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The Grand Trunk Pacific Railway and British Columbia Lower, Joseph Arthur 1939

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4" 7 The Grand Trunk P a c i f i c Railway and B r i t i s h Columbia by Joseph Arthur Lower A thesis submitted i n partiaLafulfilment of the requirements f o r the degree of Master of Arts i n the Department of History. The University of B r i t i s h Columbia A p r i l 1939. The Grand Trunk p a c i f i c Railway by Joseph Arthur Lower A thesis submitted i n p a r t i a l f u l f i l m e n t of the requirements for the degree of Master of Arts i n the Department of h i s t o r y . The University of B r i t i s h Columbia A p r i l 1939 C O N T E N T S Page 1 The Decade before the Grand Trunk P a c i f i c 1 Era of prosperity beginning 1896 -f a i l u r e of Conservatives - advance under Liberals - opening of the northwest -plans for transcontinentals. Chapter I I . Negotiations leading to Construction of the Railway II Problems of the Grand Trunk - early plans for a transcontinental - re-signation of B l a i r - the railway agreement - opposition to the railway -reasons for building. Chapter III.The Building of the Railway 55 O f f i c i a l s - the p r a i r i e section - the mountain section - opening of service. Chapter IV. The Grand Trunk P a c i f i c Subsidiaries 78 Branch Lines - Terminal Elevator Com-pany - Grand Trunk P a c i f i c Elevator Company - Terminal Warehouse Company -B. G. Coast Steamships - G. T. P. Dock Company - G. T. P. B. C. Coal Company -- Telegraph Company. The Power of the Grand Trunk P a c i f i c 91 E v i l r e s u l t s of r a i l r o a d s - influence of p o l i t i c s - unscrupulous t a c t i c s of the railway - land speculation. The Romance and Struggle of. Railway  Building Preface Chapter I. Chapter V. Chapter VI. An immense undertaking - influence on the country - problems of construction -the builders. 126 Page Chapter VII. Prinoe Rupert 135 Choosing the terminus - Kaien Island dispute - Indian reserve agreement - sale of l o t s - l a t e r r e l a t i o n s between c i t y and railway. Chapter ¥111. The Cost of the Grand Trunk P a c i f i c 152 Early estimates - reasons for high cost - loans. Chapter IX. The Last Years of the Grand Trunk P a c i f i c 161 Early statements of i t s ultimate f a i l u r e - early prosperity - reasons f o r decline - stages in the collapse of the railway - reasons for the f a i l u r e - the value of the trans-continental railway - weakness of the Grand Trunk P a c i f i c - the future of Canadian Railways. Appendix I. Summary of Contracts l e t by the Grand Trunk P a c i f i c Railway Company Appendix I I . Location and Mileage of the Grand trunk P a c i f i c Lines Appendix III.funded Debt Outstanding December 31,1918 Appendix IV. Comparison of Grand Trunk P a c i f i c and other worth American Railways Bibliography Index of Maps To face page Map 1. The Grand Trunk P a c i f i c as projected 67 Map 2. The Grand Trunk P a c i f i c as completed, 1921 91 Map 3. The Location of Prince Rupert 135 Chart 1. Comparison of railway mileage, population, railway revenues, and motor vehicles r e g i s t r a t i o n , 1876 - 1936 173 i PREFACE Western Canada has heen b u i l t around three great railways, the.Canadian P a c i f i c , the Canadian Northern, and the Grand Trunk P a c i f i c . Historians have written innumerable accounts of the f i r s t of these, but the other two, which lost t h e i r i d e n t i t y and are being rapidly forgotten, have been largely ignored. Their s t o r i e s , however, are of v i t a l im-portance i n the hi s t o r y of Canada, and present epics compar-able to that of the Canadian P a c i f i c . The following pages are an attempt to t e l l , for the f i r s t time, the story of the building of the Grand Trunk P a c i f i c Railway. i\io attempt has been made to discuss any spec i a l phase nor to prove any theory concerning the railway. The object has been to lay a foundation for the study of t h i s great transportation system, and to organize and make accessible a l l the material concerning i t . I f t h i s work opens a new f i e l d of research, i f i t challenges an investigation, or i f , at some time, i t affords a student with a needed f a c t , i t w i l l have f u l f i l l e d i t s purpose. My thanks are due to the many people who have generously assisted i n t h i s work, e s p e c i a l l y to Miss Jean W. Skelton, M.A., and to Dr. W. N. Sage, who has continually helped me with his encouragement and assistance. THE GRAND TRUNK PACIFIC RAILWAY Chapter I - The Decade Before the Grand Trunk P a c i f i c The year 1896 ended a twenty-three year downward sweep of prices which marked a new phase of world economy*-and which brought with i t "A certain resultant discouragement and lack of i n i t i a t i v e i n the world of business." 2 From that year recovery was slow but steady u n t i l 1914. In B r i t a i n , however, i t was retarded seriously by the unaccustomed com-p e t i t i o n of foreign manufacturers both i n overseas and home markets; the closing of former markets by new t a r i f f s ; and the South A f r i c a n War. By 1904 the trade of B r i t a i n was s t i l l 3 described as 'sluggish", but by the end of that year signs of r e v i v a l were becoming v i s i b l e . In spite of t h i s economic depression the decade following the Conservative v i c t o r y of 1895 was marked by a B r i t i s h r e v i v a l of interest in the world at large and especi-a l l y i n the Empire. Under the Colonial Secretaryship of Joseph Chamberlain the relations between the mother-country . and the daughter-nations underwent a r a d i c a l change. The B r i t i s h people r e a l i z e d that they were no longer along butt the. 1. Williamson, James A., A Short History of B r i t i s h Expansion, The MacMillan Co., New York, 1931, 237. £. Clapham, J . A., An Economio. History of Modern B r i t a i n , Cambridge, 1938, 5. 3. i b i d , 41, 45. vewd'myi member of a partnership of nations. I't was during t h i s Conservative ministry that B r i t a i n conquered the Sudan, drove France out of Fashoda, send Lord Curzon to India, held the pageants of 1897, 1901, and 1902, fought the South A f r i c a n War, and attended the Co l o n i a l con-ferences/of 1897 and 1902. As a resu l t of t h i s new interest i n and understanding of the empire, combined with the depression i n B r i t a i n , thousands of emigrants l e f t the B r i t i s h I s l e s to seek new homes in the colonies beyond the seas. Canada, too, was i n a state of despair Itg* 1896. Here the world depression had been accentuated by numerous l o c a l problems. The era which followed the building of the Canadian P a c i f i c Railway had been one of "booms" followed by disappointing depressions. Drought, f r o s t , and lack of markets had disheartned even the most o p t i m i s t i c . The National Policy of the Conservative party had hurt both East and West. This p o l i c y had added, f o r example, "About t h i r t y percent to the cost of cotton goods, t h i r t y - f i v e percent to the cost of clothing and furniture, and f o r t y - f i v e percent to the cost of a blanket." 1 The East had not prospered because i t found the home markets congested and few markets available outside. In the West the farmer was suffering from the s t r a i n of receiving l i t t l e f o r his crops, paying high freight rates, and buying i n a protected market while s e l l i n g against world competi ti o n . The expected immigration had f a i l e d to materialize. 1. Wrong, George M., The Canadians, Toronto, The MacMillan Company Limited. 1938, 386. 3. Thousands of young men trekked westward, but found conditions so poor that they moved on to the United states. Many out-siders started towards Ytfestern Canada, and even registered for homesteads, but lack of transportation, and the attractions offered hy the United States as they passed through that country, held them i n that country. In 1874, out of 1,376 homestead entries, 890 were subsequently cancelled; i n 1877, out of 845 entries, 463 were cancelled; i n 1896, out of 902 entries, 400 were cancelled.^" Faced with such depressing facts i t was almost with despair that the people turned i n 1896 from the i n e f f i c i e n t Conservative leaders who had succeeded B i r John A. Macdonald to the L i b e r a l party, under S i r Wilfred Laurier. But never i n their wildest dreams had the people of Western Canada imagined the change which was to come to Canada during t h i s regime. It was the good fortune of the Laurier government to be i n o f f i c e during a time when the eyes of B r i t a i n and the rest of the world were turned to Canada, and es p e c i a l l y to Western Canada. Of p a r t i c u l a r significance during these years were the Klondike Gold Rush of 1898, the Coloni a l Conferences of 1897 and 1902, the p a r t i c i p a t i o n of Canada i n the Boer War, and, a few years l a t e r , the Anglo-Japanese Agreement. The aggressive p o l i c y immediately adopted by the L i b e r a l government at t h i s time focussed world inter e s t on Canada. Laurier did much towards establishing r e c i p r o c i t y between 1. England, Robert, The Colonization of Western Canada, London, 1936, 55. 4. Canada and other nations. The propaganda of C l i f o r d S i f t o n , the imperialism of Chamberlain, and the e f f o r t s of c o l o n i a l s o c i e t i e s such as the Emigrants' Information Office and the Colonial I n s t i t u t e , found f e r t i l e s o i l i n the B r i t i s h depression which had followed the Boer War. The people of B r i t a i n began to r e a l i z e that the colonies were not refuges for the undesir-able and the u n f i t , but were lands of opportunity. Coincident with these events to be a t t r a c t i n g the eyes of the world to Canada, three great i n t e r n a l changes were talcing place. These v/ere an advancement i n industry, a move-ment i n North America towards the northwest, and a d e f i n i t e immigration p o l i c y . Each of these, although a cl e a r d i v i s i o n , i s closely interlocked with the other two; and the cumulative influence of the three caused each to grow with ever-increas-ing r a p i d i t y during the Laurier period. The foundation work done by the Conservatives i n t h e i r National Po l i c y showed r e s u l t s during the L i b e r a l i n t e r -val of power. "He JLaurier] was happy i n the hour of his coming for by 1896 the National P o l i c y had survived i t s early dark days and had fostered some prosperous industries." 1" The industries of Eastern Canada thrived and grew. Railways, after a period of stagnation, began to expand. The two most note-worthy of these are the interests of James J . H i l l , e s p e c i a l l y the Great Northern Railway, and the Mackenzie-Mann project, the Canadian Northern Railway. Pressed by the threatened opposi-ti o n of these two great r i v a l s , the Canadian P a c i f i c Railway, 1* Wrong, G-eorge M., op. c i t . , 389. 5. v/hich had added only three hundred miles to i t s system between 1 1890 and 1898, adopted a p o l i c y of great expansion. By building, purchasing, and amalgamation of both railways and steamship l i n e s i t attempted to maintain i t s monopoly i n the west.. Of especial importance i n t h i s period i s i t s construc-tion of the Kettle Valley l i n e i n B r i t i s h Columbia, of branches i n southern Manitoba and eastern Ontario, and the e s t a b l i s h -ment of a connection with the "Soo" l i n e which gave i t an alternative outlet to the A t l a n t i c through the United States. These Canadian P a c i f i c roads v/ere of v i t a l significance because they were feeders from which the minerals of B r i t i s h Columbia and the wheat of the P r a i r i e s could be procured, they supplied the Canadian P a c i f i c with a d d i t i o n a l outlets f o r the produce of the West, and, f i n a l l y , they opened the r i c h manufacturing sections of Ontario and Quebec to t h i s railway. Because of t h i s great boom i n railway b u i l d i n g , eastern manufacturers and western farmers found markets f o r their goods, and each complemented the other. In the West, now that there was a means of transportation to the market, wheat-growing increased enormously, so that i n 1903 occurred a serious grain blockade. Trade and commerce, which had increased only 36% i n volume during the 18 years preceding 2 1896, showed a gain of 107$ i n the seven years following. 1. Skelton, Oscar D., The Railway Builders, Chronicles of Canada Series, Yol. 32, Toronto, 1916, 223. 2. House of Commons Debates (hereafter c a l l e d H.C.D.) August 25", 1903, p. 9628. 6. Probably the chief feature of the L i b e r a l regime was i t s immigration p o l i c y . Under S i r C l i f f o r d S i f t o n , the Minister of the I n t e r i o r , a well-planned campaign of propa-ganda and advertising v/as car r i e d on i n Eastern Canada, United States, the B r i t i s h I s l e s , and Europe. Haryester excursions were arranged from Eastern Canada, encouraging many to the West. Thousands came from Europe and, whereas the growth of population i n Canada during the decade of Canadian P a c i f i c Railway construction averaged l i t t l e more than 1,000 per year"1", and from 1887 to 1897 about 5,000, the immigrant figures mounted to 31,900 i n 1898; 44,543 i n 1899; 128,364 i n 1903, p and increased u n t i l 1913 when a peak of 402,432 was reached. Homesteads, which averaged 3,418 per year from 1874 to 1900, jumped to an average of 22,222 for the next f i v e years. In 1896 there were 1,340 homesteads i n the North-West; i n 1903 there were 31,383. "The old charge that the Hudson's Bay Company delayed the settlement of the Canadian p r a i r i e f o r half a century i s open to question. Even after the Dominion of Canada took over the West, s e t t l e r s did not come in any large numbers. The building of the Canadian P a c i f i c Railway brought 1. Oliver, Edmund H., Canada and i t s Provinces XIX, Toronto, 1913, 172. 2. Canada Year Book 1925, 175. 3. Oliver, op.cit., 174. 7 . i n some s e t t l e r s , but the r e a l rush did not begin u n t i l the 1890's when the Americans came north looking for free land and European immigrants, who had previously come to the united States, turned to Canada as the land of opportunity." 1 This movement across the American border i s t r u l y amazing. The former exodus changed to an i n f l u x that for some 2 years was greater than that of the B r i t i s h . This sudden turn of the Americans to Canada was large l y due to the fact that the " f r o n t i e r movement" of the United States had reached i t s end. The l a s t of the "great open spaces" - the Dakotas, Montana, and to a less extent, Northern Minnesota - had been f i l l e d by s e t t l e r s with a r e s u l t i n g r i s e in the value of land. United States' farms which were s e l l i n g for $60 an acre i n 1890 were almost doubled i n price in 1898. 3 S e t t l e r s would not pay $75 to $100 an acre for land i n the United States when many sections of Canada, which were just as good'f could be 4 obtained f o r as low as fi v e d o l l a r s an acre. The land-seeking Americans, influenced undoubtedly by the advertising campaign of C l i f f o r d S i f t o n , sold their lands at a high rate and turned towards Canada f o r t h e i r homesteads. So great was this American invasion that one writer stated, "Between Calgary and Edmonton one may t r a v e l along the 1. Sage, Dr. W. N., Canada West of the Great Lakes, Ch.I, unpublished manuscript. 2. England, ob.cit., 68. 3. Burt, A. L., Romance of the P r a i r i e Provinces,Toronto, 193J, £52. 4. Charlton, J . "Another Canadian Transcontinental", North  American Review, 179. October 1904, 592. l i n e of r a i l r o a d and f i v e out of every six people are Americans The people of Eastern Canada began to fear that this great movement would result i n peaceful penetration and the ultimate annexation of Western Canada by the United States, i n 1904 approximately 50,000 Americans moved to Canada from the United States, whereas, "Eight years before some 46 Americans moved 2 into Canada." The i n f l u x of these thousands of immigrants resulted i n settlements being b u i l t f a r from the e x i s t i n g Canadian P a c i f i c l i n e s , and a tremendous increase i n the amount of grain, p a r t i c u l a r l y wheat, being produced. The crying need was f o r transportation, and the great railway boom was the result of t h i s need. Undoubtedly the railway in t e r e s t s of the United States would have responded to t h i s i f they had not been f o r e s t a l l e d by the Canadian Northernsand Canadian P a c i f i c Railways. The Canadian Northern Railway had i t s inception i n 1896 when William Mackenzie and Donald Mann purchased the charter of the Lake Manitoba and Canal Company. By means of Federal land grants and P r o v i n c i a l guarantees i t b u i l t rapidly, and by combining amalgamation with construction work, the Canadian Northern controlled 1200 miles of l i n e by 1902, extending fromoP6rt.rAr.thur, Ontario, to Erwood, Sask-atchewan. In the l a t t e r year i t obtained authority from the 1. Curwood, J . O l i v i e r , "The Eff e c t of the American Invasion", The Tvorld's Work, X, No.5, September 1905, 6608. 2. MacFarlane, Knappen T.,"Western Canada i n 1904". Review  of Reviews, XXX, No.5, November 1904, 580. Note also the figures given by England, op.cit. ,68: 1897 - 712; 1901 - 5,197; 1903 - 13,435; 1905 - over 40,000. 9. Federal government to b u i l d to Montreal, and planned to com-plete a transcontinental railway with a line to the P a c i f i c f a r to the north of the exi s t i n g l i n e of p r a i r i e settlement. This route was o r i g i n a l l y to pass Prince Albert on the way to Edmonton, and then through the Yellowhead Pass to Vancouver, but i t was l a t e r changed to take a more d i r e c t and southern route through the p r a i r i e s . Expansion i n t h i s section was rapid, and on November 24, 1905, Edmonton was reached. Meanwhile another transcontinental l i n e , which promised to become a national road, was projected by a group in Quebec c i t y under the leadership of William P r i c e , a lumber merchant. It offered a route from coast to coast shorter than any other because i t was to b u i l t i n the high l a t i t u d e s . This road, which was known as the Trans-Canada Railway, received i t s charter i n 1895, but l i t t l e v/as done u n t i l 1901,.when the charter was renewed and revised. The road was to follow an almost dire c t l i n e from Ghicoutimi, the head of navigation on the Saguenay River, to the P a c i f i c near Port Simpson. The l i n e would pass near James Bay and north of Lakes Winnipeg and Winnipegosis to the Peace River Pass. Compared with the l i n e of the Canadian P a c i f i c Railway, which was 3,078 miles, t h i s one was only 2,839, a saving of 248 miles. Moreover, i t was to have Nottoway, the only deep harbor on James Bay, and also Port Simpson, one of the f i n e s t harbours on the P a c i f i c Coast. It was a c t u a l l y b u i l t i n Quebec province from Ghicoutimi to Soberval, and subsidies granted for a l i n e sixty miles further westward.! Public opinion was highly favorable for t h i s Trans-Canada Railway, for i t offered a l i n e safe from molestation by the United States, and was all-Canadian. B r i t i s h Opinion regarded i t as a l i n k i n the Empire, and a method of cutting the distance from Liverpool to Yokohama2 v i a the United States by 2200 miles. Later developments, such as the building of the Hudson Bay Railway and the development of Northern Ontario and Quebec, show that the scheme was fundamentally sound, and i t would Jprobably have.been much more successful than the railways which caused i t s abandonment. This Trans-Canada project became abortive when Charles M. Hays announced i n 1902 that the great Canadian railway of the East, the Grand Trunk, was planning to extend i t s l i n e to the P a c i f i c Coast, and thus to become another po?/erful transcontinental. 1. H.C.D. August 27, 1903, p. 9993. 2. Although no evidence i s to be found, the Anglo-Japanese Al l i a n c e of 1902 mjji/b have affected B r i t i s h opinion favorably towards such a railway. Chapter II - Negotiations Leading to Construction of the Railway The Grand Trunk Railway'Company, chartered i n 1851, was the oldest railway i n Canada. Its termini-were Portland, Maine, and Chicago, I l l i n o i s , but between these two points i t s main line passed through Sarnia, Toronto, and Montreal i n Canada. It thus occupied the wealthiest section of Canada, Southern Ontario and Quebec. By absorbing almost a l l i t s competitors, notably the Great Western (904 miles) and the Midland Railway (473 miles) i t s supremacy was maintained there for many years. The stock of the company, which was held mostly i n England, was highly speculative, but, while about one-quarter of this stock paid from four to f i v e percent, the majority of the shareholders received no dividends of any sort. The Grand Trunk Railway was predominantly a profit-making i n s t i t u t i o n , and therefore the shareholders i n s i s t e d that a l l receipts i n excess of expenditures should be paid out i n dividends. This meant that very few reserves were accumulated, and, i n the l a s t few years of the company, that money which should have been spent on upkeep and maintenance was turned over to the shareholders. In the reports of the Railway Commission of 1917 and the Grand Trunk A r b i t r a t i o n of 1921 i t was shown that the accounts of the railway had been sormanlpu*'". 1- h.C.D., August 26, 1903. p.9799. lated as to render the accounts presented as worthless, and that "dividends v/ere paid when...there were no earnings a p p l i c -able to the payment of such dividends." 1 Over 121,000,000 which should have been spent i n maintenance (Turing the twenty years preceding 1917 had been paid on the c a p i t a l of the company. In one year alone, 1916, i t paid i t s shareholders 3 $2,500,000 while, at the same time, i t was bewailing i t s f i n a n c i a l d i f f i c u l t i e s to the Canadian government. Although the Grand Trunk at f i r s t had been prosper-ous, the competition offered by the Canadian P a c i f i c Railway brought a noticeable decline to i t s business. The Grand Trunk Railway refused an offer to b u i l d the f i r s t transcontin-ental, probably as a r e s u l t of i t s "long-distance control and 4 hand-to-mouth" p o l i c y . Moreover, as the West v/as opened, and f i r s t the Canadian P a c i f i c Railway and then the Canadian Northern b u i l t up a great t r a f f i c on the p r a i r i e s , the Grand Trunk Railway made no e f f o r t to share i n t h i s new business. As a r e s u l t , by 1897 i t was in great d i f f i c u l t i e s . Immigrants v/ere carried on i t s l i n e , only to be transferred to the other companies and ca r r i e d westward. It thus became l i t t l e more than a "feeder" of the Canadian P a c i f i c Railway, a p o s i t i o n i t found both humiliating and unproductive. Freight and t r a f f i c 1. Annual Report of Railways and Casals, 1921 (hereafter c a l l e d Grand Trunk Arbitration) p. 147 and 148. 2. Report of the Royal Commission to Enquire into Railways and  Transportation i n Canada, 1917 [Hereafter c a l l e d Railway inquiry Commission) p. lxxxvi and 84. 3. i b i d . , 8 4 . &. Newell, «3'. P., "A Review of the Grand Trunk Railway A r b i t -r a t i o n " , Engineering News Record, Y o l . XC No.5, Feb.l, 1923. 211. 13. from the western provinces, moveover, were f i r s t c arried on the r i v a l l i n e s and from them were transferred to the Grand Trunk, a practice which put the l a t t e r more than ever i n a po s i t i o n of dependency on the other l i n e s . Furthermore, whereas i t had f e l t secure i n i t s monopoly and s o l i d i t y inSSouthern Ontario, now i t r e a l i z e d that the competing roads were gradually hemming i t i n . Because of i t s theory that business should come to the r a i l r o a d , i t found i t s e l f a prey for an aggressive competitor, the Canadian P a c i f i c Kailway, which b u i l t to the towns and in thi s way not only barred the Grand Trunk from sharing the new business of the West, but also competed for the old busi-ness, even i n the established section of the country which^ the Grand Trunk had t r i e d to monopolize. In'a desperate e f f o r t to recover, the Grand Trunk in 1897 appointed Charles M. Hays as general manager of i t s l i n e s . There i s no doubt that he was one of the f i n e s t r a i l -way men i n JMorth America. Previous to h i s appointment to the Grand Trunk he had shown his a b i l i t y by saving the Wabash Railroad System from bankruptcy. With the exception of one year, 1901, he remained with the Grand'i'Trunk Railway u n t i l his death on the " T i t a n i c " i n 1912. i n the f i n a l years of his l i f e he became the vice-president and f i n a l l y president of the company. Hays began to overhaul the r a i l r o a d by dissecting i t and reconstructing i t piece by piece, tie moved the head-quarters of the company from. London, England, to Montreal. He broke through the net of l i n e s e n c i r c l i n g the Grand Trunk 14. i n Southern Ontario, and planned new feeders. Largely through amalgamation, he destroyed much of the opposition. Whereas i t had formerly heen said that a Grand Trunk t r a i n would ar r i v e , but not on time, the railway was now noted for i t s e f f i c i e n c y . From the verge of bankruptcy the Grand Trunk Railway returned to i t s p o s i t i o n as a dividend paying concern* By 1900 i t was estimated ©rand Trunk Railway c a p i t a l stock was enhanced $80,000,000 over 1895. 1 In December, 1902, for the only time i n i t s history, i t declared a dividend on t h i r d preference stock. Hays saw that i f the Grand Trunk Railway were to maintain i t s strength, i t must share i n the wealth v/hich was to be gained by the transportation of goods and people be-tween Eastern and ?,/estern Canada. He stated, We are today handling from f i f t e e n to twenty m i l l i o n bushels of grain, which comes across the lakes from Lake Superior, down to our ports, feeding the whole Grand Trunk system throughout Ontario, and thus contributing • a very large portion of our earnings. We cannot hold to that system i f we do not take some means of fasten-ing i t to us. That business today i s given to our competitors. Hence his plans for a new transcontinental l i n e which would connect the Grand Trunk l i n e s with the West. Hays expected that the opposition to his scheme would be strong, e s p e c i a l l y from the other r a i l r o a d s . Encour-aged by S i r Wilfred Laurier, however, and c e r t a i n of his 1. Carman, Albert R., "Charles M e l v i l l e Hays", Canadian  Magazine, May 1903, 17. 