The National Dream: The Great Railway, 1871-1881 (32 page)

As a Liberal, he stood for a retrenchment of government spending. He could not stomach the grandiose schemes of the Conservatives which all too often seemed to him to be designed as much for profit and patronage as for empire building. He had been a persistent critic of the Grand Trunk railway project and had fought an attempt to
merge the Great Western with it because, he felt, the measure was designed to give leading Tories more contracts. For similar reasons, he and his followers opposed Macdonald’s plan to build the Canadian Pacific; to them it was precipitate, rash and spendthrift. The Tories, with their big business connections, were temperamentally attuned to taking chances; but Mackenzie had neither the imagination nor the gambling instincts of the successful entrepreneur. His political base was in the sober farming districts and small towns of Ontario.

During Mackenzie’s term of office, only a few miles of the
CPR
were built; but it is arguable that Macdonald, in those lean years, could not have done much better, though he might have handled matters with greater finesse. Mackenzie committed the worst of all political crimes: he was unlucky. Macdonald had made his rash promises when the country was caught up in a mood of extravagant optimism. It was Mackenzie’s misfortune to take office just as the bubble was bursting. For the whole of his term the country was in the grip of a serious continental depression.

Like so much else, the depression was imported from the United States. Ironically, it was touched off by the spectacular failure of Jay Cooke’s Northern Pacific, the same company which, through a series of happenstances, had been the trigger that catapulted Mackenzie into office. But the Cooke failure was only the end product of a variety of catastrophes as ill-assorted as the Chicago Fire and the Franco-Prussian War. It really marked the end of the great period of railway empire building which saw the United States double its transportation machinery in eight years, exceeding for decades to come its real needs and sinking an enormous amount of capital into frozen assets. In short, there was no ready money, and though Cooke continued to feel “an unfailing confidence in God,” the deity on this occasion proved fickle. On September 17, at the very moment the Royal Commission was considering the implications of Cooke’s secret deal with Allan, the great financial house closed its doors and the white-bearded Tycoon wept freely in public. Five thousand commercial houses followed Cooke and his allied brokers and banks into failure; railroad stocks tumbled; by midwinter, thousands of Americans were starving.

The tidal wave of the great crash washed over all of settled Canada and continued past 1878. The collapse of grain prices in Britain hit Ontario farmers hard. The Canadian foreign shipping trade almost ceased; the three-masters floated forlornly at anchor in the harbours
of Quebec City and Halifax. With the collapse of the United States market, the lumber industry, which had undergone a rapid expansion during the years of prosperity, suffered a slump. What little industry there was began to stagnate as American manufacturers dumped their surplus goods at cut-rate prices on the Canadian market. “Let no mechanics come to Canada,” warned one disgruntled immigrant in a letter to
The Times
of London. “There are no factories here to employ them.”

The farmers, fleeing from the land, were moving into village trade with disastrous results. The
Monetary Times
decried “the craze for storekeeping” and quoted a correspondent in western Ontario who reported that “every village has twice as many struggling for trade as can live; and failures are a weekly occurrence.… The tendency to crowd into towns has huddled up in them a fourth of our population.” By 1875 business failures were running at the rate of six for every working day; each was said to represent an average loss of fifteen thousand dollars in unpaid debts. The rate of failure in Canada that year – one for every twenty-eight businesses – was three times that of the United States. During the Mackenzie regime almost ten thousand businesses, including two major Montreal banks, closed their doors. All of this had an adverse effect on business morals and ethics, which were never very high by later standards. Business men, the
Monetary Times
reported, had “lost faith in others and even faltered in their loyalty to themselves.”

It was an accident of economic history that the depression of the seventies – the Great Depression, it came to be called – neatly bracketed the Mackenzie regime. At the very end of the stonemason’s term of office Dufferin was still bemoaning it. “It is to be hoped,” he wrote to Whitehall, “that this terrible commercial depression will not continue much longer – if it does I do not know what will become of us. Our lumber trade has utterly ceased to exist – there is scarcely a lumber merchant at Ottawa who is not almost or quite bankrupt and from the window at which I am writing there are not half a dozen ships to be seen in the port of Quebec.” The Canadian treasury itself was in trouble; to have entered upon an ambitious railway project could easily have bankrupted the country.

