The National Dream: The Great Railway, 1871-1881 (15 page)

“Under these circumstances,” he wired on July 26, “I authorize you to assure Allan that the influence of the Government will be exercised to secure him the position of President. The other terms to be as agreed on between Macpherson and Abbott. The whole matter to be kept quiet until after the elections.…”

Four days later Cartier showed the wire to Allan. It was not quite enough for the shipping magnate. What if Macpherson continued to be stubborn? What would the Government do then? The ailing Cartier was forced to concede that, if a new amalgamated company could not be formed, then Allan’s Canada Pacific company would be given the charter.

Allan wanted that promise nailed down: “If you can put these points in writing for me, as you state them, I think they will satisfy our friends.”

Cartier suggested that Abbott draw up a document incorporating his pledge and return with it that afternoon. Allan and Abbott rose to leave, and as he saw them to the door, Cartier asked, in his abrupt way: “Are you not going to help us in our elections?” (Though later public testimony suggested that this was the first time the question of financial aid had been raised, the matter had undoubtedly been discussed earlier between Allan and Cartier, as Allan’s various reports to Cass and McMullen make clear.)

Allan asked how much Cartier wanted. Cartier replied that he really did not know but, because of the opposition against him, it might come to one hundred thousand dollars. Allan, the model businessman, suggested he put that in writing, too.

That afternoon – the date was July 30, 1872, the day on which Fleming, Grant and Macoun first reached the open prairie – he and Abbott were back again with two letters. One, to be signed by Cartier, promised Allan the charter; the other, also to be signed by Cartier, asked for financial help in the elections. Cartier was not satisfied with either of the letters and both were rewritten. One was to become notorious:

    “The friends of the Government will expect to be assisted with funds in the pending elections, and any amount which you or your Company shall advance for that purpose shall be recouped by you. A memorandum of immediate requirements is below.

NOW WANTED

In spite of promises to recoup, Allan did not really expect to see his money again.

Meanwhile, in Kingston, Macdonald was impatiently awaiting a reply to his telegram of July 26. When it finally arrived he was appalled. His immediate instinct was to go to Montreal at once and straighten out the mess into which Cartier had blundered; but the poll was about to begin and Macdonald could not afford to take time off from last minute electioneering. Instead he wired Cartier, repudiating the letter: his original telegram of July 26 must be “the
basis of the agreement.”
Agreement
. The ambiguity of that word would return to haunt Macdonald.

Cartier broke the news to Allan, who gracefully withdrew the letter; but he did not withdraw his financial support. He increased it. The additional fifty thousand dollars in Cartier’s original
NOW WANTED
memo was swiftly paid over – ten thousand to Langevin, Macdonald’s portly Minister of Public Works and Cartier’s successor as the leader of the Quebec wing of the party, another ten thousand to the Prime Minister and thirty thousand to Cartier’s central election committee. That was not the end of it. Allan left for Newfoundland at the height of the campaign but was pursued by a telegram from Abbott asking another twenty thousand dollars for the committee and ten thousand more for Macdonald. When Allan returned he learned that these sums had actually been exceeded. Cartier’s committee received a total of $85,000 of Allan’s money; Macdonald got $45,000; Langevin, $32,600. In addition Allan had pumped another sixteen thousand dollars worth of aid – perhaps more – into smaller election battles. Altogether he had distributed more than $350,000.

And for what? The Conservative government barely squeaked into power. In Ontario it was badly battered and in Quebec, where most of the Allan funds had been spent, it managed to capture only a bare majority. Without the West and the Maritimes, Macdonald would have been ruined politically. As for Cartier, he suffered a stunning personal defeat, which had its own ironies. By some mysterious process, a large slice of Allan’s money had been appropriated by the other side. On the day of the election, the open balloting revealed that man after man who had been paid in good hard cash to work for George Etienne Cartier had actually been in the secret service of the enemy all the while.

