The Railway Builders - A Chronicle of Overland Highways
by Oscar D. Skelton
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[Transcriber's note: This book has varying page headers. Those headers have been collected at the start of each chapter as an introductory paragraph.]

[Frontispiece: 'The surveyor, often an explorer as well, striking out into the wilderness in search of mountain pass or lower grade.' From a colour drawing by C. W. Jefferys]



A Chronicle of Overland Highways






Copyright in all Countries subscribing to the Berne Convention




I. THE COMING OF THE RAILWAY . . . . . . . . . . . 1 II. EARLY TRAVEL IN CANADA . . . . . . . . . . . . . 13 III. THE CALL FOR THE RAILWAY . . . . . . . . . . . . 27 IV. THE CANADIAN BEGINNINGS . . . . . . . . . . . . 36 V. THE GRAND TRUNK ERA . . . . . . . . . . . . . . 52 VI. THE INTERCOLONIAL . . . . . . . . . . . . . . . 93 VII. THE CANADIAN PACIFIC—BEGINNINGS . . . . . . . . 109 VIII. BUILDING THE CANADIAN PACIFIC . . . . . . . . . 131 IX. THE ERA OF AMALGAMATION . . . . . . . . . . . . 169 X. THE CANADIAN NORTHERN . . . . . . . . . . . . . 181 XI. THE EXPANSION OF THE GRAND TRUNK . . . . . . . . 196 XII. SUNDRY DEVELOPMENTS . . . . . . . . . . . . . . 220 XIII. SOME GENERAL QUESTIONS . . . . . . . . . . . . . 240 BIBLIOGRAPHICAL NOTE . . . . . . . . . . . . . . 248 INDEX . . . . . . . . . . . . . . . . . . . . . 249




THE FIRST RAILWAY ENGINE IN CANADA, CHAMPLAIN AND ST LAWRENCE RAILROAD, 1837 . . . . . . Facing page 38 From a print in the Chateau de Ramezay.

RAILROADS AND LOTTERIES . . . . . . . . . . . . . . " 48 An Early Canadian Prospectus.

SIR FRANCIS HINCKS . . . . . . . . . . . . . . . . . " 66 From a portrait in the Dominion Archives.


SIR GEORGE SIMPSON . . . . . . . . . . . . . . . . . " 110 From a print in the John Ross Robertson Collection, Toronto Public Library.

SIR SANDFORD FLEMING . . . . . . . . . . . . . . . " 114 From a photograph by Topley.



RAILWAYS OF CANADA, 1880 (Map) . . . . . . . . . . . " 130

LORD STRATHCONA . . . . . . . . . . . . . . . . . . " 134 From a photograph by Lafayette, London.

LORD MOUNT STEPHEN . . . . . . . . . . . . . . . . . " 140 From a photograph by Wood and Henry, Dufftown. By courtesy of Sir William Van Horne.

SIR WILLIAM CORNELIUS VAN HORNE . . . . . . . . . . " 148 From a photograph by Notman.

RAILWAYS OF CANADA, 1896 (Map) . . . . . . . . . . . " 180

CANADIAN NORTHERN RAILWAY, 1914 (Map) . . . . . . . " 194

CHARLES MELVILLE HAYS . . . . . . . . . . . . . . . " 200 From a photograph by Notman.

GRAND TRUNK SYSTEM, 1914 (Map) . . . . . . . . . . . " 218

CANADIAN PACIFIC RAILWAY, 1914 (Map) . . . . . . . . " 224

GREAT NORTHERN RAILWAY, 1914 (Map) . . . . . . . . . " 230

RAILWAYS OF CANADA, 1914 (Map) . . . . . . . . . . . " 238




The Coming of the Railway—The Iron Road—The New Power—Engine and Rail—The Work of the Railway

On the morning of October 6, 1829, there began at Rainhill, in England, a contest without parallel in either sport or industry. There were four entries:

Braithwaite and Ericsson's Novelty. Timothy Hackworth's Sans-pareil. Stephenson and Booth's Rocket. Burstall's Perseverance.

These were neither race-horses nor stagecoaches, but rival types of the newly invented steam locomotive. To win the L500 prize offered, the successful engine, if weighing six tons, must be able to draw a load of twenty tons at ten miles an hour, and to cover at least seventy miles a day. Little wonder that an eminent Liverpool merchant declared that only a parcel of charlatans could have devised such a test, and wagered that if a locomotive ever went ten miles an hour, he {2} would eat a stewed engine-wheel for breakfast!

The contest had come about as the only solution of a deadlock between the stubborn directors of the Liverpool and Manchester Railway, or tramway, then under construction, and their still more stubborn engineer, one George Stephenson. The railway was nearly completed, and the essential question of the motive power to be used had not yet been decided. The most conservative authorities thought it best to stick to the horse; others favoured the use of stationary steam-engines, placed every mile or two along the route, and hauling the cars from one station to the next by long ropes; Stephenson, with a few backers, urged a trial of the locomotive. True, on the Stockton and Darlington Railway, the first successful public line ever built, opened four years before, a Travelling Engine, built by the same dogged engineer, had hauled a train of some forty light carriages nearly nine miles in sixty-five minutes, and had even beaten a stage-coach, running on the highway alongside, by a hundred yards in the twelve miles from Darlington to Stockton. But even here the locomotive was only used to haul freight; passengers were still carried in old {3} stage-coaches, which were mounted on special wheels to fit the rails, and were drawn by horses. The best practical engineers in England, when called into consultation, inspected the Stockton road, and then advised the perplexed directors to instal twenty-one stationary engines along the thirty-one miles of track, rather than to experiment with the new Travelling Engine.

'What can be more palpably absurd and ridiculous,' the Quarterly Review had declared in 1825, 'than the prospect held out of locomotives travelling twice as fast as stage-coaches! We should as soon expect the people of Woolwich to suffer themselves to be fired off upon one of Congreve's ricochet rockets as trust themselves to the mercy of such a machine, going at such a rate.' And the Quarterly was not alone in its scepticism. The directors of the new railway had found great difficulty in obtaining a charter from parliament—a difficulty registered in a bill for parliamentary costs reaching L27,000, or over $4000 a mile. Canal proprietors and toll-road companies had declaimed against the attack on vested rights. Country squires had spluttered over the damage to fox covers. Horses could not plough in neighbouring fields. {4} Widows' strawberry-beds would be ruined. What would become of coachmen and coach-builders and horse-dealers? 'Or suppose a cow were to stray upon the line; would not that be a very awkward circumstance?' queried a committee member, only to give Stephenson an opening for the classic reply in his slow Northumbrian speech: 'Ay, verra awkward for the coo.' And not only would the locomotive as it shot along do such varied damage; in truth, it would not go at all; the wheels, declared eminent experts, would not grip on the smooth rails, or else the engines would prove top-heavy.

To decide the matter, the directors had offered the prize which brought together the Novelty, the Sans-pareil, the Rocket, and the Perseverance, engines which would look almost as strange to a modern crowd as they did to the thousands of spectators drawn up along the track on that momentous morning. The contest was soon decided. The Novelty, an ingenious engine but not substantially built, broke down twice. The Sans-pareil proved wasteful of coal and also met with an accident. The Perseverance, for all its efforts, could do no better than five or six miles an hour. The Rocket alone met all requirements. In a {5} seventy-mile run it averaged fifteen miles an hour and reached a maximum of twenty-nine. Years afterwards, when scrapped to a colliery, the veteran engine was still able, in an emergency, to make four miles in four and a half minutes. 'Truly,' declared Cropper, one of the directors who had stood out for the stationary engine and the miles of rope, 'now has George Stephenson at last delivered himself.'

Stephenson had the good fortune, he had earned it indeed, to put the top brick on the wall, and he alone lives in popular memory. But the railway, like most other great inventions, came about by the toil of hundreds of known and unknown workers, each adding his little or great advance, until at last some genius or some plodder, standing on their failures, could reach success. Both the characteristic features of the modern railway, the iron road and the steam motive power, developed gradually as necessity urged and groping experiment permitted.

The iron road came first. When men began to mine coal in the north of England, the need grew clear of better highways to bear the heavy cart-loads to market or riverside. About 1630 one Master Beaumont laid down broad {6} wooden rails near Newcastle, on which a single horse could haul fifty or sixty bushels of coal. The new device spread rapidly through the whole Tyneside coal-field. A century later it became the custom to nail thin strips of wrought iron to the wooden rails, and about 1767 cast-iron rails were first used. Carr, a Sheffield colliery manager, invented a flanged rail, while Jessop, another colliery engineer, took the other line by using flat rails but flanged cart-wheels. The outburst of canal building in the last quarter of the eighteenth century overshadowed for a time the growth of the iron road, but it soon became clear that the 'tramway' was necessary to supplement, if not to complete, the canal. In 1801 the first public line, the Surrey Iron Railway, was chartered, but it was not until 1825 that the success of the Stockton and Darlington Railway proved that the iron way could be made as useful to the general shipping public as to the colliery owner. At the outset this road was regarded as only a special sort of toll-road upon which any carrier might transport goods or passengers in his own vehicles, but experience speedily made it necessary for the company to undertake the complete service.

It took longer to find the new motive power, {7} but this, too, first came into practical use in the land where peace and liberty gave industry the fostering care which the war-rent Continent could never guarantee. Nowadays it seems a simple thing to turn heat energy into mechanical energy, to utilize the familiar expansive power of water heated to vapour. Yet centuries of experiment, slowly acquired mechanical dexterity, and an industrial atmosphere were needed for the development of the steam-engine, and later of the locomotive. Inventiveness was not lacking in the earlier days. In the second century before Christ, Hero of Alexandria had devised steam fountains and steam turbines, but they remained scientific toys, unless for the miracle-working purposes to which legend says that eastern priests adapted them. So in the seventeenth century, when the Norman, Solomon de Caus, claimed that with the vapour of boiling water he could move carriages and navigate ships, Cardinal Richelieu had him put in prison as a madman. About 1628 an Italian, Giovanni Branca, invented an engine which had the essential features of the modern turbine, but his crude apparatus lacked efficiency.