That was the cross Mackenzie had to bear; he was shackled financially. On the other hand, it is doubtful that, given prosperity, he would have accomplished any more than he did. He could gaze upon the universe with his telescope, but he did not see his country
as a great transcontinental nation, settled for all of its length from sea to sea. Canada, to Mackenzie, lay east of the Shield; far off were two small islands in the Canadian archipelago: the Red River settlement and British Columbia. These were necessary nuisances.

In addition, Mackenzie seemed to be plagued with a compulsion to slash his rival’s railway policy to shreds. On the hustings in 1874 and later in his public speeches he could not refrain from the kind of wild remark that filled British Columbians with dismay and goaded them into retaliation. As late as 1877 he was still using the word “insane” to describe the pact with the Pacific province. The men who perpetrated that treaty, he declared, deserved “the everlasting political execration of the country.” It was this kind of thing that turned Victoria, in Lord Dufferin’s on-the-spot description, into a “nest of hornets.”

Clearly his predecessor had saddled Mackenzie with an impossible burden. The policy was scarcely insane, but some of the terms were certainly foolhardy. A decade later George Grant recalled for
Scribner’s Monthly
that in 1870 “it had come to be considered that a railway could be flung across the Rocky Mountains as easily as across a hayfield.” In those roseate moments Macdonald had blithely promised the British Columbians that he would commence construction of the line in two years.
Two years!
In the spring of 1873, with the surveyors bogged down in the bewildering mountain labyrinth, Macdonald realized he must pay lip service to his incautious pledge. A few days before the deadline he recklessly picked Esquimalt, the naval harbour on the outskirts of Victoria, as the terminus of the Canadian Pacific Railway.

In practical terms, this meant that the railway would run to Bute Inlet on the mainland; it would then thread its way down for fifty miles from the head of the inlet through the sheer, granite cliffs of the coastline and leap the Strait of Georgia, a distance of twenty-nine miles, to Nanaimo on Vancouver Island and follow the east coast of the island to Esquimalt. The work, as Fleming reported, would be “of a most formidable character.” It would require eight miles of tunnelling and untold rock cuts just for the right of way to negotiate those sea-torn precipices. Then the track must hop from island to island over six deep intervening channels through which the rip tide sometimes tore at nine knots; that would require eight thousand feet of bridging and in two instances the spans would have to be thirteen hundred feet in length. That was greater than any arch then existing anywhere in the world.

But Macdonald at that moment had not been concerned with engineering. The votes were in Victoria; and Victoria, whose merchants were heavily involved in real-estate speculation, needed an economic boost. On July 19, 1873, exactly two years less a day after British Columbia’s admission into Confederation, a group of dignitaries took part in the cynical fiction of turning a sod near the Esquimalt naval base. In the ensuing debate over the Pacific Scandal, Macdonald had the grateful support of the island members.

This, then, was the
fait accompli
Mackenzie faced: a deadline determined, a sod turned, a terminus established and a province militant. In this fertile ground were sown the seeds for the uneasy relationship between the Pacific province and central Canada that was to be maintained into the nation’s second century. Right from the beginning, the British Columbians viewed “the East” with suspicion: the East was reneging on its promises; the East did not care about the world beyond the Rockies; the East wanted to hog everything: even the patronage plums were being awarded to men from Ontario and Quebec. On its part, the East-for Mackenzie unquestionably had the support of the public at large outside British Columbia – saw the new province as greedy, shrill and bumptious, prepared to wreck the economy of the nation for the sake of petty provincialism and real estate profits.

