The Promised Land: Settling the West 1896-1914 (39 page)

The dictum, however, did not apply to favours granted. The most flagrant example is that of Theodore Burrows, a prominent lumberman and Liberal politician who was Sifton’s wife’s brother. Between 1902 and 1905, Burrows and his lawyer-associate, A.W. Fraser, former head of the Ottawa Liberal Association, tendered for Western timber limits on twenty occasions, often concealing their interest by the use of nominees. In an astounding nineteen cases out of twenty, they were successful. And in every case they won out by a suspiciously narrow margin, the average difference between their bid and the next closest being no greater than 6 per cent. No one came close to this remarkable record. Burrows’s nearest rivals, the MacDonald brothers, tendered thirty times during the same period and failed in sixteen cases. They paid three and a half times as much for their limits, on an average, as was offered by the next highest bidders.

During this period, half of all the timber holdings under lease in the West – three thousand square miles of selected timber – fell into the hands of speculators. Half of that amount was acquired by the Burrows-Fraser combination and held for speculation. It could not have happened without Sifton’s help. In 1903, Sifton made two changes in the timber regulations that helped enrich his relative at the expense of the settlers who were pouring into the wooded areas of the West. Until that point, a licence to cut timber had to be renewed annually; if the land was required for settlement, the licence could be cancelled. That encouraged early logging operations, discouraged speculation, and ensured that vast areas could be made available for newcomers. In addition, the homesteaders in the area were given a special privilege: they were allowed to enter the timber reserves to cut logs for their own use-for building materials, fence posts, firewood.

Sifton changed all that. Timber licences could now be held until all the timber was cut, which meant the lands could be tied up indefinitely by speculators and closed to settlement. In addition, homesteaders were barred from using any of the timber. Most of Burrows’s leases were acquired immediately before or soon after these changes were made. The new regulations increased the value of his holdings and gave him greater security. He didn’t have to worry about his leases not being renewed, and so he didn’t have to plunge into a logging operation immediately; he could wait until the price went up. And he wouldn’t be bothered by homesteaders cutting his trees.

He had plenty of clout with the department. His requests sounded more like orders, and even when he broke the rules an exception was made for him. “I want this permit,” he wrote to James Smart on one such occasion. “Kindly have permit sent to me. I intend cutting on it this spring.” In this instance, all other flawed applications had been rejected, but Burrows’s wasn’t. Even though at the time he was cutting on a forbidden area, it didn’t seem to matter. The disputed tract was simply added to his lease.

Burrows was a master of tricky tendering. The accepted method of bidding on timber leases was straightforward. You used the department’s forms, stipulating the number of the timber berth, the amount of the enclosed marked cheque, and the name of the bank on which the cheque was drawn. When the advertised deadline was reached, two officers of the department opened the tenders and awarded the lease to the highest bidder.

Under this system nobody possessed of inside information could slip an extra cheque into the envelope at the last minute. But Burrows and his nominees didn’t use the departmental forms. In case after case he declined to stipulate the amount of the cheque enclosed. His bids came in at the last moment, and he often enclosed two and sometimes three cheques; at times he paid in cash.

Nor were these tenders opened in the presence of two witnesses as before. In the winter of 1902–3, James Smart turned the job over to one man, the Dominion Lands Commissioner, John Gillanders Turriff (a secretary was usually present but was not required to see the bids). Turriff was a Liberal stalwart, a former member of the North West Council and Legislative Assembly, a defeated candidate for federal office (he was eventually elected in 1904), and a close and long-time friend of Burrows and of Fraser.

Burrows was careful to conceal his own part in this suspicious method of tendering. No one would have known, for instance, that he was behind the successful bid for a valuable limit on the north slope of the Porcupine Hills. The bids were made in his stenographer’s name, and the envelope referred only to an unnamed amount. It wasn’t until the Public Accounts Committee subpoenaed the original documents instead of copies that it learned from the marginal notes in ink that three cheques were enclosed, each one just managing to outstrip the other bids by a fractional amount.

