The National Dream: The Great Railway, 1871-1881 (42 page)

Another firm that obtained extraordinary favours in the fall of 1874 was Cooper, Fairman and Company, a hardware company in Montreal. The Department of Public Works showed an astonishing preference for this concern in its purchases of steel rails, nuts, bolts and fishplates.

Here the department departed from its tendering policy and awarded a contract for steel rails worth $265,000 to Cooper and Fairman even though, two days before, another company had offered to supply the rails at ten shillings a ton less. The price the Government paid was demonstrably higher than the going price that fall.

In another instance, where the government did stick to its usual policy, the tendering was so complicated and confusing that again Cooper and Fairman were able to obtain what the commissioners described as “an undue advantage.”

In three other contracts – for nuts and bolts, for rail transport and for the construction of an engineer’s house – the same firm was given special treatment, other firms with lower prices and lower bids being passed over in their favour. Clearly Cooper and Fairman had an inside track with Mackenzie’s department. As the commissioners reported,
“it appears that an understanding existed from time to time between this firm and the Department of Public Works, beyond that which is conveyed by letters or papers on record.”

What was Cooper and Fairman’s secret? In the winter of 1874–75, the Conservative press began to leak some of the story. The silent partner of the firm was a Sarnia hardware merchant named Charles Mackenzie. He was the Prime Minister’s brother. In 1873 he had put fifteen thousand dollars into the firm-more than the other two partners combined. He was to receive a third of all profits in return. There were no profits and, indeed, no losses – no business, in truth – until the government contracts began to roll in. Mackenzie left the firm officially in May, 1875. In his testimony, long after the fact, he said he had really quit earlier – around the time the contracts came in; but he could not remember the exact date – “my memory is very poor for dates” – and his testimony and that of his former partners was so vague that it was clear to the commissioners and everybody else that he was very much a part of the firm for at least a portion of the period when his brother’s department was granting them extraordinary public favours.

In the end, it developed that not all the steel rails were really needed. They had been purchased prematurely – fifty thousand tons of them – apparently because both Fleming and Mackenzie believed they were getting a bargain, or so Fleming testified. He had thought the price was at rock bottom in 1874; besides, he said, he hoped that the presence of the actual steel in the country might speed the construction of the line.

The rails purchase was a disaster for all but Cooper, Fairman and Company. At most, twenty thousand tons were needed for the work in progress. But having purchased that amount, Mackenzie ordered an additional thirty thousand tons, even though the price was higher. Half of this extra order was supplied by Cooper and Fairman at double the going rate. After that, to everyone’s discomfiture, the bottom dropped out of the market. The rails rusted for years, unused, while the price of new rails went lower and lower and the interest mounted on the original investment. It was beginning to be apparent to the country at large that the government’s venture into the railway business was as disastrous as that of Sir Hugh Allan.

4
“Mean, treacherous coward!”

From his poplar-shaded mansion of Silver Heights, high above the serpentine Assiniboine, Donald A. Smith was contemplating with more than passing interest the future of the Pembina Branch line. In 1875, as a Member of Parliament, he had been part of a delegation that had lobbied for the line to be built “irrespective of the action of the Minnesota railway companies.” By 1878, his interest was personal as well as political. He was a member of a syndicate which was establishing rail connection from St. Paul to Pembina on the border. If the same group could lease the government line into the Red River Valley they would have a through line to Winnipeg. It was left to Smith to handle the matter politically.

As the man who had laid the last straw on the camel’s back in the Pacific Scandal debacle of 1873, Smith had considerable political power. This was demonstrated in the case of one of the shipments of rails in 1875 – those same rails that were to return to haunt Mackenzie during the Royal Commission hearings of 1880–81. A quantity of rails could have been moved up the river by the Canadian firm of Fuller and Milne, who were that summer competitors of the Kittson Line in which the Hudson’s Bay Company, through Smith, was a silent partner. The government appeared to be about to accept the Canadian firm’s quoted price when James J. Hill, Smith’s associate in the line, appeared in Ottawa and was closeted with Mackenzie. The $214,000 contract was then given to the Kittson Line without tender. The commissioners reported that Kittson had charged $44,000 more than the Canadian firm had offered and even then did not complete the contract. Such was Smith’s influence with the Mackenzie government.