Once more the coal-mines of England set invention working on a definite, continuous {8} object. As the shafts were sunk to lower and lower levels, it became impossible to pump the water out of the mines by horse power, and the aid of steam was sought. Just at the close of the seventeenth century Savery devised the first commercial steam-engine, or rather steam fountain, which applied cold water to the outside of the cylinder to condense the steam inside and produce a vacuum; while Papin, one of the Huguenot refugees to whom industrial England owed so much, planned the first cylinder and piston engine. Then in 1705 Newcomen and Cawley, working with Savery, took up Papin's idea, separated boiler from cylinder, and thus produced a vacuum into which atmospheric pressure forced the piston and worked the pump. Next Humphrey Potter, a youngster hired to open and shut the valves of a Newcomen engine, made it self-acting by tying cords to the engine-beam, had his hour for play or idling, and proved that if necessity is the mother of invention, laziness is sometimes its father. Half a century passed without material advance; even as perfected in detail by Smeaton, the Newcomen engine required thirty-five pounds of coal to produce one horse-power per hour, as against one pound {9} to-day. Then James Watt, instrument-maker in Glasgow, seeing that much of the waste of steam was due to the alternate chilling and heating of the cylinder, added a separate condenser in which to do the chilling, and kept the temperature of the cylinder uniform by applying a steam-jacket. Later, by applying steam and a vacuum to each side of the piston alternately, and by other improvements, Watt, with his partner Boulton, brought the reciprocating steam-engine to a high stage of efficiency.

It took fifty years longer to combine the steam-engine and the rail. French and American inventors devised steam carriages, which came to nothing. England again led the way. At Redruth in Cornwall Boulton and Watt had a branch for the erection of stationary engines in Cornish tin-mines, in charge of William Murdock, later known as inventor of the system of lighting by gas. Murdock devised a steam carriage to run upon the ordinary highway, but was discouraged by his employers from perfecting the machine. Another mechanic at Redruth, Richard Trevithick, captain in a tin-mine, took up the torch, built a 'Dragon' for use on the common highway, but was baffled by the {10} hopeless badness of the roads, and turned to making a locomotive for use on the iron ways of the Welsh collieries. Two years later, in 1803, he had constructed an ingenious engine, which could haul a ten-ton load five miles an hour, but the engine jolted the road to pieces, and the versatile inventor was diverted to other schemes. Blenkinsop of Leeds in 1812 had an engine built with a toothed wheel working in a racked rail, which did years of good service; and next year at Wylam on the Tyne a colliery owner, Blackett, had the Puffing Billy built, and proved that smooth wheels would grip smooth rails. Still another year, and an engine-wright in a Tyneside colliery, George Stephenson, himself born at Wylam, devised the Bluecher, doubling effectiveness by turning the exhaust steam into the chimney to create a strong draught. Using this steam blast, and adopting the multitubular boiler from a French inventor, Seguin, Stephenson finally scored a triumph, due not so much to unparalleled genius as to dogged perseverance in working out his own ideas and in adapting the ideas of other men.

Thus by slow steps the steam railway had come. It was a necessity of the age. Crude means of transport might serve the need of {11} earlier days when each district was self-contained and self-sufficing. But now the small workshop and the craftsman's tool were giving way to the huge factory and the power-driven machine. The division of labour was growing more complex. Each district was becoming more dependent on others for markets in which to buy and to sell. Traffic was multiplying. The industrial revolution brought the railway, and the railway quickened the pace of the industrial revolution.

To some critics, as to Ruskin, railways have appeared 'the loathesomest form of deviltry now extant, animated and deliberate earthquakes, destructive of all nice social habits or possible natural beauty.' Animated and deliberate earthquakes they were indeed to prove, transforming social and industrial and political structures the world over. With the telegraph and the telephone, they greatly widened the scope and quickened the pace of business operations, making it possible, and therefore necessary, for the captain of industry or finance of the twentieth century to have under control ten times the press of affairs which occupied his eighteenth-century forerunner. The railway levelled prices and levelled manners. It enabled floods of settlers {12} to sweep into all the waste places of the earth, clamped far-flung nations into unity, and bound country to country.

Nowhere was the part played so momentous as in the vast spaces of the North American continent, and not least in the northern half. The railway found Canada scarcely a geographical expression, and made it a nation.




Water Transport—Land Trails—Westward in 1800—Progress 1830—1850: The Day of the Steamboat

British North America before the railway came was a string of scattered provinces. Lake Huron was the western boundary of effective settlement: beyond lay the fur trader's preserve. Between Upper and Lower Canada and the provinces by the Atlantic a wilderness intervened. With the peninsula of Ontario jutting southwest between Michigan and New York, and the northeastern states of the Union thrusting their borders nearly to the St Lawrence, the inland and the maritime provinces knew less of each other than of the neighbouring states.

Settlement clung close to river, lake, and sea. Till the Eastern Townships were settled, Lower Canada had been one long-drawn-out village with houses close set on each side of the river streets. Deep forest covered all the land save where the lumberman or settler had cut a narrow clearing or fire had left a {14} blackened waste. To cut roads through swamp and forest and over river and ravine demanded capital, surplus time, and strong and efficient governments, all beyond the possibilities of early days. On the other hand, the waterways offered easy paths. The St Lawrence and the St John and all their tributaries and lesser rivals provided inevitably the points of settlement and the lines of travel.

The development of water transport in Canada furnishes a record of the interaction of route and cargo, of need and invention, of enterprise and capital. First came the bark canoe, quick to build, light to carry round the frequent gaps in navigation, and large enough to hold the few voyageurs or the rich-in-little peltry that were chief cargo in early days. It was the bark canoe that carried explorer, trader, soldier, missionary, and settler to the uttermost north and south and west. For the far journeys it long held its place. Well on into the nineteenth century fur traders were still sending in supplies from Montreal and bringing back peltry from Fort William in flotillas of great bark canoes. For shorter voyages the canoe gave place to the larger and clumsier bateau, the characteristic eighteenth-century conveyance. After the War of 1812 {15} the increasingly heavy downward freight of grain and potash led to the introduction from the United States of the still larger Durham boats. Along the coast and on the Great Lakes the sailing schooner long filled a notable place. Finally the steamboat came. In 1809, only one year after the Clermont had begun its regular trips on the Hudson, and before any steamboat plied in British home waters, John Molson of Montreal with John Bruce and John Jackson—luckily for Canada not all three baptized 'Algernon'—built at Montreal the 40-ton steamer Accommodation. Seven years later Upper Canada's first steamboat was launched, the 740-ton Frontenac, built at the then thriving village of Ernestown. The fleet of river and lake steamers multiplied rapidly. The speed and certainty and comfort—relative, at least—of the steamboat at once gave a forceful impetus to settlement and to travel, and for some sections ended the pioneer period.

Meanwhile, the waterways were being improved. Little was needed or done in the great network of New Brunswick's rivers or in Nova Scotia's shorter streams, but on the St Lawrence system, with a fall of nearly six hundred feet from Lake Erie to tide-water at {16} Three Rivers, canal construction was imperative. As early as 1779 canals were built round the rapids between Lake St Louis and Lake St Francis, on the St Lawrence, with a depth of only a foot and a half of water on the sills. Far westward, at Sault Ste Marie, the energetic North-West Company built, about 1800, a canal half a mile long. In the early twenties, after the failure of a private company, the province of Lower Canada constructed a boat canal between Montreal and Lachine, and a less successful beginning was made on a canal round the Chambly rapids on the Richelieu. In Upper Canada the British government built the Rideau Canal, chiefly for military purposes. The Welland Canal was begun by a private company in 1824, opened for small boats five years later, and taken over by the province in 1840, after a record notable alike for energy and perseverance and for jobbery and inefficiency. After the Union of 1841, when population, revenue, and credit were all growing, energetic digging was begun on the St Lawrence system of canals, and by 1848 vessels of twenty-six foot beam and drawing nine feet of water could sail from the ocean to Chicago.

Land transport came later than water {17} transport, and developed by slower stages. Road-making was an art which the settler learned slowly. The blazed trail through the woods sufficed for the visit to the neighbour or the church, or for the tramp to the nearest grist-mill with a sack of wheat on one's back. 'He who has been once to church and twice to mill is a traveller,' the common saying ran. The trail broadened to a bridle-road for pack-horse or saddle-horse. The winter, that maligned stepmother of Canada, gave the settler an excellent though fleeting road on the surface of the frozen river or across the hard-packed snow. Through the endless swamps jolting 'corduroy' roads were built of logs laid crosswise on little or no foundation. With more hands and more money there came the graded road, fenced and bridged, but more rarely gravelled. Finally, little earlier than the railway, came the macadamized road, and that peculiar invention of Upper Canada, the plank road, built of planks laid crosswise on a level way, and covered with earth to lessen the wear and noise. Upon these roads carriole or caleche, 'cutter' or 'lumber-wagon,' carried the settler or his goods to meeting-place and market. By 1816 a stage route was established from Montreal to Kingston, a year later {18} from Kingston to York (Toronto), and in 1826 from Toronto to Niagara and from Ancaster to Detroit.