4
George McMullen’s blackmail

All that autumn, as Sir John A. Macdonald, freed at last from the campaign, struggled to effect a compromise between the two rival companies, he was haunted by his secret promise to Allan. There was no way out of it. Senator David Macpherson remained utterly immovable and the Prime Minister had no leverage with which to budge him. He sent emissaries to Macpherson, he sent long conciliatory
letters and, at last, he himself made a pilgrimage to the rambling and turreted Queen’s Hotel in Toronto where the two Scots downed a formidable succession of brandies and soda. The attempt failed. Macdonald’s personal charm was legendary but in this case every conversation foundered on the rock of Allan’s presidency. Macpherson kept asking awkward questions. Why was the Government so committed to a man who was, in the Senator’s furious phrase, the instigator of “one of the most unpatriotic conspiracies ever entered into in this Dominion … an audacious, insolent, unpatriotic and gigantic swindle.” Macpherson could not understand it, nor could he believe, as Macdonald tried to make him believe, that Allan, as president, would have little influence.

If Allan were made president, Macpherson argued, time and again, the Canadian public would be “seized with apprehension that the R
^y
. would be handed over to the Americans”; that feeling alone would affect stock sales. Everybody, Macpherson pointed out, believed the Americans were behind Allan: “You yourself must believe it.” At the height of the election campaign Macpherson had put his finger on the crucial point at issue: “If this Ring, owing to their electioneering influence, can force Allan upon you now, what will they do when they constitute a parliamentary phalanx, able under their leader to importune, embarrass and bully the Government from day to day?” Macpherson in later correspondence indicated that he knew the Prime Minister was bound to Allan by a secret promise. He was understandably bitter but, though his relations with Macdonald were marked for some years by a studied frostiness, he did not, as a good party member, rock the boat publicly or privately.

Nor was he to be moved by Macdonald’s pleas about “putting your shoulder to the wheel,” his threats (“if you hold back, you are in my opinion playing Allan’s game”), his flattery (Macpherson’s departure would be “a great blow to myself”) or his hardheaded estimate of the prospects (“If you got the contract tomorrow it would do you no good, your friends would be defeated on the meeting of parliament.”).

It was no use; Macdonald realized that he must form a new company without Macpherson. Like it or not, he had to keep his promise to the man who had been the biggest contributor to the Conservative coffers. At this juncture he ought to have entertained some doubts about Allan. On October 4, when the Interoceanic Company refused point blank to enter into any negotiations with the Canada Pacific, the Prime Minister realized that he must dispel the
rumours of American influence once and for all. Three days later he was shocked to discover that the Montrealer, in spite of all his pious proclamations, had not actually broken off relations with McMullen and the others. Allan’s alibi to Macdonald was that he was trying to let the Americans down gradually, but he was later to testify under oath that he believed the proposition to exclude foreigners was impolitic and unnecessary and that the Government would not insist upon it. Macdonald did insist and Allan, at last, promised to obey. Was this the man who ought to be heading up the greatest of national ventures?

There was nothing the Prime Minister could do. He had made a promise, through Cartier – Allan kept using that awkward word “agreement” – and he would have to stick by it. Macdonald uneasily began to wonder just what the agreement consisted of; the memory of that ambiguous telegram, dispatched at the height of a fatiguing campaign, when whiskey and wine were flowing freely, began to nag at him. What actually
had
Cartier promised Allan? Macdonald realized that he himself did not know the exact details. Already there were rumours floating around Montreal about Allan’s gifts to the Cartier campaign. “Allan and McMullen have done a great deal of harm by their foolish talk,” James Beaty, editor of the Toronto
Leader
(his nephew had represented the Americans), wrote to Macdonald on November 4. Hincks reported to Alexander Campbell from Montreal on November 8 that “it is generally known in town that Cartier gave Allan some letter promising
something”
and that he took a receipt for a sum of money. Hincks added that Luther Holton, the leading Liberal in French Canada, was one of those who knew the story. If Holton had heard the rumours, it was safe to assume that the Liberals would start to dig. In December, Edward Penny, the editor of the Montreal Grit paper, the
Herald
, wrote to his party leader, Alexander Mackenzie, of a strong report “from a good and reliable source” that Allan had “put the screws on” by advancing $150,000 for electioneering purposes “which was in some way to be speedily repaid; but has not been repaid since.” Allan had made up his mind, Penny reported, “to have the contract at any price hoping that when he once got command of it to be able to make his own terms.” Macdonald, meanwhile, learned from Allan the full extent of Cartier’s financial dependence upon him. The Prime Minister was horrified. Was it possible that the once astute Cartier could have been so foolish? He could not believe it and sought reassurance from his old friend, who had sailed for England to seek medical aid
for his disease. Cartier’s reply confirmed Macdonald’s worst fears.

