The National Dream: The Great Railway, 1871-1881 (12 page)

He was, in short, a mover and a shaker, a tilter at windmills who attacked with equal pugnacity the Hudson’s Bay Company, the medical profession, the pomp and circumstance of British colonial society and the restricted franchise – everything that Victoria held dear. For years old Waddy battered away at the unyielding ramparts of the tight little in-group that controlled the colony until, one autumn day in 1860, he suddenly abandoned it all and turned his attention to the promotion of what eventually became a transcontinental railway scheme.

The railway – he intended it first as a wagon road to the gold-fields of the Cariboo – took over his life. Its terminus was to be at Waddington Harbour, a paper community he had created at the head of Bute Inlet, the narrow fiord that springs out of the mouth of the Homathco River, some 150 air miles north of Vancouver. The inlet and the river seduced Waddington as they were to seduce later surveyors. At an age when most men seek retirement, he spent five years struggling through the Homathco’s gloomy canyons, beggaring himself on trail-making and surveys.

The venture was marred by the Chilcoten Massacre of 1864. Nineteen of Waddington’s men were slaughtered by Indians whose women had been molested and whose fears had been aroused by pranksters who had pretended to bottle enough smallpox to destroy the entire tribe.

But nothing seemed to deter Waddington, neither Indian ferocity nor the seventy-nine hairpin turns on the sheer cliffs of the mountain named after him. He was an incurable optimist, “one of the most sanguine imaginative men I have ever met; prompt to delude himself on any matter of which he makes a hobby,” in the words of the colonial government’s police inspector, Chartres Brew. Where realists would have reckoned the odds insurmountable and retreated, the quixotic Waddington galloped forward towards disaster. By 1868 he had squandered sixty thousand dollars on his scheme, but his projected road was little more than a series of blazed trees and surveyors’ markers while his envisioned metropolis, in which some Victoria merchants had recklessly speculated, remained a pretty map.

By this time he had expanded his plans to encompass a transcontinental railway. Off he went to England where he read a paper before the Royal Geographical Society and tried, without success, to interest the Imperial government in the scheme. His attempts to sell the idea in Canada were equally fruitless. In the summer of 1869 he wrote to the government, inquiring about the possibility of building the railway, declaring that “financial parties of standing have promised me their assistance and co-operation.” Waddington’s letters went unanswered. The following year, he published an ambitious “Elements for the Prospectus” of the railway. The cost, he reckoned, would be twenty million pounds and the return on the investment would be three and a half per cent within two years.

Undeterred by the lack of response, Waddington bounced back to Canada, where he encountered William Kersteman, a promoter
who had tried to interest some prominent Canadians in building a railroad from Pembina on the Manitoba-United States border to Fort Garry, and thence across the prairies to the Yellow Head Pass. The plan collapsed with the outbreak of the Red River uprising, but when the announcement of Macdonald’s pact with British Columbia was made public, Waddington and Kersteman joined forces and descended on Ottawa. In March of 1871, during the debate on the admission of British Columbia into Confederation, they bombarded the Government newspapers with daily articles and extracts to which, Kersteman later wrote, “I may in a degree be vain enough to attribute the ultimate passing of that measure.”

In a certain sense, the two irrepressible promoters might be called far-sighted. After all, they were the first to set to work actively on the railway idea. The Pembina line, which Kersteman dreamed of, was actually the first section of the Canadian Pacific to be constructed. The Yellow Head Pass was the one that Fleming was to choose. Bute Inlet, which Waddington championed, almost became the terminus of the
CPR
. But the truth is that both men were wildly overconfident and unrealistic. Though they themselves would never have believed it, there was no possibility of either or both successfully promoting the great railway to the Pacific. Historically, they were merely the means by which the sinister figure of George W. McMullen was introduced to the Pacific railway scheme.

McMullen was just twenty-seven years old, a stubby man with a pudgy face, luminous brown eyes and short cropped beard. He came from a prominent Conservative family in Picton, Ontario; his mother’s relatives owned the local Tory paper. His father, Daniel, who had retired early from the Wesleyan Methodist ministry because, he said, his energetic revivalism had overtaxed his strength, was “greatly esteemed for his piety.” The phrase scarcely applied to the son (though he was a trustee of the Picton Methodist Church all his life). Young McMullen – he was one of twelve children – had left with a brother for the United States several years before, a move which earned him the nickname of George “Washington” McMullen (the
W
actually stood for William). By 1871 he was a hard-nosed Chicago businessman, proprietor, among other things, of a newspaper, the
Evening Post
, one of a host of short-lived journals that sprang up and died like weeds in that city during the mid-century.