2. Patterson, N., "The Grand Trunk P a c i f i c " , Canadian Magazine, Vol. XXVI. A p r i l 1906, 510. support, he secr e t l y prepared his plans. Agents were sent through Canada to discover the attitude of the d i f f e r e n t sections towards such a scheme, and to spread propaganda. When this had been done negotiations v/ere quietly entered into with the government. On November 2, 1902, a p e t i t i o n was sent c o n f i d e n t i a l l y to S i r Wilfred Laurier with the signatures of George A. Cox, Charles M. Hays, and 7/illiara Wainwright, suggesting that a railway known as the Grand Trunk P a c i f i c should be b u i l t from North Bay to the P a c i f i c . This l e t t e r apparently was sent to determine the attitude of the govern-ment and for almost two years was not revealed to any except those i n the cabinet. By agreement with the I n t e r c o l o n i a l Railway, i t offered an a l l - B r i t i s h l i n e from ocean to ocean, and in return suggested a cash subsidy of $6,400 per mile plus a grant of 5,000 acres of land per mile, payment for the carriage of mails at the same rate as that being received by the Canadian P a c i f i c Railway, materials f o r construction which could not be obtained i n Canada to be admitted free, a l l appurtenances for constructing and working of the r a i l -road to be free from taxes forever, and a l l land held by the company i n the North West T e r r i t o r i e s to be tax free for twenty years. In b r i e f this would have meant a cash subsidy of approximately $15,948,000 and land grants t o t a l l i n g 12,460,000 acres. If a value i s set to t h i s land at three d o l l a r s per acre, i t s t o t a l value would be $37,380,000. It should be noted that i n spite of the phrase "ocean to ocean", the proposed railway would have been 1,000 miles from the A t l a n t i c Ocean. The o f f e r was refused by S i r Wilfred Laurier and h i s cabinet, and other plans were formulated. As a r e s u l t , on November 24, 1902, Mr. Hays made a bare announcement that a new company was to be formed, which was to be e n t i r e l y i n -dependent of the exis t i n g Grand Trunk Railway, but which was to have exclusive t r a f f i c arrangements with i t . The announced purpose was to.obtain the f r e i g h t both to and from the West, and the route would probably follow that f i r s t adopted by the Canadian P a c i f i c Railway i n the ea r l y seventies but sub-sequently abandoned. Moreover, he stated, "The object of the company i s to get a f i r s t class route, rather than to touch the present centers of population." Later he added that one of the most important features was the proposed trade v/ith the Orient, and the f a i l u r e of t h i s to develop has often been given as one of the main reasons for the eventual f a i l u r e of the railway to succeed f i n a n c i a l l y . Because of the secrecy of the preparatory work, the announcement of this "extension of the Grand Trunk" was "regarded with some l i t t l e , surprise by the average resident 4 of the Dominion." There had apparently been no demand for such a r a i l r o a d , and this point was stressed by the opponents 1. H.C.D. May 26, 1904. 3634. Speech by Hon. Mr. F i e l d i n g . See also the l e t t e r by W. H. Biggar to the Railway  Enquiry Commissicbn, 1917, p . x x v i i . 2. Vancouver Daily Province, November 24, 1902. 3. i b i d . , February 27, 1903. 4. i b i d . , e d i t o r i a l , November 25, 1902. of the scheme. As w i l l be shown l a t e r , however, the demand soon grew, probably largely as a r e s u l t of the early propaganda and organization of hays. The announcement was very b r i e f , and because of i t s lack of d e t a i l rumors were numerous. An example of t h i s i s shown i n the Vancouver Daily Province which stated i n i t s heading over Hays 1 announcement that the r a i l r o a d would prob- -ably terminate i n Vancouver. A statement by F.M. Morse, t h i r d vice-president of the company, was very l i t t l e clearer. He stated that although the r a i l r o a d would probably be b u i l t from Gravenhurst or North Bay to Winnipeg, no plans had been formulated west of that c i t y . Other early rumors were that the road would be completed within fiv e years after the surveys, that i t would organize tr a n s - P a c i f i c steamship l i n e s , that J . Pierpont Morgan and other American, int e r e s t s had suggested financing the scheme,1, that i t was either to annex or to amalgamate with the Canadian Northern, and that i t was to be b u i l t v/ith an absence of government bonuses of any kind. In spite of i t s denial several times by both p a r t i e s , the most persistent rumor was that concerned with the Canadian Northern. It was probably caused by the f a c t that S i r Wilfred Laurier did arrange meetings between Hays and Mackenzie in 1902 and 2 1903, which apparently S a i l e d because of the excessive demands of the Canadian Northern. 3 1. Vancouver Daily Province, Jan. 27, 1903. 2. Thompson, Norman and Edgar, Major J. H., Canadian Railway  Development From E a r l i e s t Times, Toronto, 1933, 233. 3. Note the comment of Robert Borden,"At double the price the Grand Trunk would have been fortunate to escape i t s d i s r -astrous enterprise." Borden, Henry, Robert L a i r d Borden, His Memoirs (Hereafter c a l l e d Borden's Autobiography), " Toronto, 1938, 109. The b e l i e f that there were to be no bonuses was d e f i n i t e l y corrected about a week after the o r i g i n a l announce-ment. Under the headings, "The Grand Trunk a f t e r everything that isn't nailed and padlocked - Mr. Morse l e t s cat out of bag - This transcontinental scheme hot a philanthropic enter-p r i s e , " the Vancouver Daily Province quoted Mr. P. M. Morse as saying, "Of course we w i l l ask the government for subsidies, the same as have been granted to other l i n e s . The Canadian Northern and Canadian P a c i f i c received large subsidies and we w i l l n a t u r a l l y ask for the same t h i n g . " 1 The o r i g i n a l plan was simply an extension of the Grand Trunk Railway from North Bay westward to Port Arthur, p and purchase of the Canadian Northern from t h i s point. How-ever, apparently the l a t t e r would not consider t h i s , and the plan was revised. The Grand Trunk resolved to b u i l d i t s own extension to the P a c i f i c Coast.§ This new l i n e was o r i g i n a l l y to pass north of Lake Winnipeg, but was changed to enter Winnipeg.^ Believing that a subsidized railway, which would serve the sparsely populated west, but would be largely paid for by the more settled east, would be opposed strongly, and hoping to win the Quebec, supporters of the Trans-Canada Railway to t h i s scheme and thus eliminate one of the two subsidies v/hich i t had promised, the government forced the company to bu i l d from Quebec instead of from North Bay. The company r e a l i z e d that i t must agree to this plan i f i t were 1. Vancouver Daily Province, December 1, 1902. 2. H.C.D. 1905,p.9156. 3. i b i d . , August 19,1903,p.9198. 4. i b i d . , 1903, p.9199 and 1904, p.2313. to receive government assistance and for t h i s reason accepted the change. 1 It had been expected that the inhabitants of Quebec, who were discontented because the other large railways had b u i l t to Montreal, would support the government i n i t s e f f o r t s to make that c i t y the terminus of the new railway and would forget the Trans-Canada, This scheme came to naught, however, when the Maritimes demanded that the railway be b u i l t to them. The government v/as forced to lengthen the l i n e to 2 Moncton, which was f e l t to be the only solution to the argu-ment set f o r t h by Halifax and St. John, both of which wanted the terminus. It can be e a s i l y seen how t h i s r a i l r o a d became a " P o l i t i c a l , rather than a p r a c t i c a l railway, or a business railway." l" Aside from th i s argument over the eastern terminal, the only other f a c t s of importance i n the plan were that i t was to go to the northern P a c i f i c coast, and have a c a p i t a l i z a -t i o n of §75,000,000. As Hays had expected, the opposition was strong and persistent. The attack centered around two important issues - that the eastern terminus of the Grand Trunk Railway was at Portland, Maine, while any new railway should be an all-Canadian l i n e v/ith i t s terminus at a Canadian port, and, e s p e c i a l l y , that there should be no subsidy of any kind. The most outstanding and persistent opponents against the scheme, with the exception of the opposition i n 1. Jackman, W.T., Economic P r i n c i p l e s of Transportation, Toronto, 1935, 30. 2. H.C.D., June 22, 1903, p. 5175. parliament, were the Quebec interests behind the proposed Trans-Canada Railway, James J. H i l l of the Great Northern K a i l way, S i r Thomas Shaughnessy, president of the Canadian P a c i f i c Railway, and Mackenzie and Mann of the Canadian Northern R a i l -1 way. These men stated that there were already enough trans-continentals projected, that the e a r l i e r railways had been b u i l t through unsettled country and should be given a period free from competition because of the r i s k s they had incurred, and that, i f the country were fa r enough advanced to warrant another transcontinental, i t should be able to support i t s e l f . As opposed to these arguments, the supporters of the plan pointed out that the railway v/ould open new lands and there-fore would have to exist many years before i t could expect to obtain much revenue, and that because of t h i s fact i t was e n t i t l e d to as much assistance as had been given to either the Canadian P a c i f i c , Canadian Northern or any other railway. The months following the o r i g i n a l announcement are some of the most inter e s t i n g and puzzling i n the history of the railway. It has been shown that the o r i g i n a l "extension" of the Grand Trunk had been enlarged into a transcontinental, 1. Mr. Borden states: " S i r William Mackenzie c a l l e d into play his f u l l energy and resourcefulness to prevent an invasion of western t e r r i t o r y that might prove disastrous to the Canadian Northern. But Mr. Hays' project appealed very strongly to.Sir Wilfred. Mackenzie told me that he had the Government's promise to hear him further before f i n -a l l y entering into the Grand Trunk agreement. This promise was either forgotten or disregarded." This state-ment i s t y p i c a l of the contradictory evidence which i s to be found repeatedly i n t h i s problem. One part of i t suggests conspiracy, the other leads to the b e l i e f that Mackenzie would do nothing u n t i l he had heard from Laurier Borden's Autobiography, 111. to be b u i l t by the Grand Trunk P a c i f i c Railway Company,1 and that i t would carry goods f a r to the north of the parent com-pany and to a port f a r north of Portland. On June 4, 1903, after being before the railway committee for seven days, the b i l l passed that body. On June 22 Mr. Borden complained in. the House of Commons about the high c a p i t a l i z a t i o n of the road It was apparently about t h i s time that r a d i c a l changes were made i n the plans. On June 29 the Ottawa Journal stated that, after a meeting of S i r Y/ilfred Laurier, S i r William Mulock, C l i f f o r d S i f t o n , Charles Hays, and William Wainwright, i t was to be a railway assisted by the government ,awho v/ould g have the r i g h t to purchase i t i n 30 years. On July 3 the Toronto Globe published an a r t i c l e which was very close to being the f i n a l agreement. Prom t h i s we must judge that about the end of June very rapid a l t e r a t i o n s were made to the o r i g i n a l plans before they were presented to parliament. The government was s t i l l secretive, however, and the next incident was the agreement of the L i b e r a l caucus to the b i l l on July 9, followed by the resignation of the Minister of Railways and Canals, Mr. B l a i r . This was tendered 1. F i f t e e n years later the Grand Trunk o f f i c i a l s blamed t h e i r troubles to t h i s change from the o r i g i n a l plans: " I t i s not a natural connection of the Grand Trunk Railway." Railway Inquiry Commission, 1917, 76. 3- H.C.D., June 30, 1903, 5734. 3. i b i d . , 1903, p. 5893. 22. on July 10 but was not announced u n t i l July 15. 1 This delay i s another example of the apparent uncertainty of the government and further implies that i t wished to keep negotiations as secret as possible. This resignation has presented h i s t o r i a n s with one of the most d i f f i c u l t and most i n t r i g u i n g problems i n the building of the Grand Trunk P a c i f i c . B l a i r claimed that he was i n opposition to building another government road to p a r a l l e l the i n t e r c o l o n i a l , to the construction of a transcontinental railway through an unknown country, to the too-generous treat-ment being given to the Grand Trunk Railway, and declared that 2 he was i n favor of a government controlled railway. It may also have been caused by "pique not p r i n c i p l e " , because he had not been included i n the o r i g i n a l arrangements and f e l t that, as Minister of Railways, he had been slighted. Such a b e l i e f would naturally r e s u l t in h i s resignation. Later in the year B l a i r was appointed to the chair-manship of the newly formed Railway Commission, "the most important p o s i t i o n within i t s [the Government 'sj g i f t . " He resigned t h i s position on October 18, 1904. Since the l a t t e r resignation there has been a persistent attempt to discover other reasons for both his resignations, but more p a r t i c u l a r l y for the f i r s t . Implications have been numerous and three have persisted. Sometimes these are stated i n d i v i d u a l l y , but more 1. h.C.D. , 1903, 6735 and 10.0119. 2. i b i d . , Letter to Laurier, 1903, 6745. 3. Borden's Autobiography, 131. often they are clos e l y connected as a "pl o t " . B r i e f l y they were: that B l a i r had agreed to jo i n the Conservative party, that he was influenced by some f i n a n c i a l group, and that he was clos e l y connected v/ith the Mackenzie-Mann i n t e r e s t s . The f i r s t b e l i e f was a rumor that B l a i r was to receive the p o r t f o l i o of Minister of Railways under the Con-servatives but this i s denied by S i r Robert Borden. 1 The i n f l u e n t i a l f i n a n c i a l group was unknov/n, but i t was stated that B l a i r had received between $20,000 and $50,000 on the day hf h i s resignation. The most common b e l i e f was that he was i n some way connected with the Canadian Northern int e r e s t s . The Vancouver Daily Province, in.an e d i t o r i a l on the day of his resignation from the -commission, states: It i s understood that he w i l l be p r o f e s s i o n a l l y employed by one of the leading railway companies .. . . t h i s would lead to the f a i r inference that i t i s the Canadian Northern Railway which has demon-strated to the Honourable Mr. B l a i r that h i s con-nection with that railway would be much more p r o f i t -able than the chairmanship of the Railway Commission • • • • The inference that Mr. B l a i r ' s resignation may be traced to Mackenzie and Mann i s supported by Mr. B l a i r ' s remarks in accouncing his resignation, and also by the fac t that his connection with the Canadian Northern as l e g a l advisor v/ould i n no means c o n f l i c t with the sentiments he expressed regarding the Grand Trunk P a c i f i c when he l e f t the cabinet. In support of t h i s theory were the words of B l a i r i n a memorandum written on December 2, 1902, "The undersigned has long held the opinion that a port on Georgian Bay should be reached by the In t e r c o l o n i a l , and thus a connection had 1. Borden's Autobiography, 131. with the Canadian Northern.... The Canadian Northern would gladly co-operate with the government railway." 1 The best account of the combined conspiracy of Conservatives, f i n a n c i a l interests, and the Mackenzie-Mann group i s that given by Dr. CD.Skelton? He explains B l a i r ' s resignation i n these words, "The reason for thus ignoring him in the e a r l i e r stages and the ultimate reason f o r the retirement was simply t h a t , , i n view of the character and ambitions of some of the men who had made Mr. B l a i r their f r i e n d , S i r Wilfred was not prepared to confide i n him.... He was determined, that there should be no P a c i f i c Scandal." 3 The "conspiracy", however, i s not f u l l y "proven" u n t i l Dr. Skelton presents a report from Edward Farrer to Laurier. B r i e f l y , the plot was as follows: The moving s p i r i t s were David Russell, a well-to-do promoter of St. John and Montreal; J. N. Greenshields, a l i b e r a l lawyer of Montreal, who was s o l i c i t o r for Mackenzie and Mann; Hugh Graham, the proprietor of the Montreal Star, and a strong opponent of the Li b e r a l party; and Arthur Ban-sere.au.. Their purpose, at l e a s t so f a r as the f i r s t two were concerned, was to secure control of the ne?/ government i n order to unload bankrupt railways upon i t , and to secure f a t con-tracts for government railway construction; other railway interests of more permanent character "would be served".^ 1. Canadian Annual Review (Hereafter c a l l e d CA.R.),1904, 224. 2. Skelton, O.D., L i f e and Letters of S i r Wilfred Laurier, Toronto, 1921, 190-216. 3. i b i d . , 190. 4. Does t h i s mean the Canadian Northern-?' Mr. Farrer makes a long l i s t of aims and objects, including the following: A. to defeat the government and hang up the Grand Trunk P a c i f i c scheme. B. to make Blair I t h e Minister of Railways under Borden. G. to lease the In t e r c o l o n i a l . D. to bring about the purchase by the government of the Canadian Northern l i n e s west of Lake Superior. E. Grand Trunk P a c i f i c was to be suspended i n d e f i n i t e l y on the ground that the surveys did not warrant the construction of the line...the country traversed being too poor. The f i r s t two steps i n the accomplishment of this plot were the resignation of B l a i r , who v/as to take the stump against the Li b e r a l Government, and the purchase of the news-paper "La Presse", which v/as to be turned against the govern-ment. The newspaper was owned by the honorable T r e f f l e Berthiaume and was sold, "$10,000 out of $240,000 (coming) through the Bank, of which a l l the directors were Tories." Moreover, Berthiaume told Thomas Cote", the managing-editor, that Mackenzie and Mann were the chief p a r t i e s i f not the sole parties f o r whom Greenshields and Russell were .acting. Cote was further told to take his instructions from a Mr. M e l v i l l e of Boston, whom he recognized as an associate of Mackenzie and Mann. The f i n a l proof of the influence of Mackenzie and Mann i n the purchase of thi s newspaper i s a l e t t e r dated January 18, 1905, i n which they "admit procuring the majority of the stock. 1 As regards the B l a i r resignation, i t was stressed 1. Skelton, op.cit., 209. that Russell was to influence B l a i r to do t h i s , and he i s given credit i n the conspiracy of so doing. It i s pointed out, more-over, that B l a i r v/as interested before t h i s i n sundry stock market speculations j o i n t l y with Mr. Russell. This then was the "conspiracy", but f o r some reason i t f a i l e d to explode. The newspaper was purchased and B l a i r resigned, but "La Presse" did not turn Conservative and B l a i r neither attacked the Liberal party nor did he receive the important appointment he was supposed to have been promised. What happened to cause t h i s f a i l u r e ? 1 Agnes c. Laut gives the only account in her picturesque, but, unfortunately, unconvincing s t y l e . After s t a t i n g that she has f i r s t hand information that Mackenzie and Mann were interested i n the purchase of "La Presse", (but, unfortunately, she does not say the same about B l a i r ' s connection), she states: "La Presse".'. .was to f i r e the f i r s t guns. At the l a s t minute, when the a r t i c l e had been set up in type, a l o y a l follower of Laurier, an editor on the s t a f f , went down i n the basement to ink i t . It was never printed. It was not even pied. At the l a s t second i t was chopped to pieces by Laurier's f r i e n d , and Mr. B l a i r ' s open attack f a i l e d to come o f f . That i s how, perhaps, the Canadian Northern is not the Grand Trunk P a c i f i c . " 2 How much was B l a i r involved i n the eonspiracyE Writers such as the two we have quoted imply that he was i n very deep, and thus a general b e l i e f i s held that he "resigned i n an attempt to better his own pos i t i o n as well as to wreck Laurier. The whole si t u a t i o n , however, i s one of. insinuations 1. Robert Borden i n his Autoblography states, "The conjectures ...as to a plot...were e n t i r e l y groundless so f a r as I was aware." p.131. 2. Laut, A.C., "The Railroad l i g h t for the Canadian Northwest", World's Work, May 1909, 11603. and inference, but not of proof. B l a i r denied he received any money for his resignation, and no proof has been forthcoming to prove otherwise. In no place has i t been proven that he was connected with either the Mackenzie-Mann in t e r e s t s or the Con-servative party. Admitting the connection of Mackenzie and Mann with the plot outlined above, at no point i s i t shown that B l a i r was connected, except for an e a r l i e r association i n a business deal, with R u s s e l l . B l a i r ' s c r i t i c s have f a i l e d to prove,at any time, his connection with the Canadian Northern Railway or the Con-servative party. A study of his l i f e leads to the conclusion that the p o s s i b i l i t y of such a connection i s not only improb-able but even r i d i c u l o u s . Although i n his youth a Tory, he was for years the leader of the L i b e r a l party as opposition i n Nova Scotia, and from the years 1883 to 1896 he was a c t u a l l y prime minister of that province. He resigned that p o s i t i o n in 1896 to accept the p o r t f o l i o of Minister of Railways i n L a u r i e r 1 cabinet, and held that p o s i t i o n u n t i l his resignation. As a member elected by St. John, i s i t not most possible that he opposed the Grand Trunk P a c i f i c because i t would inte r f e r e with the I n t e r c o l o n i a l , as he stated? More important, the proposed road not only f a i l e d to terminate at St.John, but actually offered a serious threat to the welfare of that c i t y c i t y because of the Grand Trunk terminals i n Maine. Could he be expected to betray his constituency i n such a flagrant manner? Furthermore, had he been a member of a Conservative p l o t , would he have written to Laurier, "declaring that h i s allegiance to the L i b e r a l party on general party policy was s t i l l unshaken"? 1 . Would he have been offered the chairmanship of the newly-formed Railway Commission? Would he have a c t i v e l y supported the Honorable L. j . Tweedie, premier of New Brunswick from 1900 to 1907? If he were so clo s e l y linked with the Canadian Northern, would he lave acted as counsel for the Canadian P a c i f i c i n the struggle with B r i t i s h Columbia over fr e i g h t rates in 1906? B l a i r ' s c r i t i c s have f a i l e d to prove an u l t e r i o r motive behind his resignation. They have f a i l e d to prove his connection with the Conservatives, Canadian Northern inter e s t s , or any " f i n a n c i a l group". Faced with this lack of proof, and remembering his constituency, we must accept B l a i r ' s reasons at t h e i r face value. With the announcement of the Minister of Railway's resignation, the new plans for the railway were disclosed. I t was to be b u i l t i n two d i v i s i o n s , one east of Winnipeg, to be b u i l t by the government and to be known as the National Transcontinental, one west of Winnipeg to be known as the Grand Trunk P a c i f i c Railway. L i t t l e more than t h i s bare outline was known u n t i l 1. Standard Dictionary of Canadian Biography - a r t i c l e on p. 51 about B l a i r i s based on "private" knowledge". 2. Vancouver Daily Province, Feb. 24, 1906. 3. It w i l l be noted that Professor G. P. de T. Glazebrook apparently agrees with t h i s conclusion,for i n his recent book, A History of Tranaportation in. Canada',' Toronto ,1938, he states, "It has been asserted that B l a i r was more v f r i e n d l y to the Canadian Northern than the Grand Trunk'." (P325) July 30, when S i r -Wilfred Laurier, having signed the agreement with the Grand Trunk P a c i f i c on the day before, presented the b i l l to the House. It i s d i f f i c u l t to see why there was so much secrecy and a l t e r a t i o n before the b i l l was brought to parliament, and why the,.bill was presented-so late in the session. Were the Grand Trunk o f f i c i a l s unwilling to b u i l d to Moncton, or did they refuse to accept the long unproduc-tive stretch between Winnipeg and Quebec unless i t was b u i l t by the government? How much influence had the Grand Trunk in the formation of the plans? What was the part played by Senator Cox?""- There are no records of the reasons, and no explanation was given. Apparently, once the agreement had been made there was great haste to bring i t to the House, for the resolution was not put on the order papers beforehand, as was customary, and the leader of the opposition was not given a copy u n t i l a f t e r the prime minister's opening speech. "Sir. Wilfred did not extend the courtesy of giving me i n advance a copy of the b i l l which he handed across the f l o o r of the House at the conclusion of his speech...resenting rather strongly what I regarded as unusual discourtesy, I spoke p at considerable length i n reply.v 1. Senator Cox was the outstanding f i n a n c i e r of Canada at t h i s time. He was a member of the Grand Trunk and Grand Trunk P a c i f i c directorates. He v/as president of the Canadian Bank of Commerce, and i t i s s i g n i f i c a n t that, i n the words of Dr. Chester Martin, "It v/as common knowledge that the Grand Trunk Railway was not permitted to go into bankruptcy be-cause i t would have injured the 'Canadian Bank of Commerce." The Conservative party were so c e r t a i n of his influence that i t based many of i t s attacks on the byword, "Cox can't wait." cf. H..C.D. , 1903 pp. 9593';,.: 10434 and 11864. 2. Borden's Autobiography, 112. The contract between the Grand Trunk P a c i f i c Railway and the government was signed on July 2 9 , 1 9 0 3 . The ne?/ plans necessitated the passing of two acts of parliament, i n 1903 , 1 both of which were amended i n 1904 . The f i r s t of these i s known as, "Ah Act to Incorporate the Grand Trunk P a c i f i c Railway company," and the other, "An Act respecting the con-str u c t i o n of a National Transcontinental Railway." So closely are these connected that i t i s necessary to study both to understand f u l l y e i t h e r . The f i r s t of these two acts, in i t s revised form, was presented to the House of Commons on July 3 0 , 1903 , and the debate lasted u n t i l August 1 0 . The modificationa were debated from A p r i l 4 to May 6 , 1904 . It begins with a preamble stating that, "The undertaking contemplated would be for the general advantage of Canada." The most important men who compose the company, a-nd who are appointed provisional d i r e c t o r s are l i s t e d as follows: S i r Charles Rivers Wilson, G.C.M.G.,C.B.; Lord Welby, G.C.B.; John A. Glutton-Brock; Joseph Pr i c e ; A l f r e d W. Smithers, a l l of London, England; the Honourable George A..Cox; H. M. P e l l a t t , E. R. Wood, a l l of Toronto; 2 the Honourable Y/illiam Gibson^of Beamsville, Ontario; J . R. Booth of Ottawa; honourable h. B. R a i n v i l l e , Charles M. Hays, 1. Statutes 1903 . ch. 1 2 2 . 3 Ed. VII. " 1 9 0 3 . ch. 7 1 . 3 Ed. VII. " 1904 . ch. 8 0 , a Ed. VII. « 1904 . ch. 2 4 . 4 Ed. ¥ 1 1 . Sessional Papers 4 Ed.VII, no. 37 - Supplemental agreement. 2 . Senator Gibson was one of. Canada's foremost contractors and was very active i n public works. He was also president of the Bank of Hamilton. Frank W. Morse, William Wainwright, a l l of Montreal; and John B e l l of B e l l e v i l l e . 