In January, 1903, an American syndicate applied to enter a 7,000-square-mile forest north of Prince Albert and select 500 square miles of the best timber. It was an unprecedented idea of a magnitude never
before contemplated, for whoever gained that limit would have a monopoly of the timber in the area. In the end, it turned out, the American syndicate didn’t have a chance. But Burrows did, in spite of a violent protest from the mayor, the board of trade, and the leading businessmen of Prince Albert.

The department put the area up for tender but made sure that nobody – including the Americans – would have time to examine it. Interested parties had only a month to cruise the 7,000 square miles and decide what to pay for 500 square miles spread out over the whole region. There was no competition. Burrows and Fraser, hiding behind nominees in the name of the Big River Lumber Company, got the timber rights on a billion feet of spruce for less than two cents an acre. The profits were enormous. Burrows had paid five thousand dollars. He sold half his interest for eighty thousand dollars before the land was even explored or blocked.

Another of Burrows’s façades was the Imperial Pulp Company, a firm as mysterious as the North Atlantic Trading Company. Sifton’s political opponents tried for years to find out who was behind this shadow firm, which apparently lived in a Winnipeg post office box, owned no sawmills or equipment, and had no officers. Its letters were signed with a stamp; it was not listed in any business directory; it had never applied on its own for a timber limit, but bid on other applications. This company did not use the department’s printed form; though more than one cheque was enclosed, that fact was not stipulated on the envelope; and the total amount bid was scribbled in ink.

Between December 1902 and February 1904 this firm, under various names, tendered for nine timber leases in the Territories and was successful in every case. The total amount of its bid was $54,975, a sum suspiciously close to the total amount bid by the nine closest bidders: $51,771. It took the Opposition Conservatives five years to discover whose company this was. In 1908, it finally came out. The president was Sir Daniel McMillan, Lieutenant-Governor of Manitoba and a prominent Liberal; the managing director was Theodore Burrows. The leases had been obtained entirely for speculation, the land tied up from settlement. In all the intervening years the company hadn’t built a single sawmill or cut a stick of timber, and hundreds of homesteaders had been prohibited from cutting firewood or building materials in the area. For its investment of fifty-five thousand dollars, the “company” had obtained timber limits worth, in 1908, in the neighbourhood of one million dollars.

Again, in some of these cases the department left so little time for exploration after advertising the timber limits that Imperial Pulp had the bidding all to itself. In one such case, Burrows’s lawyer, Fraser, attempted to preserve the appearance of competition by preparing two bids, one in Burrows’s name, one in the name of W.H. Nolan, a political crony. Nolan got the two limits for eleven hundred dollars and turned them over within a few hours to the Imperial Pulp Company. But the fiction that Nolan owned the leases remained on the books for years, frustrating the attempts of investigators to tie them to Sifton’s brother-in-law. Like Burrows, Nolan was an old friend of Turriffs – a school chum he had known for forty years. Imperial’s nine successes all took place when Turriff was opening the tenders. Burrows’s successes all took place during the time Sifton headed the department.

Very little of this was known, however, during Sifton’s term of office. The full details did not appear until 1908 when Herbert Ames, the Conservative member for Montreal – St.-Antoine, with terrier-like tenacity forced an investigation by the Public Accounts Committee. Ames, who travelled the country before the 1908 election lecturing on this and other scandals, summed up his own argument in Parliament on May 19:

“I feel a great opportunity has been lost; it has been lost in order that certain gentlemen, close to the Government, might become millionaires. And to this end our three provinces have been despoiled. The day will come when there will be handed over to these provinces the remnants of the lands that should have been theirs long ago. But before that is done, practically all the timber of value will have been given away. These are the assets the provinces should have in order to develop themselves and carry on their internal affairs.… Yet you propose to shear Alberta and Saskatchewan of practically all their assets to give them into the hands of speculators.

