver Island, the Esquimalt and Nanaimo Railway, which had been

projected {224} originally when it was hoped that Canada's first

transcontinental would find its terminus at Victoria by crossing the

straits from Bute Inlet, was acquired from the Dunsmuir interests. On

the mainland of British Columbia activity was concentrated in the

southern section. The rich mineral discoveries in the Boundary country

led to the extension of the Canadian Pacific westward from Lethbridge,

through the Crow's Nest Pass. The company was given a Dominion

subsidy, and in return a general reduction of rates was secured. After

years of contention with the Hill roads which were crowding into the

same territory, and in face of immense engineering difficulties, a

continuation of this line by way of Penticton gave promise of a second

through route. Meanwhile, entrance was secured to Spokane and Portland

in the United States. In the plains and prairie section a close

network of lines developed. The narrow-gauge line of the Alberta

Railway and Irrigation Company, which had done good pioneer service,

under the guidance of Elliott Galt, in developing Alberta's

possibilities in coal and irrigated land, was absorbed in 1911. The

northern country was traversed by two new east and west lines. The

Qu'Appelle, Long Lake and {225} Saskatchewan, extending from Regina to

Prince Albert, lost to the Canadian Northern in 1906, was replaced by a

new line and 'cutoffs' and extensions built in every quarter. South of

the border equal activity was displayed in throwing out feeders for the

Soo and Duluth lines. The acquisition of the Wisconsin Central in 1909

gave the Canadian Pacific entrance into Chicago, while an agreement

with the Wabash made it possible to link up its western United States

lines with its southern Ontario road at Detroit. In Ontario, a branch

from Toronto to Sudbury made the Canadian Pacific independent of the

Grand Trunk's North Bay link, an extension from Guelph to Goderich

tapped a fertile country, a line from Port M'Nicoll on Georgian Bay to

Bethany near Peterborough gave a short through route for grain, a lake

shore route eastward from Toronto provided access to the towns which

the Grand Trunk, in its promoters' concern for through traffic or in

its contractors' desire for low land charges, had side-tracked, while

stock purchase and later a lease of the Kingston and Pembroke gave

entrance into Kingston. In Quebec, short tentacles were pushed up into

the Laurentian hills north of Ottawa; south of the St Lawrence the

chief step taken {226} was the 999-year lease of the Quebec Central,

sanctioned in 1912. In the Maritime Provinces the New Brunswick

Southern or Shore line and the Dominion Atlantic, successor to the

Windsor and Annapolis, were leased in 1911, and running rights secured

over the Intercolonial into Halifax.

[Illustration: 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. {227} 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 {228}

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 {229} 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 {230}

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 {231} 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.

[Illustration: Great Northern Railway, 1914]

As a matter of fact, in 1914 Canadian railways controlled four miles in

the United {232} States for every mile in Canada controlled by railways

of the United States. The Canadian Pacific alone owned or leased over

five thousand miles in the United States, chiefly in the northwest,

while it had close working agreements with the Wabash and the New York,

New Haven and Hartford. The Grand Trunk controlled over seventeen

hundred miles, two-thirds in the Michigan peninsula and the remainder

in New England, while the Canadian Northern ran for some forty miles

through the United States, south of the Lake of the Woods. The

American interests in Canada were more scattered, but the Great

Northern, the Michigan Central, the Pere Marquette, and the New York

Central all developed important Canadian extensions.

In short, the interrelations were certainly no more extensive than

would have been expected in the case of two friendly nations lying side

by side for three thousand miles, connected by ties of speech and by

common commercial and social customs. The only difficulty which arose

out of the situation was the division of jurisdiction between the

Railway Commission of Canada and the Interstate Commerce Commission of

the United States. The heads of the two commissions, Mr Justice {233}

Mabee for Canada and Mr Knapp for the United States, endeavoured in

1910 to work out a plan for joint control, but without final success.

In the past half-century government ownership of railways has been much

discussed in Canada, dividing attention with the allied question of

railway ownership of the government. It cannot be said that any

decisive public opinion or policy has resulted. Important steps toward

government ownership have been taken in the last twenty years. The

Intercolonial and Prince Edward Island Railways have been retained by

the government and extended, a federal line has been built in Manitoba

and a provincial one in Northern Ontario, and the National

Trans-continental has been constructed by the government for lease to a

private company. Yet, at the same time, the main railway projects

continued to be entrusted to private companies, and the proportion of

the whole mileage under private operation increased.

The most important incident in the Intercolonial's later history was

its extension from Quebec to Montreal in 1898, by the purchase of the

Drummond County Railway and the lease of a stretch of forty miles in

length from {234} the Grand Trunk. Six years later the Canada Eastern,

running from Gibson to Loggieville, was purchased. Many bankrupt lines

in the Maritime Provinces and Quebec were offered to the Intercolonial

as valuable feeders. In the later years of the government of Sir

Wilfrid Laurier and in the first years of Sir Robert Borden's

administration, authority was sought to acquire such of these roads as

might be desired, but restrictions due to the action of the Canadian

Senate or the political difficulty of discriminating between the

railways prevented any rapid acquisition. Changes in administration

were tried. As a half-concession to the demand that the Intercolonial

should be operated by an independent commission, a board of management

was established in 1909, consisting of the chief officials of the road.