1 The head o f f i c e was to be i n Canada. The company was to have a c a p i t a l stock of $45,000,000 (not $75,000,000 as i n the f i r s t plan), i n shares of $100, but no one was to have more than ten percent of the shares subscribed. $20,000,000 of this stock might be issued i n p r e f e r e n t i a l stock, and the re-mainder in common stock. When §$2',000,000 worth of stock had heen subscribed, the provisional directors were to c a l l a meet-ing of the stockholders which was to elect not less than nine and not more than f i f t e e n d i r e c t o r s . When the act was amended the subscription t o t a l was changed to $1,000,000 which was to be paid into a chartered bank along with 20$ i n t e r e s t . To protect the government, one direct o r , who would have a l l the rights and pr i v i l e g e s of an ordinary d i r e c t o r , but no shares, was to be appointed and paid by i t . The "Line of Railway" clause stated that the company might lay out, construct, and operate a railway of a gauge four feet, eight and one-half inches from Moncton through the center of New Brunswick to a place i n the province of Quebec near the c i t y of Quebec, thence north-west to the bounday of Ontario within, f i f t y miles of Lake A b i t i b i , north of Lake Nipigon to Winnipeg, near Battleford, Edmonton, and Dunvegan, or by such other more feasible route located l a t e r to Peace, Pine, or other pass, to Port Simpson, Bute Inlet,or other points on the P a c i f i c coast. Branches were to be b u i l t to a point near North Bay or iMipissing Junction, to Montreal, to 1. For a Canadian company the English representation was very powerful. Fort William, Port Arthur, or any other Canadian Sort on Lake Superior, to Brandon, Regina, Prince Albert, and Calgary respectively, and from a point i n B r i t i s h Columbia to Dawson i n the Yukon T e r r i t o r y . Should the National Transcontinental be b u i l t by the government, the Grand Trunk P a c i f i c would have the right of building branch lines from i t . There were to be f i v e sections of the railway: Eastern, Quebec, Woodland, P r a i r i e , and Mountain. A proviso i s added to the e f f e c t that i t is to have, "Regard that the P r a i r i e section, except for satisfactory reasons, s h a l l be constructed at such a distance generally not less than t h i r t y miles from any other main l i n e of railway already constructed." The way i n which th i s l a t t e r clause was f l a g r a n t l y violated w i l l be shown l a t e r , but i t should be noted that i n disregard-ing t h i s proviso the railway shows that i t must have been very i n f l u e n t i a l with the L i b e r a l government, and, that i n building close to other l i n e s the railway f a i l e d i n one of i t s primary-objects - the opening of the new country at the north. Bonds, debentures, or other s e c u r i t i e s might be issued to the amount of $30,000 per mile i n the three eastern sections, $20,000 per mile i n the p r a i r i e s , and $50,000 i n the mountains, but might only be issued i n proportion to the amount of railway constructed or under contract to be construct ed. These figures are interesting because they lead to the discussion as to the cost of the road. Did the government expect these figures to approximate the cost, were they set as a maximum, or were they simply arbitrary? Bonds issued under t h i s clause were to be a f i r s t charge upon the section of the railway in respect to<3 which they were issued. Bonds might also he issued by the railway on vessels or any other property that i t might obtain, but were not to exceed their value. The company also had authority to issue mortgages on land-grant feonds to the extent of two d o l l a r s per acre i n the event of a land subsidy being given. The railway might own or lease vessels, wharves, hotels, telegraphs, and such accessories along i t s l i n e , and might develop lands i n i t s v i c i n i t y . It was given the power to a i d s e t t l e r s , acquire or lease running r i g h t s over other roads, b u i l d bridges, and c o l l e c t t o l l s , and possess shares in other types of organizations, such as mines or lumber firms. A f i n a l clause stated that i f the construction of the^ railway was not commenced and $3,000,000 expended on i t . within two years after the passing of the act, or i f the railway was not finished and put i n operation within seven years, the act would be n u l l and void. By a supplemental agreement i n 1904 t h i s time for completion was extended to December 1, 1911. On December 5, 1911 another extension was made, the p r a i r i e section being allowed u n t i l December 1, 1912 and the mountain section u n t i l December 1, 1914. "The Aet respecting the construction of a National Transcontinental Railway" was debated in the House from September 2 u n t i l September 30, 1903, and the amendment from A p r i l 26 to May 2, 1904. It i s closely connected with the Grand Trunk P a c i f i c B i l l , and the discussion over i t was much the same. There are two sections to t h i s b i l l , onacealing with the construction of the National Transcontinental Kailway, the other being an agreement between the government and the Grand Trunk P a c i f i c Railway Company. As the National Transcontinental Railway Act i s concerned with the r a t i f i c a t i o n of the agreement between the government and the Grand Trunk P a c i f i c Railway, i t i s better to study this agreement f i r s t . It begins by giving a l i s t of names of the directors of the Grand Trunk P a c i f i c Railway Company, which i s s i m i l a r to the l i s t already given, with the exception of those men who were members of the government and who, as such, could not share i n a contract with the government. These men were three senators, Cox, Gibson and R a i n v i l l e . In the long preamble to the act i t i s stated that the reasons f o r building the railway are to bring railway f a c i l i t i e s to the great areas of Canada lacking them, to serve the r a p i d l y expanding trade commerce, to open and develop the northern zone, to promote inte r n a l and foreign trade, to develop commerce through Canadian ports, and to b u i l d a .road from ocean to ocean e n t i r e l y in Canadian t e r r i t o r y . The transcontinental railway was to be divided into the two d i v i s i o n s c a l l e d "Eastern" and "Western"\ The dividing point between Moncton and the P a c i f i c was Winnipeg. The Western d i v i s i o n was subdivided into the P r a i r i e and Mountain sections, while the Eastern d i v i s i o n was i n three sections. The Eastern d i v i s i o n was to be constructed by the government as soon as possible, and the Western d i v i s i o n by the Grand Trunk P a c i f i c Railway Company. When the Eastern d i v i s i o n was 35. completed i t was to be leased and operated by the Company f o r f i f t y years, with the option of renewing the lease for another f i f t y years. This would mean the control of a new transcontin-ental railway under one c o n t r o l l i n g body. For the f i r s t seven years the lessee was to pay only "working expenditures" and for the remainder of the term three percent of the "cost of construc-t i o n " above the "working expenditures". Should the earnings during the f i r s t three years of the re n t a l period.(that i s from the eighth to the tenth years inclusive) be less than three percent, the company did not have to pay for these three years, but i f t h i s were done the interest of these years was to be accumulated and added to the cost of construction, and interest to be paid on i t . By. t h i s clause i t was possible for the railway to rent t h i s d i v i s i o n for ten years for only "working expenditures". For the protection of the company the s p e c i f i c a t i o n s of the Eastern d i v i s i o n were to be submitted to them and approved before the commencement of work. The location of the Western d i v i s i o n was to be cmmpleted by December 1, 1908. The company was to lay out, construct and equip this d i v i s i o n and maintain a standard not i n f e r i o r to that of the main l i n e of the Grand Trunk Railway between Montreal and Toronto as f a r as practicable, with the exception of double-tracking. =The company was to deposit within t h i r t y days the sum of $5,000,000 as security, on which the government was to pay interest at three percent. This i n t e r e s t was waived by the Grand Trunk P a c i f i c . 1 The Se.ss. Papers 37 (a), 1904. Letter Hays .to F i e l d i n g l 36. deposit was to be returned when the Western l i n e was completed, and had been supplied with r o l l i n g stock to $15,000,000, even i f the Eastern d i v i s i o n should not be completed. Default of the company would r e s u l t i n f o r f e i t u r e of the deposit. Because of the terms of lease, in which the com-pany was to pay only working expenditure for seven years and interest on the cost of construction for the remainder of the term, these two phrases "working expenditure" and "cost of construction" were defined f u l l y . On the question of duty, i t was stated that no cost was to be added i f the government imported the goods, but i t would be charged to contractors. The company agreed to supply modern and complete r o l l i n g stock to the Western d i v i s i o n to the value of $15,000,000 and to the Eastern d i v i s i o n to the value of $5,000,000. It also guaranteed proper maintenance of the Eastern section during r e n t a l period. The c a p i t a l stock of the company was set at $45,000,-000 of which not more than $20,000°,000 was preferred and not less than $25,000,000 was common. The Grand Trunk Railway was to hold a l l the common stock except for 1,000 shares which were to be held by the d i r e c t o r s . In 1904 t h i s clause was amended to permit the Grand Trunk' Railway to dispose of the stock "provided i t s h a l l continue to hold...a majority of the said stock." This was never done, and the Grand Trunk held a l l the stock for which i t paid a "nominal sum".1 The government guaranteed p r i n c i p a l and interest of the bonds issued by the company up to 75$ of the amount of 1. Railway inquiry Commission 1917, xxv. construction in each d i v i s i o n , but the p r i n c i p a l amount was not to be i n excess of $13,000 per mile on the p r a i r i e section, and $30,000 per mile on the mountain section. In 1904 the company attempted to have the r e s t r i c t i o n s removed but t h i s was done only i n the mountain section, where the government set no l i m i t on the t o t a l cost. The company was to be respons-i b l e for inter e s t on the bonds i n the p r a i r i e section from t h e i r date of issue, and the government was to pay the interest on the bonds of the mountain section for seven years at not over three percent. The g>vernment agreed to extend t h i s for three years, but a l l interest during t h i s period was to be ca p i t a l i z e d and inter e s t paid on i t by the company for the ensuing f o r t y years. The amended agreement stated that the company was to be allowed f i v e years of grace, and then a trustee was to be appointed who would take care of the road and share the p r o f i t s i n proportion to the amount of bonds held. The second series of bonds, that i s the remainder, were guaranteed by the Grand Trunk P a c i f i c Company. Fi n a l clauses of the agreement state that a l l supplies for the Western d i v i s i o n s h a l l be obtained from Canadian producers, i f possible, and that a l l f r e i g h t not s p e c i f i c a l l y routed s h a l l be carried e n t i r e l y i n Canadian t e r r i t o r y and to a Canadian port. The main body of the National Transcontinental B i l l began with a summary of the agreement with the Grand Trunk P a c i f i c Railway, r a t i f i e d the agreement, outlined the types of bonds, and gave the power to the GrandTTrunk Railway to acquire, s e l l , and guarantee the bonds of the Grand Trunk P a c i f i c Kailway. The Grand Trunk Railway's obligations were set out as the guaranteeing of the remainder of the' Grand Trunk P a c i f i c bonds after the government have guaranteed 75$, and the acquiring of $24,900,000 common stock in the other company. The Eastern d i v i s i o n , which was known as the National Transcontinental Railway, was to be b u i l t by the government. The work of construction and operation was to be in the hands of a commission appointed by the government. At f i r s t there were three commissioners, but t h i s number was increased i n 1904 to four, one each from the Maritlmes, Quebec, Ontario, and the West. They were to be appointed by the Governor-General i n Oouncil, which group also appointed a secretary and chief engineer. A l l other appointments were to be made by the commission, N O member of the Canadian parliament could hold an o f f i c e with emolument under the commission. Its power was to end when the Western d i v i s i o n of the railway was complete and open for t r a f f i c . 1 The commissioners were to obtain funds for the project by issuing debentures to the Minister of Finance, which would be repayable f i f t y years after July 1, 1903, with interest at three percent paid semi-annually. The interest on the government loan for this railway was not to exceed three and one-half percent. The Grand Trunk P a c i f i c B i l l was read the t h i r d time on August 10, 1903, and the National Transcontinental 1. It was believed that by that time the National Transcont-inental Railway would be completed, but this proved to be an error. B i l l on August 30. They both received the Governor-General's assent on October 24 of that year. The amendments to both b i l l s were passed f i n a l l y on May 27, 1904. The discussion in parliament, e s p e c i a l l y on the National Transcontinental B i l l was long and verbose. Much ir r e l e v a n t material was introduced, and much r e p e t i t i o n was included. The debate divided i t s e l f into three main sections, an alternative p o l i c y offered by Mr. R. A. Borden, the leader of the opposition; c r i t i c i s m s of the government pol i c y ; and the answers which the L i b e r a l party presented to their c r i t i c s . The al t e r n a t i v e p o l i c y by Mr. Borden"'' suggested that the I n t e r c o l o n i a l Railway should be extended to Georgian Bay ay the a c q u i s i t i o n of the Canada A t l a n t i c Railway and the building of any necessary l i n k s . This.would keep an a l l -Canadian connection from east to west, would make, the Inter-c o l o n i a l a profit-making road, and would mark a progressive step i n government ownership. As the Canadian P a c i f i c Railway was carrying only about o n e - f i f t h of i t s possible capacity from North Bay to Fort William t h i s section should be purchased 1 by the government and joined to the i n t e r c o l o n i a l , with running ri g h t s f o r the four great Canadian roads. This would save the construction of another line through the d i f f i c u l t and un-productive section north of the Great Lakes, which could not H-.C.D. , August 18, 1903. pp.8961 - 9006.. 2. Borden states the Canadian P a c i f i c had agreed to s e l l . Borden's Autobiography, 114, footnote. 4 0 . hope to compete with the water transport of g r a i n s , 1 and would offer an a l l - y e a r outlet for the p r a i r i e s . To r e l i e v e the congestion between Winnipeg and Fort William the government should give assistance to both the Canadian P a c i f i c and Canadian Northern Railways towards the improvement of th e i r l i n e s , on condition that the government control their rates, and running r i g h t s be given to the i n t e r c o l o n i a l and Crand Trunk. To complete the transcontinental line assistance should be given to the Grand Trunk Railway to b u i l d a l i n e , which would extend far north of the proposed Grand Trunk P a c i f i c to Edmonton, on which the government should have complete control of rates, and from there the Canadian Northern and Grand Trunk P a c i f i c were to amalgamate to build one l i n e through B r i t i s h Columbia. Combined with t h i s scheme was to be a thorough rebuilding and equipping of the Georgian Bay and A t l a n t i c ports. The value of these proposals, as Borden pointed out, would be the development rather than the t h r o t t l i n g of the i n t e r c o l o n i a l , the use of lakes and inland waterways as a complement of the railway system, the opening of new country, e s p e c i a l l y i n the productive west, and an all-Canadian road which did not o f f e r competition to those already exi s t i n g , as well as an immense saving in the duplication of l i n e through the then unproduc-tive Canadian Shield. Borden's followers added l i t t l e else to his plan, 1. H.0.D. 1903, p. 7710. It i s shown that the cost from Port Arthur to Montreal was 12 cents by the Canadian P a c i f i c and 6 cents by boat for each bushel. In fairness to Borden i t must be noted that he stressed the railway as an ALL-YEAR route and that the idea of only one railway north of the Great Lakes would have probably been sound. Note other than to point out that the government's scheme offered serious competition to the canal system of Canada, which had cost the country §7,000,000. The government, led by C l i f f o r d S i f t o n , condemned the plan because i t would confine the Grand Trunk Railway to two provinces and would not a f f e c t i t s American outlet, would leave 1200 miles of northern Ontario and Quebec unopened, involved a longer route than the government p r o j e c t , 1 would mislead the western farmers by stating that they were getting a government road, and would cost much more than the o r i g i n a l plan. In fairness to t h i s plan i t must be noted that i t was never considered seriously by the L i b e r a l party who, v/ith t h e i r majority, ruthlessly pushed the o r i g i n a l scheme through the House. The chief opposition to the b i l l s as presented by the government arose from the haste and incompleteness of the plan, the questionable need of another transcontinental r a i l -way, the i n a b i l i t y to give eiien an approximate estimate of Laurier's reply, "I believe...raiIways can compete success-f u l l y with water routes." p.10542. 1. A pamphlet, The Grand Trunk P a c i f i c Railway, no printer, no date, issued by the L i b e r a l party showed the following-Government scheme: Winnipeg - Quebec 1,475 miles Quebec - Moncton 400 " Moncton - Halifax 186 " Total 2,061 miles Borden scheme: Winnipeg - Fort William (C.P.R.) 426 miles Ft. William Sudbury (C.P.R.) 555 » Sudbury-Scotia Jet(to be b u i l t ) 105 " Scotia Jet. - Coteau (C.A.R.) 294 " .Coteau - Montreal (G.T.R.) 39 " Montreal- Halifax (I.C.R.) 837 " Total 2,256 miles the cost, the competition i t offered to the I n t e r c o l o n i a l , the ignoring of the waterways, the dubious influence of the Grand Trunk Railway, and the cost to the government. Later devel-opments v/ere to show that each c r i t i c i s m v/as j u s t i f i e d , but the Liberal party refused to be swayed from i t s o r i g i n a l pro-j e c t . The haste with which the plans were made has been shown. It seemed i s i f the government had simply drawn a lin e across the map of Canada, with an eye to p o l i t i c a l i n f l u e n c e , 1 and determined to build the road there. Through-out the entire debate there was a surprising ignorance shown as to the route, type of countrytto be crossed, possible grades and curves, necessary bridges, passes, and such e s s e n t i a l f a c t s . The r e s u l t is that the estimated costs and expected r e s u l t s are also i n d e f i n i t e , and therefore diverse. "T challenged any minister to state the cost of the Eastern Section within ten m i l l i o n s . None of them accepted the 2 challenge," says Borden. True, the Canadian P a c i f i c Railway had been b u i l t i n just such a haphazard way but i t had had a 'definite section of*the west as a terminus, and one of i t s primary objects was to j o i n t h i s to Canada. Was there such need fo r haste i n the b u i l d i n g of the new railway? The L i b e r a l s explained the suddenness with which they presented the b i l l to be due to the need of a railway immediately. Borden r i d i c u l e s this idea. "The transportation question had been 1. Infra, Chapter IV. 2. Borden's Autobiography, p. 173. with them seven years," he states. "After long consideration they had d e l i b e r a t e l y declared and announced that no such conclusion could be reached without a thorough and comprehen-sive inquiry into the whole question. Five months had passed and no report had been made. Although h&B«FiQ.ded as absolutely v i t a l and e s s e n t i a l , the commission and i t s inquiry and report were absolutely disregarded." 1 After the b i l l was passed six months elapsed before the government began i t s surveys. Fortunately the grades and curves which i t had promised were not impossible, but at f i r s t these were not by any means a ce r t a i n t y . Later events would seem to show that the reason for haste was due to the pressure of the Grand Trunk o f f i c i a l s and to the excellence of the railway as an e l e c t i o n platform. It i s surprising how l i t t l e actual demand there was for t h i s road before the Grand Trunk Railway and the L i b e r a l party announced i t . Manitoba was probably more interested in the development of the Canadian Northern and the routes into the United States. The North-west T e r r i t o r i e s were f i g h t i n g for p r o v i n c i a l status, and, as f a r as railways -were concerned, were watching the growth of the Canadian Northern, which was closer and seemingly more r e a l . B r i t i s h g Columbia feadcwatchedefive governments i n o f f i c e i n f i v e years, and was i n a period of government i n e f f i c i e n c y , corruption, and i n s e c u r i t y . On January 5, 1903, Premier E. G. P r i o r of 1. Borden's Autobiography, 113. 2. Premiers J . H. Turner, C. A. Semlin, J . Martin, J . Dunsmuir, E. G. P r i o r . B r i t i s h Columbia stated, "I do not approve of giving assistance to the scheme to run a railway to Port Simpson, thus b u i l d i n g up a r i v a l c i t y to Vancouver, Victoria, and other coast c i t i e s . " As late as August 11, 1903, B l a i r stated, "There i s no evid-ence that the people of this country demand t h i s l e g i s l a t i o n . " 2 But public opinion soon turned i n favor of the transcontinent-a l scheme, and even Premier P r i o r , who probably saw the trend, stated that he favored a railway to open the n o r t h , 3 and at a l a t e r meeting with Laurier and Hays i s reported to have promised land grants to aid the railway,but, because of the f i n a n c i a l state of the province, no money.^ In spite of the powerful opposition, e f f e c t i v e propaganda had aroused enthus-5 iasm for the railway before the year had passed. It was not the need of the railway that presented a problem to the people; i t was the route and cost. How much would the railway cost? Under the cont-racts agreed upon the government was to pay f o r the National Transcontinental Railway, and to do t h i s could issue bonds up to $30,000 per mile, on which i t could pay up to three and one-half percent in t e r e s t . For seven years i t received no rent, but a f t e r t h i s was to be paid three percent of the cost of construction, a loss of one-half percent. It paid the 1. Vancouver Daily Province, January 5, 1903. 2. H.C.D., August 11, 1903, 8419. 3. Vancouver Daily Province, January 30, 1903,report of meeting 4.ibid. , February 2, 1903. • ( a t Y a l e » 5.The discontent following the Alaska Award of 1903 must have influenced public opinion i n Canada for a transcontinental to connect the north country more securely to the Dominion. i n t e r e s t on the c o s t of the Mountain s e c t i o n f o r seven y e a r s . I t g uaranteed 75$ o f the Grand Trunk P a c i f i c R a i l w a y bonds, on c o n d i t i o n t h a t the P r a i r i e s e c t i o n d i d not c o s t more than $13,000 p e r m i l e . 1 G u a r a n t e e i n g bonds was not supposed t o mean t h a t the government would pay any of them. The Grand Trunk P a c i f i c R a i l w a y was t o have a c a p i t a l o f $45,000,000. I t p a i d r e n t on the E a s t e r n s e c t i o n , when i t was b u i l t , a f t e r seven y e a r s . I t r e c e i v e d seven y e a r s ' i n t e r e s t on the bonds f o r the M o u n t a i n s e c t i o n , but none on the P r a i r i e . The government, however, g u a r a n t e e d 75$ on the bonds o f b o t h s e c t i o n s , w i t h the p r o v i s o t h a t the P r a i r i e s e c t i o n must n o t exceed $13,000 per m i l e . The seven y e a r s which the government g r a n t e d on the M o u n t a i n s e c t i o n began a f t e r the r o a d was c o m p l e t e d . The Grand Trunk K a i l w a y g u a r a n t e e d t h e r e m a i n d e r of the bonds i s s u e d by t h e Grand Trunk P a c i f i c , which i t was t h e n e s t i m a t e d might be as h i g h as $20,000,000 on the P r a i r i e and $50,000,000 on the M o u n t a i n s e c t i o n . I n r e t u r n i t r e -c e i v e d a p p r o x i m a t e l y $25,000,000 of common s t o c k i n the Grand Trunk P a c i f i c , and no p r o v i s o was made to s e t the p r i c e i t must pay f o r t h i s . L a u r i e r a d m i t t e d t h a t t h i s s t o c k would not r e a l i z e the f u l l p a r v a l u e . 2 The Grand Trunk c o u l d d i s p o s e of some of t h i s s t o c k but must h o l d the m a j o r i t y a t a l l t i m e s . I t can be seen t h a t t h i s agreement l e f t much scope 1. The Canadian N o r t h e r n on the p r a i r i e s was e s t i m a t e d a t between $18,000 and $19,000 per m i l e a t t h i s t i m e . H.C.D. 1903, 5143 and 7844. 2. - Ibid., 5159. i n interpretation, and the conjectures at the cost of the railway were very diverse. Mr. Borden stated that i t would cost the government between $155,000,000 and §171,OOO,OOO, depending on the price for which the bonds s o l d . 1 S i r Wilfred Laurier estimated only $13,000,000 which by a peculiar c o i n c i -dence equalled the national surplus of 1903, and therefore i t could be b u i l t without the people paying one d o l l a r . This estimated cost was obtained by reckoning the inter e s t which the government v/as to pay for seven years on the Mountain section and the National Transcontinental. 2 Laurier stated that this was the only actual subsidy the railway would receive. Speak-ing of the cost of the transcontinental he says, "The sum t o t a l of the money to be paid by the government for the construe t i o n of that l i n e of railway from Moncton to the P a c i f i c w i l l be...$13,000,000, and not a cent more." 3 This wide difference in the estimates was the result of i n s u f f i c i e n t date, and the d i f f e r e n t d e f i n i t i o n s of "cost to the people". On the National Transcontinental 4 i t is s u f f i c i e n t to state that Borden estimated the cost at between $117,750,000 and $130,000,000 and Acting-Minister of Hallways, Mr. F i e l d i n g , 1. G.A.R. , 1904, 75. 2. H. C. D. 1903, 7691j see also F i e l d i n g estimate p.8588. 5.ibid., 7691. 4.C.A.R. 1904, 96. Note also the estimate on page 97 by . George Taylor as $25 for each i n d i v i d u a l i n Canada, $125 f o r each family, $1500 each voter, $100,000 each township, and $©00,000 for each constituency. at $71,156,975, ^ ](inotc including |2,384,246 for the Quebec bridge), and the t o t a l actual cost was $159,881,197, which is almost three times the government's estimate. On the Grand Trunk P a c i f i c proper, F i e l d i n g estimated that the P r a i r i e section would cost the government nothing, while the Mountain section would cost only the intere s t for seven years, a t o t a l of $2,334,575. Borden estimated the cost of the P r a i r i e section might be as high as $13,060,000, and the Mountain section $28,000,000, f o r a t o t a l of $41,060,000. • This difference i s due to the fact that Borden included the cost of the government guarantees. Wot the least important figure i n the opposition's statement was the difference i n 2 interest of one-half percent, v/hich amounted to $18,850,000. At the same time that S i r Wilfred Laurier was promising Canada a transcontinental railway for $13,000,000, Charles Rivers-Wilson, president of the Grand Trunk Railv/ay, was pa c i f y i n g the stockholders by declaring that t h e i r guarantee was only for £2,968,000, plus interest amounting to £118,720, which was not to accrue u n t i l eight years a f t e r the beginning of the contract, and Charles M. Hays was showing the same group that with t h i s eight years, plus the seven years without interest, plus the three years extension, the Grand Trunk P a c i f i c would not become a burden on the Grand Trunk for eighteen years. One of the most b i t t e r l y fought discussions centered 1. H.C.D., 1903, 3626. 2« G>A*R. 1904, 96. 3. i b i d . , 71. 