The Liberals had grudgingly gone along in 1871 with the fiction that British Columbia had a population of sixty thousand. It did, but only if one counted the Indians and the Chinese, who outnumbered the whites four to one. This was a special concession made to the Pacific province to help lure it into Confederation; no other province was allowed to count either natives or Orientals when it came to enjoying federal grants or popular representation. British Columbia was receiving Ottawa largesse and sending members to Parliament at a rate out of all proportion to the rest of the country. The rest of the country resented it.

Each side accused the other of bad faith. British Columbia was incensed by Mackenzie’s declaration during the election campaign that the pact of 1871 was “a bargain made to be broken.” The Government, on the other hand, was equally aggrieved when it was discovered that the province had completely forgotten the promise made by its chief delegate, Joseph Trutch, that British Columbia would not insist on the literal fulfilment of the bargain.

During the election Mackenzie had been at pains to water down Macdonald’s impossible dream. He talked about a land and water route across the nation, with the rail line being built piecemeal. This, in effect, became Liberal policy, although the administration, beginning in 1874, made continuing attempts to entice private entrepreneurs to build the entire line by offering a subsidy of ten thousand dollars and twenty thousand acres per mile. Although that offer was considerably more generous than Macdonald’s, there was no real hope of attracting private capital during the depression. If the railway was to be commenced, it would have to be built in sections as a public work. There would be an easterly link – a subsidized extension of the Canada Central from Pembroke to Lake Nipissing – and two westerly links: first, a line from Lake Superior to the Red River to replace the Dawson Route and, secondly, a branch line from Selkirk to Pembina on the United States border which, it was hoped, would give the Red River its long desired connection with the outside world. After that, as funds were available, other sections would be built – but scarcely within ten years.

This was not good enough for British Columbia. Its premier, who was a federal
M.P
. to boot, was an eccentric but canny creature. He had been born plain Bill Smith in Windsor, Nova Scotia, but had legally changed his name to Amor de Cosmos, a mixture of Latin, French and Greek, so that he could get his mail in the California mining camps, which were crawling with Smiths. De Cosmos had started as a photographer in Victoria, established the
British Colonist
, and gained a reputation for a vitriolic pen and certain idiosyncrasies of character which became more pronounced as the years went by (it was whispered, among other things, that he dyed his hair and beard!). His attempts to make a pragmatic deal with Ottawa over the railway pact brought about his downfall. His plan was to trade away some of the original terms in return for Mackenzie’s pledge to build a drydock at Esquimalt. The Victorians would not hear of it. In February, 1874, eight hundred of them attacked the crimson, pagoda-shaped buildings in which the legislature met – the Bird Cages, they were called – drove the Speaker from his chair and the Lover of the World from the room and right out of provincial politics. (He retained his federal seat but relinquished the premiership.) They created, on the spot, a Terms of Union Preservation League and made it clear that they wanted the terms of the “insane act” fulfilled to the letter. “The terms, the whole terms and nothing but the terms” became a Victorian rallying cry for most of the decade.

Out to British Columbia, post-haste, went the former Liberal

Party whip, James David Edgar, commissioned by Mackenzie to bring about some feasible arrangement with the British Columbians who were “setting at defiance all the rest of the Dominion and the laws of nature.” Edgar’s job, as Mackenzie saw it, was to explain the truth behind the Conservative seductions. The reason Macdonald had promised them so much was “because the administration here sought additional means of procuring patronage before the general election and saw in coming contracts the means of carrying the elections.” As Edgar was to discover, such an explanation would scarcely appease the British Columbians who were themselves as hungry for patronage and for contracts as the greediest eastern favour-seeker.

Edgar, who had worked so hard and so effectively for his party during the debate on the Pacific Scandal, seemed the ideal negotiator: handsome by the standards of the day with his fierce Dundreary whiskers of jet black, his waxed moustache, his scholar’s brow and his hard, muscular body. He was a poet of some stature – he won a prize that year for some “spirited lyrics” – and he was to have considerable influence on the country’s literary future: Canada owes her first copyright laws to Edgar. His two-year-old son, Pelham, would become the most discerning literary critic in the country.