There was something a little frightening about Donald A. Smith. Perhaps it was the eyebrows – those bristling, tangled tufts that jutted out to mask the cold, uncommunicative grey eyes and provide their owner with a perpetual frown. At fifty-eight, his face leathered by the hard glare of the Labrador snows, his sandy locks and flowing beard frosted by the years, Smith had the look of a Biblical patriarch.

He was a stoic; nothing could touch him; the Company had seen to that. There is a particularly telling story about Smith’s service within the Hudson’s Bay Company that underlines the Spartan aspects of his character. Years before, in the heart of Labrador, he had suffered
an appalling attack of snow-blindness, an affliction that turns the whole world crimson and makes the victim feel as if his eyeballs are being scoured with burning grit. Accompanied by two half-breed guides, the sufferer set off from his post at Mingan, which lies on the northern coast of the St. Lawrence Gulf, on a fearful snowshoe journey to Montreal, five hundred and fifty-five miles distant by crow’s flight. Arriving at his destination, Smith hammered on the door of Sir George Simpson, the “Little Emperor,” who ran the company with a hand of iron. Simpson was not remotely concerned about Smith’s plight; rather he was enraged that a servant of the company should have deserted his post. He gave the victim a tongue lashing: “If it’s a question between your eyes and your service in the Hudson’s Bay Company, you’ll take my advice and return this instant.” Then, after a peremptory medical examination, he turned him face-about into the snows. The return journey was so harsh that the guides died before reaching their destination. Smith stumbled the remainder of the way, half dead from exhaustion, fear and hunger. Years later when asked to describe that ghastly journey he could not bring himself to recall it. “No, no, I can’t,” he told an interviewer. “It is too terrible to think about.”

There is no doubt that this incident, and others like it in that bleak land which Jacques Cartier said belonged to Cain, had left its mark upon him. For all of his life he never complained and he never explained; that was the Company way. Few public men had more vitriol heaped upon them than Smith in his long lifetime; he bore it all without blinking as he had borne the Little Emperor’s abuse. In the election of 1874, Macdonald’s supporters, incensed beyond reason by his defection from their ranks, had pelted him with raw eggs until he was unrecognizable. He did not flinch. Wintry of temperament, courtly of manner, he wrapped himself in a screen of suavity which masked the inner fires, bitter furies and the hard resolution of his soul. He was unshakable in crisis and this, one future day, would stand the
CPR
in good stead. It was impossible to panic Smith; he invested in stocks and debentures with great Scottish prudence but once he bought a stock, so legend had it, he never sold it. The market could bounce around like a tumbleweed; Smith did not turn a hair. Once, late in life, when he had achieved a baronetcy, he was discussing with a friend the merits of a certain security. “Your Lordship has some of it,” the friend insisted. The old man did not believe him but finally got out his long investment list and there, sure
enough, was the forgotten stock, purchased many years before and greatly increased in value.

It was this quality of unruffled repose – a kind of patrician self-confidence derived from the old fur-trading days when orders were unquestioned and a chief factor was a minor liege lord – that made Smith so formidable in negotiation. He did not suffer from false modesty. “It is said of the Scotch that they have a good opinion of themselves,” he was wont to remark. “Well you know that, in reason, is a good thing. You know the Scotchman’s prayer, ‘Lord, gae us a guid conceit o’ oursels.’ That prayer has been abundantly answered.”

In Winnipeg he was admired, hated, feared, respected but scarcely loved. On his first visit to the North West as Macdonald’s envoy in the Riel uprising, he had shown courage, tact and diplomacy. His name was mentioned as a possible lieutenant-governor of Manitoba. Smith preferred the hurly-burly of political life. His active support came from the fur traders, many of whom were shunted across constituency lines at Company expense on election day. Being disciplined Hudson’s Bay Company men, they knew what to do.