Road-making policy fluctuated between the Scylla of local neglect and the Charybdis of centralized jobbery. At first the settler was burdened with the task of clearing roughly the road in front of his own land, but the existence of vast tracts of Clergy Reserves, or other grants exempt from clearing duties, made this an ineffective system. Labour on roads required by statute, whether shared equally by all settlers or allotted according to assessed property, proved little more successful. On the other hand, the system of provincial grants for road-building too often meant log-rolling and corruption, and in the Canadas it was discontinued after the establishment of municipal institutions in 1841. The reaction to local control was perhaps too extreme, and we are to-day recognizing the need of more aid and control by the central provincial authorities. In the Maritime Provinces the system worked better, and when the railway came these provinces possessed a good network of great roads and by-roads, without a single toll-gate. With the passing of the Joint Stock Act by the Canadian {19} legislature in 1849, toll-road companies were freely organized, and many of the leading roads were sold by the government to these private corporations, and without question their operations brought marked improvement for a time.

To realize more concretely the mode of travelling before the railway came, let us make the journey, say, from Quebec to Toronto, at three different periods, in 1800, in 1830, and in 1850.

'In no part of North America,' wrote an experienced traveller just at the close of the eighteenth century, 'can a traveller proceed so commodiously as along the road from Quebec to Montreal.'[1] A posting service had been established which could fairly be compared with European standards. At regular intervals along the road the traveller found post-houses, where the post-master kept four vehicles in readiness: in summer the caleche, a one-horse chaise built for two passengers, with a footboard seat for the driver and with the body hung by broad leather straps or thongs of bull's hide; in winter the carriole, or sledge, with or without {20} covered top, also holding two passengers and a driver. The drivers were bound to make two leagues an hour over the indifferent roads, and in midwinter and midsummer the dexterous, talkative, good-humoured driver, or marche-donc, usually exceeded this rate for most of the journey of three days. From Montreal onward no one travelled in winter except an occasional Indian messenger. Even in summer few thought of going by land, though some half-broken trails stretched westward. The river was the king's highway. The summer traveller at once purchased the equipment needed for a week's river journey—tent, buffalo-skins, cooking utensils, meat and drink—and secured passage on board one of the bateaux which went up the river at irregular intervals in brigades of half a dozen. The bateau was a large flat-bottomed boat, built sharp both at bow and stern, with movable mast, square sail, and cross benches for the crew of five or six. Sometimes an awning or small cabin provided shelter. In still water or light current the French-Canadian crew—always merry, sometimes sober, singing their voyageur songs, halting regularly for the inevitable 'pipe'—rowed or sailed; where the current was strong they {21} kept inshore and pushed slowly along by 'setting' poles, eight or ten feet long and iron shod; and where the rapids grew too swift for poling, the crews joined forces on the shore to haul each bateau in turn by long ropes, while the passengers lent a hand or shot wild pigeons in the neighbouring woods. At night the whole party encamped on shore, erecting tents or hanging skins and boughs from branches of friendly trees. With average weather Kingston could be reached in seven or eight days; the return journey down-stream was made in two or three. From Kingston westward the journey was continued in a sailing schooner, either one of the government gunboats or a private venture, as far as York, or even to the greater western metropolis, Queenston on the Niagara river. In good weather thirty or forty hours sufficed for the lake voyage, but with adverse winds from four to six days were frequently required.

Thirty years later those to whom time or comfort meant more than money could make the through journey in one-third the time, though for the leaner-pursed the more primitive facilities still lingered. For the summer trip from Quebec to Montreal the steamer had outstripped the stage-coach. Even with {22} frequent stops to load the fifty or sixty cords of pine burned on each trip—how many Canadian business men secured their start in prosperity by supplying wood to steamers on lake or river!—the steamer commonly made the hundred and eighty miles in twenty-eight hours. The fares were usually twenty shillings cabin and five shillings steerage, though the intense rivalry of opposing companies sometimes brought reckless rate-cutting. In 1829, for instance, each of the two companies had one boat which carried and boarded cabin passengers for seven and six-pence, while deck passengers who found themselves in food were crowded in for a shilling.

From Montreal to Lachine the well-to-do traveller took a stage-coach, drawn by four spanking greys, leaving Montreal at five in the morning, for stage-coach hours were early and long. At Lachine he left the stage for the steamer, at the Cascades he took a stage again, and at Coteau transferred once more to a steamer for the run to Cornwall. Shortly after 1830 steamers were put on the river powerful enough to breast the current as far as Dickenson's Landing, leaving only a twelve-mile gap to be filled by stage, but in 1830 it {23} was still necessary, if one scorned the bateau, to make the whole journey from Cornwall to Prescott by land, over one of the worst through roads in the province. The Canadian stage of the day was a wonderful contrivance, a heavy lumbering box, slung on leather straps instead of springs, and often made without doors in order that, when fording bridgeless streams, the water might not flow in. With the window as the only means of exit, heavy-built passengers found it somewhat awkward when called upon, as they often were, to clamber out in order to ease the load uphill, or to wait while oxen from a neighbouring farm dragged the stage out of a mud-hole. The traveller who 'knew the ropes' provided himself with buffalo-skins or cushions; others went without. Arrived at Prescott, the passengers shifted to a river steamer, fitted more commodiously than the little boats used in the lower stretches, but still providing no sleeping quarters except in open bunks circling round the dining-saloon.

For thousands of the immigrants who were pouring into Upper Canada the fares of the river steamer were still prohibitive. Many came on bateaux, sometimes poled along as {24} of yore, sometimes taken in tow by a steamer. Often more than a hundred immigrants, men, women, and children, would be crowded into a single thirty-foot bateau, 'huddled together,' a traveller notes, 'as close as captives in a slave trader, exposed to the sun's rays by day, and the river damp by night, without protection.'[2] Still more used the Durham boat for the river journey. This famous craft was a large, flat-bottomed barge, with round bow and square stern. With centre-board down and mainsail and topsail set on its fixed mast, it made fair progress in the wider stretches. But on the up trip it was for the most part poled or 'set' along. Each of the crew took his stand at the bow end of one of the narrow gangways which ran along both sides of the boat, set firmly in the river bottom his long, heavy, iron-shod pole, put his shoulder to it, and, bending almost double, walked along the gangway to the stern and inch by inch forced the boat up-stream. 'The noise made by the clanking of the iron against the stones, as the poles were drawn up again toward the bow, could be heard for a long distance on a calm summer's day.' Finally, at Prescott or Kingston the Durham boat was exchanged for {25} the lower decks of the steamer, and the rest of the journey made with somewhat greater speed, if not much greater comfort.

The twenty years which followed 1830 saw the steamboat in its prime. The traveller going westward from Quebec in 1850 had a simple task before him: a change at Montreal was the only necessary break in a relatively comfortable and speedy journey. Two days now sufficed for the trip from Montreal to Toronto. In the United States, river boats had been evolved which far surpassed anything Europe had to offer in luxury and speed. Canadian business men were not far behind, and the St Lawrence lake and river route was well supplied with crack steamers, of the Royal Mail and rival lines, or with independent boats. The competition was at times intense, both in fares and in speed. Many Canadians of the day, absorbed in the local or personal rivalries of these boats, and impressed by their magnificence and reliability, were convinced that the last word in transportation had been said. Yet, on the lake and river, winter barred all through traffic. The main turnpike roads of the interior were greatly improved, but even on these long-distance traffic was expensive, and the {26} by-roads, especially in the spring and autumn, were impassable except at a snail's pace. For traffic of town with town and province with province some means of transport less dependent on time and tide was urgently needed.

[1] Isaac Weld, Travels through the States of North America and the Provinces of Upper and Lower Canada (Fourth Edition), p. 300.

[2] Shirreff, A Tour through North America, p. 143.




National Unity—The Fight for Western Trade

We have seen how in England a succession of workers almost apostolic in continuity had brought the steam railway to practical success, and how in Canada, before the railway came, men were making shift with bateau and steamer, with stage-coach and cart and caleche, to carry themselves and their wares to meeting-place and market. Now we may glance for a moment at the chief hope and motive of those who brought the locomotive across the seas.

In all but the very earliest years of railway planning and building in Canada, two aims have been dominant. One has been political, the desire to clamp together the settlements scattered across the continent, to fill the waste spaces and thus secure the physical basis for national unity and strength. The other has been commercial, the desire to capture the trade and traffic of an ever-expanding and {28} ever-receding west. Local convenience and local interests have played their part, but in the larger strategy of railway building the dominant motives have been political and commercial. They have been blended in varying proportions; each has acted against the other as well as with it, but at all times they give the key to facts which otherwise remain a meaningless jumble of dates and figures.

The political motive is familiar and needs only brief reference. That the present Canada is not a natural geographical unit is an undeniable fact. Each of the principal sections has more natural connection with the corresponding section of the United States than with the other parts of Canada. And sixty years ago it was doubtful whether any common sentiment could take the place of the physical unity which was lacking. There was, of course, no national consciousness, based on common history and common aspirations. At best the link of the scattered colonies was that of common loyalty to the British crown, and at worst a common inherited antagonism to the great republic to the south. Yet far-seeing and courageous men were not content to accept the decrees of geography or of the {29} diplomats who had been over-generous in conceding territory to American claims. They sought unity and understanding, out of fear of aggression from their overshadowing neighbours and out of faintly shaping hope of what the northern half-continent might become.

For unity, knowledge and daily intercourse were needed; for knowledge and intercourse, speedy and cheap transportation was essential. Within each province and between the two Canadas much had been done, but neither river, canal, nor turnpike could serve to annihilate the vast distances that separated east from west and west from farthest west. Only the railway could achieve such a task.

But more was needed than patriotic sentiment. All-red speeches might adorn a banquet or win an election, but facts—or fictions—as to freight and dividends were needed to beguile the capital from investors' pockets. The hope of securing for the Canadian provinces the trade and traffic of the golden West was, in early years as in late, much the strongest factor in railway policy.