48. on the i n t e r c o l o n i a l Railway. I t was pointed out that the Int e r c o l o n i a l was primarily a m i l i t a r y road, and had never been intended as the f i n a l l i n k of a transcontinental. True, i t was an all-Canadian road, as opposed to the Canadian P a c i f i c , which crossed Maine, and gave the Liberals the opportunity to draw the red herring of "bonding p r i v i l e g e " 1 i n their support of the new road, but the proposed new road was also approximately 180 miles shorter. There would be l i t t l e cause for competition, for only at the termini were the two roads within t h i r t y miles of each other. The influence of the Grand Trunk Railway i n the new plan was always a source of d i s t r u s t and fear. The directors of the two companies were much the same, so that i t was often said that the names of the two railways were synonomous.2 The older railway was to hold a c o n t r o l l i n g part of the stock, andntherefore to control the other's p o l i c i e s . In the two or three years following the granting of the charter these fears were to be accentuated. Lt was obvious from the f i r s t that the new Trans-continental scheme was an attempt to better conditions f o r 1. The bonding p r i v i l e g e had- become a source of much d i s -cussion since a l e t t e r about this time from S i r Andrew Carn-egie to the London Times threatening i t s withdrawal i f the . po l i c y of inter-imperial trade preference was continued. Cleveland had also threatened t h i s in the United States elections of 1888. During the Great War the Canadian P a c i f i c was forced to route goods through the other l i n e s for a short time. See Skelton, O.P., L i f e and Letters of S i r  Wilfred Laurier, I I , 192. 2'. The Grand Trunk directors i n December 1903 included S i r Charles Rivers-Wilson, A. W. Smithers, J . A. Glutton-Brock, Joseph Price and Lord Welby. the Grand Trunk Railway. From i t s very inception the new line was considered as a feeder for the established parent company. The requirements of the government had forced the railway to change i t s original"plans, but when Charles Rivers-Wilson stated that the plan meant a partnership with the government, the remark was not received with favor i n Canada. The connection of a large business venture such as this with the government i s bound to arouse doubt among the masses of the people as to i t s value and honesty, e s p e c i a l l y when such a company i s f e l t to be interested in the United States. The trend of the Grand Trunk towards the United States i s very obvious. Charles M. Hays was an American. The termini of the railway were the A t l a n t i c seaboard of the United States, e s p e c i a l l y at Portland, Maine, where the company had spent some $20,000,000 on f a c i l i t i e s , and Chicago, I l l i n o i s , on Lake Michigan. During the early part of the surveys repeated p e t i t i o n s were sent to the government com-pl a i n i n g of the number of aliens (that i s , Americans) being employed b y the Grand Trunk P a c i f i c , and in spite of the report of Mr. Hays that 96$ were either Canadian or B r i t i s h c i t i z e n s , the report of Judge Winchester, who was appointed to i n v e s t i -gate the charge, states, "There was no earnest endeavor made to obtain Canadian engineers...had such an e f f o r t been made there would have been no d i f f i c u l t y i n obtainingea s u f f i c i e n t number capable....There was, however, a very earnest desire to obtain American engineers for the work and i s some cases applications were made to the heads of other railway com-panies to re l i e v e men for the purpose." In fa i r n e s s to the Grand Trunk P a c i f i c i t must be admitted that i n some sections, such as the Skeena River, Canadian engineers were employed, but throughout the history of the railway the complaints are so numerous that i t must be accepted as a fact that the major-i t y of the higher o f f i c i a l s were Americans. It was pointed out that the proposed route of the Grand Trunk P a c i f i c would bring grain from between 400 and 600 miles north of the American border to Winnipeg, which was only 45 miles away, From there i t was a single step to obtain f a c i l i t i e s to the United States and from there to the Grand Trunk terminus.at Chicago, i n 1906 an appasent move in this d i r e c t i o n was taken with the obtaining of control of the Wisconsin Central Railway by the Grand Trunk. 2 There was no reason why, at the end of f i f t y years , the Grand Trunk P a c i f i c should not permit i t s lease on the National Transcontinental to lapse, and divert I t s t r a f f i c through the American channels. In 1909 occurred another incident which strength-? ened the b e l i e f of some people i n the complicity of the Grand Trunk o f f i c i a l s with United States i n t e r e s t s . This was the resignation of vice-president F. W« Morse. It was stated that he was forced to resign because, "The L i b e r a l party caught him 'grafting' and that his 'graft' t o t a l l e d $2,000,000. It was further implied that most of thi s money went to 1. Sessional Paper, 36 (a), 1905, 64. 2. H.C.D.., June 12, 1906, 5137. 51. Americans.''' Although there i s no proof to substantiate this accusation, and therefore i t cannot be considered M e , i t presents an i n t e r e s t i n g contemporary b e l i e f in the influence of Americans on the company. It has been shown that the o r i g i n a l plans of the Grand Trunk P a c i f i c had undergone several changes when they were presented to the government. The proposed contract was not agreeable to the railway and was revised i n 1904. In proposing the a l t e r a t i o n s to t h i s agreement, Charles Rivers-Wilson wrote to Laurier as follows: I have been confronted with many d i f f i c u l t i e s i n bringing my colleagues to accept the view wMch I entertain on the general merits of the scheme.... It has always seemed to me that the Government of Canada and the Grand Trunk Railway Company, being i n point of fact partners in the enterprise,... the former actuated by consideration of National p o l i c y , the l a t t e r by the necessity f o r securing Its share in the growing prosperity of the north-west....too large a portion has been imposed on the Grand Trunk Company....I think this s h i f t i n g of the balance was caused by the extreme, and I must say, i n many respects unfair, opposition met with in the House. The object of the amendment i s to a l l a y any possible apprehensions of our shareholders. 2 The fe e l i n g of the people as a whole was that the Grand Trunk received the better part of the bargain, i n that they had l e f t the unproductive area north of Lake Superior to the government, while the Grand Trunk P a c i f i c drew the im-mediate t r a f f i c of the west. The Grand Trunk had twice before refused to b u i l d the section north of Lake Superior before the Canadian P a c i f i c undertook to do i t , 3 and seemed to be attempt-1. Prince Rupert Empire, A p r i l 24, 1909. 2. Sessional Paper 57 (a), 1904. 3. Makers of Canada Series X, "Lord Strathcona" bp John McNaughton, 1926, p.302. ing to elude i t again, es p e c i a l l y in view of the fa c t that i t was reported that the Canadian P a c i f i c lost $1,000,000 on i t s l i n e i 1 It was feared, with good reason, that the Grand Trunk P a c i f i c had no intention of using t h i s l i n e , and this b e l i e f was accentuated on October 1, 1905, when the Grand Trunk Railway purchased the Canada A t l a n t i c Railway. With t h i s they also gained the Canada A t l a n t i c Transport company, which operated a f l e e t of f r e i g h t steamers on the Great Lakes, and afforded a connection between the Grand Trunk and Grand Trunk P a c i f i c without the use of the National Transcontinental, and by ammuch more direc t route. This was the railway, incident-a l l y , which Borden had suggested the government should pur-chase, but which had been considered too expensive. In b r i e f there are three underlying factors which influenced the building of the Grand Trunk P a c i f i c Railway, and each had a major share i n causing not only the construction but also the ultimate f a i l u r e of the road. These three are the optiraism of the times, the necessity of the Grand Trunk Railway to reach the West, and the influence of p o l i t i c s and vested interests. Throughout the entire early negotiations i s to be f e l t the pressure of strong influences, which are apparent only in a fe?/ scattered places. The indefensible extension eastward to Quebec and Moncton was purely a p o l i t i c a l gesture. The project was on several occasions a f t e r t h i s referred to as Laurier's "$200,000,000 ocean to ocean vote catcher", 2 and i t was remarked that the road was not buildfc 1. H.C-.B. 1903, 9691. 2. i b i d . , 10378. to carry grain as much as i t was to carry e l e c t i o n s . The haste with which the b i l l was pushed through parliament, and the delay i n s t a r t i n g cons truetion,as well as the period of uncert-ainty i n the early months of 1904, 1 both lead to the conclusion that these statements had a sound basis. Was B l a i r ' s resign-ation a sign of one man's disagreement with the cabinet, or were there others who submitted to the w i l l of the majority? How e f f e c t i v e was the lobbying which accompanied the b i l l , and how much influence had Senator Gibson, one of the foremost contractors i n the Dominion, and Senator Cox, the outstanding f i n a n c i e r i n Canada at the time? B e l l stated that, "The Canadian P a c i f i c came before the Railway Committee with a proposal to b u i l d a line from Y/innipeg to Edmonton, some 700 miles...and they did not ask one d o l l a r assistance. They met with such discouragement that they withdrew the b i l l . " 2 YThy was the government so opposed to this? Yftiat offer of the Winnipeg Board of Trade caused the railway to pass that c i t y ? 3 1. B . A . R ., 1904, 17: "At the beginning of 1904 i t was generally assumed that the government were not quite certain whether they should take the Grand Trunk P a c i f i c contract to the people for approval without awaiting the expected r e v i s i o n of i t s terms, or hold another Session, revise the contract ... and then appeal to the country." 2. H.C.D. 1904, 2314. 3. i b i d . , 2314. F. W. Morse spent six weeks i n V i c t o r i a while the L e g i s l a t i v e Assembly was i n session there but f a i l e d to receive the subsidy he wanted and threatened to b u i l d the railway e n t i r e l y from the east as a r e s u l t , but the Canadian Northern o f f i c i a l s were re-ceived r e a d i l y by the same government a few years l a t e r . The Grand Trunk P a c i f i c was b u i l t and, as we know now, the building was f a u l t y . But where the f a u l t l i e s has not as yet been determined, and w i l l not be known u n t i l much more of the fog v/hich enshrouds i t s o r i g i n has been cleared away. 55. Chapter I I I . The Building of the Railway On August 10, 1904, as a meeting' in London, the -stockholders of the Grand Trunk P a c i f i c Railway Company elected t h e i r d i rectors to take the places of the p r o v i s i o n a l directors appointed at the incorporation of the company. The new d i r e c t o r s were Charles M. Hays, F. W. Morse, W. H. Biggar, and William Wainwright of Montreal; S i r Charles Rivers-Wilson, the Right Honourable Lord Welby, A. W. Smithers, J . A. Glutton-Brock, and Colonel Firebrace of London, England; the honour-able George A. Cox and E. R. Wood of Toronto; H. A. A l l a n and E. B. Greenshields of Montreal; J . R. Booth of Ottawa; and John B e l l of B e l l e v i l l e . The o f f i c e r s appointed were Charles M. Hays, president; F. W. Morse, vice-president; and William Wainwright, second vice-president. The executive committee consisted of Charles M. Hays, the Honourable George A. Cox, F. W. Morse, and Yfilliam Wainsrright. On August 11 the chief engineer fidrtthe Trans-continental Railway Commission was announced as ri. D. Lumsden of Toronto. The same day I".-.. Premier Parent was named as the representative of the Canadian government on the Grand Trunk P a c i f i c board of d i r e c t o r s . Under the pro v i s i o n a l d i r e c t o r s much work v/as done i n surveying both the Eastern and Western d i v i s i o n s during the jspidfcjnig of 1903. Their work in the former d i v i s i o n was l a t e r sold to the government to be used on the iMational 56. Transcontinental Railway for $352,379 ,52 , 1 and a f t e r t h i s the Grand Trunk P a c i f i c concentrated on the Western d i v i s i o n , for which i t was responsible. Geographically t h i s d i v i s i o n f a l l s into two natural sections, which were known as the p r a i r i e section and the mountain section. It was the former of these which was begun f i r s t , and which was completed long before the other. On the p r a i r i e s i t was understood from the begin-ning that the new line was to pass far north of the e x i s t i n g railways, but, i n spite of a l l the early promises, the Grand Trunk P a c i f i c was b u i l t due westward from Winnipeg to Portage l a P r a i r i e , p a r a l l e l i n g the other two railways, and from there i n almost a straight l i n e to Edmonton, between the Canadian P a c i f i c and Canadian Northern. This fact alone shows that the Grand Trunk P a c i f i c was more interested i n obtaining business than i n opening and developing the country. In other words, i t was a money-making scheme more than a nation-building project. If a l i n e i s drawn on the map from Portage l a P r a i r i e to Edmonton i t w i l l be seen that i t follows the natural ;g'@>0|£ra3Shical phenomena across the Great Central P l a i n between those other two natural d i v i s i o n s i n North America, the Can-adian Shield and the Rocky Mountains. This line c l o s e l y J follows the isothermic l i n e s , p a r a l l e l s the southern boundary of the Canadian Shield, l i e s in the so-called "parkland" and " b l a c k - s o i l " b e l t s , follows the section which lends i t s e l f 1. H.C.D., duly 13, 1905, 9490. most r e a d i l y to the growth of both Marquis and Reward wheat, and closely indicates the routes used by the early t r a v e l l e r s and s e t t l e r s on the p r a i r i e s . In other words, the Grand Trunk P a c i f i c followed the most natural route from east to west and passed through the most f e r t i l e section of the Great pla i n s area i n Canada. Communication between Winnipeg and Edmonton had been established long before the railway era. The early fur-traders had t r a v e l l e d t h i s road from the time of the "pedlars", but t h e i r route had been c i r c u i t o u s , following Lake Winnipeg and the Saskatchewan River. This route was followed almost e n t i r e l y during the times of the "canot du nord", and a f t e r them by the "York boats". No successful means of competition for this system was evolved u n t i l about 1860, when the Hudson's Bay Company established the Northern packets, a brigade of dog teams, -for the winter loads. This was i n three sections, the f i r s t running from the Red River to Norway house, the second to Carlton, and the t h i r d to Edmonton. As they s t i l l followed the Lake Winnipeg-Saskatchewan River route they can be considered as l i t t l e more than a winter substitute f o r the older method of carrying goods. The f i r s t type of transportation to t r a v e l consist-ently i n a f a i r l y d irect l i n e from Winnipeg to Edmonton was the Red River cart. In 1863 the Overland expedition of over two hundred people used these carts to the f o o t h i l l s of the Rockies. In 1873 i t was estimated that about 150 carts l e f t Fort Garry for Edmonton. There was a well marked t r a i l between 58. the two c i t i e s , which was a distance of about 600 miles. The t r a v e l l e r s usually t r a v e l l e d d i r e c t l y westward to the present si t e of Portage l a P r a i r i e , and thence n o r t h w e s t e r l y to Ed-monton. It was a lonely t r i p with very few isolated s e t t l e -ments to pass on the way. The journey was so slow that the guides made only one t r i p during the summer. After 1869, when the Hudson's Bay gompany surrendered i t s rights to the T e r r i t o r i e s , communication across the p r a i r i e s made a rapid advance, and much was learned about t h i s hitherto isolated country. The most important step i n opening the west was the building of the Canadian P a c i f i c Railway. When i t was f i r s t projected, surveying was done and much was discovered about the p r a i r i e country. The most famous cf the surveyors v/as Sir Sanford Fleming. He favored a route much to the north of that adopted by the Canadian P a c i f i c , and i n 1871 made a t r i p through the t e r r i t o r y from Winnipeg to the Yellowhead Pass. This journey was largely responsible for the r e a l i z a t i o n of the value of the land throughout that section,and thus increased the growth of settlement. It also had a great influence i n the b u i l d i n g of the Government telegraph from Winnipeg to Edmonton between the years 1874 and 1879. From that time u n t i l the Grand Trunk P a c i f i c was b u i l t , there was much emigration to the prairies,.and much survey work was done, so that Laurier was able to state quite t r u t h f u l l y , "There are mountains of information." 1 Unfortunately 1. H.C.D. 1903, 12651. See page 10672 for l i s t of reports. for the railway this vast amount of information was of a very diverse nature, and, when the actual work of surveying for a railway was begun, i t was discovered that very l i t t l e of i t was of use. The Grand Trunk P a c i f i c was forced, therefore, to survey the actual route in d e t a i l before beginning the actual construction of the road. The reconnaisance surveys began i n the spring of 1903, when from f i f t e e n to twenty parties were i n the f i e l d . Stress was l a i d on the fact that the road must have a maximum grade of \ of ±f0, which means 21.12 feet per m i l e , 1 and a maximum curvature of 4°, which i s the arc of a c i r c l e with a radius of 1432.5 feet. Many protests regarding the employment of American engineers were proven to be large l y true by the investigation of Judge Winchester. On October 21, 1904, Hays stated that the t e r r i t o r y had been "pretty well covered" 3 by the reconnaisance surveys. It was shortjfcy a f t e r this that there were rumors that the road would not be b u i l t because the Grand Trunk P a c i f i c was d i s s a t i s f i e d with the terms. This was probably an e l e c t i o n "gag", for on.December 17 the company deposited £1,000,000 of guaranteed stock as i t had agreed to do i n the charger, and on December 24 i t gave reassurance that the road 1. Note the value of good grades as given i n H.C.D. 1903, p.9837. "A locomotive which would draw 250 tons on the l e v e l would only be able to draw 125 tons on .4$ gradient; 71.43 tons on a 1$ gradient; and 68.5 tons on a 1.2$ gradient." 2. supra, 49. 3. H.G.D.1905, 14648. would be b u i l t . The deposit of s e c u r i t i e s instead of cash caused some c r i t i c i s m , and as a result a deposit of $5,000,000 was acknowledged by the Bank of Montreal on March 9, 1904. The fact that parliament opened the following day i s not without s i g n i f i c a n c e . This parliament considered the amendments of the Grand Trunk P a c i f i c Bailway Company B i l l and the National Transcontinental B i l l . Because of the mountainous nature of the country and also because of the lack of settlement the Mountain section of the railway presented much more of a problem to the survey-ors' than the p r a i r i e s . On the eastern margin of: t h i s section i s the b a r r i e r presented by the Rocky Mountains, v/hich at Mount Robson reach a height of over 12,800 feet, and which have an average width of sixty miles. They extend i n a general north-westerly d i r e c t i o n and decrease towards the north, with passes i n the region under investigation, much lower than those farther south. Next to these stretches a terraced i n t e r -mountain trench, occupied by the Upper Fraser and Canoe Rivers. West of this i s the Cariboo Range, around which the Fraser River bends. The Fraser flows southward through the I n t e r i o r Plateau, a region, of mountains, f l a t s , large lakes and r i v e r s . It i s joined at Fort George by i t s tributary the Nechako. Farther to the west are the Babine Range and Bulkley Mountains. These are broken by the Skeena River and i t s t r i b u t a r y the Bulkley. F i n a l l y there i s the g r a n i t i c Coast Range, with peaks almost 8,000 feet high i n t h i s region, steep high c l i f f s , and t o r r e n t i a l r i v e r s . This section of the country was much less known than the p r a i r i e s . The fur-traders, i t i s true, had b u i l t f o r t s at McLeod Lake, Stuart Lake, and Praser Lake as early as 1805 and 13 1806, and many more during the ensuing years. They had devel-oped routes to these f o r t s across the mountains and to the sea at the southern end of the present province. The Canadian P a c i f i c surveyors had explored the passes through the mountains c a r e f u l l y , and as a r e s u l t S i r Sandford Fleming had d e f i n i t e l y favored the Yellowhead above a l l other passes through the Hockies As a re s u l t of these investigations and the work of the early fur-traders i t might be said that the d i s t r i c t east of Fort Fraser was well-known i n a general way, but west of thi s point the country was largely unsettled and almost unknown. This i s one of the reasons f o r the indefiniteness of the o r i g i n a l Grand Trunk P a c i f i c charger, which names the terminus as "Port Simpson or some other point on the P a c i f i c Coast." Reconnaisance surveys iiere carried out i n 1903 by the Grand Trunk P a c i f i c , but the route was not decided for some time. This led to many.rumors, and any group of surveyors was suspected as being the forerunners of the r a i l w a y . 1 Un-doubtedly the Grand Trunk P a c i f i c o f f i c i a l s were secretly making t h e i r plans and carrying out investigations i n many sections of the province i n order to determine the best route. The year 1904 was apparently without incident i n the building of the Grand Trunk P a c i f i c , except for the 1. See Vancouver Daily Province, October 9, 1903 for report on surveyors at Port Simpson. reconnaisance surveys, but i n actual fact much necessary foundation work was completed. On May 4 the p r o v i n c i a l cabinet of B r i t i s h Columbia agreed on Kaien Island as the terminus, but t h i s was not known for almost two years; on August 11 a tour of the west was begun by a number of o f f i c i a l s of the company, including Messrs. Wainwright, Biggar, Cox, and Hays; and on December 17 i t was announced that the f i r s t group of shares in the company had been purchased by Messrs. Speyer and Company of New York and London, and N. M. Rothschild and Sons. The shares were-ssubscribed ten times over, and r e a l i z e d $14,600,000. By the end of the year the preliminaries were fi n i s h e d , and i n 1905 the actual work of construction was begun. There are f i v e stages i n the b u i l d i n g of a railway; the preliminary survey; the detailed survey, which determines the route; the construction of the right of way, v/hich consists of clearing and making a l e v e l road-bed; the laying of the track, or, as i t i s commonly c a l l e d , the ''steel", a f t e r which tr a i n s may run on the road for the aiding of the construction ' work; and b a l l a s t i n g , which means the f i l l i n g of the space between the sleepers with gravel a r rubble. Jester t h i s i s completed regular service may be inaugurated. The Grand Trunk P a c i f i c was begun i n three sections, the Fort William branch, the li n e from Winnipeg westward, and the l i n e from Prince Rupert eastward. The second of these includes the P r a i r i e Section and the eastern h a l f of the Mountain section. The actual d i v i d i n g point between the two was selected by. Collingwood Schreiber and E. B. E e l l i h e r on 63. November 21, 1907. It was to be the east bank of Wolf Greek, which was 129 miles east of the summit of the Yellowhead and about 120 miles west of Edmonton. Wolf Creek i s 665 feet higher than Edmonton and 840 feet below the Yellowhead. S i r Wilfred Laurier turned the f i r s t sod on the Eort William-Superior Junction branch i n September 1905. By the end of 1906 eighty-nine miles were completed. This was i n -creased to 200 i n the following year, and the l i n e was com-pleted i n 1908. The l a s t l i n k was the Kaministiqua bridge which was completed on October 24, and the regular passenger service was begun on. November 28. The National Transcontinental line from Superior Junction to Winnipeg was much slower, and was not completed u n t i l 1911. From then i t was possible to ship goods on the Grand Trunk P a c i f i c from the western prov-inces to the head of the Great Lakes. The f i r s t sod west of Winnipeg was turned at Sand •Hilly Manitoba, on August 28, 1906. The road to Portage l a P r a i r i e was projected that summer, and brought a strong protest from the Canadian Pacific. Railway. This p e t i t i o n was dated August 18, 1905, and stated "...For some 300 miles west of Winnipeg i t i s simply designed as a competitor to e x i s t i n g l i n e s , and i n no part of that distance does the location of the Grand Trunk P a c i f i c show that they sare more than six miles from the ex i s t i n g l i n e s . "1 T i i e p r o t e s t was unavailing, however, for although the contract of the Grand Trunk P a c i f i c stated that 2 i t was not to be within 30/ miles of the e x i s t i n g railway l i n e s , 1 ' C. A. R.,1905, 548. 2. supra, 32. the l a t t e r railway had the ear of the government. On June 22, 1907 the contract for t h i s section v/as l e t to Messrs. Treat and Johnson, and the road was completed i n November 1907. The survey of the l i n e on the. p r a i r i e s presented few d i f f i c u l t i e s and progressed r a p i d l y . Almost the entire section was projected i n 1905, and the plan and p r o f i l e of the l i n e received the approval of the government in 1907. The f i r s t contract was l e t on February 24, 1906, to MacDonald, McMillan and Company of Winnipeg f o r 245 miles west of Portage l a P r a i r i e , approximately Touchwood H i l l s ; and the contract for the next 140 miles, approximately to Saskatoon, was. given to the Canadian White Pine Company of Montreal. The l i n e to Edmonton, 517 miles, was contracted by Foley, Larson and Company.1 In 1906 an order for 50,000 tons of steel was awarded to the Lake Superior Steel Corporation. The work of construction on the p r a i r i e s was com-paratively simple. By the end of 1906 MacDonald, McMillan and Company had done 75$ of their grading and 60$ of the necessary culverts. Some of the work proved more d i f f i c u l t than expected, however, and the Grand Trunk P a c i f i c Company v/as forced to r e l i e v e them of some of the more d i f f i c u l t sections such as that near Miniota and i n the Qu'Appelle Valley The contract for the l a t t e r was sublet to Messrs. Treat and Johnson. One of the greatest causes of delay was the nec-essity of building bridges and culverts. On the p r a i r i e 1. For a complete l i s t of contractors see Appendix I. , 65. section ••the-re were eleven s t e e l and concrete bridges b u i l t . The largest were at Saskatoon, Edmonton,Battle River, Clover Bar on the North Saskatchewan, the Assiniboine at Lazare , and also at Portage l a P r a i r i e , the South Saskatchewan, Pembina River, and across the Miniota branch of the Canadian P a c i f i c Railway. E s p e c i a l l y noteworthy were the Battle River Bridge, 2,770 feet long and 180 feet high; the South Saskatchewan, 1510 feet long; and the Pembina River, 820 feet long and 200 feet high. The bridge contractors were the Canadian Bridge Company, Messrs. John Gunn and Company, and Charles May. Grading was pushed along very rapidly and the entire p r a i r i e section to Wolf Creek was completed i n December 1908. Track laying was much slower, being held up in the early stages by a shortage of t i e s , and l a t e r by a shortage of s t e e l . Great d i f f i c u l t y was found in supplying materials before the s t e e l was l a i d and even then the sbsenee of bridges was a handicap. These two problems were overcome by building waggon roads and temporary bridges. The most d i f f i c u l t problem was the shortage of men. Even were the railway to bring men from Europe many of them l e f t to take up homesteads, to work as farm hands, or to join the other r a i l r o a d s . L i t t l e s t e e l was l a i d i n 1906. By the middle of 1907 the r a i l s had reached Rivers, Manitoba, and by the end of the year almost Saskatoon. By the end of 1908 they had passed Wainwright and were about 100 miles from Edmonton. In 1909 they reached Edmonton, and the following year completed the p r a i r i e section to Wolf Creek. 