The National Dream: The Great Railway, 1871-1881 (58 page)

By late afternoon people of all classes were streaming towards the station. Almost every prominent Montrealer was present, no matter what his politics. A reception committee of some fifty leading Tories was waiting on the platform; packed behind it, pushing, craning and buzzing with anticipation, was an immense throng. Suddenly from a distance came the sharp reports of fog signals being fired as a salute along the right of way and then the train itself appeared, dead on time.

Macdonald’s special car was shunted to a siding and a few moments later the Prime Minister appeared, his face wreathed in smiles. Almost everybody who knew him remarked on how healthy he appeared – “ten years younger” was the common remark. The English trip had done him good. More important, success was written on his features.

Macdonald, full of “animal spirits” in the
Mail’s
phrase, was, in his usual fashion, greeting friends and enemies alike with gibes and sallies. He caught sight of Amor de Cosmos in the throng – perhaps his most vitriolic opponent from British Columbia – and he remarked that the first news he had read in the papers when he touched at Rimouski was that British Columbia had obtained another representative in the form of a great sea serpent. Macdonald remarked jovially that he thought it would now be hard to match the Pacific province.

The Club Cartier, an organization of young Conservatives, had the inevitable address of welcome to present and the crowd waited as patiently as it could until this formality was over. Then every neck strained forward as the Prime Minister prepared to speak. It was a brief, somewhat vague statement but it was what everyone wanted to hear. The Government, Macdonald indicated, had secured financing for the great railway. He could not spell out the details, for these must first be presented to the Governor General.

As was often the case he appeared to say more than he really did
and much of what he did say was deceptive. From his short speech in Montreal and the interviews with friendly reporters that accompanied it, no one could have divined that the railway was to be built by a predominantly Canadian group. Macdonald made a good deal of the German element in the Syndicate, which was, in point of fact, very small. But it was considered politically important to get token money from Germany, which would, as Macdonald told the crowd at the station, divert the tide of immigration to Canada. He mentioned no financial houses or individual capitalists but in an interview with the friendly
Mail
talked about “a Syndicate composed of eminent capitalists from Frankfurt, Paris, London, New York and Canada thus forming a combination of interests in order to further emigration from all those countries.” Since McIntyre had returned home on the same boat, his connection with the new syndicate was generally accepted. The United States element was played down to a point where the Conservative Winnipeg
Times
even denied its existence. But the Prime Minister was able to reassure the cheering crowd on several points: the new syndicate would finish the line in ten years, it would not build the easy portions first or save the hard ones for the last, and, finally, the road would not cost as much as Sir Hugh Allan had offered to build it for in 1872. Moreover, it would not cost the older provinces of Canada one cent: the sale of western land would pay for it all.

Before he finished Macdonald could not resist a political gibe at his opponents. (The
Globe’s
James Harper, the only shorthand reporter present, squeezed between a mass of jocular Tories, was taking it all down verbatim.) The time would come, Macdonald said, when Canada’s teeming millions would remember that it was the Conservative Party that had given the country its great railway.

“I shall not be present,” said the Prime Minister. “I am an old man, but I shall perchance look down from the realms above upon a multitude of younger men – a prosperous, populous and thriving generation – a nation of Canadians who will see the completion of the road.”

This sobering reminder of the Prime Minister’s mortality produced a curious lull in the jollity. It was not easy to contemplate a Canada without Macdonald. Loved or hated, despised or revered, he had become a kind of permanent fixture with his silver-knobbed cane, his fur-collared coat and his familiar Red River sash.