Meanwhile, in Chicago, George McMullen was experiencing little twinges of uneasiness as he studied Allan’s reports of his lavish spending. On September 16, 1872 (Grant and Fleming reached the summit of the Yellow Head Pass that day), Allan informed him that he had paid out the staggering sum of $343,000 in gold for election expenses and other disbursements connected with the railway contract. He still had $13,500 to pay, “which will close everything off.” The original fund of forty thousand – later boosted to fifty thousand – which Jay Cooke had contributed, had long since dried up. Allan’s letter was really an expense account.

Startled by the magnitude of these figures, McMullen lost no time in getting to Montreal to confront Allan. There is considerable dispute as to what was said. According to McMullen’s account, Allan filled him in on a long series of negotiations with Cartier, explaining that he had already supplied some two hundred thousand dollars in election funds before the “agreement” of July 30 was reached. He had secured the agreement, McMullen’s account said, by refusing to pay any more of the drafts that were pouring in until Cartier, on the Government’s behalf, put his promises in writing.

Whatever was said, McMullen was mollified. He returned to Chicago where, some weeks later, he suffered another shock. On October 24, Allan, under Macdonald’s goading, finally broke the news to his American associates that he would have to dump them. McMullen was furious. There were angry letters, evasive replies and finally, on Christmas Eve, a face-to-face meeting between the two men in Montreal. Here, at last, Allan made it bluntly clear to McMullen that it was all over: he was closing off all arrangements with the Americans and repudiating any obligations they might feel he was under to them. McMullen was in a state of rage. He had squandered more than a year of his time and tens of thousands of his and his associates’ dollars and now it appeared that he, like the frustrated Kersteman (who was at that very moment heading for Francis Hincks’s doorstep and ultimate disillusion), had had no hope of success from the outset. Allan had deceived everybody. He had deceived the Government; he had deceived his friends; he had deceived his backers, and, above all, he had deceived himself – led on to greater and greater foolishness by what Lord Dufferin was to call “the purse proud and ostentatious notion of domineering over everybody and overcoming all obstacles by the brute force of money.”

The apoplectic McMullen suggested that if Allan had a scrap of
honour left he would either stick to the original agreement or step right out of the picture. This Allan refused to do, whereupon McMullen threatened to tell the entire story to the Prime Minister; after all, he had in his possession all of Allan’s indiscreet correspondence. McMullen had for some time considered these damaging letters to be his ace in the hole. In August he had told his second cousin in Woodstock that “Sir Hugh Allan is a tricky fellow and not to be depended upon, but I think we have got him so tightly bound by these letters that he dare not go back on us.”

Allan, apparently sure of his ground because of his deal with Cartier, remained obdurate. Perhaps he did not believe that McMullen would carry out his threat. But McMullen was not a man to shilly-shally. He wanted compensation and, if he did not get that, he wanted revenge. Off he went to Ottawa with no less a purpose than to blackmail the Prime Minister of Canada.

The encounter, which Macdonald had been half expecting and certainly dreading for all of that autumn, took place on New Year’s Eve, 1872. The politicians and businessmen of the seventies seem to have had a certain insensitivity to festive occasions. Allan and McMullen had battled it out on Christmas Eve. Hincks had given Kersteman a dressing down on the Yule. Now McMullen was waiting to see the Prime Minister in the East Block while the rest of the nation was preparing jubilantly to usher in the new year of 1873 – the blackest in all of Macdonald’s long political career.