1. c f . Sessional Paper 20, Part IV, 1915. Passenger service was inaugurated soon a f t e r the st e e l was l a i d . So urgent was the need fo r sending wheat from the new d i s t r i c t s around the railway that, although the road was not o f f i c i a l l y opened, often construction t r a i n s would return with loads. The opening of t r a f f i c along the l i n e was begun on July 30, 1908, when the f i r s t passenger t r a i n from Winnipeg c a r r i e d 19 passengers, including F. W. Morse, to Portage l a P r a i r i e . On September 21 a tri-weekly service to Watrous was inaugurated, with an extension to Wainwright twice a week. The l a t t e r was made tri-weekly on November 23. By the end of the year trains were carrying passengers to Hawkins, Saskatchewan, 680 miles from Winnipeg, but the regular service had not begun. On June 14, 1909 the f i r s t passenger t r a i n a r r i v e d at Scott with s i x coaches and 215 passengers, and on July 14, 1909, transportation was extended to Edmonton, regular service beginning September 22. On June 3, 1910 d a i l y passenger service began, cutti n g four hours o f f the Canadian Northern time from Edmonton to Winnipeg. On July 18, 1910, service was extended to Edson, beginning regularly on February 12, 1911. Edson was the f i r s t d i v i s i o n -a l point west of Edmonton end i n the mountain section. The mountain section was begun from both ends. The entire s t r e t c h was under contract to Foley, Welch and Stewart, or t h e i r associates, Foley Brothers* Larson and Company, who sublet most of the work. This p o l i c y caused some c r i t i c i s m on the grounds that the sub-contractors were h i r i n g men of i n f e r i o r quality.' 1' A f t e r much preliminary surveying had been LI. H.C.D. February 25, 1909, 3939. done the location of a route was begun i n 1907, under Engineer Fry, and the actual route was located by November, 1908. The greatest problems to face the surveyors were the pass through the Rocky Mountains and the route across the Berkley Mountains. 1 In the former case there were many passes2, but the choice f i n a l l y narrowed to three, the Peace River, Pine River, and Yellowhead. The Yellowhead was f i n a l l y chosen, but f o r fear of the competition from the Canadian Northern this choice was kept secret f o r some time. Two large and well-advertised parties were sent to the other two passes, while a small select group did the actual work i n the Yellow-head. Another problem was the choice between two routes from Aldermere to Copper River. One of these was v i a the Telkwa River and Zymoet River to the Skeena, the other was to follow the Bulkley td i t s junction with the Skeena at Hazelton. The former route was about 80 miles shorter and was favored by Taylor, the engineer i n charge of t h i s d i s t r i c t , but pressure from the provincial government resulted i n the l a t t e r being chosen. It was shown that t h i s route would open up the a g r i c u l t u r a l section near Hazelton and also the northern mines, es p e c i a l l y those of the Babine Range, a f f o r d an outlet to the Babine and Kispiox Valleys, and, f i n a l l y , afford a 1. The lack of information about th i s country can be re a l i s e d by the story which related how the locating engineers discovered a band of Iroquois high up i n the Yellowhead who had no knowledge of the happenings of the previous century, c f . Warman, Cy« "Railway Construction up to Date", Canadian Magazine, June 1911, Vol.XXXVII, 398. 2. see Map 1 f o r the alternative routes. s a t i s f a c t o r y junction f o r the r a i l r o a d to Dawson. This r a i l -road would f i n d a natural route to the north from that point through the Kispiox and Nass River valleys. The work was sub-let by the contractors i n small sections, most of which were less than f i v e miles long. Many of the sub-contractors obtained several sections, however. These sub-contractors were as follows: R. Ross and G. A. Carlson; A. L, McHugh; Craig Brothers; John E. Bostrom; Angus Stuart; N e i l Keith; McDonald and M c A l l i s t e r ; M. Sheedy; Smith Brothers; Stano and Harstone; Prince Rupert Construction Com-pany; Dan Stewart; Fred Peterson; Norman McLeod; Dan Horrigan; Washtock and Company; D. A. Rankin; Freberg and Stone; Boie Brothers and Stone; Joe Amantea; Kerr and Company; Backus and Company; P. Salvus; Ross and McCaull; Ferguson Company; Moran and Chiene; Bostrom and Kullander; Duncan Ra&s; Johnson, Carey, and Helmers; J. A. Mackenzie and Company; Lund, Rogers and Company; Hogan Construction Company; Carlton and G r i f f i n ; Burns and Jordan; John Bostick; Bates, Rogers Construction Company; Siems Carey and Company; Archie McDougall; Sheedy and Paget; and Magoffin and Berg. The base of operations f o r the eastern end of the mountain section was Edmonton. Supplies were c a r r i e d from there to the d i f f e r e n t bases wither by construction t r a i n or >^  by wag©an„ The construction t r a i n was able to run over the tracks as soon as they were l a i d , and, because i t could not average over eight miles an hour, was nicknamed "the F l i e r " . The wagons were used to carry supplies to those camps which were beyond the "end of s t e e l " . The customary price f o r hauling was f i v e cents a pound, with no allowance f o r distance There were about 600 teams working through the Rocky Mountains two-thirds of which were p r i v a t e l y owned. Another common method of obtaining supplies was by steamer from Seda Greek up the Fraser to the "end of s t e e l " . F. W. Stewart had two steamers i n operation which had e a r l i e r been used on the Skeena f o r the l i n e from Prince Rupert. They were the "Operator'and the Conveyor,. each with a capacity of 175 tons, and powerful enough to push a scow with a 90 ton steam shovel against the current} These were not as s a t i s f a c t o r y as the teams, however, as they could only be operated when the r i v e r was high. In 1912, because of the l i g h t snowfall, they were used f o r only three weeks. One of the most interesting phenomena of r a i l r o a d building i s the "end of s t e e l " v i l l a g e . One writer has described that of the Grand Trunk P a c i f i c as follows: The "end of s t e e l " v i l l a g e was b u i l t around the "Pioneer", the mechanical track-layer - an ungainly overgrown box car with weird semi-human arms. The v i l l a g e i s always, three miles from the end of s t e e l . That three miles ^la p o s i t i v e l y the only r e s t r a i n t i t knows; f o r ?/ithin that distance of the end of s t e e l the contractor has complete l e g a l control i n unsettled d i s t r i c t s . And knowing the h e l l that l i v e s i n those shacks he pushes them to the extreme of his authority. An "end oS s t e e l " v i l l a g e is made up of booze, 1. Vancouver Daily Province, February 10, 1911, has an ~~ interesting account toy J.G.Quinn, of the Fort George Tribune. He says, "We have now s i x steamers on the Upper Fraser. The largest and the best i s the B.X. The others are the Chileo, which may be a t o t a l l o s s as she was caught on her l a s t t r i p a short distance below Cottonwood Canyon.,..The other wrecked boat i s the old Charlotte, which had several mishaps l a s t 1 summer. The other steamboats,are the C h i l c o t i n , the Quesnel, and the l i t t l e Fraser." 70 b i l l i a r d s , a nd b e l l e s . I t i s t h e home o f t h e i l l i c i t l i q u o r t r a f f i c o f c o n s t r u c t i o n ^ t h e l o c a t i o n o f enough p o o l t a b l e s t o s t o c k a l a r g e c i t y , a n d t h e r e s i d e n c e o f women who n e v e r e l s e w h e r e e n j o y e d so much f r e e d o m . T h r e e - q u a r t e r s o f t h e s h a c k s a r e r e s t a u r a n t s i n f r o n t -f o r a b o u t s i x f e e t . The r e s t a u r a n t i s m e r e l y an o u t -w a r d p l a u s i b l e e x c u s e f o r t h e e x i s t e n c e o f t h e s h a c k . B a c k o f t h e l i t t l e c o u n t e r i s t h e p o o l room...and t h e n t h r o u g h a s m a l l doorway, up a s h o r t f l i g h t o f s t a i r s t h a t b r e a t h e e x c l u s i v e n e s s a n d p r i v a c y i s t h e r e a l o b j e c t o f e x i s t e n c e - t h e c a r d room. F r e e bunk h o u s e s a r e t h e p r o v i s i o n o f t h e c o n t r a c t -t o r s f o r the. d i s a b l e d , h e l p l e s s bohunk who h a s s p e n t t h e e v e n i n g and e v e r y t h i n g e l s e i n t h e o t h e r s h a c k s . A t M i l e 50 B.C. t h e r e was even a b a t h house b ut i t f a i l e d i g n o m i r d b u s l y b u t n o t u n e x p e c t e d l y . A t F i t z h u g h , w h i c h i s w i t h i n t h e p r o v i n c e o f A l b e r t a , t h e l i d was k e p t c l o s e d a l i t t l e b y the mounted p o l i c e , b u t t h e i r j u r i s d i c t i o n e n d e d a t t h e b o r d e r o f B r i t i s h C o l u m b i a , and t h e r e a t t h e summit, r i g h t on t h e b o u n d a r y , t h e d o o r s were opened w i d e , a n d down t h r o u g h m i l e s 17, 29, a n d 50 t h e y r e m a i n e d t h a t way. M i l e JB9c!.hadrapreputation o f w h i c h i t s i n h a b i t a n t s r e f u s e d t o be p r o u d . . . . A s p e c i a l c o l l e c t i o n o f s h a c k s grew u p a t t h e w e s t e r n edge o f t h e p a s s , on t h e s i t e o f t h e T e t e Jaune Cache I n d i a n v i l l a g e . . . an o l d n e g r e s s r a n t h e town..,. An "end o f - s t e e l " v i l l a g e i s a d i s g r a c e b u t T e t e Jaune was i n d e s c r i b a b l e . 1 Work f r o m t h e e a s t e r n s i d e o f t h e m o u n t a i n d i v i s i o n s t a r t e d i n t h e autumn o f 1909, b u t f o r o v e r a y e a r made l i t t l e p r o g r e s s p a s t W o l f C r e e k b e c a u s e o f t h e n e e d o f two l a r g e b r i d g e s a n d a deep c u t t i n g . The W o l f C r e e k b r i d g e h a d s i x s p a n s , a n d was 652 f e e t l o n g and 127 f e e t h i g h ; t h e M c l e o d r i v e r b r i d g e h a d e i g h t s p a n s , a n d was 1066 f e e t l o n g and 118 h i g h ; w h i l e t h e o n e - h a l f m i l e between them n e c e s s i t a t e d t h e r e m o v a l o f 130,000 c u b i c f e e t o f e a r t h . From W o l f C r e e k w e s t w a r d t h e c o u n t r y i s b r o k e n up e x t e n s i v e l y b y m e a n d e r i n g w a t e r w a y s and low h i l l s , w h i c h r i s e i n r e g u l a r s e q u e n c e t o c u l m i n a t e i n t h e " d i v i d e " , a r i d g e between t h e McLeod and A t h a b a s c a R i v e r s . I n t h e 100 m i l e s 1. F o r t George H e r a l d , Sept,20,1913 - a r t i c l e by W.Lacey May, c o p i e d f r o m t h e R a i l r o a d and C u r r e n t M e c h a n i c s . west of Wolf Greek, before the bridges,which were necessary before the s t e e l was l a i d , were f i n i s h e d , about twenty gangs of men worked i n d i f f e r e n t sections constructing the r i g h t of way. On August 3, 1910 Wolf Greek bridge was f i n i s h e d and by March,1911, a long bridge of 14 spans with a t o t a l length of 802 f e e t , was completed at P r a i r i e Creek and track was l a i d for 65 miles. The road here i s also very d i f f i c u l t , following the Roche Miette and Miette River v a l l e y to the Yellowhead Pass. The d i f f i c u l t y of the building eaa be understood, when i t i s r e a l i z e d that t h i s r i v e r f a l l s 400] feet i n 17 miles, which i s over 23-g- feet to the mile, where as e the railway grade does not exceed 21 f e e t a mile. There were also several other large bridges b u i l t before the pass was reached, the largest being the Athabasca River, which had three spans of 225 feet each. The summit, which marks the B r i t i s h Columbia boundary and i s 129 miles from Wolf Creek, was reached by s t e e l on November 15, 1911. A f t e r the summit was passed, the road followed the Tete Jaune gorge for about t h i r t y miles to the headwaters of Fraser at Moose lake. Steel reached t h i s point i n March 1912, and a tri-weekly service began i n August. From t h i s point the construction was much simpler, supplies being obtained by the r i v e r boats. Although the country was not so d i f f i c u l t to b u i l d through as the actual Rockies, the "gumbo" or clayey mud which i s found throughout t h i s section was a great problem. By A p r i l 12, 1913 the s t e e l reached the Raushuswap River, where a bridge 850 feet long was b u i l t , and two months l a t e r passenger trains were running to Tete Jaune Cache. On 72. November 25 the railway crossed the Fraser for the t h i r d time near the present s i t e of Hansard, and by the end of the year was at Willow River. By January 12, 1914 steel had arri v e d at the Fraser across from Fort George, and on January 27 the tracklayer crossed on a temporary bridge which was destroyed by ice the same day. The bridge across the r i v e r at t h i s point, which had been begun on August 31, 1912, was completed on March 7, 1914, and Prince George thus became connected with the east by r a i l . Progress from then was rapid. By the end of March the present s i t e of Filmore was reached, and on A p r i l 7, the l a s t spike was driven by R. B. E e l l i h e r , the chief engineer, about two miles east of Nechako crossing. Although no great ceremony was held at the time, 1500 people attended the driving of the l a s t spike. The P a c i f i c Coast end of the road presented many d i f f i c u l t i e s . The f i r s t of these was the problem of a suitable terminus. The o r i g i n a l contract had mentioned Port Simpson, but i t was understood that this would not be used i f a b e l t e r place -could be located. Surveys showed that the best l o c a t i o n would be on Kaien Island on a small i n l e t known as Tuck's Inlet. However, the old Admiralty chart showed a rock i n the harbor which would be a serious obstacle to navigation. A new survey f a i l e d to locate t h i s impediment, and as a result the i s l a n d was selected as the western terminus of the Grand Trunk P a c i f i c . The name Prince Rupert was given to i t as a result of a competition sponsored by the railway. Five thousand answers were received, the winner being 73. Miss Eleanor MacDonald of Winnipeg, who received a prize of $250. The advertising received was cheap at the p r i c e . The i s l a n d of Kaien i s separated from the mainland hy a channel known as the Zanardi Rapids, because the t i d e s flow through i t at a rate of from 12 to 14 miles an hour. The problem of bridging t h i s was accentuated hy the r i s e and f a l l of the t i d e , which at times was as high at 26 feet. The f i n a l bridge across th i s channel had s i x spans and t o t a l l e d 645 feet. It was not completed u n t i l July 1910, and as a r e s u l t caused much delay i n the laying of s t e e l . The f i r s t sod was turned at Prince Rupert on May 7, 1908, a month a f t e r the f i r s t sub-contracts f o r the western end were l e t . The building of the f i r s t 100 miles was influenced l a r g e l y by the policy of the Grand Trunk P a c i f i c of buying pro f i t a b l e charters formerly issued to other railways. In B r i t i s h Columbia two roads were taken by them, the northern, P a c i f i c and Omineca on March 20. , 1905, and the Vancouver, Western and Yukon Railway, one of James J. H i l l ' s enterprises i n August 1907. Construction began at Copper River!; where the former of these two roads would meet the Skeena i f i t were b u i l t from Kitimat. The beginning of the work, and the back-ground of the purchase of the Northern, P a c i f i c and Omineca, is described i n the Prinoe Rupert "Empire" of August 24, 1908, as follows: Construction work has been started on the Kitimat branch of the Grand Trunk P a c i f i c at the mouth of 1. Then commonly known as "Newtown". Copper River....The Kitimat branch i s being b u i l t under a charter granted by the p r o v i n c i a l l e g i s l a t u r e several years ago....The company that obtained this charter also received a promise of a cash subsidy of $5,000 a mile, provided $100,000 i n construction work was expended before a s p e c i f i e d date t h i s year. The Grand Trunk P a c i f i c purchased the charter i n 1905, and i n order to get the cash subsidy have l e t a contract to "Jack" Stewart and his associates. Ninety men with horses and supplies were unloaded at Port Essington on August 13, and went by the steamer Northwest up the Skeena to Copper River .Mouth. The 185 miles from Prince Rupert to Hazelton i s the most d i f f i c u l t pieee of engineering i n the entire r a i l r o a d . In 120 miles the Skeena drops about 1,000 f e e t , wi ich makes i t one of the most rapidly running waterways on the coast. The l a s t 60 miles are t i d a l , which increased the problems of construction. The railway follows the banks of the r i v e r through almost s o l i d rock f o r about 60 miles, when i t reaches the "Hole i n the Wall". Moreover, i n these mountains, avalanches and rock s l i d e s constitute formidable and aggressive menaces. In 1911 snow s l i d e s were so excessive that a tunnel between 1400/ and 1600 feet long was driven at mile 44 i n an attempt to escape the danger, Further up the r i v e r i s K i t s e l a s Canyon, which necessitated three tunnels of 400, 700, and 1100 feet respectively. In the f i r s t 211 miles of railway there were 13 tunnels, t o t a l l i n g 8,886 feet. When the railway crossed the r i v e r 13 miles below Hazelton a bridge which had s i x spans and t o t a l l e d 930 feet was needed. One cut In t h i s section of the road was 6600 feet long and took almost 26 months to complete. So d i f f i c u l t was the route that over 12,000 miles of t r i a l lines" and surveys were run to locate 186 miles of track. Construction of the f i r s t two sections, the f i r s t of 100 miles to Copper River, and the second of 140 miles to Aldermere, was begun i n many places. Steel was delayed by the Zanardi Rapids, and the materials were c a r r i e d to the camps by means of shallow-draught, stern-wheeled steamers. There were f i v e of these, the Henrietta, Port Simpson, Di s t r i b u t o r , Omineca and Conveyor, a l l owned by Foley, Weleh and Stewart. In 1909 another steamer was b u i l t at the Spratt shipyards i n V i c t o r i a . They were used i n the simmer,^ but were of l i t t l e use i n the winter. Their speed was estimated at 14 miles an hour, but because of the current of the r i v e r t h i s varied, so that whereas i t took from f i v e to eight days to reach Hazelton, the return journey could be made in fourteen hours. Sometimes the current was so strong that i t was necessary to haul the boats against i t by cables. By March 31, 1910 the grading and culverts were completed f o r almost 100 miles east of Prince Rupert, the wharf had been b u i l t at that c i t y , but only about seven miles of track had been l a i d , and no stations or buildings of any kind had been b u i l t along the road. On July 31, 1910, the f i r s t construction t r a i n crossed the Zanardi bridge, and from t h i s time on these trains greatly assisted the work. By September s t e e l was l a i d for 70 miles, and C.C.Van A r s d o l l , 2 the chief engineer 1. '.:In the summer of 1911 i t was estimated that they c a r r i e d 5,662 tons of f r e i g h t . 2. Van A r s d o l l was generally nick-named "four-tenths Van" because of his insistence of t h i s percent: of grade. of the mountain section, had moved his headquarters to New Hazelton. At the same time l o t s were offered f o r sale in E l l i s o n , the f i r s t townsite to be aold east of Prince Rupert, Steel went l i t t l e f a r t h e r that year because of the K i t s e l a s Canyon, where the tunnels were not completed on January 20, 1912. By March 1912 the r a i l s had reached SkeBna crossing where they were again forced to wait f o r the building of the bridge. Meanwhile t r a i n s were run on the f i r s t part of the railway and passengers took a boat across the Skeena to the remainder of the track. In September, 1911, arrangement was made with t*he Hudson's Bay Company and Foley, Welch and Stewart, by which boats met the t r a i n s and i t was possible to buy a through t i c k e t almost to Hazelton. In the spring of 1912 track laying was pushed ahead r a p i d l y , and i n spite of the f a c t that there was snow on the ground, 30 miles were l a i d i n s i x weeks. On March 31 the Skeena bridge was completed. In August the tracks had reached Sealy Gulch, where one of the largest bridges, with a length of 900 f e e t , was b u i l t . Trains were run tri-weekly to Sealy, which was a station b u i l t at that time about three miles from Hazelton. F r i c t i o n between Hazelton and the Grand Trunk P a c i f i c caused trains to stop at Sealy in preference to the older town, and t r a i n s did not enter New Hazelton as a station point u n t i l January 10, 1913. From t h i s time on progress was steady. On February 28 t r a i n s were running regularly to Porphyry Greek. On May 23 s t e e l reached Telkwa. In September i t was at Decker Lake, and by the end of the year reached Burns lake. By March 15, 1914, s t e e l had reached Fraser Lake, and on A p r i l 5, 1914, i t met the s t e e l from the east. The f i r s t through t r a i n reached Prince Rupert on A p r i l 8, 1914. Regular passenger t r a f f i c did not s t a r t f o r several months. On August E4 f r e i g h t t r a i n s hegan a regular run, and on September 6, 1914 , passenger t r a i n s began a regular schedule from Prince Rupert to Winnipeg. With the beginning of regular t r a i n service the actual construction of the Grand Trunk P a c i f i c Railway might be considered as completed , although there was s t i l l much to be done such as the improvement of road-beds, the construc-ti o n of sidings, and the replacement of temporary bridges. The undertaking had proven to be much greater than i t s originators had expected. It began i n a period of boom, prosperity and peace, but i t f i n i s h e d i n a time of gloom, depression,and war. The inspired v i s i o n of Laurier, which had been expected to do great things f o r Canada, was proving i t s e l f to be a millstone around the neck of the government of Borden, and as the next few years progressed i t was to become a s t i l l greater hindrance to the entire country. Chapter IV. The Grand Trunk P a c i f i c Subsidiaries Before the construction of the main l i n e of the railway had been started the grand Trunk P a c i f i c Railwqr had begun the formation of subsidiary companies. The f i r s t of these was the Grand Trunk P a c i f i c Branch Lines Company. The opposition i n parliament was loud i n i t s c r i t i c i s m of thia organization, c r i t i c i s m s v a l i d not only for t h i s subsidiary but f o r the others that were formed l a t e r . It was pointed out that, before the Grand Trunk P a c i f i c had b u i l t a mile of railway, the same men who formed i t had approached parliament with the object of forming another company which wished to b u i l d approximately 4800 miles of railway as branch l i n e s , It had already been agreed i n the o r i g i n a l contract of the parent company that i t might b u i l d branches from the National Transcontinental to Montreal,, North Bay, and the head of Lake Superior, and from i t s main l i n e to Brandon, Regina, Prince Albert, Calgary, and Dawson,1 This new company desired to b u i l d these and also a number of other l i n e s . The advantage of t h i s new organization was that i t d id not have to respect the p r i n c i p l e advanced when the Grand Trunk P a c i f i c was formed of not p a r a l l e l i n g other railways within a distance of 30 miles. It was further pointed out by the Conservative party that the forming of t h i s new company would enable the Grand Trunk P a c i f i c Railw^r Com-•1, See Map 1. 79. pany to avoid some of t h e i r obligations by tr a n s f e r r i n g the more profitable sides of railw^r construction to t h i s concern. The Act to Incorporate the Grand Trunk P a c i f i c Branch Line Companylj passed i t s t h i r d reading on June 30, 1906, and received the Royal Assent on July 13, Its shareholders included Charles M, Hays, F i W. Morse, William Wainwright, f . H. Biggar, and D'Arcy Tate. The c a p i t a l l s t o c k was $50,000,000 of which $20,000,000 might be issued as preference. A l l the common stock was held by the Grand Trunk P a c i f i c Railway i n consideration of the supply of r o l l i n g stock for -use on the branch l i n e s , except 1,000 shares which were to go to the di r e c t o r s . There were to be about 4800 miles of branch l i n e s , which were l a t e r increased to 7,509 miles. In 1908 l e g i s l a -t i o n was passed which stated that the l i n e s must be begun within two years and f i n i s h e d i n f i v e . There were eighteen branch l i n e s i n the o r i g i n a l act, but thi s number was i n -creased u n t i l by the end of 1909 the company had chartered 22 branches, 5 i n the eastern d i v i s i o n and 17 i n the Western. 1 A study of these branches shows that they were b u i l t for the purpose of gaining t r a f f i c from the larger established centers of population and to break the monopolies held by the other railways, e s p e c i a l l y the Canadian P a c i f i c . The Branch Line Company charter also g&ve wide powers i n reference to steamers, docks, telegraphs, hotels, and other matters, but these powers were not u t i l i z e d because 1. H.C.D. December 13, 1909, 1366. these a c t i v i t i e s were provided for by other subsidiary com-panies. The branches which the company were granted power to b u i l d were completed i n only a few instances, but to appreciate the thoroughness by which the o f f i c i a l s hoped to gain a foot-hold throughout the entire country i t i s necessary to glance at the entire s l a t e . A number of the branches were to be from the National Transcontinental to the eastenn centers. From a point near Edmunston on the National Transcontinental Railway a branch was to be b u i l t to Riviere du Loup, Quebec. Frem Montreal a l i n e was to be b u i l t through J o l i e t t e to a point on the National Transcontinental near Waymantaehi, Quebec Another l i n e was to join Montreal d i r e c t l y with the main l i n e . Two branches were to join the National Transcontinental in Ontario, one from Ottawa and one from O r i l l i a . A belt l i n e was to be b u i l t around Winnipeg, aa d a branch from that c i t y to the southern boundary of Manitoba. A gior t l i n e was to be b u i l t from the main l i n e of the Grand Trunk P a c i f i c to Neepawa, Manitoba. From Brandon a l i n e was to be b u i l t to the southern boundary of the province, and another l i n e , vii i c h obviously would p a r a l l e l the Canadian Northern, was to be b u i l t to Regina. On A p r i l 30, 1909, approval was given to a l i n e projected from Regina to Moosejaw which continues the p a r a l l e l i n g of the other railways. From a point on the main l i n e (Melville) a l i n e to Yorkton was l a t e r to be extended to the Hudson Bay near Fort C h u r c h i l l . The f i r s t part of t h i s l i n e was surveyed by R. P. Graves, and b u i l t i n 1909 and 1910. Another l i n e from M e l v i l l e was begun towards Regina i n 1909, 81. reaching as f a r as Belcarres in that year. It was planned to extend t h i s l i n e to the southern boundary of Saskatchewan, Another branch was to be b u i l t from the main l i n e (Young) to Prince Albert, and this route was approved by the Minister of Railways on June 21, 1909, A branch which was to be b u i l t from Scott to B a t t l e f o r d was surveyed by D. Bergen, but not b u i l t . One of the most important branches was from T o f i e l d to Galgary, and thence to the southern boundary of A l b e r t a , 1 The road as f a r as Galgary was contracted to J. D. McArthur and Company of Winnipeg i n 1907 an.d was completed in 1913. It is another l i n e which interferes with the Can-adian P a c i f i c , , and a f t e r the formation of the Canadian National Railways was joined to the Canadian Northern l i n e from Saska-toon to Calgary. On September 6, 1913, an en nouneement was made concerning a l i n e which was projected from Calgary through Moose jaw, Medicine Hat, and the Crow's Nest country to B r i t i s h Columbia. It i s obvious that a l l the l i n e s i n southern Alberta would ha1?e been a drastic blow at the Canadian P a c i f i c monopoly i n that t e r r i t o r y . Another short l i n e was to be b u i l t to any port on the, Bay of Fundy, thus completing the National Transcontinental to the A t l a n t i c . In B r i t i s h Columbia branches were authorised to Dawson from some point on the main l i n e (probably near Hazelton), another along the west coast of Vancouver Island, and a t h i r d to join Vancouver to the P a c i f i c , Omineca and Northern Railway, which was another way of saying the main l i n e of the Grand Trunk P a c i f i c . 