Almost as soon as the ministerial train puffed out of the station
towards the capital the great debate over the Syndicate, as it was now called, began. By October, the composition of the new group had leaked out even though the actual contract was not signed and the specific details had still to be worked out. The members were George Stephen and Duncan McIntyre of Montreal; John S. Kennedy of New York; James J. Hill and Richard B. Angus of St. Paul; Sir John Rose’s old firm of Morton, Rose and Company, London; and the German-French financial syndicate of Kohn, Reinach and Company. Norman Kittson, who had an interest, was not named at the time: too many men with St. Paul addresses would have caused a storm in the Opposition press. There was, as well, another name far more conspicuous by its absence – that of Donald A. Smith. Smith, of course, was to be a major shareholder in the
CPR
; but since his name was an obscenity to Macdonald and the entire Conservative Party there was no way in which he could be publicly connected with the Syndicate.

It had been a bad year all round for Smith, politically; indeed, it marked his withdrawal from the political scene. Following his successful re-election to the constituency of Selkirk in 1878, a petition was filed in court charging that his seat had been secured through bribery and corruption. Behind this move was seen the fine hand of the Prime Minister himself, for Macdonald was still smarting from the parliamentary skirmish of the previous spring. The matter did not come to trial until after the House recessed in 1879 at which time Smith was confirmed in his seat. But a local journalist discovered that the judge who gave the decision had borrowed four thousand dollars from Smith and that a mortgage was registered on the jurist’s property in Smith’s name as security for the loan. The case was appealed to the Supreme Court, which thought a clear case of corruption had been made – not against Smith personally, but enough to void the election. Smith ran in a by-election in September, 1880, spending, as he later admitted, thirty thousand dollars. His connection with the St. Paul and Manitoba railway told against him and he was defeated.

“Donald A., the —— voters have taken your money and voted against you,” the secretary of his campaign committee is said to have complained.

“You have properly expressed the situation,” Smith replied quietly.

The result was scarcely known, to the immense jubilation of the Tory press (“
SELKIRK REDEEMED
” trumpeted the
Mail)
, when Smith suffered a second blow to his ego: the knowledge, imparted to him by
Stephen, that he could not be publicly associated with the greatest of all national enterprises. The Syndicate would take his money but it did not want to be saddled with his name. Nonetheless, his presence as a silent partner was assumed by both press and public and a great to-do resulted.

The usually imperturbable Smith briefly dropped his mask and gave Stephen a rare, private glimpse of his very human ambitions. “You will have heard of the trouble that Smith has given me … because I did not put his name into the contract,” Stephen wrote to Macdonald. “I had to tell him that I omitted it to avoid discussion in the House but rather than he should be unhappy I would let him out of the business. He is excited almost to a craze and so troublesome that I do not care if he does withdraw though his money and co-operation would be useful, so would his knowledge and influence in the North West.”

Smith did not want to withdraw his money but he did want recognition, and so the fuss continued. A week later Stephen told Sir John Rose that he had had “a terrible bother with D. Smith because his name is not printed in the papers to submit to the House.” Actually both Stephen and Angus thought they were doing Smith a good turn by keeping it out; public mention could only bring down further calumny upon that shaggy head, but “he has been like a baby over this thing,” Stephen reported. Late in January, Smith was still at it – “so sensitive as to his position in the company and … so sore at me and Angus for omitting his name in the Contract.”

Stephen was equally exasperated with the French-German element in the Syndicate which Macdonald had insisted upon for entirely political reasons. “It gives us prestige in the province of Quebec and frees the Company – (in public opinion) – from the tyranny of the English stock exchange,” the Prime Minister had explained. Kohn, Reinach and Company was a French-German group which included the French Société Générale. The Europeans were in the Syndicate for two reasons only: first, they expected to make a quick profit, and, second, they hoped to get further business from the Canadian government, as did the English house of Morton, Rose and Company. Without the inducement of further business it is doubtful if either firm would have entered the venture. Even at that, the French at the last moment threatened to back out unless they could get assurance either of a speedy profit or of Stephen’s pledge to buy up their shares if the operation proved unprofitable. “If we had our Charter I would
be inclined to make short work of the Frenchmen,” the impatient Stephen wrote to Macdonald. “Meanwhile I suppose we must not break with them until we’re through Parliament.”