In 1913 this board was dissolved and the management vested in a single

commissioner, F. P. Gutelius, formerly of the Canadian Pacific.

Financial returns showed little improvement. True, the record,

unbroken since 1873, of annual failure to meet even operating expenses,

was varied after 1898 by small surpluses in two years out of three, but

the net deficits since Confederation rose to over eleven {235} millions

by 1913; and while there was no question that the administration had

been improved, there was room for belief that the surpluses had been in

part book-keeping ones, obtained by including in the large capital

expenditure items properly chargeable to revenue.

At first sight this failure to meet operating expenses, much less to

pay interest on the investment, together with constantly increasing

capital outlay, seemed to warrant strong condemnation of government

methods. And, in truth, a serious indictment could be framed.

Efficient government ownership is more difficult in a democratic

country where shippers, employees, would-be employees, supply dealers,

all have influence over the administration, than it is in a

bureaucratic state. Intercolonial employees were given their posts and

kept in them by political influence, and their numbers were often as

excessive as energy was lacking. Supplies of coal and new land as

required were usually purchased from political friends, with an

additional margin for campaign contributions;[1] at election times the

{236} road became a vast political machine. Under the administration

of the governments of Laurier and Borden the grosser scandals ceased,

but in one form or other political influence continued to be exerted.

Yet this was not the whole story. If the Intercolonial did not earn

dividends, there were other reasons at work than government

inefficiency. The road ran for long stretches through barren country

where little local traffic originated. In competing for through

traffic it was handicapped by the roundabout length of its route: it

ran along two sides of a triangle, while the Canadian Pacific,

subsidized by one political party, was built along the base, and the

National Transcontinental, built by the other party, came in between;

in summer it had to face the competition of the St Lawrence route as

well. Nor was dividend-earning the sole standard of success to be

applied. The Intercolonial was built originally for political and

military ends, not merely for commercial gain. It had given shippers

the lowest rates in the world: 'the surplus is in the pockets of the

people,' one of the political heads declared. If, it was often urged,

the canals of Ontario and Quebec were operated by the government at a

dead {237} loss, without a cent of tolls, why grudge the Maritime

Provinces, to whom Confederation had been less kind, the benefit of

operating at bare cost the government railways! The Intercolonial had

undoubtedly done much to weld the eastern and central provinces

together, and this was worth more than a million dollars or two in

interest charges.

The desire for rates at cost, or lower, which has made the people in

Eastern Canada oppose all suggestions to turn over the Intercolonial to

the Canadian Pacific or Canadian Northern, led those of Western Canada

to urge government ownership of the other federal venture, the Hudson

Bay Railway. Owing to its far northern position, Manitoba possesses

ocean ports, Nelson and Churchill, which are nearer Liverpool than New

York is. Why, then, carry the grain of the prairie fifteen hundred or

two thousand miles to an Atlantic port before loading it on the ocean

freighter? Proposals to build a railway to a Hudson Bay port and to

establish a steamship line to carry the traffic at sea seemed plausible

and won much western support. Investigation soon made the difficulties

clear. Hudson Bay was fairly free from ice, but Hudson Straits were

studded with icebergs far into the summer. {238} Ships of special

construction would be needed for the dangerous passage, and, in any

event, grain could not be shipped until the spring after it was

harvested and would have to be stored in elevators during the winter.

And in the meantime the three transcontinental railways were enlarging

the eastern funnels, while the Panama Canal made an outlet by Vancouver

feasible. Still, there was a gambling chance that something would come

of a railway to Hudson Bay, and if the stroke succeeded, Canada would

be given a new coast, and would front the sea at the north as well as

at the east and the west. The territory between Le Pas, a terminus of

the Canadian Northern, and Port Nelson, selected as the better port on

Hudson Bay, had some mineral and agricultural promise. So, in the

prosperous days of 1911, it was decided to attempt the work. As it was

largely an experiment, the government's plan of state construction and

possibly operation found wide support. The line was still under

construction in 1914.

[Illustration: Railways of Canada, 1914]

Another exploration road which amply justified the faith of its

promoters was the Timiskaming and Northern Ontario. This railway,

striking up from North Bay into the mineral region and clay belt beyond

the {239} height-of-land, was begun by the Ontario government in 1902

as a colonization road. It was fortunate enough to uncover the riches

of Cobalt's silver-camp in its construction; later, mining development

at Gowganda and Porcupine brought it traffic; and the building of the

Grand Trunk Pacific made it an important connecting link. It was able,

then, from the outset to show favourable results, direct as well as

indirect. It was built and controlled by a government commission,

efficient and more or less free from politics.

[1] The deputy-minister, Mr Collingwood Schreiber, instanced in 1882 an

attempt of a farmer, whose claim was nursed by influential politicians,

to collect $70,000 for a gravel-pit liberally estimated to be worth $5.

{240}

The Railway Builders: A Chronicle of Overland Highways · 第 12 / 13 章