The Promised Land: Settling the West 1896-1914 (52 page)

The following year, Mackenzie and Mann got further guarantees by
making themselves the heroes in another battle with the Canadian Pacific.

It is the afternoon of November 8, 1902, in Edmonton, and we have joined a wagonload of vigilantes heading for Strathcona to do battle with the
CPR
. Strathcona is a
CPR
town, a divisional point on the branch line from Calgary. Edmonton is not. It sits across the river without any rail transportation to connect it to the outside world. But Mackenzie and Mann’s Edmonton, Yukon and Pacific Railway will provide that link if it can only connect with the
CPR
line at Strathcona
.

The
CPR
is determined that will never happen. It has sent a switch engine, loaded with a
CPR
crew, to puff back and forth over the spot where the upstart railway plans to make the connection. It has a court order refusing any connection and a uniformed policeman to back the order up. That is why we are rumbling down McDougall Hill and across the Low Level bridge, where the new tracks are already in place, and up the incline of Scone Hill, past the
CPR
roundhouse to the spot where the hated engine is blocking all chances of a link-up
.

A crowd has gathered on the scene, but we vigilantes are helpless because nobody has turned up from the new railway to force the issue. The hours tick by. Dusk gathers. A chill wind whistles up the valley of the North Saskatchewan. What has happened? Where is W.J. Pace, the E.Y. & P. construction chief? Has he given up without a struggle?

Not quite. At 5:15 Mr. Pace appears, ambling cheerfully up the line from Mill Creek. Has he got something up his sleeve? His countenance does not suggest it. He whistles to himself under his breath, looks about casually, talks to friends in the crowd, acts as if he hadn’t a care in the world
.

We check our watches. It’s 5:25; the through train from the south is due at any moment. Down from the
CPR
roundhouse comes a messenger with orders to release the engine from its sentry duty long enough to make way for the oncoming locomotive. Off it chugs; a moment later the big train roars into view, flashes past, and rumbles away
.

A sharp whistle splits the air-a signal from Pace. Out from a nearby copse of bushes leaps a concealed crew of construction men. They rip up the tracks as we fight back an attempt at interference from the
CPR
’s employees. Before the guard train can return the switch is in its place. The
CPR
has been beaten. The Strathconians are in retreat. Edmonton has its connection, and a court decision will allow it to remain
.

As Mackenzie and Mann well knew, railways, real estate, and politics were inextricably mixed in the West. In 1905, the partners decided to ask for federal bond guarantees to build a line between Saskatoon and Calgary. The Conservatives failed to oppose the scheme in Parliament probably because Tory insiders were shown the route of the proposed line, a piece of information that allowed a favoured few to buy up land close to the right of way. They got the land cheap by pressuring the
CPR
, which owned it, to reduce the price from $5.00 to $3.50 an acre. The money for the purchase came from George Foster, a former Tory Minister of Finance who was then general manager of the Union Trust Company. Foster simply appropriated cash from the funds of the Independent Order of Foresters, which the trust company was administering, and then sold the lands back to the Union Trust at a profit of two dollars an acre. Foster and his political friends, who included such Tory stalwarts as Rodmond Roblin, made a $200,000 profit on the deal, with Foster keeping ten thousand acres of the best land for himself.

In this way, Mackenzie and Mann pulled the Opposition’s teeth and got the guarantees needed to build the railway without spending a penny, while the Tory insiders, using other people’s money held in trust, turned a handsome profit. The real loser, however, was the Conservative party, which had hoped to make use of the Liberal political scandals to fight the election of 1908. When a royal commission issued its report in 1907, it became difficult for the pot to call the kettle black.

The Canadian Northern grew in such a haphazard fashion that it was not until after the turn of the century that the country woke up to the fact that the two partners were planning to stitch the pieces together into a new transcontinental railway. Meanwhile, Sir Wilfrid Laurier was dreaming dreams of his own.