When the white man came to North America, he found himself hemmed in to the Atlantic coast by the long range of the Appalachians. These mountains, though not {30} lofty, were rugged and covered with dense forests and tangled undergrowth. There were few doorways to the great open spaces beyond. On the far north the southward intrusion of the ocean, known as Hudson Bay, opened a precarious way, important in the early days of the white man's period, possibly to become important again in our own, but negligible during the intervening years. From the south, entrance could be had by the Mississippi and its tributaries, offering for most of the year ten thousand miles of navigable waters. In the east the St Lawrence system, stretching three thousand miles westward from the sea, and the Hudson and Mohawk rivers, passing through a gap in the Alleghanies, offered still more convenient access.

Early and late in the history of the white man's America the land and the trade of the interior have been the prize sought by rival nations and rival cities, and the possession of a speedy and convenient route has been the means of securing the prize. The later warfare was less spectacular than the old, but no less keen. The navvy took the place of the Indian, pick and shovel and theodolite the place of bow and musket, and a lower freight {31} by a cent on a bushel of wheat became the ammunition in place of the former glass beads or fire-water. But seventeenth- or eighteenth-century Englishmen and Frenchmen on Hudson Bay, Spaniards and Frenchmen on the Mississippi, Frenchmen and Englishmen on the St Lawrence, Dutchmen and Englishmen on the Hudson, did not strive more eagerly for control than the Montreal and Halifax, Portland and Boston and New York, Philadelphia and Baltimore and New Orleans of the nineteenth century. The struggle became especially intense when the advancing flood of settlers cut their way through the Appalachian woods and burst into the prairies of the Mississippi valley. There was no longer a ten-year struggle to clear a space of forty or fifty acres; at once the soil was ready for the plough. For a few years the grain of the valley states was needed for their own inrushing settlers, but a surplus grew rapidly and had to find an outlet in the east or in Europe. The miraculous speed of western settlement and the magnitude of the prize at stake soon centred public interest on the question of the route which was to provide this outlet.

The Mississippi route was the first to be {32} developed. In canoe and pirogue, bateau, flatboat, and ark, settlers went up and produce came down. But the winding stream, the shifting channel, the swift current, the frequent snag and sand-bar made navigation down-stream dangerous and navigation upstream incredibly slow: the heavier vessels took three months for the trip from New Orleans to Louisville. With the coming of the steamboat a strong impetus was given alike to settlement and to export trade. By the forties New Orleans ranked the fourth port in the world and the Mississippi valley exceeded the British Isles in the ownership of ships' tonnage. In 1850 the Mississippi still carried to the sea cargoes twice the value of those that sought the Lakes and the Erie Canal, though in the import trade these proportions were reversed. At this time a line drawn east and west through the centre of Ohio marked the commercial watershed. Not until after the Civil War did the glories of the Mississippi pass away.

Next, New York devised its master-stroke, the Erie Canal. Gouverneur Morris and De Witt Clinton saw the opportunity which the Mohawk-Hudson cleft in the Appalachian barrier offered, and the state rose to it. {33} Digging was begun in 1817, and in 1825 the first barge passed from Lake Erie to the Hudson. At first the canal was only a four-foot ditch, but it proved the greatest single factor in the development of the region south of the Lakes. Prosperous cities—Buffalo, Lockport, Rochester, Syracuse, Utica, Schenectady—sprang up all along the route. Cost of transport from Buffalo to New York was cut in four. The success of New York led Pennsylvania to build canals through the state to Pittsburg, with a portage railroad over the Alleghanies, while in the west canals were dug to connect Lake Erie with the Ohio, and Lake Michigan with the Illinois and the Mississippi.

To the Canadian of that day the West meant Upper Canada or Canada West, and 'the far west' meant Illinois and Indiana. The Saskatchewan was to him little more than the Yang-tse-Kiang. But although the far west was not under his own flag, it dominated his thoughts as greatly as the North-West has dominated our thoughts half a century later. Canada sought its share of the western trade. The Canadian provinces were thinly peopled, their revenues were scanty and their credit low, but the example of New York stirred them to the effort to remove the barriers to {34} navigation in the St Lawrence, and to offer their magnificent lake and river ship-route against the petty barge canal which was capturing the western trade. The Welland Canal was built to carry east-bound traffic beyond the point where Buffalo tapped it, and by 1848, as we have seen, canals were completed on the St Lawrence, providing a nine-foot waterway from Chicago to Montreal.

It was a magnificent effort for a struggling colony. But it was scarcely finished—the paeans of self-congratulation on the unexpected discovery of an enterprise quite Yankee in its daring were still echoing—when it was found to have been made largely in vain. So far from monopolizing the trade of the western states, the St Lawrence route Was not even keeping the east-bound traffic of Upper Canada itself. The reasons were soon plain. The repeal in 1846 of the Corn Laws and in 1848 of the differential duties in favour of the St Lawrence route were temporary blows. The granting of bonding privileges by the United States in 1845 drew traffic from Canada to southern routes. Ocean rates were cheaper from New York than from Montreal; in 1850, for example, the freight on a barrel of flour from New York to {35} Liverpool was 1s. 3 1/2d., while from Montreal it was 3s. 0 1/2d. This was because the majority of the vessels arriving at Montreal came in ballast, and also because on the outward voyage the offerings of timber made rates high. Timber enjoyed a preference in the British market, and, as has happened since, this preference was simply absorbed by the vessel owner. But most important of all, in the United States the railway, with its speedy, all-year service, had already taken the place of the canal. The Canadian ports were fighting with weapons obsolete before completed.




Portage Roads—Projects of the Forties—The St Lawrence and Atlantic—The Great Western—The State and the Railway

From the beginning in Canada, to a much greater degree than in Great Britain or in the United States, the railway was designed to serve through traffic. But it was regarded at first as only a very minor link in the chain. River and canal were still considered the great highways of through traffic. Only where there were gaps to be bridged between the more important waterways was the railway at first thought profitable. In the phrase of one of the most distinguished of Canadian engineers, Thomas C. Keefer, the early roads were portage roads.

In 1832, two years after the completion of the Liverpool and Manchester Railway, a charter was granted by the legislature of Lower Canada to the Company of the Proprietors of the Champlain and St Lawrence Railroad, for a line from Laprairie on the St Lawrence to St Johns, sixteen miles distant {37} on the Richelieu river, just above the rapids. From St Johns transportation to New York was easily effected, through the Richelieu to Lake Champlain and thence to the Hudson. This portage road promised to shorten materially the journey from Montreal to New York.

Construction was begun in 1835, and the road opened for traffic in July 1836. The rails were of wood, with thin flat bars of iron spiked on. These were apt to curl up on the least provocation, whence came their popular name of 'snake-rails.' At first horse power was used, but in 1837 the proprietors imported an engine and an engineer from England. Some premonition of trouble made the management decide to make the trial run by moonlight. In spite of all the efforts of engineer and officials, the Kitten would not budge an inch. Finally an engineer, borrowed from the Baltimore and Ohio Railroad, reported that all that was needed was 'more wood and water,' and given these the Kitten gambolled along at twenty miles an hour.

The Champlain and St Lawrence was at first operated only in the summer, when its services as a portage route were most needed. After a decade of moderately successful working, it was decided, significantly, to lengthen {38} the rail and shorten the water section of the route. By 1852 the rails had been extended northward to St Lambert, opposite Montreal, and southward to Rouse's Point, on Lake Champlain. Twenty years later this pioneer road, after a period of leasing, was completely absorbed by the Grand Trunk Railway.

For ten years the sixteen-mile Champlain and St Lawrence was the sole steam railway in British North America, while by 1846 the United Kingdom had built over twenty-eight hundred miles, and the United States nearly five thousand. Political unrest, commercial depression, absorption of public funds in canals, hindered development in Canada. Many projects were formed and charters secured—for roads in the western peninsula of Upper Canada, between Cobourg and Rice Lake, on the Upper Ottawa, in the Eastern Townships, and elsewhere—but they all came to nothing. It was not until the railway mania broke out in England in the middle forties—when 'King' Hudson, first of the great promoters and speculators, turned all to gold; when ninety schemes were floated in a single week, calling for eighty million pounds; when companies capitalized at over seven hundred millions scrambled for charters {39} and all England fought for their shares—that Canadian promoters found interest awakened and capitalists keen to listen. At the same time, the active competition of United States roads for the western traffic and the approaching completion of the St Lawrence canal system prompted further steps. A second stage in Canadian railway building had begun.

First may be noted three small lines, which were in their beginnings chiefly portage roads of the most limited type. The Montreal and Lachine, begun in 1846 and completed in 1847, was the second complete road built. Its track of eight miles took the place of the earlier stage route round the Lachine rapids. Five years later an extension, the Lake St Louis and Province Line, was built from Caughnawaga, on the opposite shore of the St Lawrence, to the boundary and beyond to Mooer's Junction, where it made connection with American roads, and thus offered a route from Montreal to New York rivalling the older Champlain and St Lawrence route. A steam ferry, which could carry a locomotive and three loaded cars, was used for crossing from Lachine to Caughnawaga. The enlarged line, known as the Montreal and New York Railroad, did not prosper, and was {40} eventually absorbed by its rival, the Champlain and St Lawrence. The third completed road, the St Lawrence and Industry Village, was also built in Lower Canada, running from Lanoraie on the north bank of the St Lawrence twelve miles to the village of Industry, later Joliette. It was opened for traffic in 1850, and was a road for use in summer only. Meanwhile, the desirability of building a road to circumvent Niagara had not escaped attention. In 1835 the Erie and Ontario Railroad was chartered, and in 1839 the line was opened from Queenston to Chippawa. The grades near Queenston were too steep for the locomotives of the day, and the road was operated by horses; even so, it halted a hundred feet above the level of the river, and failed to make good its promise as an effective portage route. In 1852 the charter was amended, and two years later the road was rebuilt from Chippawa to Niagara-on-the-Lake, and operated by steam. It was later extended to Fort Erie and absorbed by the Canada Southern.

