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utility. Laurier particularly warned the members from Quebec against the danger of coercive action:
It is always a fault on the part of a minority in any legislative assembly to throw obstacles in the way of a government in order to force them to act against their will. . . . All questions coming before this House should be decided according to justice, equity and fairness. If the Pacific resolutions were just and reasonable, it was their duty to adopt them; if they were unjust and unreasonable, it was their duty to object to them. There is in the Dominion no body of men who should always be so careful to adhere to principles of justice as the Quebec contingent in this House, which must always be in a minority.
For this stand Laurier was warmly attacked in the province of Quebec, but he held a great open air meeting in the Champ de Mars, in Quebec city, and was triumphantly indorsed by his constituents.
The railway crisis was passed for the moment, but soon it reappeared. The loan was exhausted in rapid and costly construction. The Government, as security for the advance, had taken a mortgage not only on the main line, but on all the company's interest in the Eastern branch lines, their unsold stock, and their land grant. When further funds were needed, it was found impossible to borrow or to sell stock with a blanket mortgage covering every asset of the road. Once more, in the winter of 1884-85, the directors approached the Government. They had been forced at last to abandon their policy of relying on stock rather than on bond issues. They requested that the unissued $35,000,000 stock in the Government's hands be canceled, that an equal amount of five per cent. first mortgage bonds be issued, and that the Government should accept a portion of this issue as its security, leaving the balance free for disposal in open market. The Government declined any further aid or variation. Early in January Van Horne met Pope and said: "Why not put us out of our misery? Let us go off into a corner and bust."
Pope replied that the Government was too much afraid of what Louis Riel and
his half-breed followers in the Northwest might do to undertake any further entanglements. They feared a dangerous outbreak in the spring. Riel's emissaries were out stirring up the Indian tribes. When the grass grew, the Indians would move. Three thousand men could cope with them at the start; later it might take two years and fifty thousand men. "I wish your C. P. R.
Van Horne had had experience in military transportation during the Civil War and he asked:
"When could your regiments be ready?"
"The first or second week in March."
Van Horne told Pope and later the council that he could get regiments through from Kingston or Quebec to Qu'Appelle on the Saskatchewan in ten days. The members of council did not credit him.
"Has any one a better plan?" asked Macdonald. None had, and Van Horne was told to prepare. There was a stretch of two hundred and fifty miles between Dog Lake and Nipigon which did not seem passable; in half of it no tracks were laid, and where rails were, rolling-stock was lacking. Yet six days after the first troops, the batteries from Kingston and Quebec had left Ottawa, on March 28, they were in Winnipeg, and could have been in Qu'Appelle in seven. When the troops reached the first gap of forty miles they were bundled into sleighs and driven along the tote-roads through the woods. Then came a stretch of ninety miles with rails laid, but only three locomotives and forty flat-cars. The sleighs and teams were loaded on the cars, and the whole outfit carried through the bitterly cold Lake Superior snows. Then a trackless gap, then a flat-car stretch, and so on to the end. In more than one place rails had been laid down over the snow and ice. Camps and provisions had been supplied along the way. It was a triumph of energy and organization. In 1870 it had taken Wolseley and his men more than two months to reach Fort Garry; had the same delay occurred in 1885, and assuming also that the Government had persisted in its supine neglect of the
grievances which gave Riel his opportunity, the half-breed rebellion and the Indian rising would have proved vastly more dangerous and destructive. Why, knowing the danger, the Government took no effective steps to check it in advance, is another question.
The national service thus conspicuously rendered by the Canadian Pacific made the Government more amenable to its requests and the opposition less vigorous in its resistance; in fact, Van Horne suggested that the Canadian Pacific ought to build a monument to Louis Riel. The Government agreed to cancel the $35,000,000 stock and authorize the issue of a similar amount of bonds.
The company was not yet out of the woods. The opposition must register its criticisms and point to the confirmation of its earlier prophecies, while the Government was not prepared to carry through the necessary legislation until the success of other measures was assured.
It was, however, not the opposition's arguments, but the Government's delays that worried the company. Though the Government had a majority of nearly two to one in the Commons, it was not finding it easy to jam through the long and contentious program of legislation it had prepared. The session was the longest in Canadian annals, lasting from January 29 to July 20.
The middle of July came, and the railway was in hard straits. Its credit and the credit of its backers had again been stretched to the breaking-point. A payment of four hundred thousand dollars had to be made before three o'clock on July 11 to a creditor who declined to accept any renewal. The Canadian Pacific, which in later days could borrow at will by the hundred million, could not meet this claim. Its directors faced a receivership and loss of control. At twelve o'clock the bill passed, and the road was saved. Stephen went to London, and without difficulty floated the $15,000,000 bonds through the Barings. The $5,000,000 borrowed from the Government was returned without being used, the company incidentally finding almost as much difficulty in giving it back as in securing it, since Mackenzie Bowell, who
was acting premier during Sir John's absence in England, could not understand a railway paying back a loan ahead of time, and suspected a trap.