Laurier was haunted by the ghost of John A. Macdonald, whose Pacific railway policy, bitterly attacked by the Liberals at the time, had turned out to be a political asset, keeping the Conservatives in power for almost two decades. If one transcontinental railway had done that for Macdonald, why couldn’t another do the same thing for Laurier? The Prime Minister saw himself in the history books of the future, a man of vision tying the country together, the saviour of the West.

This was the genesis of the Grand Trunk Pacific, a child of the ailing Grand Trunk, the company that had missed its big chance in the 1880s when it turned down the Pacific franchise. Now $400 million in debt,
saddled by inefficiency, red tape, lack of initiative, and above all, absentee control vested in an English board of directors, the pioneer railway began to consider missed opportunities. It looked to the West for succour, or at least its hard-driving general manager, Charles Hays, did. An American entrepreneur who had pulled the moribund Wabash railroad out of a morass of debt, Hays had been hired by men who remembered what another Yankee, Van Horne, had done for the
CPR
.

Van Horne had been brought to Canada for a princely fifteen thousand dollars a year. Hays’s salary was twenty-five thousand dollars. He defected briefly when the Southern Pacific offered him four times as much but bounced back north again after a frustrating year with the American line. By 1902, he was ready to span the awesome desert of the Canadian Shield and spread the tentacles of his road into the lucrative prairies. The time seemed right. As the
Manitoba Free Press
reminded its readers that year, “the vital importance to this part of the Dominion of having all the transportation facilities that can possibly be secured is … ever foremost in the public mind.”

Hays, who was well aware of the Western clamour for more railways, wanted as many concessions from the government as he could squeeze out of Laurier. He wanted a land grant, a cash subsidy, and tax exemptions in return for his pledge to build from North Bay, Ontario, to the Pacific Coast. Laurier balked. The government wanted no more land grants: the 25 million acres ceded to the
CPR
were causing enough problems. But Laurier was desperate for an election issue: what better than the bright promise of a new transcontinental railway stretching from Moncton, N.B., to Port Simpson, B.C., on the northern Pacific coast? He made a counter-offer: the Grand Trunk’s subsidiary, the Grand Trunk Pacific, would build the western half of the new line, starting at North Bay, rounding the Great Lakes, crossing the prairies, and driving through the Yellowhead Pass of the Rockies. The money would be raised partially by government bond guarantees and partially by the parent company itself. At the same time, the government would build the eastern half of the line, from North Bay to Moncton, to be known as the National Transcontinental, and lease it back to the Grand Trunk.

This plan was scarcely on paper before it met with resistance. Hays’s London boss, Sir Charles Rivers-Wilson, was terrified of the country north of Lake Superior, an uninhabited, agriculturally unproductive thousand-mile expanse of granite, schist, and muskeg. There was no profit in it; indeed, it had almost destroyed the
CPR
. Laurier, still
hypnotized by the memorable railway debates of 1881 that had helped sink the Liberal party, gave in. The government would build
all
the line from Winnipeg to Moncton; the Grand Trunk could stop worrying about the empty desert of the Shield. And when the job was done, the Grand Trunk could lease the whole thing.

It was a sweetheart deal: the government was going to build the difficult half of the railway and, in effect, underwrite half the cost of the rest. It required all of Laurier’s eloquence that summer and fall of 1903 to get the measure through the House. “I am well aware that this plan may scare the timid and frighten the irresolute, but, sir, I may claim that every man who has in his bosom a stout Canadian heart will welcome it as worthy of this young nation, for whom a heavy task has no terrors, which has the strength to face grave duties and grave responsibilities.”

There it was, an echo of Macdonald, to whom Laurier, as an up-and-coming young parliamentarian, had listened in 1881. Now he was about to see his own national dream come true.

There was bitter opposition, as there had been in Macdonald’s day, but now it was the Conservatives who cried giveaway. Every opposition paper in the country sided with A.G. Blair, the Minister of Railways, who thought the plan disastrous, quit the cabinet, and crossed the floor on the issue. A stout defender of the government-owned Intercolonial that had united the Maritimes in 1876, he saw no reason for a second transcontinental line. It was, he declared, “one of the most indefensible railway transactions which has ever taken place in this country.”