McMullen was interested in railways and canals. Indeed, he was interested in anything that might make him a dollar. He had an agile,
inquisitive mind which, for all of his long life, intrigued him into the most curious ventures-the growing of aphrodisiacs, for example, and the development of a long-distance cannon. He had come to Ottawa in the spring of 1871 as part of a Chicago delegation seeking the enlargement of the Chicago and Huron Shipping Canal. Waddington and Kersteman were both ardent Yankeephiles. Kersteman was sure that only the Americans had the know-how to build the railway. Waddington’s profitable years in California had convinced him that Americans were the kind of people who got things done.

Armed with surveys, maps, pamphlets and copies of speeches, the two enthusiasts approached McMullen, who was intrigued enough to seek further support in the United States. A series of meetings followed in Ottawa, Chicago, New York and Toronto. By July, McMullen had brought a covey of American businessmen into the scheme. His co-promoter became Charles Mather Smith, a Chicago banker. Smith brought in W. B. Ogden, an original incorporator of the Northern Pacific. Ogden brought in General George W. Cass, heir apparent to the presidency of the Northern Pacific, and, more important, Jay Cooke, the Philadelphia banker who controlled the railroad’s purse strings and who had his clear, boyish eyes focused on the Canadian North West, which he hoped would become a tributary of his railroad.

Cooke’s first hope was for out-and-out annexation, which would give the Northern Pacific a total monopoly of the land west of the lakes. Failing that, Cooke and his agents intended to work for a Canadian line which would be dependent on the U.S. road for an outlet. In his dreams, Cooke visualized an international railway, running from Montreal through American territory south of Lake Superior and then cutting back into Canada by way of the Red River to proceed westward across the prairies. The railroad, and eventually the territory itself, would be totally under American control. When Ogden wrote to Cooke in June, 1871, urging him to take preliminary steps to “control this project,” it was exactly the opportunity that Cooke had been seeking.

It was an ironic situation. The first people to call on the Canadian government to offer to build the Canadian Pacific were the representatives of the very men whom the Canadian Pacific was intended to thwart.

The Americans arrived in Ottawa in mid-July about a week before the contract was signed (on July 20) with British Columbia. They
came armed with a set of documents stating the terms on which they would undertake to build the railway. They had brought some extra political muscle along in the shape of a robust and red-bearded Irish lawyer, James Beaty, Jr., of Toronto. Beaty came of a powerful Conservative family. His uncle was editor of the daily Toronto
Leader
and he himself helped found both the
Monetary Times
and the Confederation Life Association. Before the end of the decade Beaty would be mayor of Toronto. But, in spite of his presence, the atmosphere in Sir Francis Hincks’s office on July 13 was decidedly chilly and it began to dawn on McMullen and Smith that Kersteman and Waddington had over-represented their political leverage. Indeed, they turned out to be liabilities rather than assets. Hincks, who was Macdonald’s Minister of Finance, later wrote to Beaty that Kersteman was “a man of straw” who was clearly trying to peddle an influence he did not have: “I am persuaded that owing to Mr. Kersteman’s premature and most injudicious proceedings, the greatest injury has been done to a great undertaking.” The day after the meeting with Hincks, the Prime Minister, at Waddington’s urging, agreed to see the Americans “as a matter of politeness,” but made it quite clear that any railway scheme, at that stage, was too premature for serious discussion. Moreover, any plan would have to be substantially Canadian and it was clear that Macdonald did not consider the present Canadian emissaries substantial at all. Waddington, he wrote to a friend, was a “respectable old fool” who had handled the whole matter most improperly. To Macdonald, the only value this patently Yankee delegation had was as a kind of lever to force Canadian capitalists to take the matter of the railway seriously.