On November 7, 1885, the last spike in the main line was driven. A train carrying Smith, Van Horne, and Sandford Fleming had come through from Montreal to Craigellachie, in Eagle Pass in the Gold Range, where eastward and westward track-layers were to meet. Van Horne had determined there would be no ceremonious speeches or driving of golden spikes. Less than two years before, the Northern Pacific had celebrated its completion by organizing an excursion, at a cost of a third of a million, to take part in driving a last golden spike, and as the train laden with investors and brokers and champagne passed through what seemed to the watchers from the car-windows the hopelessly arid deserts of Montana, on a scorching summer day, the guests had slipped out at passing stations to use their free telegram-blanks to unload their stock; and scarcely had the golden spike been driven when the road was bankrupt. But Smith would drive a spike, if an iron one, and Van Horne gave him his way. The train passed on to Port Moody, crossing the continent in exactly five days.
To the general public the great task. was over. To the men in control it was only beginning. Ballast had to be laid, wooden trestles filled with earth or replaced with stone or steel, curves straightened, grades lessened, rollingstock increased, and terminals built or extended. What was more difficult, traffic had to be built up. For a thousand miles the road ran through mountain range and rocky waste. Even on plains and prairie settlement had gone little way. When the Canadian Pacific began construction, the white settlers in the belt of twenty miles on each side of the line between Portage la Prairie and Kamloops, some twelve hundred miles, could be counted on the fingers of one hand. To find business, the company capitalized its scenery, carried buffalo bones while waiting for wheat, pushed its Ontario and Quebec extensions, developed traffic at both United States ends of the line, sought settlers in Eng
land, aided industries at strategic points, organized a loyal and efficient staff, and by unremitting effort met operating expenses, paid a dividend, and accumulated a surplus every year from the beginning. The company's obligations to the Government were promptly met. In March, 1886, the cash advanced upon the security of the $20,000,000 bonds was repaid, and for the balance of the indebtedness the Government agreed to take back six million acres of the land grant at $1.50 per acre. By the following year the company was in uncontrolled possession of its property, and the prophecies of repudiation were confounded.
In the West the Canadian Pacific reaped not gratitude, but steadily rising denunciation. It had given vast territories the communication with the outer world that had been passionately desired, but the settlers in the West, as is the way with men, would persist in comparing their lot not with what it had been before the railway came, but with the conditions of more fortunate neighbors.
The through rate on wheat from Winnipeg to Montreal was ten cents a bushel higher than from St. Paul to New York, and local rates on coal and lumber and merchandise several times as great as for equal distances in the East. When the Westerner was told that high rates were normal and necessary in a new country with little traffic, he replied that so long as the Canadian Pacific held a monopoly of through traffic there was no means of ascertaining what was normal and necessary. When the West demanded competition, freedom to seek an outlet through American roads to the southward, the company stood on its bond. The contract with the syndicate provided that for twenty years the dominion would not charter any competing road between the company's main line and the United States border, running south or southeast or within fifteen miles of the border, and, further, that in the event of the formation of any new province out of the western territories a similar restriction would be imposed. Not only did company and Government alike insist rigidly on the observance of this agreement, but they went beyond and sought to prevent Manitoba from
chartering any competing road, though it had been explicitly acknowledged in 1881 that the dominion had no power to control Manitoba's policy in advance, though it could control the territories farther west.
The company resisted stoutly any relaxation of its monopoly position. Stephen contended that the guaranty against competition had been an essential factor in inducing the shareholders to undertake so precarious an enterprise. The monopoly privilege was indispensable to induce investment by English shareholders, who had seen so many promising railway enterprises ruined by unnecessary competition. The costly link around Lake Superior would not have been built had the company anticipated that the traffic, slender at best, would be in part diverted to the south. The whole national purpose of the undertaking, it was further urged, would be sacrificed unless Canadian goods were carried from sea to sea, through Canadian territory, and Canadian terminals built up by Canadian traffic.
The arguments were forceful, but not wholly convincing. Few English shareholders had, as a matter of fact, been attracted. If the Lake Superior link could only be built by maintaining high rates for decades, that was an argument for postponing its construction. Nor was national unity likely to be promoted by a policy of federal disallowance and railway stubbornness. At last Macdonald was compelled to give way. In 1888 the Canadian Pacific agreed to surrender its monopoly privilege in return for a government fifty-year guaranty of a $15,000,000 issue of 31 per cent. bonds, secured on the 15,000,000 acres of the land grants then unsold. Shortly afterward the Northern Pacific entered Manitoba, and though rates did not fall as far as had been hoped, at least the settler knew henceforth that his ills were due to nature and geography and not to Stephen or Macdonald.
The Canadian Pacific was not yet out of politics. In the general election which followed it was deeply concerned, and took a more direct and decisive part than at any time during the years when the main line was under construction.