More ambitious schemes were under way—the planning of the St Lawrence and Atlantic in Canada East, and of the Great Western and later the Northern in Canada {41} West. These roads were all designed to secure for Canadian routes and Canadian ports a share of the through traffic of the West. They were all links in longer chains; the time of independent through roads had not yet come. The St Lawrence and Atlantic was built to secure the supremacy of the upper St Lawrence route by giving Montreal a winter outlet at Portland. The Northern, running from Lake Ontario at Toronto to Georgian Bay at Collingwood, was a magnified portage road, shortening by hundreds of miles the distance from Chicago and the upper lakes to the St Lawrence ports. The Great Western, connecting Buffalo and Detroit, was the central link in the shortest route between New York and Chicago. Not only were these roads important in themselves, but the experience acquired in the endeavour to finance and construct them largely determined the policy of the great era of railway construction which began with the chartering of the Grand Trunk.

The St Lawrence and Atlantic was the Canadian half of the first international railway ever built. At the outset much more than half of the enterprise and activity was centred in the United States, for the Canadas {42} were still apprentices in railway promotion and construction. The ambition of an American seaport prompted the planning of the line, the untiring energy of an American promoter made it possible, and American contractors built the greater part.

The little city of Portland possessed the most northerly harbour on the Atlantic coast of the United States. Mr John A. Poor, whose lifetime was devoted to the extension of railways in northern New England, dreamed of making it, by a road to Montreal, the outlet of the trade of the West, at least so far as freight traffic went. Passengers and mails, he conceived, could best be carried to Europe from Halifax, nearly six hundred miles nearer than New York to Liverpool, but the railway connecting Halifax with the large American cities should pass through Portland, and thus make it an important divisional point, if not a terminus. His enthusiasm fired his fellow-citizens: the city subscribed for stock in the proposed road to Montreal, and guaranteed bonds, while private subscriptions mounted still higher, at least on paper. More difficulty was experienced in inducing allies in Montreal to undertake the Canadian half of the road. Before 1845, however, Montreal {43} business men were convinced that a railway to Portland or Boston offered them the best means of recovering from the blow inflicted by the repeal of the British preference on Canadian wheat and flour. If Montreal could not be the New York of Canada, it might at least occupy the position which Buffalo was now achieving, gathering all the trade of the interior to forward it in summer and especially in winter over the new road. The advantage of such a line in the development of the Eastern Townships was also evident.

The only question in dispute in Canada was as to the relative merits of the Boston and the Portland route. The superior energy of the Portland promoters weighed down the scale in favour of their city. In February 1845 Poor struggled five days through a north-east blizzard, and reached Montreal just in time to turn the vote of the Board of Trade against Boston. He organized a spectacular race of express sleighs to disprove the claim that, though the British packet called at Portland before going on to Boston, the route by Boston would prove speedier. Relays of teams were provided all along the rival roads from Boston and from Portland, five to fifteen miles apart; evergreen bushes {44} were set up in the snow to mark the road; part of the Montreal mail was taken off at Portland, and part at Boston, and dispatched by the rival couriers. The Portland relay covered the distance, nearly three hundred miles, in twenty hours, and dashed into Montreal, with all colours flying, twelve hours ahead of the Boston contingent. The cheers that greeted the victors marked the definite turn of popular favour toward the Portland route. Two allied companies were incorporated—the Atlantic and St Lawrence to build the United States section of the railway, and the St Lawrence and Atlantic to build from Montreal to the border.

The St Lawrence and Atlantic was a valuable medium of experience, if not of traffic. In its management were found the leading business men of Montreal, such as Moffat, M'Gill, Molson, Stayner, and Torrance. At first all was fair. Subscriptions came in freely from Montreal and the Eastern Townships. One of the youngest of the directors, Alexander T. Galt, then commissioner of the British-American Land Company, succeeded in floating a large quantity of stock in England—the first of countless railway appeals to the London market—only to have the subscriptions {45} withdrawn in 1846 when the Hudson bubble burst. The Canadian stockholders put up what money they could. The city of Montreal took L125,000 stock. The British-American Land Company and the Montreal Seminary each lent L25,000. Country subscribers were permitted to make payments in pork or eggs for the use of the construction gang, though one director resigned because not allowed to turn in his farm. The contractors, Black, Wood and Company, as was customary in the United States at the time, took a large portion of their payment in stock. Still, funds were lacking. Internal difficulties developed; directors did not direct; and in 1849 the finances were found to be in a hopelessly tangled state. Galt then took charge as president, with John Young—forwarder and born promoter, active in all transportation schemes, whether for canal, railway, or bridge—as vice-president. Under their skilful financing the work went on, but scarcely forty miles could be opened in 1849. To complete the road to the border, in the depression which prevailed, seemed utterly beyond the unaided resources of private capitalists, and the directors turned to the government for aid.

Meanwhile, Upper Canada lagged in action, {46} although schemes were many. Omitting merely local projects, the roads most in the public eye were those leading west and north from Lake Ontario. The Great Western project had been longest under way, and showed a significant evolution. In 1834 the legislature of Upper Canada had granted a charter to the London and Gore Railroad Company. This road was designed to carry the products of the rich western peninsula to the bordering lakes, and chiefly to Lake Ontario. The main line was to run in the direction of Governor Simcoe's great highway, Dundas Street, from Burlington Bay to London, while power was taken to extend the road to Lake Huron and the navigable waters of the Thames. Nothing was done under this charter. When it was renewed by an Act of 1845, the name was changed to the Great Western, and, more important, the route was altered to extend from the Niagara river via Hamilton to Windsor and Sarnia. For meanwhile the New York Central had reached Buffalo, and the Michigan Central was being pushed westward from Detroit toward Chicago. A road through Canada would provide a shorter link than one south of Lake Erie, and the Great Western was designed to fill this gap.


With all the possibilities of through and local traffic, and of comparatively good grades and few curves, the road was long in starting. An eminent American engineer, Charles B. Stuart, reported glowingly on the prospects. Two citizens of Hamilton, Allan MacNab, fiery politician and calculating lobbyist, and Isaac Buchanan, untiring advocate of railways, protection, and paper money, threw themselves into the campaign. Samuel Zimmermann, the best known contractor of the period, a Pennsylvanian who had come to Canada to take a Welland Canal contract, and stayed to be the power behind the scenes in the provincial legislature, was prepared to build the road. Hudson gave the scheme his approval. All to no immediate purpose. The contracts were let, ground was broken at London in 1843, but the money to build was not forthcoming. In consequence the Great Western also turned to parliament for aid.

The Toronto, Simcoe and Huron Union Railroad Company—later known as the Northern—the first road in Upper Canada on which steam locomotives were used, was still slower in emerging from the promotion stage. The idea of building a great portage road between Lake Huron and Lake Ontario was an obvious {48} one, and proposals for its construction were frequent. It was not until the scheme was taken up by Frederick Chase Capreol, a sanguine and ingenious Englishman many years resident in Toronto, that any real progress was made. Capreol conceived the brilliant idea of combining the lure of a lottery and the increment of land values to finance a road from Toronto to Georgian Bay. His proposal was to raise funds by a lottery for the purchase of 100,000 acres of land along the route of the railroad, and to pay for the road out of the increase in the value of the land. Objections moral and financial were urged, and Capreol modified his scheme. In 1849 an Act was passed granting a charter and permitting the raising of money either by subscription or by lottery, but it was reserved by the governor-general for royal assent, on account of the lottery clause. Capreol, nothing daunted, sailed for England, and in seven weeks was back with royal assent assured. The lottery, for all its alluring promises, fell flat. Then the Northern, too, clamoured for public aid.

With these local roads under way or actively promoted, still larger projects loomed up. A line from Montreal to Toronto, paralleling the St Lawrence, and thus for the first {49} time competing with water transport instead of merely supplementing it, began to be talked of as possible. The need of bringing the Maritime Provinces into closer touch with the Canadas lent support to plans of a road from Halifax to Quebec. But for these extensive schemes public aid was even more indispensable.

Hitherto the government of British North America had framed no definite or continuous railway policy. There had been general agreement that railway building should be left to private enterprise. In 1832, when the charter of the Champlain and St Lawrence was under discussion in the legislature of Lower Canada, some members advocated government ownership, but Papineau, the French-Canadian leader, protested against the jobbery that would follow. In the forties the government of Canada was selling its highways to toll-companies, and was not likely to embark on railway construction. In several later charters provision was made for state purchase, after a term of years, at cost plus twenty or twenty-five per cent. Control of private companies in the interest of the shipper was sometimes sought. In the charter of the Champlain and St Lawrence a maximum rate was prescribed {50} at 3d. a mile for passengers and 9 3/4d. a mile per ton of freight, subject to reduction when profits exceeded twelve per cent. In Upper Canada the earlier charters set no maximum, though the governor in council was given power to approve rates. It appeared to be held that different forwarding companies would make use of the iron way, and afford sufficient competition to protect shippers and passengers against extortion. New Brunswick in 1836 revealed the not modest expectations of profit which prevailed. It provided, in the St Andrews and Quebec charter, that after ten years tolls, if excessive, might be reduced to yield only twenty-five per cent profit. The same sanguine expectations were reflected in the provision made in eight charters issued by Lower Canada between 1845 and 1850, that half the profits over a minimum varying from ten to twenty-four per cent were to go to the state.