All this time, the team of Mackenzie and Mann, supported by provincial bond guarantees, had been gluing their various Western lines together into a pastiche that was beginning to resemble a national network. Why didn’t Laurier turn to them to build a railway to the Pacific? They were clearly prepared to build one anyway. Or, alternatively, why didn’t he suggest an amalgamation of the Canadian Northern and the Grand Trunk?

Actually, he had tried to do that the previous winter, but not very hard. There were overtures, conferences, discussions, proposals between the two factions. These came to nothing. The Easterners looked upon the Western partners as brash upstarts; the ambitious Hays wanted to drive them out of business and swallow them. Mackenzie and Mann saw the Eastern railwaymen as fogies, taking their orders from London. It was
their
plan to gobble up the Grand Trunk.

Laurier, who could have waved a big stick and forced amalgamation,
declined to do so. Mackenzie and Mann were a little too slick, a little too sharp for his taste; seasoned political manipulators, they seemed to have Blair in their camp. Nor did he believe that they had the finances to do the job. And yet the pair had those very qualities he would praise in the House-men for whom a heavy task held no terrors. Again it was a case of the East-West schism, the West suspicious of the East, the East underestimating the West.

Clifford Sifton wanted to divide the country between the two forces, with the Grand Trunk building the line east from the lakehead, the Canadian Northern building west to the Pacific. In that way the Eastern company would get all the Western business, the Western company would enjoy the traffic from the East. Sifton tended to lean toward Mackenzie and Mann, which perhaps explains why he wanted to give them the easier half of the project. Hays he dismissed as a “cold blooded raider of the treasury.” Sifton’s plan made some sense, more sense certainly than Laurier’s, but it never came to fruition.

But why should the government turn the rich prairie territory over to a private firm? Why should the government not own the railroad its bonds were helping to underwrite, especially when it had assumed total responsibility for building the most difficult part of the line? Several Western papers wanted nationalization; Sifton, too, was leaning that way. But Laurier had bleak memories of the ill-fated attempts of Alexander Mackenzie, his former leader, to build the
CPR
as a government venture. And the case of the Intercolonial was just as bad – an invitation to graft and inefficiency.

The Prime Minister felt he could not wait. Grain was piling up along the main line of the
CPR
, and the railway did not have enough freight cars to move it east. Beyond the main line, new settlers sat idle, unable to produce at capacity because their farms were too far from the nearest railhead.

“We cannot wait because in these days of wonderful development time lost is doubly lost,” a weary Laurier told the House. “We cannot wait because at this moment there is a transformation going on in the conditions of our national life, which it would be a folly to ignore and a crime to overlook … our duty … is not of tomorrow but of this day, of this hour and of this minute … Heaven grant that while we tarry and dispute … an ever-vigilant competitor does not take to himself the trade that properly belongs to Canada.”

Laurier got his way. Now, at last, he had his election issue. Unhappily, it turned out that the Grand Trunk could not borrow enough money to
finance its part of the bargain. The election was put off, a new session of Parliament called, and the deal with the railway watered down once more. Among other things, the government now agreed, in effect, to guarantee, if necessary,
all
the funds needed to build the mountain section of the line.

Thus the way was cleared for two new Pacific railways, both supported largely with public money. Laurier’s original plan, to run the
GTP
far north of the
CPR
, was abandoned. The two railways would often parallel one another across the plains and through the mountains. In retrospect it seems idiotic, but in those euphoric days nobody bothered to look into the future. The West was railway-crazy, and the East was basking in the West’s prosperity. The cost of building the new transcontinental Grand Trunk line would nearly equal the cost of digging the Panama Canal, but when the Liberals went to the country in the late fall of 1904 with their railway policy in place, the country gave them an overwhelming mandate.