The Canadian Pacific, though carry
ing through the All-Canadian road north of Lake Superior, had not overlooked the advantages of a line south of the lake through American territory. During
the construction of the main road it had built a branch from Sudbury to Sault Sainte Marie (Ontario), which faces the peninsula jutting northeast between Superior and Michigan. Once the main enterprise was consolidated, the management prepared to enter this new territory, with its forest and mining wealth and with the fertile fields of Minnesota, in which their old friend Hill reigned supreme, beckoning them from beyond. In 1891 they acquired a controlling interest in the stock of two United States roads, each a consolidation of many small lines, extending westward from Sault Sainte Marie (Michigan). The Duluth, South Shore and Atlantic, as afterwards completed, traversed the whole shore of the lake from the Sault to Superior. The Minneapolis, St. Paul and Sault Sainte Marie connected the Sault with Minneapolis and eventually, through extensions and purchase of other roads or controlling interests, gave the Canadian Pacific entry into Chicago and a connection between Minneapolis and the Canadian border.
To complete the transaction it was necessary to float nearly $47,000,000 of securities in London. While the roads in question were not in Canada, and while the relations between the Canadian Pacific and the Government had ended, the directors realized that an election in which the Government would be defeated would be fatal to their plans, particularly with an unsettled money market. Years of political conflict had identified the railway and the Conservative party in the public mind, so that although as a matter of fact a Liberal victory would not have altered public policy toward the road in the slightest, it might have jeopardized the success of the new financing. Accordingly in November, 1890, Stephen and Van Horne asked Macdonald whether there was an election in sight. He answered, no; not within ten or eleven months; he would go to the country now, but no campaign funds were in sight.
In February, 1891, Mr. Laurier and
Longley of Nova
Scotia were traveling from Montreal to New York, where they were to speak at a dinner of the Canadian Society. Learning that Van Horne was on the same train, Laurier went into his car, where they chatted pleasantly till nearly midnight on matters far from railways or politics. Just as he was about to leave, Laurier turned to Van Horne.
"I suppose, since you are in the secrets of the Government, you can tell when the elections will be held," he said.
"I am not in the secrets of the Government," Van Horne returned. "Ask Sir John."
"Well, then," Laurier replied, "I may give you some news: Parliament will be dissolved before we return from New York."
Laurier went on to New York, and spoke as he had planned, emphasizing the need of closer trade relations between Canada and the United States; it was at this banquet that Secretary of State Windom was taken ill and died. Van Horne, though finding a melancholy satisfaction in the reflection that Windom's stroke had fallen on him immediately after a speech in which he had denounced the Canadian Pacific, had meanwhile had other matters to think of. He had been thunderstruck by Laurier's news. That night he had not been able to sleep; in the morning he cabled Stephen in London. Stephen replied that the news was incredible; that Laurier was not in the secrets of the Government, and that Macdonald's word was given. Before the day was over, they learned that the report was correct, and that Canada was soon to be in the throes of a general election.
It has usually been understood that the Government hastened the bringing on of the elections because of the evident growth in popularity of the Liberal demand for unrestricted reciprocity with the United States. Doubtless this was a factor in the decision, but the determining factor was the Canadian Pacific's necessity. Macdonald had spoken to Pope of his promise to Stephen and Van Horne. Whereupon Pope replied:
"That makes this just the time to bring on the election."
"The C. P. R. crowd simply can't let you lose, with all they have at stake: they will have to shell out as never before." The reasoning was irresistible, and the elections followed.
In the contest which followed, the most hard-fought in Canadian history to that day, the Canadian Pacific fought for the Government in public and private. The public opposition was based on the harm that would be done to Canada if the tariff bars were lowered and Canadian trade deflected to American railways and American cities. That danger must be averted, if not by legal monopoly, at least by tariff walls. In a forceful and telling letter to the Montreal "Witness" Van Horne put the case against unrestricted reciprocity more effectively than any other critic had done. But the company's action was not confined to argument in the public press. The "C. P. R. crowd" did "shell out," as Pope had prophesied, and shell out liberally, or rather Conservatively. All the influence of a great organization which ramified into every corner of the dominion, the votes of its employees, the prestige of its directors, were exerted without stint. When the votes were counted, the Government, though fought to a standstill in Ontario and Quebec, had triumphed by a narrow majority, secured,
in Cartwright's phrase, from "the shreds and patches of the dominion." What was more to the point, it was secured largely from the domains of the Canadian Pacific. There are few more astounding instances of the relation between politics and business than the fact that in every constituency but one through which the Canadian Pacific ran a Conservative was returned. The exception was Marquette, Manitoba, where Robert Watson's victory by six majority was attributed to certain oversights and to the wrong assumption on the Government's part that in this seat the Liberal candidate could not be beaten.
The election was over. The flag had been waved as never before. Macdonald's cry, "A British subject I was born, a British subject I will die," had been the keynote of the campaign. Thousands of Canadians had imagined the country's national existence and national honor were at stake, and voted to avert the dangers of too intimate trade connections with the United States and the risk of diversion of Canadian traffic to American railways. Now the country was safe, and those who had directed the puppets from behind the scenes were free to pour millions of British pounds into projects for the extension of Canadian roads into the United States.
(To be continued)