The prevalent belief in the great profits to be obtained influenced public opinion against any grant of government aid, except during a brief period before the Rebellion of 1837, when the lavish policy of state construction and state bonuses adopted by the neighbouring republic proved contagious in Upper Canada. {51} Under the influence of that example the Cobourg Railroad was to be granted a loan of L10,000 as soon as an equal sum was privately subscribed and one-third was paid up. The Toronto and Lake Huron was promised L3 for every L1 of private capital expended, up to L100,000, while the London and Gore was offered a loan of twice that sum; in both these cases the loan was to be secured not only by a lien on the road, but by the liability of the communities benefited to a special tax. None of these generous offers was taken up, and they were not renewed. But a growing realization of the importance of railways and of the evident difficulty of building them in Canada solely by private funds compelled the formation of a new policy of state assistance. This new policy ushered in the first great period of railway construction.




The New State Policy—The Canadas: First Phase—The Maritime Provinces—Halifax to Quebec—European and North American—Howe's Negotiations—Hincks to the Rescue—The Maritime Provinces—The Canadas: Second Phase—Struggle for the Contract—Floating the Grand Trunk—Construction Under Way—The Grand Trunk in Straits—Causes of Failure—Speculation and Jobbery—Great Western and Northern—The Canadas: Third Phase—Municipal Enterprise

It has been seen that by the close of the forties British North America was realizing both the need of railway expansion and the difficulty of financing it. Other factors combined to bring about the intervention of the state on a large scale. Both in the Canadas and in the Maritime Provinces political disputes were giving place to economic activities. The battle of responsible government had been fought and won. Men's energies were no longer absorbed by constitutional strife. Baldwin and LaFontaine were making way for Hincks and Morin; Howe had turned to constructive tasks. Responsibility was bringing new confidence and new initiative, though colonial dependence still continued to hamper enterprise. British and American contractors discovered the virgin field awaiting them, and local politicians discovered the cash value of votes and influence. The example set in the United States was powerful. Massachusetts {53} had guaranteed bonds of local roads to the extent of eight millions, without ever having to pay a cent of the interest; and though New York's experience had been more chequered, the successes were stressed and the failures were plausibly explained away.

The eight or ten years which followed 1849 are notable not only for a sudden outburst of railway construction and speculative activity throughout the provinces, but for the beginning of that close connection between politics and railways which is distinctively Canadian. In this era parliament became the field of railway debate. Political motives came to the front: 'statesmen' began to talk of links of Empire and 'politicians' began to press the claims of their constituencies for needed railway communications. Cabinets realized the value of the charters they could grant or the country's credit they could pledge, and contractors swarmed to the feast. 'Railways are my politics,' was the frank avowal of the Conservative leader, Sir Allan MacNab.

Three names are closely linked with this new policy—those of Howe in Nova Scotia, Chandler in New Brunswick, and Hincks in Canada.

Francis Hincks, merchant, journalist, and {54} politician, moderate reformer, and Canada's first notable finance minister, took the initiative. As inspector-general in the second Baldwin-LaFontaine Cabinet, he brought down the first instalment of his railway policy in 1849. In the previous session a committee of the House had considered the demand of the Great Western and of the St Lawrence and Atlantic for assistance, and had discussed the less advanced proposals for railways from Montreal to Toronto and from Quebec to Halifax. Allan MacNab, as chairman of the committee, had listened sympathetically to the plea of Allan MacNab, president of the Great Western, and the committee had reported in favour of guaranteeing the stock of the two companies to the extent of a million sterling. No action was taken at this session. Meanwhile Hincks, by instruction of his colleagues, had drawn up two memoranda—one suggesting that the crown lands in the province might be offered as security for the capital necessary to build the road within the province, and the other urging the Imperial government to undertake the road from Halifax to Quebec. Capitalists gave no encouragement to the first suggestion, and the British government had not replied to the {55} second by the end of the session of 1848-49. Accordingly, in April 1849 Hincks brought down a new policy, based upon a suggestion of the directors of the St Lawrence and Atlantic. The proposal was, to guarantee the interest, not exceeding six per cent, on half the bonds of any railway over seventy-five miles long, whenever half the road had been constructed, the province to be protected by a first charge after the bondholders' lien. MacNab seconded the resolution; voices from Bytown and the Saguenay mildly questioned the policy, but the resolution passed unanimously.

Even with this aid construction did not proceed apace. It was still necessary for the companies to complete half the road before qualifying for government assistance. This the St Lawrence road effected slowly, in face of quarrels with contractors, repudiation of calls by shareholders, and hesitancy of banks to make advances. The Great Western did not get under way until 1851, when American capitalists, connected with the New York Central, took shares and a place on the directorate. In the same year the Toronto, Simcoe and Huron, later known as the Northern, began construction.

Meanwhile suggestions from the Maritime {56} Provinces had brought still more ambitious schemes within practical range, and these led Hincks to take the second step in his policy of aid to railways.

In the Maritime Provinces, from 1835 to 1850, many railways had been projected, but, with the exception of a small coal tramway in Nova Scotia, built in 1839 from the Albion coal-mines to tide-water, not a mile was built before 1847. There, as elsewhere, the pamphleteer and the promoter acted as pioneers, and the capitalist and the politician took up their projects later. The plans which chiefly appealed to public attention looked to the linking up of St Andrews, St John, and Halifax with Quebec and Montreal and with the railways of Maine. From the outset the projects in these provinces were much more ambitious than the local beginnings in the Canadas. They were more markedly political and military in aim, and in consequence depended in greater measure upon the aid of the British government. When at last construction was begun, the policy of provincial ownership was more widely adopted.

When in 1876 Sandford Fleming drew up a record of the great work just completed under his direction, the Intercolonial Railway, he {57} called attention to the first proposal for such a road, found in an article contributed to the United Service Journal in 1832 by Henry Fairbairn.[1] The author proposed the two chief projects which for half a century were to engross the attention of the Maritime Provinces: a road from St Andrews to Quebec, which should 'convey the whole trade of the St Lawrence, in a single day, to Atlantic waters,' and another line from Halifax through St John to the border of Maine, which should command for Halifax 'the whole stream of passengers, mails, and light articles of commerce passing into the British possessions and to the United States and every part of the continent of America.'

St Andrews was the winter port in British territory nearest to the upper provinces. If the territory in dispute on the Maine boundary fell to New Brunswick and Quebec, a road not more than 250 or 300 miles long could be built from this port to the city of Quebec. In 1835 a Railway Association was formed in St Andrews, an exploratory survey was made, and the interest of Lower Canada was enlisted. {58} In the following year New Brunswick gave a charter to the St Andrews and Quebec Railroad, and the Imperial government agreed to bear the cost of a survey. But the survey was speedily halted because of protests from Maine; in 1842 the Ashburton Treaty assigned to the United States a great part of the territory through which the line was projected, and the promoters gave up. Then in 1845 the railway mania in England brought a revival of all colonial schemes. Sir Richard Broun took up the plan for a line from Halifax to Quebec, along with other grandiose projects connected with his endeavour to revive the lost glories of the baronetage of Nova Scotia, but did not get past the stage of forming a provisional committee. This discussion revived the flagging hopes of St Andrews, and, as will be seen in detail later, a beginning was made by a railway from St Andrews to Woodstock, the New Brunswick and Canada, for which ground was broken in November 1847.

The provincial legislature early concluded that it would be impossible to induce private capitalists to build an intercolonial road unaided. They were unanimous also, not yet having emerged from the stage of colonial dependence, in desiring to throw the burden {59} of such aid as far as possible on the British government. In the absence of a colonial federation the United Kingdom was the main connecting-link between the colonies in British North America, and was presumably most interested in matters affecting more than a single colony. The British government, however, had by this time about decided that the old policy of treating the colonies as an estate or plantation of the mother country, protecting or developing them in return for the monopoly of their trade, did not pay. It had reluctantly conceded them political home rule; it was soon to thrust upon them freedom of trade; and it was not inclined to retain burdens when it had given up privileges. Mr Gladstone, secretary for the Colonies, agreed, however, in 1846, to have a survey made at the expense of the three colonies concerned.

This survey, the starting-point for the controversies and the proposals of a generation, was completed in 1848, under Major Robinson and Lieutenant Henderson of the Royal Engineers. 'Major Robinson's Line,' as it came to be known, ran roughly in the direction eventually followed by the Intercolonial—from Halifax to Truro, and thence north to Miramichi and the Chaleur Bay, and up the {60} Metapedia valley to the St Lawrence. The distance from Halifax to Quebec was computed at 635 miles, and the cost at L7000 sterling a mile or about L5,000,000. Acting on the assurance of engineers that the route was feasible, each of the three colonial governments offered in 1849 to set aside for the work a belt of crown lands ten miles wide on each side of the railway, and to pledge L20,000 a year to meet interest or expenses, if the British government would undertake the project. Downing Street, however, replied politely but emphatically that no aid could be given.

After the plan of a northern route to Quebec was thus apparently given its quietus, interest shifted to the Portland connections. The building of the road from Montreal to Portland added further strength to the claims of this route. On paper, at least, it seemed possible to make the connection between Montreal and Halifax by following either the northern or the southern sides of the great square. One of the southern sides was now under way, and by building the other, from Portland to St John and Halifax, connection with the Canadas would be completed. Under the leadership once more of John A. Poor, Portland took up the latter project. The name of {61} the proposed road, the European and North American, showed the influence of the same hope which Fairbairn had expressed—that the road from Portland to Halifax would become the channel of communication between the United States and Europe, at least for passengers, mails, and express traffic. With a line of steamers from Halifax to Galway in Ireland, it was held that the journey from New York to London could be cut to six or seven days.