For all of his days in Winnipeg, Donald A., as he was called, was a figure of controversy. Seldom quoted in the newspapers, he was constantly attacked in them, especially after he shifted his political loyalties in 1873. The
Nor’wester
attacked him. The
Times
, which believed – probably correctly – that he had a financial interest in the rival
Free Press
, hit out at him month after month. Later, the
Free Press
attacked him as well. The laird of Silver Heights remained imperturbable, travelling daily by coach the six miles to and from his office, living his Spartan life – two meals a day, no spirits – sitting around the fire at night with visitors, recalling the old days in Labrador. His stays in Winnipeg were solitary enough, for his wife refused to join him in the barbarous North West. She was a child of Labrador and the hub of her existence had always been the fur-traders’ capital, Montreal. She sprang from the Hardisty dynasty of Hudson’s Bay traders. Smith had married her, in the custom of the trade, by “the rites of Labrador,” i.e., without benefit of clergy, there being none available in those days. Years later, when he was about to become Lord Strathcona, it was revealed that he had no marriage certificate. This would never do: with his title in the balance, Smith agreed to a hasty wedding in the British Embassy in Paris. He was seventy-seven at the time.

The rail line to the border, which Smith and his partners coveted,
was officially a branch of the almost non-existent
CPR
. Early in 1878, before the branch line was completed, Smith’s cousin George Stephen made several trips from Montreal to arrange with Alexander Mackenzie for a ten-year lease of the government line to the syndicate, which was building the connecting line to the border from St. Paul. This would require an amendment to the Canadian Pacific Railway Act of 1874. On March 18, Mackenzie rose in the House to introduce a bill which would empower Parliament to lease the Pembina Branch to unspecified parties. The House would have to approve the principle first, Mackenzie pointed out, before going into the details of any contract. No mention was made of Donald A. Smith’s interest; in fact, one month before, Mackenzie had firmly denied in Parliament that he had had any discussion about such an arrangement with Smith and his friends. This was, to put the very best construction on it, a not-very-white lie. On February 10, George Stephen had written to Jim Hill that he was on his way to Ottawa to see Mackenzie “to come to a definite and written understanding as to the terms of our arrangement with them for the Pembina branch.…”

On March 8, the
Globe
reprinted an earlier dispatch from the St. Paul
Pioneer Press
, which gave Donald Smith and his partners cause for alarm since it named them as having already secured the lease on the Pembina Branch of the
CPR
. “Antagonistic parties”— which meant the Northern Pacific – were warned not to waste their time trying to secure something which was already locked up. Mackenzie was queried about this in the House and again he was careful in his reply not to mention the interest of Donald A. Smith. “The Government know nothing about who all the parties are who are connected with the road; but Mr. Stephens
[sic]
has been in communication with the Government.…”

Of course the Prime Minister knew all about Smith’s interest in the Pembina Branch. Why was he at such pains to conceal it from the House and the public? Simply because Smith’s name was an abomination to the Conservative opposition; they would fight like mad dogs any scheme in which he had an interest. On this occasion Smith’s personal interest was identical with that of his employer, the Hudson’s Bay Company, and also with that of his Manitoba constituents. It was clearly advisable to get control of the much-abused line from Pembina into the hands of a group that could run it efficiently. But Smith had made some bitter enemies in 1873 and one of them was Macdonald, a political leader famous for the retort that he did not
want men who would stick by him when he was right, he wanted men who would stick by him when he was wrong. Smith had not stuck by him. If, in 1878, the Member for Selkirk had risen in the House to support motherhood, it is conceivable that Macdonald and his followers would have been strongly tempted to opt for matricide. They were out for Smith’s blood. At a political picnic in Or ange ville the previous summer, Tupper had launched a vicious attack on Smith, who, he charged, was really at outs with Macdonald because as Prime Minister he had once refused certain favours to the Hudson’s Bay Company. Then he had “sat on the fence and watched the course, certainly not in the interests of the country, because he did not want to jump too soon and find he had jumped into a ditch. But when he came to the conclusion that the Government was going out, he made a bolt and he [Tupper] had no doubt that he had a great deal of reason since for having congratulated himself on having jumped as he did.”