1, On t h i s l i n e , near Camrose, Alberta, i s the biggest wooden bridge i n Canada. See Special Committ of Senate to Enquire into the Serious Railway Conditions, 1938 , (He r e af t e r g&ejf er*e d to as Senate Investigation) 120"5~! This l a s t branch was not b u i l t , but i t gave r i s e to the P a c i f i c Great Eastern, which was begun in 1912 and continued spasmodically u n t i l 1921. The act which incorporated t h i s railway 1 was between the government; and Foley, Welch and Stewart, and between Foley, Welch and Stewart and the Grand Trunk P a c i f i c Railway Company. The road was to be b u i l t from 2 Vancouver to Prince Ge,orge, and i t was agreed that the Grand •> Trunk P a c i f i c should have the f i r s t option of purchase and the running rights on the l i n e . The P a c i f i c Great Eastern would receive a guarantee of i t s bonds for 135,000 per mile. The interest on these bonds was to be 4$. The incorporators included three contractors, and among others, B ?Arcy Tate, who was also a direc t o r on the Grand Trunk P a c i f i c Branch Lines Company. Obviously the P a c i f i c Great Eastern was to be a subsidiary of the Grand Trunk P a c i f i c , but, because of the d i f f i c u l t i e s which both railways l a t e r encountered, i t was not purchased by the other company. It became an unp r o f i t -able venture, and the contractors were forced to r e l i n q u i s h t h e i r rights to the B r i t i s h Columbia government, which has consistently l o s t immense sums of money on i t . There i s a b e l i e f ihasome quarters that i t was the intention of the Grand Trunk P a c i f i c to use t h i s l i n e as a means of deriving much business from Vancouver and the other southern ports of B r i t i s h Columbia, a b e l i e f which would not 1. B r i t i s h Columbia Statutes, 1912, Ch. 34 and 36. 2. c f . Location and Mileage of Railways of Canada, Dominion Bureau,of S t a t i s t i c s , Transportation Branch, 1924. p. 20. The road was completed.from North Vancouver 1o Whytecliffe, and from Squamish to Quesnel, B.C. , a t o t a l of §61,2? • miles. 83. be inconsistent with the p o l i c y of the railway. I t has been asserted that the Grand Trunk P a c i f i c Railway bought mueh of the land near William's Lake, aid the conclusion from this i s that i t was the intention of the railway to make that c i t y , rather than Prince George, the great railway center of northern B r i t i s h Columbia. Some even assert that the aim was to b u i l d d i r e c t l y eastward from William's Lake to the Yellow-head, which would have meant making the main l i n e of the Grand Trunk P a c i f i c terminate at Yancouver, and the l i n e to Prince Rupert would have become a secondary l i n e , i f i t was not abandoned altogether. As no records e&ist of t h i s scheme, nothing can be proven to substantiate these claims. They must be accepted as possible, but l i t t l e more than that 1 can be said. By the P a c i f i c Great Eastern the B r i t i s h Columbia government gave i n d i r e c t assistance to the Grand Trunk P a c i f i c Branch Lines Company. The other two western provinces, esp e c i a l l y Saskatchewan, did much to encourage i t as w e l l . In 1909, by an arrangement with the Saskatchewan government, the Grand Trunk P a c i f i c Saskatchewan Railway Company was formed. This company was to b u i l d 475 miles of l i n e , 150 in 1910 and the remainder by 1912. The l i n e s from M e l v i l l e to Regina and from M e l v i l l e to Canora, were to be completed by 1910.another l i n e s included one from nesr Saskatoon, approximately 95 miles, to Battleford; from Watrous 75 miles to Swift Current and thence 50 more miles to Weyburn; and . 1. Both Dr. Robie L. Reid and Dr. Kaye Lamb, p r o v i n c i a l l i b r a r i a n , v e r i f y t h i s rumor. from M e l v i l l e 75 miles to Watrous. The Saskatchewan govern-ment guaranteed the bonds of the company which paid 4%, f o r $13,000 per mile, the bonds being issued f o r t h i r t y years from 1909. In 1912 an addi t i o n a l 90 mines were guaranteed and secured by a f i r s t mortgage on the li n e s of the Grand Trunk P a c i f i c Branch Lines Company as well as another 335 miles on the Grand Trunk P a c i f i c Saskatchewan Railway Company. Altogether the Saskatchewan government has guaranteed £1,792,000 worth of 4$ bonds on 670 miles of Grand Trunk P a c i f i c Saskatchewan Railway Company. The Alberta government acted in- a s s i m i l a r manner to that of Saskatchewan. The chief difference was that the guarantee, while i t was set at $13,000 per mile, might be increased to $15,000 i f the government so desired. Today the Alberta government guarantees £500,000 of f i r s t mortgage 4$ bonds, representing a t o t a l of 670 miles on the Alberta l i n e s , as well as £238,600 worth of 4$ f i r s t mortgage bonds on the Alberta branch from Biekerdale to the (goal mines. On t h i s l a t t e r piece of l i n e the Alberta government guaranteed 58 miles at $20,000 per mile. With the formation of the Branch Lines Company and i t s various s u b s i d i a r i e s , the Grand Trunk P a c i f i c was able to continue building on the p r a i r i e s for several years a f t e r the main l i n e was complete. For example, i n 1911 the follow-ing l i n e s were under construction: 93 miles from Regina to Moose jaw, 90 miles from Regina to the international boundary, 120 miles from Young to Prince Albert, 50 miles from Oban to B a t t l e f o r d , 124 miles from Mirror to Calgary, 50 miles from Biggar to the int e r n a t i o n a l boundary, 58 miles from Bickerdale to the coal mines. By the end of the year trains were operating on two branches, from T o f i e l d to Mirror, and from Ganora through Yorkton and M e l v i l l e to Regina. This was a t o t a l of 221 miles. The Grand Trunk P a c i f i c Branch Line Company with i t s connections was the most important subsidiary of the Grand Trunk P a c i f i c Company. There were several other subsidiaries which also played an important part i n the devel-opment of the transcontinental. Gn June 12, 1906 the Grand Trunk P a c i f i c Terminal Elevator Company was formed* Its c a p i t a l stock was |5,000,000, of which $501,000 was issued i n 1906 and owned by the Grand Trunk Railway Company. The purpose of this organization was the erecting and operating of an elevator on the Lake Superior terminal of the railway. On November 18, 1908, the contract f o r the elevator to be b u i l t at Fort William was given to the Canadian Stewart Company of Montreal. On A p r i l 14, 1910, by an act of the federal government, the Grand Trunk Railway Company was authorized to acquire and dispose of the stocks of the company. Closely a l l i e d to this was the Grand Trunk P a c i f i c Elevator Company Limited, which was incorporated December 24, 1908. It had $1,000,000 worth of stock issued i n shares of $100. Its purpose was to "lease the terminal elevator and warehouse to be erected on the Grand Trunk P a c i f i c grounds at Fort William, Ontario." The capacity of th i s elevator was to be 3,500,000 bushels?,, and the cost of construction, which 86. was l a t e r extended by $581,000, was to be $1,248,000. On July 22, 1912, the Grand Trunk P a c i f i c Terminal Warehouse Company was formed with the object of building a chain of warehouses i n Montreal, Toronto, Fort William, Winnipeg, Edmonton, Vancouver and Prince Rupert. Its c a p i t a l was $10,000,000, of which one-half was to be issued immediately. By &he end of the month the government of Saskatchewan had guaranteed addi t i o n a l bonds f o r terminals i n Regina, Saskatoon, Moose jaw, Prince l l b e r t , and Swift Current. One of the most active and valuable of the Grand Trunk P a c i f i c ' s subsidiaries was the Grand Trunk P a c i f i c Town and Development Company Limited. Incorporated August 2, 1906, under t h i s name, i t changed to the Grand Trunk P a c i f i c Development Company on January 20, 1910. It agreed to buy from the Canadian government 135 tr a c t s of land v/hich included 19,931 acres of crown lands, at a price of three d o l l a r s an acre, and to give the government one-quarter of the net proceeds of sales or rentals f o r townsite purposes. 1 These were to be along the railway where they would be most available for town s i t e s . It was also permitted to buy 11,279.81 aeres of unpatented homestead lands, f o r which i t paid the govern-ment $1.00 per acre and i n addition paid the homesteader the amount demanded in each case. A t h i r d type of land purchased were Indian reservations. 2 !• g»0»P« January 17, 1910, 1966. 2. I b i d . , January 25, 1911, 2366. 87. The entire stock of the company was held, and guaranteed by the Grand Trunk Pae i f i o Railway. The total value of i t s stock was $5,000,000, of which $3,000,000 of common stock was issued and $2,000,000 of preferred stock was not issued. The Grand Trunk P a c i f i c Railway Company owned 29,990 shares of the paid up stock and the remaining 10 were divided equally among the f i v e d i r e c t o r s , Charles M. Hays, E. J. Chamberlain, Wm. Wainwright, W. H. Biggar, and E. H. Fitzhugh, The purpose of the company was to acquire land and lay out townsites, promote mining, operate tramways, and to develop other related projects. It was very active in northern B r i t i s h Columbia, p a r t i c u l a r l y around Prince Rupert, New Hazelton, Fort Fraser and Fort George. One ©f i t s largest sales was a tract of 764 acres near Prince Rupert which were sold to Moreton Francis and S i r Edgar Vincent of England f o r $217,500, which was almost ten times the o r i g i n a l cost p r i c e . One of the fundamental reasons for the construction of the Grand Trunk P a c i f i c Railway had been the development of trade with the Orient. In connection with th i s the promoters of the company had hopes f o r the development of a trans-oceanic steamship service. The B r i t i s h Columbia coast service was expected to be the beginning of this great steam-ship system, f o r i n 1909 Captain C. H. Nicholson was appointed manager and organizer of the P a c i f i c f l e e t and i t s extension to China and Japan. The f i r s t mention regarding the development of a coast steamship service i s found i n theaWi-nnlpeg Free Press of September 5, 1908, which states, "The Grand Trunk P a c i f i c purchased 280 feet of water f r o n t between the Alaska steam-ship wharf and the marine and f i s h e r i e s dock f o r ovear $100,000 from C l i f f o r d W. Brown in V i c t o r i a . " The Grand Trunk P a c i f i c Coast Steamship Company developed a regular coast service f o r many years. The f i r s t of t h e i r f l e e t was the Prince Rupert, which was b u i l t by Swann and Hunter of Newcastle, England. It made i t s maiden t r i p to Prince Rupert on June 16, 1910. Two other ships, the Prince George and the Prince Albert entered the service sooqi. a f t e r . The three vessels were a l i k e , being o i l burners of 2,850 tons, with a length of 306 fe e t , a beam of 42 f e e t , and being capable of 18 knots per hour. A regular service was maintained during the year from Taeoma, Seattle, and Vancouver to Prince Rupert. In 1911 the service was extended to Stewart, Alaska, and f o r the years 1916, 1917, and 1918 a summer service was operated to Skagways On November 12, 1909, an agreement was made with the dominion government f o r a steamer to run to the Queen Charlotte Islands ifasom Prince Rupert. For t h i s the government was to give a subsidy of $200 a t r i p . During the winter a f o r t n i g h t l y service was maintained and during the summer a weekly. The contract was to l a s t u n t i l March, 1915. When the Grand Trunk P a c i f i c became a part of the Canadian National Railways t h i s steamship l i n e v/as maintained. At present i t consists of f i v e vessels which maintain an a l l - y e a r service from Vancouver to Prince Rupert and from Vancouver and Prince Rupert to the Queen Charlotte Islands. In 1930 a summer service started to operate to Alaska and i s s t i l l i n operation.1 In 1910 an attempt was made to invade the Vancouver, Victoria,and Seattle triangle service. The Grand Trunk P a c i f i c Coast Steamship Company operated a twice weekly-service in summer and a weekly service i n winter on this run from 1910 to 1923. In August, 1930, an attempt was made to revive t h i s service hy the Prince David, hut the venture ended on September 15, 1931, as i t was fel'Jt .that there was not enough t r a f f i c to warrant i t s competing with the Canadian P a c i f i c Coast Steamships. Closely connected with these steamships was the Grand Trunk P a c i f i c Dock Company, of Seattle. In 1909 i t leased a dock known as the Flyer Dock on Railroad Avenue between Madison and Main streets i n Seattle from the Commercial Company. : Here i t agreed to b u i l d a concrete dock to the value of $250,000, During 1904 and 1905 there was much interest by c a p i t a l i s t s i n the Bulkley and Telkwa d i s t r i c t s . The Grand Trunk acquired 17 ,000 acres of land i n this section and formed the Grand Trunk P a c i f i c B r i t i s h Columbia Coal Company. This; company controlled 12 sections of land alongside the railway about 16 miles from Hazelton. Here i t d r i l l e d three tunnels, from which i t supplied coal to the B r i t i s h Columbia section of the railway. There, were about 100 shareholders who met annually i n Vancouver. In 1906 was formed the Grand Trunk P a c i f i c Telegraph Company, with a c a p i t a l of $5,000,000 and stock guaranteed by 1. Senate Investigation, p. 966 and 1103 to 1106. the Grand Trunk P a c i f i c Railroad. It had a very broad charter, i t s main purpose being to build a telegraph l i n e alongside the railway, but i t could also acquire cable l i n e s , telephones, wireless telegraphs,and similar u t i l i t i e s . It inaugurated a service between Winnipeg and Prince Rupert on November 21, 1914. These many subsidiaries permitted the Grand Trunk P a c i f i c to escape many of i t s obligations, and thus to do many things not i n the o r i g i n a l charter. The Grand.Trunk P a c i f i c Railway held the control i n a l l of them, and they -enabled the railway company to increase i t s grants and subsidies enormously. It was shrewd company promoting,' but the boom broke i n 1913 and the railway found i t s subsidiaries to be detriments instead of the hoped-for assets. 91 Chapter V. The Power of the Grand Trunk P a c i f i c The b uilding of railways i n North America has had - four e v i l r e s u l t s : the e x p l o i t a t i o n of the laboring c l a s s ; the building of c i t i e s with crowded.unsanitary conditions; the corruption of p o l i t i c s and morals; and the formation of large fortunes by which the d i s t r i b u t i o n of wealth was made more uneven. The Grand Trunk P a c i f i c was no d i f f e r e n t from the other railways. Throughout i t s entire period of construction are complaints from the laborers about the wretched accommo-dation, poor food, high rate of mortality, and low wages. It did bring about the building and development of c i t i e s , but i t must be noticed, in fairness to the railway, that some of i t s c i t i e s were planned before any of the l o t s were sold and the e v i l s of overcrowding were overcome. This was not done from a humanitarian point of view, however, but from the point of view of the p r o f i t s to be made from these develop-ments. As regards the corrupting influence of the railway on p o l i t i c s much has been said, and much more can be shown, but even then the tale w i l l be f a r from complete for many years. F i n a l l y , there i s no doubt that the railway was a money-making scheme, and that not only were fortunes made by those connected with the railway, but other speculators entered the f i e l d and either made or l o s t huge sums of money. "Anyone who investigates the genesis of the early railways of Canada," says Biggar, " w i l l be impressed by the number of members of parliament who, while p u b l i c l y advocating the building of railways for the sole purpose of developing the resources of the country, obtained personal control of the roads. They prostituted their positions i n parliament to this end, and used not t h e i r own cash but the public money and cr e d i t wherewith to construct the l i n e s , and then took to themselves the p r o f i t s derived by public funds."^ The Grand Trunk P a c i f i c Railway was a L i b e r a l project, and i t became a recognized f a c t that, "After 1902, r ? •railways are out p o l i t i e s ' became true once more."" Although p o l i t i c a l graft has never been proven i n connection with the Grand Trunk P a c i f i c Railway, i t s influence on p o l i t i c s , and the influence of p o l i t i c s on i t , are to be found again and again. The building of l i n e s through as many constituencies as possible, the influence i n e l e c t i o n s , and the opposition of the government to other railways are a few of the more obvious indications of p o l i t i c s . "The campaign pamphlets ci r c u l a t e d by the L i b e r a l organization i n the East set forth a p o l i c y absolutely d i f f e r e n t from that they set f o r t h i n the West." 3 Under S i r John A. MacDonald the Conservative party had been responsible f o r the Canadian P a c i f i c Railway. "That railway, strongly opposed by the L i b e r a l s , had proved to be an enduring monument to the foresight and enterprise of a Conservative administration. In these l a t e r days of development and prosperity i t was anticipated that another great transcontinental railway, extending on Canadian t e r r i t o r y from A t l a n t i c 1. Biggar, E. B., The Canadian Railway Problem, Toronto,1917, 69. -2. Skelton, Oscar D., L i f e and Letters of S i r Wilfred Laurier, Toronto, 1921, 185. 3. Borden's Autobiography, 121. 93. to P a c i f i c , would prove to be an even more conspicuous monument to a L i b e r a l administration. 1 At f i r s t Laurier. hoped to amalgamate the Grand Trunk P a c i f i c project, with the Canadian Northern, and i n t h i s way to create a transcontinental f a r greater than the f i r s t . But the Can-adian Northern was a profit-making scheme, and the o f f i c i a l s were cl o s e l y t i e d to the Conservative party, AS a res u l t the negotiations f a i l e d . In 1903 the government, " t r i e d to buy the Manitoba l i n e s but they could not get together...they had meeting a f t e r meeting, with them, but the best terms they could get were that they assume a l l o b b l i g a t i o n s , a l l bonds, and every-thing else, and give $25,000,000 fo r the common stock of that l i t t l e bunch of l i n e s up around Winnipeg." 2 Balked by these excessive demands, Laurier deter-mined to b u i l d an e n t i r e l y separate road with the cooperation of the Grand Trunk o f f i c i a l s . This e n t a i l e d much government support of p o l i c i e s which were d e f i n i t e l y opposed to the o r i g i n a l scheme of the Grand Trunk P a c i f i c . Instead of running far to the north the line was b u i l t on the p r a i r i e s between the Canadian northern and Canadian P a c i f i c . Whereas i t had been the o r i g i n a l intention not to off e r competition to e x i s t i n g l i n e s , permission was given to b u i l d to a l l the l a r g -est c i t i e s on the p r a i r i e s , and by their o r i g i n a l plans the Grand Trunk P a c i f i c Branch Line company would have p a r a l l e l e d the Canadian P a c i f i c at a distance of not more than ten miles 3 fromr.WInnipeg to~ Calgary, and probably to the crow's Nest. Two examples of p a r t i a l i t y to t h i s road are outstanding. In 1. Borden's Autobiography,109. 2. Kailway Inquiry (jommiasion, 3. H.C.D. 1906. June 18, 5470 -1. 1 9 1 7 » 8 0 • 1905 the Canadian P a c i f i c Kailway petitioned the government to protest the p a r a l l e l i n g of l i n e s between Portage l a P r a i r i e and Winnipeg, e s p e c i a l l y as, in some places, the "proposed-Grand Trunk P a c i f i c l i n e s would be within 9 or 10 miles of branches of the Canadian P a c i f i c Kailway." 1" The "objections were overruled on alleged l e g a l grounds." 2 Furthermore, the judgment stated, "There i s no l i m i t a t i o n , i n f a c t , as to the t h i r t y m i l e s . " 3 On June 1, 1911, the Board of Kailway Commissioners ruled that the Grand Trunk P a c i f i c would not carry freight over i t s l i n e through the Yellowhead to Northern B r i t i s h Columbia. This was a blow to the Canadian Northern, as i t had intended to have i t s construction materials carried by the Grand Trunk P a c i f i c through t h i s section and thus cut down much of i t s expense. But i f the L i b e r a l Government t r i e d to hinder the Canadian P a c i f i c Railway, that powerful organization r e c i p r o -cated. The following l e t t e r to Laurier concerning the elections on the p r a i r i e i n 1905 shows t h i s : You are no doubt aware i n a general way of the attitude of the Canadian P a c i f i c Railway i n both pro-vinces, i n the constituencies of Banff, Calgary,and Gleichen i n t h i s province, the Canadian P a c i f i c Kailway had p r a c t i c a l l y charge of the .campaign and every influence they could use, f a i r or u n f a i r , was brought to bear on the L i b e r a l s . The influence of the Canadian P a c i f i c Railway can be f e l t , a l so, i n every point i n Saskatchewan province where they had p u l l . They have shown t h e i r hands... and I would make i t war to the knife from th i s out. 4 1. Sessional Paper 20(c), 1907, 79. 2. C.A.R. 1905, 548. 3. Sessional Paper 20(c),1907 — 80. 4. Skelton, 0. D., Qp.cit., 244 (footnote). Fortunately for the Grand Trunk P a c i f i c Railway, the Lib e r a l s held an overwhelming majority in the federal house u n t i l 1911 when the Conservative government under Robert Borden gained power. 1 By t h i s time the railway was so near to being b u i l t that he could do nothing but f i n i s h i t . Had he wished to hinder i t , he was faced by the fact that p r a c t i c a l l y the only section incomplete was i n B r i t i s h Columbia, which had remained f a i t h f u l l y conservative from the time the railway had begun. This does not mean that the f e e l i n g between the Conservatives and the Grand Trunk P a c i f i c was at any time f r i e n d l y . S i r Robert Borden states, "I referred to the active and antagonistic intervention of the Grand Trunk R a i l -way against our party i n 1908, and emphasized strongly that we desired ho quarrel with any great corporation i n Canada; but that i f such a corporation desired to attack and p e r s i s t i n attacking our party we were prepared to meet them and to press the quarrel to the b i t t e r end....Subsequently Mr. Wain-wright, Parliamentary Representative of the Grand Trunk Railway, c a l l e d and suavely inquired i f I intended to allude to his company, protesting at the time that my suspicions were e n t i r e l y unfounded. He received l i t t l e comfort out of our 2 interview." Two of the western provinces maintained L i b e r a l governments while the railway was being constructed, and there-1. Note: i n 1911 S i r William Van horne spoke on Montreal p o l i t i c a l platforms against the L i b e r a l party. 2. Borden's Autobiography, 315. fore did a l l i n t h e i r power to advance the project. In the others, B r i t i s h Columbia and Manitoba, S i r Richard McBride successfully fought the railway and forced i t to b u i l d from the west, while Mr, Roblin was fortunate i n holding the key p o s i t i o n for the building of a transcontinental. In both p r o v i n c i a l and f e d e r a l governments were many charges of g r a f t . "The reliance upon -the public treasury ...brought into Canadian p o l i t i c s the most corrupting single factor i n Confederation times, apparent in campaign contribu-tions, advance information as to location of land deals, free passes for members and t h e i r f a m i l i e s , the buying of newspapers, - the whole 'long t r a i l , 1 i n Mr. Bennett*s phrase, 'of- parliament-ary corruption, of lobbying, of degradation of parliamentary i n s t i t u t i o n s , of the lowering of the morals of public l i f e . ' " 1 In every province the influence of the railway was f e l t , and i n almost every one were scandals or charges of p o l i t i c a l scheming, i n the Maritimes the resignation of B l a i r as Minister of Railways, and the choice of Moncton as the terminus ga?©eexamples of the influence of p o l i t i c s . It might be noted as a result of t h i s , St. John followed B l a i r i n opposing the L i b e r a l Scheme and elected a Conservative i n 1904. In Quebec province, i t was the pressure from Quebec c i t y which resulted in the railway passing through that c i t y 1. Skelton, P.P.,op.cit., 419. Note: On January 26, 1939, on the occasion of his farewell speech to Canada delivered at St.John, New Brunswick, Mr. Bennett referred to the problem of railways and patronage as one of Canada's four great problems. i n preference, to. Montreal.. In the scandal connected with the resignation of B l a i r , the attempt of the Conservatives and the Canadian Northern interests to oust Laurier hy the purchase of "La Pressed has been shown.1 In 1907 a more flagrant charge of graft was investigated i n what i s known as the "Asselin Case." 2 Olivar Asselin was the editor of a newspaper, Le Nationaliste, which charged Prevost and Turgeon, two members of the p r o v i n c i a l cabinet, of conniving with a Belgian syndicate under Baron de l'Epine. This group was to purchase large areas in the A b i t i b i region on the supposed route of the Grand Trunk.Pacific. They were to be sold the land f o r one d o l l a r an acre, of which seventy cents was to go to the public treasury and t h i r t y cents was to be given to campaign funds. In the t r i a l the jury s p l i t with a vote of s i x f o r each side. . The charges were unproven, i t i s true, but the r e s u l t i n g judgment was far-from s a t i s f a c t o r y , and Prevost resigned h i s p o r t f o l i o of Minister of Mines, Lands and F i s h e r i e s . i n Ontario the L i b e r a l s , under Ross, i n 1904 granted the Grand Trunk P a c i f i c $2,000 plus 6,000 acres ofr land for each mile b u i l t on the branch l i n e to Fort William from the National Transcontinental Railway. As the t o t a l mileage was about 200 miles this grant meant a t o t a l subsidy of $400,000 and 1,250,000 acres of land. The railway agreed to cer t a i n conditions such as the procuring of s e t t l e r s , but i n return for the cancellation of this clause the company l a t e r surrendered 525,000 ac r e s . 2 A further proviso i n the 1. supra, 24, 25. 2. Lovett, i i . A.. Canada and :tne Grand Trunk, 1924, p. 161. 98. agreement j.dded that u n t i l the company had located i t s lands a d i s t r i c t 36 miles broad and 200 miles long was closed to settlement. On the lands granted the Grand Trunk P a c i f i c was . given a l l the minerals and a l l timber except pine. It i s worth noting that the policy of permitting railway companies to choose t h e i r lands was abolished in the United States some years before, and companies there were forced to take lands without choosing the best portions. In 1905 the Conservatives, led by Whitney, swept the province, and from t h i s time u n t i l the completion of the road the Conservatives were in power. No further subsidies were granted, nor were any branch l i n e s b u i l t i n t h i s province. In Manitoba the Conservative party maintained a clear majority during these years. It was a government which favoured much railway building, and Premier Roblin i s recog-nized as c l o s e l y connected with the Canadian Northern. In 1901 the Manitoba government required a 999 year lease at a payment of $300,000 a year of the 354 miles i n Manitoba which belonged to the Northern P a c i f i c Railway. These l i n e s were then leased to the Canadian Northern Railway. 