In July 1850 a great convention assembled in Portland, attended by delegates from New Brunswick and Nova Scotia as well as from Maine and other New England states. Intertwined flags and fraternal unity, local development and highways to Europe, prospective profits and ways and means of construction, were the themes of the fervent orators and promoters. The convention was enthusiastically in favour of the project. The 550 miles from Portland to Halifax—222 in Maine, 204 in New Brunswick, and 124 in Nova Scotia—would cost, it was estimated, $12,000,000, half of which might be raised by private subscription and the rest by state and provincial guarantee.

The delegates from the Maritime Provinces {62} returned home full of enthusiasm, but increasingly uncertain about the securing of the necessary capital. At this stage Joseph Howe came to the front. He had much earlier, in 1835, before entering parliament, taken the lead in advocating a local railway from Halifax to Windsor, but had not been prominent in recent discussions. He now urged strongly that the province of Nova Scotia should itself construct the section of the European and North American which lay within its borders. He proposed further to seek from the Imperial government a guarantee of the necessary loan, in order that the province might borrow on lower terms. The Colonial Office, while expressing its approval of the Portland scheme, declined to give a guarantee any more than a cash contribution. Nothing daunted, Howe sailed for England in November 1850, and by persistent interviews, eloquent public addresses and exhaustive pamphlets, caught public favour, and in spite of Cabinet changes in London secured the pledge he desired.

In the official reply of the Colonial Office Howe was informed that aid would not be given except for an object of importance to the Empire as a whole, and that accordingly {63} aid was contingent upon securing help from New Brunswick and Canada to build the whole road from Halifax to Quebec. Major Robinson's line need not be followed if a shorter and better could be secured; any change, however, should be subject to the approval of the British government. 'The British Government would by no means object to its forming part of the plan that it should include provision for establishing a communication between the projected railway and the railways of the United States.' The colonies were to bear the whole cost of the loan, and were to impose taxes sufficient to provide interest and sinking fund, and thus ensure against any risk of loss to the United Kingdom.

Howe returned triumphant. The British government would guarantee a loan of L7,000,000, which would build the roads to Portland and to Quebec and perhaps still farther west. He hastened to New Brunswick, and won the consent of its government to the larger plan, went on to Portland and allayed its murmurs, and with E. B. Chandler of New Brunswick reached Toronto, then the seat of government of the province of Canada, in June 1851. His eloquence and the dazzling {64} offer of cheap and seemingly unlimited capital soon won consent. The representatives of the three provinces agreed to construct the road from Halifax to Quebec on joint account, while Canada would build the extension from Quebec to Montreal, and New Brunswick the extension to the Maine border, each at its own risk, but in all cases out of the L7,000,000 guaranteed loan.

Then suddenly the bubble burst. The Colonial Office, late in 1851, declared that Howe had been mistaken in declaring that the guarantee was to extend to the European and North American project. The British government had no objection to this road being built, but would not aid it. The officials of the Colonial Office declared that they never meant to promise anything else.

It is difficult to assign with certainty responsibility for this serious misunderstanding. Possibly Howe's optimism and oratorical vagueness led him to misinterpret the promises made, but his reports immediately after the interviews were explicit, and in dispatches and speeches sent to the Colonial Office and acknowledged with high compliments, his version of the agreement had been set forth clearly and for months had gone {65} unchallenged. He cannot be freed from a share of the blame, but the negligence of Downing Street was at least equally the source of the misunderstanding.

The whole plan thus fell to the ground. The consent of the three provinces was essential, and New Brunswick would not support the Halifax and Quebec project if the Portland road, running through the most populous and influential sections of the province, was to be postponed indefinitely. Hincks determined to endeavour to save the situation. Accompanied by John Young and E. P. Tache, he visited Fredericton and Halifax early in 1852, and hammered out a compromise. New Brunswick agreed to join in the Halifax to Quebec project on condition that the road should run from Halifax to St John and thence up the valley of the St John river; Nova Scotia agreed to this change, which made St John rather than Halifax the main ocean terminus, on condition that New Brunswick should bear five-twelfths as against its own three-twelfths of the cost. It remained to secure the consent of the Imperial government to this change in route, and accordingly Hincks, Chandler, and Howe arranged to sail for England early in March. Hincks sailed {66} on the day agreed; Chandler followed a fortnight later; Howe, repenting of his bargain, postponed sailing a fortnight, a month, six weeks, and then announced that because of election pressure he could not go at all. Hincks and Chandler found in office in London a new government which appeared biased against the valley route. Upon a peremptory request from Hincks for a definite answer within a fortnight, the British Cabinet, in spite of the previous promise to consider the route an open question, declined to aid any but a road following Major Robinson's line. The negotiations broke off, joint action between the provinces failed, and each province switched to its own separate track.

Howe steadily maintained the policy of state ownership, but had unusual difficulty in carrying Nova Scotia with him. The great English contracting firm of Peto, Brassey, Betts and Jackson, whose operations in the other provinces will be discussed at greater length, offered to find the necessary capital if given the contracts on their own terms. Many Nova Scotians were dazzled by the promises of the agents of this firm, and Howe in 1853 was forced to agree to their proposals. The contractors found themselves unable to make {67} good their promises, in face of panics on the stock market in England, and in the following year Howe's original policy was sanctioned. He himself retired from political life for a time in order to carry through, as one of the railway commissioners, the policy he had steadfastly urged.

It was on June 13, 1854, that the first sod was turned for the construction of the Nova Scotia Railway, and a beginning made at last. The road was to run from Halifax to Truro, with a branch to Windsor. Progress was slow, but by 1858 the ninety-three miles planned had been completed. Then came a halt, when reality succeeded the glowing visions of the prospectus, the service proved poor, and the returns low. Nine years later an extension from Truro to Pictou was constructed. This gave Nova Scotia at Confederation in 1867 145 miles of railroad in all, built at a cost of $44,000 a mile, and connecting Halifax with the Bay of Fundy and the Gulf of St Lawrence. The gauge adopted was five feet six, and the Nova Scotia road led the way in Canada in using coal for fuel.

New Brunswick had a more chequered experience. After the collapse of the Halifax and Quebec project, her efforts were confined {68} to the road running north from St Andrews and to the European and North American.

The possibilities of St Andrews as an ocean terminus had been severely hampered by the thrusting in of the Maine-wedge between New Brunswick and Quebec, but still the town struggled on. In 1847 shares in the railway had been placed both in England and in the province, and the legislature guaranteed the interest on debentures and also granted a land subsidy. Still, the money came in slowly. Operations were time and again suspended, contract after contract was made, and reorganizations were effected. In 1858 the road had reached Canterbury, and four years later its temporary terminus at Richmond; in 1866 a branch to St Stephen was opened, and in 1868 an extension to Woodstock, making 126 miles all told, costing about $20,000 a mile. At Confederation only a third of the distance between St Andrews and Riviere du Loup on the St Lawrence had been completed, and the road was in a receiver's hands.

The European and North American also had its troubles. Maine proved unable to build its section. In 1852 the New Brunswick government made a contract with the English {69} firm already referred to, under the style of Peto, Betts, Jackson and Brassey, for the construction of a line from Maine to Nova Scotia, at $32,500 a mile. The province agreed to subscribe $6000 stock and lend $9400 in bonds per mile; the contractors were to find the rest of the money in England. This they failed to do. The firm was dissolved in 1856, and the government took over the road, completing it from St John to Shediac, 108 miles, in 1860. The western half was not begun until August 1867.

To return to the upper provinces. By 1851 the St Lawrence, the Great Western, and the Northern were under way, and more ambitious schemes proposed. The Guarantee Act of 1849, which was the first phase of Hincks's policy, assuring public aid for the second half of any road at least seventy-five miles in length, was proving inadequate, and the government was considering an extension of its policy. At this juncture the golden news arrived of Howe's success in securing the L7,000,000 loan at bargain rates. All hesitation was removed. No doubt was felt that the roads would pay, once they were built; the only difficulty had been to find the money to build them. And now L7,000,000 was {70} available—L4,000,000 of it for Canada, at probably 3 1/2 per cent. Paper computations soon proved that L4,000,000 would suffice not only to build Canada's third of the Quebec-Halifax route, but to build a trunk line from Quebec or Montreal through to Hamilton, whence the Great Western ran to Windsor on the frontier opposite Detroit.

At once a struggle began for the control of this fund. The Montreal merchants who had bought experience in building the St Lawrence and Atlantic, John Young, Luther Holton, and D. L. Macpherson, with A. T. Galt of Sherbrooke, were first in the field, and pressed for a charter to build from Montreal to Kingston, intending later to extend this road to Toronto. Then the most noted firm of contractors in railway history, Peto, Brassey, Betts and Jackson (the forms of the firm name varied), who had built one-third of the railways of Britain, and also roads in France and Spain and Italy and Prussia and India, were attracted to this fresh field by Howe's campaign in England. They sent an agent to Toronto in 1851 to offer to construct all the roads needed, and to find all the capital required, with partial government guarantees. Hincks, with whom the decision lay, was {71} eminently an opportunist. In 1849 he had argued against government ownership; now he argued for it. Yet he did not close the door against retreat. The new Act, passed in April 1852, marked the second or Grand Trunk phase of his gradually shaping policy. Besides providing for the Canadian share of the Halifax to Quebec road, the Act contemplated three alternative methods of continuing this Trunk line westward. The province was to build it if the guaranteed loan could be stretched far enough; failing this, the province, together with such municipalities as wished, could undertake the extension; should both modes fail, private companies might be given the privilege, with a provincial guarantee of half the cost, covering both principal and interest. No roads except those forming part of the Trunk line and the three already under way were to be aided. The Montreal and Kingston Railway, in which Holton, Galt, and Macpherson were prime movers, was chartered, and also the Kingston and Toronto, but in both charters a suspending clause was included preventing the charters from taking effect until special proclamation was made—after the other plans had failed.