In the end, Stephen told the nervous French that he would build the railroad himself, with or without their help, and “this confidence … did them good.” Macdonald sent a hurried letter to Rose in England, pointing out the political importance of the French-German involvement and Rose wrote at once to Stephen: “I quite see that they will be troublesome and minute, but I don’t think to an extent that patience and good temper won’t enable you to deal with.” After the contract was signed, Stephen himself went to Paris to stiffen the Frenchmen’s resolve.

It was Stephen’s first venture into the periphery of politics and the inability to deal directly, swiftly and conclusively with matters he considered to be purely business had already begun to torment him. The wretched contract seemed to be taking weeks to complete and after it was signed Parliament would have to consider it before any company could be formed and the actual work of building the railway could be begun. He began to fire off letters to Macdonald urging speed: not a day must be lost in the preparation of the contract and in the Act of Incorporation. “Unless we have
cars
running over a long piece of the road west of Winnipeg by this time next year, both the Government and the Contractor will be put to discredit with the public.” There must be parliamentary sanction “at the earliest possible day”; the European signatories must rush to Ottawa and thence to Montreal to iron out all the differences as swiftly as possible. Stephen was almost breathless with impatience.

Nothing, of course, moved as swiftly as he hoped. He had expected to embark for London at the end of October to meet Tupper. He had to postpone his sailing date.

Among other things, the status of the Pembina Branch had to be ironed out. John Henry Pope talked to him about giving the government a share of its net earnings for fifteen years; Stephen wanted none of that. He wanted the line, complete, for the
CPR
and he wanted a monopoly. If the
CPR’S
main line was tapped at Winnipeg by other, rival lines running to the boundary, “no sane man would give one dollar for the whole line east of Winnipeg.” This was the original bargain that the Syndicate had made with the Government. Like everyone else, Stephen was reluctant to build a foot of railroad north of Lake Superior. When Macdonald insisted, he agreed – but
on one condition: he must have a monopoly of all rails running from the Red River to the United States border. On this he was adamant and in mid-October he made it clear that he was prepared to cancel the entire contract if there was any change in this arrangement. The Pembina Branch would have to subsidize the lonely line that ran through the Precambrian desertland. Macdonald was reluctant: he saw the political disadvantages of granting a western rail monopoly to an eastern company. And yet he was caught between two unyielding points of view. He must have an all-Canadian railway; to get it he would have to concede to the importunate Stephen who again and again in his letters was hammering home the point. Stephen feared “strangulation in the hands of our Chicago rivals hanging over our heads.” The danger “is
real
and
imminent.”
If any other railway except the
CPR
made connection with Winnipeg the money spent east of that city “might as well have been thrown into the Lake.”

Stephen had never talked so toughly before and only Macdonald knew, perhaps, how hard a bargain he was driving. For this was the basis of the “Monopoly Clause” in the
CPR
contract, which would turn the West against the railway and against the East and lay the basis for almost a decade of bitterness before it was voluntarily revoked. The impotence of the Manitobans in the matter of building their own railway lines became, in that province, a
cause célèbre
which was to lead to a long-term disaffection towards Ottawa and towards the railway itself. Macdonald could see that clause returning to haunt him – returning to haunt the nation. But there was nothing he could do.

3
The Contract

The contract was finally signed on October 21 and the battle lines were drawn for the greatest parliamentary struggle since the Pacific Scandal. The comments in the Opposition press, before and after the contract was tabled in the House in December, give some evidence of the virulence of the attack. The Ottawa
Free Press
referred to the whole thing as “a stupendous outrage.” The paper declared that “nothing that ever entered the human mind can equal it … the terms are more like what would be imposed by a military conqueror after the country had been prostrated by an unsuccessful war.” The Monttreal
Daily Witness
cried that “one stands aghast before this Pacific
Railway contract, so monstrous are its provisions and so monstrous its omissions. We take days to gather breath to discuss it and then we quail before the uselessness of the task.” The Manitoba
Free Press
called it “a ruinous contract” and the
Globe
, as may be imagined, was apoplectic.