1 There i s no doubt Roblin favoured the Canadian Northern i n many ways, es p e c i a l l y with guarantees, and i n return he demanded and obtained lowered rates. It i s s i g n i f i c a n t that there was no Manitoba branch l i n e subsidiary to the Grand Trunk P a c i f i c . The provinces of Alberta and Saskatchewan were not 1. Fournier, L. T., Railway Na t i o n a l i z a t i o n i n Canada, Toronto 1935, 32. formed u n t i l 1905. In that year both elected L i b e r a l govern-ments. The premier of Saskatchewan was Walter Scott who remained i n o f f i c e while the railway was being b u i l t . The premier of Alberta was A.'C. Rutherford u n t i l 1910, when, because of a s p l i t i n the party, A. L. S i f t o n succeeded him. -These governments assisted.the railway i n a l l conceivable ways, not the least of which was the formation of the Alberta Branch Line Company, and the Saskatchewan Branch Line Company. Altogether these governments guaranteed f16,786,440 of f i r s t mortgage bonds. In connection with these provinces i t must be remembered that the Canadian P a c i f i c Railway was very powerful i n the south, and the influence of the railways in p o l i t i c s i n these provinces i s very marked. An i n t e r e s t i n g example i s c i t e d in the Prince Albert Herald i n 1908 of a town which had been held back for years and sidetracked by the Grand Trunk P a c i f i c , because i t voted Conservative. 3" In no province was the antagonism between the Grand Trunk P a c i f i c and the government so obvious as i n B r i t i s h Columbia during the early years of the company's l i f e . The government there was Conservative under the leadership of Sir Richard McBride during the entire period of b u i l d i n g . As early as Mei?ch 3, 1903, the V i c t o r i a Colonist stated that, "The. province was now being punished by the government at Ottawa and the railway for presuming to have a Conservative government•" 2 1. C.A.R. 1908, 202 2. C i A . R . 1903, 373 100. The people as a whole favored the railway and therefore the pr o v i n c i a l government could not oppose i t , but i t could endeavor to make the terms as onerous as possible and check the o f f i c i a l s , of the railway i n any way possible with-out endangering the building of the road. Two e d i t o r i a l s in the Prince Rupert Empire are enlightening, the one beacuse i t leaves no. doubt i n the mind of the reader as to the p o l i t i c a l a f f i l i a t i o n s of the newspaper, and the other because i t sum-marizes the attitude of the p r o v i n c i a l governments to the railway. On June. 12, 1909, i s to be found t h i s terse but d e f i n i t e remark, "Everything the Grand Trunk Railway has done west of Winnipeg has been done i n a h e l l of a way," and the other statement, written on May 1, 1909, reads, "Mackenzie and Mann have announced that they w i l l extend to Vancouver. It i s generally supposed that a deal has been arranged with Premier McBride. Mackenzie and Mann are s o l i d with the gov-ernment of Ontario, which i s Conservative. Theyown the government of Manitoba, which i s Conservative. The government of B r i t i s h Columbia i s Conservative, hence f r i e n d l y . " The f i r s t statement i s too prejudiced, as there i s no doubt the Grand Trunk P a c i f i c did some f i n e work i n the west,but, as w i l l be shown in the next few pages, they also did some that was far from creditable. When the actual construction of the road was begun i t was discovered, much to the dismay of B r i t i s h Columbia, that there was no clause which forced the railway to begin at the western end. This meant that the en t i r e l i n e could be b u i l t from Winnipeg westward, which would not only delay the construction i n B r i t i s h Columbia, but would also mean a great l o s s of business to the people of the province, espec-i a l l y i n the c i t i e s of the southern coast. The Grand Trunk P a c i f i c sought to use this fact to blackmail Premier McBride and the government, and to make them grant either a large cash subsidy or land grant. In 1905, while the L e g i s l a t i v e Assembly was s i t t i n g , F. W. Morse, vice-president of the com-pany, spent f i v e weeks in V i c t o r i a , obviously lobbying. Apparently his demand was a grant of 15,000 acres per mile to abut on the railway, which the company agreed to s e l l at the prices asked by the government, namely $1.00, $2.50, and $5.00 an a c r e . 1 As i t was estimated that there were roughly 400 miles of line i n B r i t i s h Columbia, the grant under these terms would have t o t a l l e d 6,000,000 acres. The government told him p l a i n l y that he would receive no subsidy, whereupon he remarked, "I am sorry that the people of B r i t i s h Columbia have not s i g n i f i e d a desire to co-operate wrth us." 2 i n March 23 the government reaffirmed i t s attitude by o f f i c i a l l y announcing that there would be no subsidies at a l l from v i c t o r i a during that session. This was ten days after Morse's naive statement that the r®ailway intended to build from east to west, but would s t a r t i n the west i f i t obtained a good subsidy from B r i t i s h Columbia. Could anything "savor more of a holdup" than t h i s statement? To the credit of Richard McBride, i t must 1. Vancouver Daily Province, March 11, 1905. 2. Vancouver World. February 27, 1905. 102. be r e a l i z e d that he was not stampeded by the threats of Morse, and found a way to obtain the railway without submitting to h i s demands. Foiled i n his demands, Morse petulantly l e f t the province determined not to build the l i n e from the west. To cover the obvious reason, he issued t h i s statement to the Winnipeg Free Press on March 27, 1905, "If construction were to begin at the western end, a l l the r o l l i n g stock, motive power, bridge and track materials would have to be shipped to the coast over a r i v a l road and sent north by water a distance of several hundred miles. Again i f the l i n e were b u i l f from the east to the west, settlement would follow the l i n e , which would be a revenue producer as f a s t as i t was constructed." This i s very plausiblw t a l k , but not plausible enough to hide the re a l reasons. Premier McBride, however, found himself i n a d i f f i c u l t p o s i t i o n . Apparently he had saved the land grant but had lost the agreement of the railway to b u i l d from the west. It speaks much for the p o s i t i o n he held that he was again successful i n the elections of 1906. however, a weapon soon appeared by which he could force the railway to b u i l d from the P a c i f i c end. It was trying to obtain possession of oertain Indian reserves, e s p e c i a l l y fchose near Kaien Island, and to do t h i s i t must have the consent of the p r o v i n c i a l government. This was the weapon which McBride used success-f u l l y , so that the road was begun from the B r i t i s h Columbia end. The f i n a l agreement was signed February 28, 1908. 1 By 1. C.A.R., 1908, 528. i t the Grand Trunk P a c i f i c Railway received 32,000 acres on the Tsimpsean reserve, for which i t paid $2.50 an a c r e . 1 The land was to be sub-divided and the company was to pay three-quarters of the cost of subdividing. The company further agreed to buy supplies i n l o c a l markets i f possible. For t h i s the province conceded the r i g h t of way, not exceeding 100 feet i n width, from the border to the coast, and gave exemp-ti o n from taxation u n t i l December 31, 1921. There was an understanding that the railway was to st a r t building from the west coast. This agreement meant a grant of approximately 1,000,000 acres of land, which was f a r below the 6,000,000 adked by Morse i n 1905. Although McBride had forced the Grand Trunk P a c i f i c to agree to his. demands, and had ins i s t e d on the railway being b u i l t i n B r i t i s h Columbia, he preferred the Canadian Northern Railway, and encouraged '1$ by h i s favorable a t t i t u d e . Before the e l e c t i o n of 1909, McBride entered into negotiations with the Canadian Northern and his actions present an i n t e r e s t i n g contrast to his treatment of Morse and the Grand Trunk P a c i f i c He stated, "The government w i l l welcome any f a i r and equitable arrangement between the Canadian Northern and t h i s province. It i s a thoroughly Canadian system, controlled by Canadians, It has done a great deal for the farmers of Manitoba, Saskr-atchewan, and Alberta, and may do a great deal for B r i t i s h Columbia. Assistance w i l l be necessary but the interests 1. By the law of B r i t i s h Columbia one-quarter of this land reverted back to the province. 104. and rights of the province w i l l be served." 1 Donald Mann was at t h i s time i n V i c t o r i a , aid, without any waste of time, nego-t i a t i o n s at once proceeded. By the agreement the B r i t i s h Columbia government guaranteed $21,000,000 f o r 600 miles of l i n e . R. G. Tatlow, the Minister of Finance, and F. J . Fulton, the Commissioner of Lands, resigned because they protested that p r o v i n c i a l aid was unnecessary as the Canadian Northern would bu i l d to the coast anyway. As i n the case of the Grand Trunk P a c i f i c agreement, the terms were kept secret u n t i l public opinion forced t h e i r publication. While they supported the Canadian Northern, McBride and the people of B r i t i s h Columbia did not discourage the Grand Trunk P a c i f i c , because they r e a l i z e d that i t was a necessary step towards the f u l l development of the province. In 1909 McBride said, "By no means do I approve of the reckless and unbusinesslike policy of the federal government with regard to t h i s company. Nevertheless we welcome the l i n e here i n B r i t i s h Columbia. The i n t e r e s t s of the Grand Trunk P a c i f i c p are almost i d e n t i c a l with the interests of the province." There was never the closeness between B r i t i s h Columbia and the Grand Trunk P a c i f i c that there was with the other railway, l a r g e l y because the northern railway was a L i b e r a l project, while B r i t i s h Columbia was a Conservative province. The people did not forget that S i r Wilfred Laurier had s a c r i f i c e d the B r i t i s h Columbia seats in the federal house during the elections of 1908 because he would not support the exclusion 1. C. A. R. 1909, 587. 2. Vancouver Daily Province, January 26, 1909. of Orientals which would have compromised h i s imperial p o l i c y . Moreover, the Laurier government had shown t h e i r antagonism towards the western province when they "declined to have any share i n the...extension through B r i t i s h Columbia to the coast With the ele c t i o n of the Conservatives under Robert Borden to powsr i n the federal house in 1911, B r i t i s h Columbia &nd Manitoba received t h e i r rewards. Both Richard McBride and Roblin declined positions i n the cabinet. Large loans were made during the next few years to enable the r a i l -way to f i n i s h . "A cash subsidy was granted to B r i t i s h Columbi extension.. .in 1913 i t [the federal government voted a cash subsidy of $15,645,000 on the d i s t i n c t understanding p that t h i s would make i t possible to complete the road." The McBride government also proved much more gracious in guaranteeing the bonds of the Grand Trunk P a c i f i c . With t h i s assistance the railway was enabled to complete i t s main lin e in B r i t i s h Columbia. From the beginning to the end the Grand T runk P a c i f i c presents a sordid picture of p o l i t i c a l patronage. Begun as a L i b e r a l scheme, i t was completed under the Con-servatives, and both parties used i t f o r their own ends. Province by province the same story i s to be seen. The r a i l -way must be constructed to please the adherents of the party in power, i t must be used as a possible source of new con-st i t u e n c i e s , and i t must be used as a weapon to inconvenience the opposition. The great underlying problem facing those 1. Skelton, 0. D., o p . c i t . , 420. 2. i b i d . . 420. 106. who t r i e d to save the railway i n i t s decline was the rescue of the railway from p o l i t i c s and of p o l i t i c s from the railway. The railways of Canada were b u i l t for profit-making, and many schemes were introduced by which these p r o f i t s could be increased. In t h i s respect the Grand Trunk P a c i f i c stands well to the fore. It was unsurpassed in the vari e t y and un-scrupulousness of i t s methods. The promoters of thi s scheme seemed to v i s u a l i z e the whole of western Canada as t h e i r hunting ground, to be ensnared and robbed at w i l l . At times the railway was not averse to going beyond the law, undoubtedly f e e l i n g that with i t s parliamentary support i t would not be checked. As a re s u l t many complaints were made regarding i t s actions. In 1911 i t was brought to the attention of the Railway Commissioners that the Grand Trunk P a c i f i c had crossed 80 highways i n Alberta without the Board's consent, in spite of the fact that the penalty for t h i s offence was l e g a l l y a fine of $25.00 for each offence. 1 A simi l a r case to thi s was the protest to the commissioners by the c i t i z e n s of North Edmonton regarding the cl o s i n g of the Fort Saskatchewan T r a i l . The railway had closed the t r a i l by building across i t . The Brand Trunk P a c i f i c had progressed in t h i s section without the consent of the Board and without presenting plans, o^nis omissions of which v/ere both i l l e g a l . Negotiations continued for three years before the Grand Trunk P a c i f i c gave signs of actually agreeing to the requests of the Board and the c i t i z e n s . 1. The Aldermere I n t e r i o r News, A p r i l 7, 1911. 107. However, the agreement did not come soon enough to prevent the commissioners handing down a judgment. This was in the words of Chief Commissioner Mabee, who at a l l times appeared to have •no fear of the Grand Trunk o f f i c i a l s , and whose strong con-demnation bears p a r t i a l r e p e t i t i o n . He begins, "This death bed repentance never appeals to me strongly," and continues, "I am forced to say I think t h i s matter i s quite i n l i n e with many other ma matters that your company has had with the Railway Board, and I think i t i s high time that some steps should be taken to f i n d out whether the engineering department of the Grand Trunk P a c i f i c i s subject to the Railway Act, or whether i t has a procedure unto i t s e l f uncontrolled by the law that the other companies are supposed to be governed by....Your road i s there i l l e g a l l y . . . a new order requiring the railway to f i l e within t h i r t y days detailed plans and complete i t within t h i r t y days a f t e r approval. The penalty f o r f a i l u r e s h a l l be $100 a day for every day's default...and I w i l l under-take to see i t w i l l be imposed and enforced."! In 1908 the municipality of Miniota.in Manitoba asked that the Grand Trunk p a c i f i c put in overhead instead of l e v e l crossings, because at that point the railway runs for a mile through a deep cut arid t r a i n s could not be seen. It was further pointed out that in i t s second crossing the Grand Trunk P a c i f i c had diverted the highway without securing 2 authority from the Municipality f i r s t . In 1908 Fort William protested at the desire of the railway to run a large spur; track along Weebing Avenue. For i t s case the c i t y stated that the only reason the Grand Trunk P a c i f i c gave for wanting the street was that the land along i t had been reserved f o r i n d u s t r i a l s i t e s and i t wanted 1. Sessional Papers 20(c), 1913, 330 --338. 2. Winnipeg Free Press. September 14, 1908. to get the business from them. It was shown, however, that the owners of the property had already reserved a right of way along private property for the purpose of laying a spur track, and that the plan of the railway would p r a c t i c a l l y keep the c i t y away from the r i v e r frontage. 1 Another protest which revealed an i n t e r e s t i n g legal escape from the s p i r i t of the o r i g i n a l contract of the r a i l -way came from the Central Saskatchewan Boards of Trade, who protested that the service was not adequate. In reply to t h i s the Railway Commission pointed out that the Act stated that "period of construction" means the time which should elapse u n t i l the western d i v i s i o n should be completed, and u n t i l the end of that time the railway did not have to open for t r a f f i c . It had received permission to carry s e t t l e r s and their e f f e c t s on the construction t r a i n s , and also to run a tri-weekly service of mixed t r a i n s , but regular passenger t r a i n s were not required. In spite of t h i s the railway was abusing i t s p r i v i l e g e of carrying s e t t l e r s by 2 running excursion t r a i n s to the east. "An enlightening picture of the methods of the Grand Trunk P a c i f i c i n crushing i t s small competitors comes from Saskatoon. Here the company had an agreement with a -bus company f o r the exclusine right of pi c k i n g up fares from i t s station. E. A. P u r c e l l , an independent cab driver, attempted to obtain passengers there, and the company agent 1. Winnipeg Free Press, July 21, 1908. 2. Sessional Papers 20 (c), 1911, 312. 109 used several methods to prevent his succeeding. At f i r s t P u r c e l l was not allowed to back up to the station platform, Wich forced any prospective passengers to walk 100 feet through mud to him. Later the agent p i l e d up trucks and baggage i n front of h i s cab so that customers were further inconvenienced. P u r c e l l protested to the Railway Commission, and, i n giving the decision i n his favor, Judge Mabee commented, "Nobody but your company t r i e s to do i l l e g a l things a l l the time.'*1 These are a scattered few examples, but they are t y p i c a l of the high-handed action of the Grand Trunk P a c i f i c . In other ways t h e i r methods of making money were even more impudent. An excellent example of t h i s i s the expense account submitted to the government on June 30, 1905. The railway claimed to have spent $986,293, but the government auditor, Mr. Shannon, disallowed $162,000. The government engineer, Mr. Schreiber, however, overruled him and allowed the whole olaim. Some of the figures included i n this estimate, which was supposed to be the "cost of construction", were $26,000 for l e g a l expenses and |46,000 for terminal land, of v/hich $20,000 went to Mr. Morse and $26,000 to Peter Larsen (of whom we a h a l l hear l a t e r in the Kaien Island dispute, but who supposedly gained nothing from that deal). Other figures disallowed by Shannon included |3,000 as the expenses of Morse and Hays fo r a t r i p to the P a c i f i c coast, |125 per month for a clergyman's services, |325 to Mr. Wainwright for 1. prince Rupert Daily News, December 29, 1911. The case i s treated f u l l y i n Sessional Paper 20(c), 1913, p. 352. "advertising" (of which there i s no record), $1,132 for Hays* t r i p to England, §4,661 for the s a l a r i e s of the London o f f i c i a l (most of whom were r e a l l y Grand Trunk o f f i c i a l s ) , $2,433.33 for d i r e c t o r s * fees, and so on. The f i r s t estimate was with-drawn hy the company, a fact which the Conservatives were loud to c r i t i c i s e , and a second statement was issued, of which Shannon s t i l l disallowed f70,000. It i s small wonder that Walker, the senior auditor of the Grand Trunk P a c i f i c , l e f t f o r the Mediterranean i n the middle of the i n v e s t i g a t i o n . It i s s i g n i f i c a n t , too, that Schreiber, a L i b e r a l appointee, l e t the f i r s t estimate pass, and that the L i b e r a l party permitted the Grand Trunk P a c i f i c to withdraw the f i r s t est-imate e n t i r e l y . 1 Although the railway f a i l e d in t h i s attempt to fleece the government, i n 1911 they were more successful. -As the r e s u l t of a decision of the Railway Commission regard-ing an i n t r i c a t e point connected with the Grand Trunk P a c i f i c Act of 1904, the railway was awarded the sum of $10,080,000. This sum had no connection with the subsidies which were granted from time to time, and was therefore p r a c t i c a l l y a g i f t . As i n a l l railway building, most of the money was v made from land speculation. It must not be understood that the Grand Trunk P a c i f i c and i t s subsidiaries were the only ones to make fortunes by t h i s method as a re s u l t of the railwsy Many other organizations and individuals attempted to take .• 1. ri. C D. March 20, 1907, 5027 f f . 2.. C.A.R.1912, 124. The exact wording of the award w i l l be found quoted at t h i s place, but i s too i n t r i c a t e f o r t h i s study. 111. advantage of the r i s i n g values of land, and speculation was heavy throughout the whole area served by the road. h. G. Brewster, a man who was noted for h i s honesty and intolerance of g r a f t , summarized the extent to which th i s had been done i n B r i t i s h Columbia alone up to 1914 as follows: Along the l i n e s of the Grand Trunk P a c i f i c and P a c i f i c Great Eastern, 144 syndicates have secured 1,284,720 acres of the best a g r i c u l t u r a l lands.... These are held by speculators. 67 of these syndicates average 15,000 acres each. The govern-ment receives from these alienated lands...about enough to run the government fo r about f i v e months. We get only $450,000 taxes from the land, whereas at four percent i t ought to bring over #1,000,000 a year. 1 Another report t e l l s that, "A large portion of the a g r i c u l t -ural lands along the l i n e are i n the hands of speculators. One Winnipeg syndicate took 35,000 acres at eight d o l l a r s . . . . There i s a tax of 25 cents per annum per acre on wild land, however....The price r e a l i z e d from the sale of lands i s often from $12 to $20 an acre." 2 None of these speculators were as large nor as grasping as the Grand Trunk P a c i f i c . It i t s attempts to gain a p r o f i t from land specu-r l a t i o n , the railway faced several problems. These were the competition of other speculators, the obtaining of land grants from,the governments, the dealing with thos.e i n d i v i d -uals or groups who already owned the land which the railway wanted, and the marketing of t h e i r s i t e s for high p r i c e s . In achieving these r e s u l t s , the company had one great advantage in that i t knew where the railway was to run, and i t had the 1. Prince Rupert Daily News, A p r i l 4, 1914. 2. Winnipeg Free Press, August 27, 1910. 112. power of creating stations i n places suitable to i t s needs. Sometimes the lin e ran through, or close to, a settlement that was already in existence before the railway was begun, and i n t h i s case the problem was to gouge as large an amount, in either land or money, from the municipality as possible. At other times the railway wished to enter some c i t y which was already established, and in th i s case the problem was to maintain a b l u f f that i t would not b u i l d there unless i t received a subsidy. Many examples are to be found of the granting of subsidies to the railway by m u n i c i p a l i t i e s , or the "squeezing** of those which were slow i n paying. Examples can also be found of methods of persuasion which were l i t t l e more than poorly-disguised blackmail. One of the f i r s t towns which would na t u r a l l y expect to be on the Grand Trunk P a c i f i c was Brandon, Manitoba, e s p e c i a l l y i n view of the f a c t that i t s member was C l i f f o r d 1 S i f t o n , and he had p r a c t i c a l l y promised i t . But i t i s well to observe what actually did happen there. In 1905 and 1906 F. W. Morse t r a v e l l e d through Western Canada ascertaining the attitude of the d i f f e r e n t c i t i e s towards the Grand Trunk P a c i f i c , or, i t would be more t r u t h f u l to say, the o f f e r s of the d i f f e r e n t c i t i e s to the railway. Apparently most of them were amenable, but Brandon, probably t r u s t i n g the word of S i f t o n , proved stubborn. The result was the statement of Morse on August 8, 1906, which i s a poorly disguised threat, that the coming of the railway 1. H. C. D., March 27, 1912, 6324 113. to Brandon would depend on the improved attitude of the c i t i z e n s , as at that time i t was the only western town throwing obstacles i n the way of railway entrance. 1 The c i t y proved obstinate, or else had too much f a i t h i n the words of a p o l i t i c i a n , and the r e s u l t was that because of the "lay of the land and the general d i r e c t i o n of the road," 2 the main l i n e did not pass through Brandon (a lesson to any other towns which might have had the same a t t i t u d e ) , and three years l a t e r not even a branch l i n e had been b u i l t to the town. In July 1909 Brandon brought pressure to bear upon the railway i n an attempt to have the ten miihe branch l i n e b u i l t from Justice by that v 3 autumn only to learn two months la t e r that, " I t i s our poJ.ioy [The Grand Trunk PacifiCjf p o l icy to build a road f i r s t where the bonds are guaranteed, and on t h i s account we w i l l not b u i l d into Brandon t h i s f a l l . " ^ The l i n e was b u i l t i n 1910, but did not prove to be as valuable as the c i t y expected because i t was not b u i l t through the c i t y . The chief obstacle was the building of a bridge across the Assiniboine River. In 1912 the federal government interceded, and granted a. subsidy on both l i n e and bridge. The o r i g i n a l agreement was that the railway was to obtain 15$ of the amount spent oh the bridge as long as t h i s does not exceed $20,000, but i n an 1« C. A. B. 1906, 112. 2. i b i d . t 112. 3. Winnipeg Free Fress, July 28, 1909. 4. CM. Hays,.quoted i n Winnipeg Free Press, September 6,1909. attempt to set t l e the difference between the c i t y and the railway the contract was changed to 2.5$ of the cost of the bridge with no l i m i t a t i o n on the t o t a l . 1 Thus, again, aft e r a wait of s i x years, the Grand Trunk P a c i f i c emerged from the struggle with an excellent contract for i t s e l f , and Brandon was forced to s u f f e r for i t s "stubbornness". Most c i t i e s v/ere not as d i f f i c u l t as Brandon-, how-ever, and did co-operate with the railway. Those c i t i e s which hoped to be d i v i s i o n a l points or termini 'were e s p e c i a l l y liable f o r a bonus. Three excellent examples are Fort William^Regina,• and Edmonton. The terminus on Lake Superior had been l e f t very vague by the charter, and the c i t y to be honoured with the award was Fort William. The terminus was made at Mission Island on March 30, 1905, which enabled the railway to have 7 miles of water frontage, and f o r t h i s the c i t y paid a bonus of $300,000 i n installments, 1600 acres which were to be exempt from municipal taxation for 15 years, the ri g h t s of closing up and using cer t a i n streets, and $50,000 towards the Kaministiq.ua Bridge. In Regina an agreement was made between the c i t y and the Grand Trunk P a c i f i c Branch Lines Company i n 1912. In return for making t h i s a d i v i s i o n a l point, and buil d i n g a sta t i o n and hotel costing $1,000,000, the c i t y bestowed on the railway a r i g h t of way and a grant of land. In.1905 the company agreed to make Edmonton a d i v i s i o n a l point between Winnipeg and the coast, for which i t received a cash bonus of $100,000 and other concessions. In the following year the Grand Trunk P a c i f i c agreed to purchase 1. H.C.D., March 26, 1912, 6060. 