The next move was to arrange terms with {72} the other provinces and secure the promised Imperial guarantee. How Hincks and Chandler's mission failed has already been told. Hincks then made another sharp curve and decided for company control. Before leaving Canada he had made up his mind that the construction should be entrusted to British contractors, and was authorized to negotiate with the Brassey firm. Now that the Imperial guarantee had faded away, capital was needed more than contractors. The Brasseys promised both, offering, if given the contract, to organize a company in England which would provide all the capital not guaranteed by the province.

This seductive offer was to prove the main cause of the financial embarrassment of the Grand Trunk. It involved at the outset a dubious connection between company and contractor, and also for two generations an attempt to manage a great railway at a range of three thousand miles. So fatal did it prove that in later years each party to it endeavoured to throw the responsibility for the initiative on the other, and enemies of Hincks declared that he, as well as Lord Elgin, the governor-general, had been bribed to wreck the negotiations with the British government {73} in order to take up with Brassey. Whether or not Hincks was first to resume negotiations in London, it was the contractors who had already taken the initiative in America, sending a representative to Toronto, and taking part in the elections of 1851 in Nova Scotia against Howe. It is clear also that the British government was unwilling to consider anything but the unacceptable Major Robinson line. Hincks was justified in looking elsewhere for capital, but he was not justified in binding himself to one firm of contractors, however eminent.

Hincks returned to Canada with a tentative contract in his pocket. To Canada, too, came Henry Jackson, a partner in the Brassey firm for this enterprise, and one of the most skilful and domineering of the railway lobbyists in Canada's annals, rich in such methods. At once a battle royal began in parliament. On August 7, 1852, the Montreal and Kingston and the Kingston and Toronto charters were proclaimed in force; apparently the supposition of the government was that the English contractors would simply subscribe for the bulk of the stock in these companies. But the Canadian promoters were not willing to give up their rights so easily; a week after the {74} books were opened, Galt, Holton, and Macpherson subscribed between them L596,500 and seven of their associates took up the nominal balance of the capital of L600,000 which was authorized. Hincks met this move by bringing down a bill to incorporate a new company, the Grand Trunk Railway Company of Canada, and the rights of the rival claimants came before parliament for decision.

On behalf of the English promoters it was urged that the Canadian promoters could not raise the necessary capital, that the Galt-Holton-Macpherson subscription was a fake, that the English contractors could induce capitalists to invest freely at low rates, and that their superior methods would result in a road of more solid construction and lower working expenses than the ordinary American railway. Holton and Galt, on the other hand, contended that their subscription was in good faith, that tenders were in, and that with provincial guarantee and municipal aid, and by paying the contractors partly in stock, they could finance the road. It would be better, they urged, to have the control in the hands of men who knew the province rather than in the hands of outsiders. The Grand Trunk Company, seeking incorporation, was only a {75} sham company, under the thumb of the contractors, formed to ratify a foregone contract with them. If the Montreal and Kingston Company was given control, it would invite the Brassey firm to tender on the same basis as other contractors: no more could honestly be asked.

Galt and Holton had the best of the argument, but Hincks had the votes, and rumours which Jackson spread of the Brassey millions and the firm's open door to all the money markets of Europe brought conviction or afforded excuse. The railway committee reported in favour of the English promoters, though the competition had compelled them to reduce their price by a thousand pounds a mile, and to accept a guarantee of L3000 per mile instead of half the cost. At the same time the Brassey firm secured a charter for the Grand Trunk of Canada East, to run from Quebec to Trois Pistoles—Canada's first section of the Halifax to Quebec route. The same aggressive firm had already secured a contract for the Quebec and Richmond, which was to join the St Lawrence and Atlantic at Richmond, and, as has been seen, for New Brunswick and Nova Scotia roads. With these contracts seemingly secure, Jackson sailed for {76} home. But Canadian promoters were quick to learn. Galt had another card to play. As president of the St Lawrence and Atlantic he proposed to amalgamate this road with the Montreal and Kingston, and to build a bridge at Montreal, thus securing an essential part of the trunk line. Hincks became alarmed at the Montreal interests thus arrayed against him, and proposed as a compromise that the Grand Trunk should absorb the St Lawrence road and build the bridge at Montreal on the condition that the opposition to its westward plans should be abandoned. Upon this all parties agreed, and the English and Canadian promoters joined forces.

Negotiations were completed in England early in 1853. As yet the Grand Trunk Company was but a name. The real parties to the bargain were many. First came John Ross, a member of the Canadian Cabinet, but representing the future Grand Trunk, of which he was elected president. The Barings and Glyns, eminent banking houses, had a twofold part to play, as they were closely connected with the contractors and were also the London agents of the Canadian government. The contractors themselves, Peto, Brassey, Betts and Jackson, of whom Jackson, accompanied {77} by the company's engineer, A. M. Ross, had spent a year studying the Canadian situation, put in anxious weeks hammering out the details of the agreement and the prospectus to follow it. Galt represented the St Lawrence and Atlantic and the Atlantic and St Lawrence, while Rhodes and Forsythe of Quebec had charge of the interests of the Quebec and Richmond. An agreement was reached to amalgamate all the Canadian roads and to lease the Maine road for 999 years. This left Toronto the western terminus. An attempt to absorb the Great Western and thus secure an extension to Windsor came to nothing. This failure gave Galt an opening for another brilliant stroke of railway strategy. A company had recently been chartered to build a road from Toronto to Guelph and Sarnia, and the firm of Gzowski and Co., of which Galt was a member, had secured the contract. Galt, acting with Alexander Gillespie, a prominent London financier who was the agent of the Toronto, Guelph and Sarnia Railway, now proposed to substitute this line as the westward extension. Everybody was in an amalgamating mood, and the bargain went through. All contracts previously made were taken over by the amalgamated company, and the {78} investing public was told that all uncertainty as to the total amount was thus removed—as it emphatically was, for the time.

A glowing prospectus was drawn up. The amalgamated road would be the most comprehensive railway system in the world, comprising 1112 miles, stretching from Portland and eventually from Halifax (by both the northern and the southern route) to Lake Huron. The whole future traffic between west and east must therefore pass over the Grand Trunk, as both geographical conditions and legislative enactment prevented it from injurious competition. 'Commencing at the debouchere [sic] of the three longest lakes in the world,' the prospectus continued, 'it pours the accumulating traffic in one unbroken line throughout the entire length of Canada into the St Lawrence at Montreal and Quebec, on which it rests on the north, while on the south it reaches the magnificent harbours of Portland and St John on the ocean.' It was backed by government guarantee and Canadian investment, and its execution was in the hands of the most eminent contractors. The total capital was fixed at L9,500,000 sterling. The revenue was estimated at nearly L1,500,000 a year, which, with working expenses at forty {79} per cent of revenue, and debenture interest and L60,000 for lease of the Atlantic and St Lawrence Railway deducted, would leave L550,000 or 11 1/2 per cent on the share capital.

On the advice of Baring and Glyn only half the capital was issued at first. This decision proved a serious mistake. In 1853, when the company was floated, money was abundant and cheap; the shares and bonds issued were over-subscribed twenty times, and were quoted at a premium before allotment. Scarcely was the issue made when war with Russia loomed up, and money rose from three to seven or eight per cent. Never again was it possible for the Grand Trunk to secure capital in such abundance.

But this was for the future to disclose. At once construction began in Canada. A. M. Ross was appointed chief engineer, and S. P. Bidder general manager, both on the nomination of the English bankers and contractors. Plant was assembled in Canada, orders for rails and equipment were placed in England, and navvies came out by the thousand. At one time 14,000 men were directly employed upon the railways in Upper Canada alone. In July 1853 the last gaps in the St Lawrence and Atlantic had been filled up, though not {80} in permanent fashion. In 1854 the Quebec and Richmond section was opened; in 1855, the road from Montreal to Brockville and from Levis to St Thomas, Quebec; in 1856, the Brockville to Toronto and Toronto to Stratford sections. Not until 1858 was the western road completed as far as London. The year 1859 saw the completion of the Victoria Bridge, the extension from St Mary's to Sarnia, and a new road in Michigan, running from Port Huron to Detroit. By 1860 the eastern section extended to Riviere du Loup, where a halt was made.

From the outset difficulties undreamed of had developed. Money was hard to get and early traffic returns were disappointing, so that the company found it almost impossible to secure the balance of the capital required. The road from Montreal to Portland was found to require heavy expenditure to bring it up to the standard. The contractors, for their part, were embarrassed by the company's shortage of funds and by the great rise in the prices of land, materials, and labour. Their own activities, the Reciprocity Treaty of 1854 with the United States, the Crimean War, had combined to bring on a period of inflated prices such as Canada was not to experience {81} again for half a century. With wheat at two dollars a bushel, and 'land selling by the inch,' even liberal margins of profit on contracts vanished.[2]

In these straits the company turned to the government for aid. It had many supporters in the House. No one could deny the benefits which its operations had conferred upon the province. The government guarantee of interest and the government nomination of a part of the board of directors were plausibly held to involve responsibility for the solvency of the company. It was not surprising, therefore, that for a decade after 1855 scarcely a year passed without a bill to amend the terms {82} of the Grand Trunk agreement. One year it was an additional guarantee, another a temporary loan, again a postponement, and again a still further postponement of the government's lien. It soon came to be recognized that the money which had been advanced under the guarantee provisions must be considered a gift, not a loan, though to this day the amount nominally due still figures as an asset on the Dominion government's books. Incidentally, the embarrassing government directors were dispensed with in 1857.

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