The Americans did not give up. Through their lawyer, Beaty, they indicated that they were prepared to be generous: they would welcome some prominent Canadians on the board of their railway company. Beaty would be obliged if Hincks would name “such persons as you think proper to have associated in the matter, either from personal or political considerations.” There was free stock to be distributed and a hint of ultimate profits for insiders. The questionable morality of all this seemed to escape the finance minister, who merely replied: “I fear that you are going altogether too fast.” The ambiguity of that statement was to return to haunt Hincks when the correspondence was made public two years later.

At this point, the Americans unceremoniously dumped both Waddington and Kersteman, though they apprised neither of their fate.
Kersteman, with Macdonald’s apparent encouragement, continued to attempt to raise funds to build the line, secure in the belief that he was to be made a provisional director of the new company when it was formed. He journeyed to England and came back, late in 1872, full of enthusiastic but vague promises of financial assistance. Macdonald palmed him off on Hincks. The promoter arrived on the finance minister’s doorstep in Montreal on Christmas Day, where he found himself subjected to some unseasonable abuse. Events had passed him by; the Americans by this time had become a decided liability and the wretched Kersteman – the man who had brought them into the business in the first place – was dismissed as a troublemaker. It began to dawn on Kersteman, after four years of unremitting labour and twenty-five hundred dollars spent out of his own pocket, that nobody at any time, Canadian or American, had ever had the slightest intention of cutting him in on the Pacific railway company.

As for Alfred Waddington, he died on February 26, 1872, a victim of smallpox, the same disease that had indirectly caused the massacre of his survey party eight years before. The reports of his death and funeral were meagre; the briefest of paragraphs mentioned his promotion of the railway. Back in Victoria, where he had for so long made news, the
British Colonist
gave him a cursory eulogy. “Poor Waddington,” it called him. The reference was not unkind and certainly not inaccurate.

2
Sir
Hugh Allan’s shopping spree

As Waddington and Kersteman fade into the wings, the formidable figure of Sir Hugh Allan strides out to stage centre. This vain, haughty and politically naïve shipping magnate was the richest man and the most powerful financier in Canada.

In his Notman photograph, Allan looks like the prototype of the nineteenth-century robber baron. He is seen taking a pace forward as if to lunge upon the hapless photographer, and the fierceness of his terrier face is enhanced by a shaggy mane of hair and whiskers, snow white, which encircles his features like the frame of a picture. Allan’s annual income was estimated at more than half a million dollars a year, a sum so immense that it is hard to grasp today. A dollar in 1871 was worth four or five in 1970; since there was no income tax, Allan’s net income amounted to more than two millions annually in modern terms. It allowed him to build and maintain his baronial mansion in Montreal on which he bestowed the Gothic title of Ravenscrag. Here he had entertained Prince Arthur, a piece of hospitality which undoubtedly contributed to his knighthood in 1871.

Like so many Canadian financiers of the period, Allan was a Scot and a self-educated as well as a self-made man. His father had been a shipmaster, engaged in trade between the Clyde and Montreal and young Allan was raised in the company of sailors. He left school at thirteen, immigrated to Montreal three years later in 1826, and shortly after went to work for a firm of commission merchants and shipbuilders. Within a dozen years, Allan had risen to senior partner, a driving, hard-working man who studied furiously in his spare hours to make up for his lack of schooling. Unlike most English-speaking Canadians of that time, he made a point of learning French; it was to his advantage to become fluent in the language.

The history of the Allan Line, as his Montreal Steamship Company was popularly called, is substantially the history of Canadian maritime commerce in the nineteenth century. Under Hugh Allan’s leadership, and that of his younger brother, Andrew, the original firm shifted direction, concentrating on shipbuilding and keeping pace with the disturbing changes in ocean transportation which saw steam replace sail and iron replace timber. The company was constructing iron screw steamships as early as 1851 and was the first to adopt the spar or flush deck on its new vessels. When it was awarded a mail contract between Great Britain and Montreal and acted as one of the chief troop carriers in the Crimean war, its future was secured. The penniless, half-educated Scottish boy had become the head of one of the principal fleets of the world. If he was proud, egotistical and single-minded he had reason to be. Starting with nothing he had amassed the greatest fortune in Canada. He was president of the Merchants’ Bank, which he had founded, and of fifteen other corporations; he was vice-president of half a dozen more. His interests encompassed telegraphs and railways, coal and iron, tobacco and cotton, cattle, paper, rolling mills and elevators.