“Mr. Speaker, the circumstances connected with the tenders we have examined … lead, to my mind, to one inevitable conclusion, and that is that there has been either fraud or imposition practised in obtaining some of these limits. If it is well founded, what is the logical conclusion of the matter? It is that the country has been robbed and that certain persons today are in possession of stolen goods, that should be restored to the people of Canada.”

The goods were not restored, but after Sifton left office his successor abolished the system of tendering for timber leases, substituting public auctions, with the government placing a reserve bid on each lease.
Ames’s exhortations fell largely on deaf ears; in those heady days of the Western boom, the public was happy to return the Liberal government to office. But Sifton’s margin was reduced in Brandon and Burrows went down to defeat largely because of the publicity surrounding the revelations. It did no permanent damage. He survived the disgrace, pocketed his profits, and in 1926 was appointed Lieutenant-Governor of Manitoba.

4
Big Jim’s political clout

During his term as Minister of the Interior, Clifford Sifton moved to gather all the reins of power into his own hands. This was particularly true when it came to granting valuable grazing leases to ranchers in the dry cattle country of southern Alberta. By 1902, the Minister had taken unto himself the absolute right to grant or deny such leases and to do it without the names of specific individuals being placed before the Privy Council. In this way he was able to reward friends and political associates without arousing public suspicion. Under this system, leases were granted to men who did not at the time live in Canada, who owned no cattle but held the leases for speculation, while the bona fide cattlemen and ranchers in the area who tried to obtain similar privileges found themselves shut out.

One such friend was J.D. McGregor, the one-time livery stable keeper and cattle man in Brandon who had, since 1888, been one of Sifton’s strongest political supporters and also his campaign manager. McGregor was a mountain of a man, smooth-faced and double-chinned, a pioneer whose family had arrived in Manitoba in 1877, when he was only seventeen. In the smoky back rooms of Brandon politics he was known by his initials, as J.D., and sometimes as Big Jim. As we have seen, Sifton made sure McGregor was given
CPR
meat contracts on the Crow’s Nest Pass line. In the Yukon, as a paid employee of Sifton’s department, McGregor received other benefits, all of them potentially lucrative. He was named Inspector of Mines and given the job of collecting royalties in cash from Klondike prospectors, a task hitherto performed impeccably by the Mounted Police.

In that job there was room for considerable graft. There was even more in the disposal of liquor licences. Thus, when Sifton named McGregor liquor licensing commissioner for the Yukon, Superintendent
Sam Steele of the Mounted Police, who sat on the liquor board, balked. The job, he said, was an open invitation to illicit wealth. The veteran policeman lost the round. In a brutal telegram dated September 8, 1899, Sifton pulled him out of the Yukon and effectively ended his career. When McGregor returned to Brandon, the plum jobs in the Yukon were transferred to his brother, Colin.

In 1901, in the cattle country of southern Alberta between the Bow and the Belly rivers, Big Jim McGregor and a banker partner, A.E. Hitchcock, a prominent Medicine Hat Liberal, managed to tie up some ninety-one thousand acres of land for grazing cattle. As in the case of the timber lands, these twenty-one-year leases were temporary; they could be cancelled on two years’ notice if homesteaders wanted to move in on the land. But in December 1904, with Sifton’s former law partner, A.E. Philp of Brandon, McGregor went to Ottawa to see his friend the Minister and changed all that. As a result, he and six other prominent Liberals were given special privileges: their leases were granted irrevocably for twenty-one years. Shortly after Sifton resigned that law was rescinded.

Big Jim and his partner had another privilege: they were allowed to select 10 per cent of the leased land for outright purchase. Again the law was bent. That land was supposed to be in the vicinity of the ranch buildings only, but McGregor chose the finest ninety-one hundred acres he could find; the two men paid one dollar an acre in a private deal with the department. A year later the same land was valued at twelve times that amount.

But McGregor had made more than a profit. By tying up the land for twenty-one years he had made it impossible for anyone in the adjacent area to tap the Bow for irrigation without first settling with him. And that is exactly what Big Jim had in mind. In southern Alberta, land was of little use to immigrants unless it was irrigated.