800 acres of land i n the Alberta c a p i t a l f o r yards, s t a t i o n grounds, and so fo r t h , and the c i t y council granted a bonus of $400,000 i n cash or debentures as well as c e r t a i n exemption from taxation. In B r i t i s h Columbia the railway found the land much more d i f f i c u l t to obtain than on the p r a i r i e s as much of i t was Indian reserve, and as the land speculators had been very a c t i v e , wear the junction of the Fraser and Nechaco Rivers was the old settlement of Fort ..George. When the railway approached t h i s point i t discovered that the Natural Resources Security 'company, an organization influenced by George Hammond of Vancouver, controlled about 2J,po seres i n the townsite. In an e f f o r t to escape from t h i s group the railway attempted to purchase an Indian reserve north-east of Fort George and to bu i l d i t s own townsite there, which was to be named Prince George. 1 On A p r i l 29, 1910, i t published in the l o c a l news-papers a plan of the new townsite showing the railway passing through the Indian reserve, and with the st a t i o n i n thi s section. However, owing perhaps to the influence of -Hammond's associates, the Indians proved loath to s e l l . Negotiations were carried on through Dr. John BcDougall, an o f f i c i a l of the Indian department at Ottawa, and the Grand Trunk P a c i f i c offered $68,000 to the Indians for the abandonment of t h e i r reserve, and an addit i o n a l $10,000 to enable them to buy new land. As the reserve t o t a l l e d 1,300 acres the price was approximately $50 per acre. The Indians, however, refused to 1. Nicknamed i n advertisements "The Winnipeg of B r i t i s h Columbi There i s an in t e r e s t i n g account of Fort George i n the Vancouver Daily Province, August 4, 1911. 116. s e l l , and the reason was given tersely i n the phuase of one of them who i s reported to have said, "White man ketchum reserve •'$50 an acre, solium lot $50; Indian dam f o o l sellum." 1 Apparent-l y even the ignorant natives were learning from the white man. Further offers were made hy the company, and they now approached the Indians through Father Coco l a . Gradually they began to adopt a favorable attitude towards the company's proposals, u n t i l f i n a l l y the reservation bee^ae divided into, two groups, one led hy Chief Loui who desired to s e l l , and the other hy Joseph Quail. After much palavering, the former group proved successful, and i n February an agreement was made by which the railway agreed to pay $15,000 a year for ten years, and give the Indians a new reserve of about 750 acres 15 miles east of Prince George. This was more than double the f i r s t o f f e r of the railway. Now the Grand Trunk P a c i f i c found i t s e l f opposed by the Natural Resources Security Company, which had bought most of the available land in the d i s t r i c t from the o r i g i n a l s e t t l e r s , i n 1907. When the crown grants were issued to the railway, i t protested that i t had not been given the section controlled by the other company, but the p r o v i n c i a l Depart-ment of Lands upheld the o r i g i n a l settlements. This land .was subdivided by the Natural Resources Security Company and developed so that both the population and number of buildings grew. When the Grand Trunk P a c i f i c Development Company, 1. Prince Rupert Optimist, December 27, 1910. the subsidiary which the railway used for the e x p l o i t a t i o n of townsites, met a s i t u a t i o n l i k e t h i s , i t s general p o l i c y was to give the owners 50$ intere s t i n the townsite i n exchange for a clear deed to their property. 1 But Hammond and his associates refused these terms, The railway therefore deter-mine d to build i t s station farther east than i t had o r i g i n a l l y planned. Hammond protested to the Railway Commission and i t ordered that the station should be b u i l t at the west end of the reserve. However, the Grand Trunk P a c i f i c appealed t h i s decision and i t was reversed, so that the station was b u i l t at Prince George, on the eastern end of the reserve. After t h i s the railway proceeded with the develop-ment of the s i t e . I t planned a $200,000 hotel among other things. The l o t s were auctioned i n Vancouver and Edmonton i n September, 1913. A t o t a l of 1,175 l o t s were sold for a t o t a l sum of $1,293,135. The lowest price paid was $120, the highest was $10,200. Hazelton presented a very s i m i l a r problem to the railway company. Here again was an established settlement, but i t was not on the projected l i n e of the railway as i t was on the north side of the BuStkley River and the railway intended to follow the southern bank. The south bank of the riv e r was at that time commonly known as T a y l o r s v i l l e , but upon the purchase of 640 acres by Robert K e l l y f o r $100,000 i t was spoken of as the "Kelly Lot". The land adjoining t h i s s i t e was controlled by the Northern in t e r ! or Land Company 1. Omineca Herald, May 16, 1913. on September 1, 1911. K e l l y and the land company amalgamated and named the townsite New Hazelton, "the Spokane of Canada". They immediately put l o t s on the market at prices varying from §150 to #500. On September 24, 1907, the Railway Commission had given i t s sanction to a s i t e for a station at New Hazelton chosen by the chief engineer of the railway company. 29.03 acres of land were a l l o t t e d in the townsite for the s t a t i o n and yards. But t h i s did not s a t i s f y the Grand Trunk P a c i f i c Railway, and i t demanded a larger part of the townsite. When th i s was refused i t proceeded to exploit a townsite at E l l i s o n , about three miles to the west. Lots were advertised there, but i t was found that not only was E l l i s o n on a curve, but i t also had too heavy a grade for a s t a t i o n . The railway company then turned i t s e f f o r t s towards the e x p l o i t a t i o n of a point three miles to the east of New Hazelton, known as l o t 851, which i t named South Hazelton. This action was appealed to the Railway Commission, and judge Mabee gave his decision on December 19, 1911, that the s t a t i o n must be b u i l t at New Hazelton. i n making t h i s decision he said, i t i s a public scandal that a railway corporation should go about the country and obtain conveyances of t h i s kind under f a l s e pretences, i f a private i n d i v i d u a l had done what t h i s company has done, he would probably land i n the penitentiary. At any rate he ought to be i n a penitentiary. The land was obtained through the grossest deceit on the part of the representatives of t h i s company, and i t i s a breach of f a i t h of the worst character that they should attempt to repudiate t h e i r contract. 1. Sessional Paper 20(c), 1913, 373. 119. The Grand Trunk P a c i f i c Town and Development Company appealed the decision of the commissioners, and on May 11, 1912, the Governor-General i n Council cancelled the order of the com-mis sionersaahd sent i t hack to them fo r reconsideration. On June 22, the Railway Sommission repeated i t s former decision that the station should be b u i l t at New Hazelton. Thus balked the Grand Trunk Pa c i f i c , did i t s best to boost i t s own holdings and to retard the progress of New Hazel-ton. On November 29, 1912, a protest was sent to the Railway Commission stating that the railway was unloading a l l i t s trains at Sealy, three miles to the west, and then the t r a i n s were running empty to the "Y?* at New Hazelton, turning around there, and going back. It was December 20 before the railway f i n a l l y chose i t s station s i t e at New Hazelton, and even after that i t did not hurry to erect the b u i l d i n g . In order to harass further the town the railway delayed four carloads of timber which was being sent to construct a bridge across the Bulkley to Hazelton, so that the work on t h i s had to; be stopped for some time. Thus was New Hazelton punished f o r no* "co-operating'* with the railway. These two c i t i e s , Prince George and New Hazelton, are notable in the development of the Grand Trunk P a c i f i c since they show the ruthlessness and covetousness of those who b u i l t i t , and reveal that i t was not altogether a "national s p i r i t " which imbued the men who sere responsible for i t s cons true t i o n . Can Canada owes much to the Grand Trunk P a c i f i c Railway, and i t s influence i n the early years of the twentieth century was tremendous. I t i s unfortunate that such a great organization, which did so much towards the opening and development of the Dominion, should have used i t s strength so s e l f i s h l y . A company which might have l e f t as a monument to i t s e l f the knowledge that i t had done more good f o r Canada than any other single group, l e f t instead a sordid memory of e x p l o i t a t i o n , corruption, and i l l - u s e d power. Does i t not seem jus t i c e that an organization which used the methods of t h i s one should find i t s e l f bankrupt? But i s i t not lamentable that the very people whom i t had wronged should be forced to burden themselves with i t s e v i l s ? It i s only to be hoped that the future w i l l recompense the people of Canada for t h e i r sufferings by yet making this l i n e a great railway and an important factor i n the development of the nation's unity and prosperity. Chapter VI. The Romance and Struggle of Railway Building In i t s magnitude, the d i f f i c u l t i e s which i t faced, and the romance of i t s history, the building of the Grand Trunk P a c i f i c Railway challenges the imagination. It presents a c o l o r f u l epic of struggle, danger, and suspense, comparable with the t a l e of any of the great railway ventures. The actual construction of the Grand Trunk P a c i f i c was an immense tasTr and required the f i n e s t type of organ-i z a t i o n and planning. Its main l i n e was 1758 miles long from Winnipeg to Prince Rupert, a tcememdous undertaking f o r a young country with a population of less than six m i l l i o n ^ and two other great railways i n the process of construction. It was b u i l t i n ten years, which means an average of one-half a mile each day. As many as 10,000 men worked on i t at one time, and in..1913 B r i t i s h Columbia alone had 6,500 employees. 24 steamshovels and over 600 teams were used when the road was being b u i l t through the Yellowhead. Almost 300 new towns and villagessand m i l l i o n s of acres of a g r i c u l t u r a l land were opened by i t . Sections, with buildings, were marked off every twelve miles i n the p r a i r i e s and every seven i n the moun-1. - A r t i c l e by'W.W.Swanson in ;?The Economic Review, September 1917, gives the following figures of persons per mile of railway: Canada 185; Argentine 274; United States 400; United Kingdom 2,000; Russia 4,000. p. 690. tains. There were 34 s t e e l and concrete bridges of which 26 were i n the Mountain Section, 13 tunnels t o t a l l i n g 9,000 fe e t , and 7 snowsheds with a t o t a l of 1700 feet. The road bed was ballasted to the depth of 18 inches, and the r a i l s weighed 80 pounds per yard, an exceptionally high figure f o r North America. The tracks crosssthe Canadian P a c i f i c Railway s i x times and the Canadian Northern seven. Besides the railway construction there were fences b u i l t along both sides and a telegraph l i n e p a r a l l e l i n g the entire route. The Canadian Car Company of Montreal, which had the contract for r o l l i n g Stock, turned out 8 cars each working day f o r f i v e years, a t o t a l of 12,000 fr e i g h t and 250 passenger.cars. 1 Charles M. Hays had stressed the f a c t that the road should have a minimum grade and curvature, h i s aim being a road with a maximum grade of i of one percent, which means a r i s e of 21.12 feet per mile, and a maximum curvature of 4 degrees, which means a c i r c l e with a radius of 1432.5 feet. Although t h i s was not achieved the r e s u l t was s u r p r i s i n g l y close i n view of the Mafctle that was known of the route when Mays made his demands. the f i n a l maximum grade was four-tenths, of one percent against t r a f f i c going east and f i v e -tenths of one percent against that going west, a r i s e of 26.4 feet per mile, except for one stretch on the Rocky Mountains near Tete Jaune Cache, where fo r 19 miles the grade against t r a f f i c going east i s one percent. There was no curve on the p r a i r i e s over three degrees except i n the c i t i e s 1. Lovett, K. Jp. op. c i t . , 164. This was a $10,000,000 contract issued i n 1906. 123. of Edmonton, which had four curves over t h i s f i g u r e , and Winnipeg, which had one. In the mountains the maximum curve was six degrees. When i t i s re a l i z e d that the e x i s t i n g trans-continentals at that time ranged .up "to four percent, or 208 feet per mile of r i s e , the Immensity of the task can be f u l l y r e a l i z e d . The advantage which t h i s construction gave the Grand Trunk P a c i f i c over other roads i s outstanding. Por example, a t r a i n which could draw 250 tons on the l e v e l could draw 125 tons on a four tenths percent gradient, 71.43 tons .on a one percent gradient, and only 62.5 tons on a one and two-tenths percenttgradient. 1 The gross capacity of an engine on the Santa Fe Railway was 376 tons, the Union P a c i f i c 2 572 tons, but on the Grand Trunk P a c i f i c 2,014 tons. A fr e i g h t t r a i n on the Grand Trunk P a c i f i c could carry four times as heavy a load as i t could on the Great Northern, Northern P a c i f i c , or union P a c i f i c , f i v e times as much as on the Santa Fe, and seven times as much as on the 'Canadian P a c i f i c . In regard to thi s Charles M. Hays stated, "The int e r e s t on the cost of such a l i n e w i l l be returned to us ten times and over in economy of operation and the increased 4 safety of our passengers. 1. H.Q.P. August 27, 1903, 9836. 2. Cameron, Agnes Deans^n. "Cock 0' the North", Westward  Ho Magazine, Y, October 1909, 624. 3. The "Big H i l l " between Hector and F i e l d on the Kicking Horse Pass Railway r i s e s as much as 4.4 percent, which i s 232 feet per mile. The construction of the Grand Trunk P a c i f i c was largely responsible for the b u i l d i n g of two s p i r a l tunnels here by the Canadian P a c i f i c i n 1909. One was 2800 feet long, the other 3200 fee t , and the cost was |1,250,000. The influence of the railway on the country as a whole cannot be over-emphasized. It afforded an outlet for the wheat of the p r a i r i e s and the goods of the east. This was one of the most important factors i n a t t r a c t i n g thousands of s e t t l e r s to Canada. In 1908 i t was estimated that 72,000 people l e f t the United States alone to seek fr e e farms i n Canada, 1 and although i t must be admitted that the Grand Trunk P a c i f i c was not the primary cause of t h i s i n f l u x i t s influence cannot be disregarded. For example, on March 27, 1909, the Winnipeg-Free Press reported, ''Five car loads of s e t t l e r s l e f t Portage f o r the west yesterday on the Grand Trunk P a c i f i c , and two t r a i n s loads w i l l go early next month." So great was the necessity of transportation for the s e t t l e r s that the railway obtained permission to carry them on the work t r a i n s before the road was actually opened for t r a f f i c . The significance of t h i s great immigration movement can be r e a l i z e d from the figures showing the t o t a l immigration into Canada for the 2 six years commencing 1908. Most of these people s e t t l e d i n the west and towns sprang up l i k e mushrooms. Wainwright, 4.(from previous page) Winnipeg Free Press,December 5, 1908. The truth of his statement has been amply carried out since the road was b u i l t . The inves t i g a t i o n held by the Senate i n 1938 shows t h i s repeatedly. An excellent example i s to be found on p. 635 of the report. 1. Cameron, D. C., op.clt., 627 . 2. cf. Carrothers, W., .A., Emigration from the B r i t i s h I s l e s , London, 1929, 316.. which was put on the market July 1, 1908, i s a t y p i c a l one of these "boom" towns. In two months i t had f i v e general stores, two hotels, f i v e lumber yards, two l i v e r y stables, two drug stores, two hardware stores, three doctors, and a resident population of 300. unfortunately many of these towns were too much l i k e mushrooms. They sprang up overnight during the boom, but when the ensuing depression h i t the country, and the speculators had milked the g u l l i b l e dry, they declined and became unimportant. Such collapses are one of the great e v i l s of railway building and prove a great handicap not only to the ultimate success of the railway but also to the country as a whole and to i t s cre d i t abroad. The railway did more than build up the a g r i c u l t u r a l sections o f the p r a i r i e s . The great demand for lumber, t i e s , and poles caused a boom i n B r i t i s h Columbia m i l l s . In the north the railway enabled Prince Rupert to ship the f i s h , for which i t has since become famous, across the continent. Shipping on the P a c i f i c coast flourished as never before. The need of.coal resulted in the opening of the coal mines i n the Rockies south of Edson and also i n the Bulkley v a l l e y . In the l a t t e r place the Grand Trunk P a c i f i c was responsible f o r the surveying of much, of the country around the Telkwa and i t s t r i b u t a r i e s the Mud and Goat Creeks, which resulted i n the development of the mines of that section. In a l l parts of the continent i n t e r e s t was aroused by this new road. The industries of the east hummed with the manufacturing of goods which were needed in the new west. So great was the demand for s t e e l that the m i l l s of Ontario and Nova' §cotia were not able to keep up with the demand. Moreover the manufacturers of the east and of England watched keenly the building of a l i n e which would cut 500 miles from the route by Vancouver to Yokohama and 1500 from the route through San Francisco. Unfortunately i t was not shown at the time that, although Grand Trunk P a c i f i c route was Ifehis much shorter, there were 500 miles of additional land haul, which more than n u l l i f i e d the advantages of the shorter distance. i n conjunction with the railway the Grand Tnunk P a c i f i c were responsible f o r a boom in the building trades. Hundreds of section houses, section men's homes, freight sheds, and other such buildings were necessary. 1 There were also, at d i v i s i o n a l points, round houses and other buildings necessary for the maintenance of the r o l l i n g stock. The largest of these was at Transcona, 2 which was b u i l t i n the municipality of Springate, six miles east of Winnipeg, by the Grand Trunk. 3 P a c i f i c and National Transcontinental together. The t o t a l 1. One firm of contractors, Smith Brothers and Wilson, of Regina, b u i l t f o r t y s t a t i o n houses. 2. Winnipeg Free Press, September 19, 1908, has a f u l l page account of this undertaking. 3. H.G.D. February 15, 1909, 1070. A sample of the type o f graft that was being done i s revealed here i n regard to these terminals. It was shown that the proprietors, J.H. Kern and F.C.Mathews, had purchased the land a very short time before and were asking the government for twice the amount which they had paid. They o r i g i n a l l y asked for $300 an acre, but were only paid $277.50, which resulted i n a p r o f i t to them of $100,000. cost was $5,000,000, of which the Grand Trunk P a c i f i c paid $3,500,000. The shops were opened i n January 1913. At that time there were 3,000 men employed i n them.. Many other noteworthy buildings were erected by the Grand Trunk P a c i f i c Railway. The MacDonald Hotel at Edmonton, the Selkirk Hotel i n Winnipeg, which was contracted Ey George A. P u l l e r Company of Montreal for $1,500,000, the hotel at Prince Rupert, and the $200,000 hotel at Prince George, which was b u i l t by H a l i b i r d and Roche of Chicago. Many fine depots were b u i l t , those at Regina and Winnipeg being b u i l t by the Canadian Northern and Grand Trunk P a c i f i c together. That in Winnipeg cost of $1,000,000.1 As the early bitterness between these two r a i l r o a d s wore o f f , both evinced a marked tendency to co-operate. This was shown i n the l i n e through Edmonton and also on a stretch of 12 miles of track about twenty miles west of the Yellowhead. In t h i s section the Grand Trunk P a c i f i c b u i l t a double track and the other railway rented i t . The d i f f i c u l t i e s which the Grand Trunk P a c i f i c had to overcome were numerous and at times serious. The f i r s t problem was the shortage of s t e e l , and E. J . Chamberlain attributed., the delay i n construction during 1911 to the f a i l u r e of the Sault Ste. Marie and Nova Scotia steel m i l l s to d e l i v e r the r a i l s , claiming that they were 18,000 tons short of their requirements. The most important disturbances, however, were caused by the problems of labor, the shortage of men, and the unrest of the workers. !• H. C. P., 1907, 5512 138. From the beginning the shortage of men was f e l t s e riously. The competition from the other railway companies, as well as the farmers, and the attractiveness of free home-steads caused great delay i n the building of the railway. In 1909 i t was estimated that the railwayywas 3,500 men short, and i n 1910 the number had increased. It was in that year that W. Stewart was sent from Montreal to Scotland with powers to spend $1,000,000 to obtain 5,000 laborers., By 1912 the shortage was not so great, but on November 30 of that year Schreiber stated that the Balkan wars were drawing many men from the country and causing another shortage. 1 In 1913, when work was concentrated in the Mountain Section, the short-age was not so keenly f e l t . As serious as the shortage of labor was the unrest among the men. The men were employed through employment agencies i n the east which, because the men were given free transportation and quarters on a r r i v a l , charged exorbitant rates. Naturally the men were discontented. Their chief protests were that the accommodation and food were poor, the hours long, the machinery used defective, that the wages were low, that there were too many accidental deaths, and that fav o r i t i s m was shown. Most of these charges werepprobably true, e s p e c i a l l y where the work was being done by small sub-contractors, but they were probably aggravated by the fortunate position i n which the men found themselves because of the short-age of labor, undoubtedly a large number of men were k i l l e d on 1. Fort George Herald, November 30, 1912. the road, but i t must be also noted that the number of accident a l deaths on the Grand Trunk P a c i f i c was not as high as the government-built National Transcontinental. The most serious charge of t h i s type occurred i n bl a s t i n g the K i t s e l a s tunnels, where eight men were blown up i n a week. The railway o f f i c i a l s blamed the unrest on the Industrial Workers of the World, commonly knbwnflas the I.W.W., which was at that time causing much trouble throughout the continent, but t h i s charge was never proven. Strikes were numerous. On March 13, 1909, one hundred men walked out from the Ross and McCaull contract near Prince Rupert, claiming that wages farther inland were higher. In July of the same year, a strike of trainmen on the l i n e occurred and lasted f o r about three weeks. On Sept-ember 28, 1910, a magistrate i n Edmonton, examining/the claims of six laborers, stated that the treatment of the men working on the railway was abominable. Strikes became more numerous in 1911 and 1912. On May 19, 1911, two hundred men near Aix walked out f o r more pay. In October, the machinists and boilermakers demanded 41 cents per hour and went on s t r i k e when i t was refused. In 1912 they were awarded 45 cents and 47 cents an hour. In July 1912 occurred the largest s t r i k e on the railway. It began when between 2,000 and 3,000 men near Hazelton quit. They were- joined a week l a t e r by 10,000 men on the eastern end of construction. The s t r i k e was blamed on the I.W.W. and tropps were sent from Edmonton to protect the company's property. This was probably strongly influenced 1. There i s no data on the number. The t o l l from those who tra v e l l e d by r a f t s down the fr a s e r i s exceptionally high according to eye-witnesses. 130. by the unrest i n the southern railways where a series of s t r i k e s occurred about th i s time, but was also most l i k e l y caused by just grievances against the Grand Trunk P a c i f i c . 1 In an e f f o r t to overcome these d i f f i c u l t i e s great e f f o r t s were put.forth-by the railway o f f i c i a l s to import cheap labor. One scheme was to import men from Scotland. More serious was the attempt to import A s i a t i c s . In March 1909 s i x t y Russian moujiks arr i v e d from S i b e r i a , the f i r s t contingent of a larger number who were reported to have been brought by the Grand Trunk P a c i f i c . 2 These were not given the notoriety which the Oriental importations received. The MaBride government fought unceasingly against Orientals, but the L i b e r a l government i n Ottawa would not a s s i s t i n the exclusion of Japanese. On the day before the federal elections of 1907 the Vancouver Daily Province published the following report: The Union Supply and Contracting Company, Limited -( i n r e a l i t y the Grand Trunk P a c i f i c . . . a s i t s manager i s Mr. E. G. Russell, who i s the c o n f i d e n t i a l agent of the Grand Trunk P a c i f i c on the coast, and i t s stock-holders are said to be members of the l o c a l L i b e r a l machine) - has, i t i s understood, entered into an arrangement to furnish through one of the largest labor firms i n Tokyo, Japan, at least 50,000 coolie Saps during the year. This i s obviously a p o l i t i c a l move, and was very successful as McBride swept the province. That there was much truth i n the charge, however, can be seen by the attitude 1. It i s impossible to obtain a complete l i s t of the labor troubles of the Grand Trunk P a c i f i c . As i t was a private company no record of i t s s t r i k e s was kept by the federal government. 2. H.C.D. February 25, 1909. An eyewitness had t o l d me there were "hundreds of Russians" employed. of Laurier towards Oriental exclusion and by the statements of several of the Grand Trunk P a c i f i c o f f i c i a l s . Gollingwood Schreiber, the chief engineer f o r the government on the grand Trunk P a c i f i c , stated in October,1907, "That i s why we want Japs, but the people w i l l not l e t them come i n , " 1 and i n 1909, "The mountain section of the Grand T^unk P a c i f i c w i l l never be b u i l t , at least not u n t i l you are grey-headed, unless the contractors are allowed to get i n other than white laborers. Of t h i s I am firml y convinced." 2 S i r Charles Rivers-Wilson said, "The temporary employment of three or four thousand A s i a t i c s would save two or three years....At the end they could be tatcen back to the Orient." F i n a l l y there i s the statement of Kays at Prince Rupert, "It i s a question of labour.... I am not saying your government i s doing anything i n t e n t i o n a l l y to stop labour coming i n , but I think i n the desire to keep out the so-called undesirables they are r e a l l y 4 keeping out many good men." In surveying t h i s great engineering wonder we must admire the foresight and the w i l l of the men who were res-ponsible for i t s construction. Above a l l , of course, c r e d i t goes to Charles M. Hays, who succeeded S i r Charles Rivers-Wilson as president on October 12, 1909. The a b i l i t y of th i s man, who brought the Grand Trunk from the verge of bank -ruptcy and was responsible f o r the moving of the executive of 1» 0«A.R., 1907, 159. 2. Winnipeg Free Press,Sept.13, 1909. 3. i b i d . October 13, 1909. 4. Prince Rupert. Optimist, October 25, 1910. that railway from London to Canada, i s to be seen f u l l y i n the building of the Grand Trunk Eac'ifi;c. It was he who had most to do with the o r i g i n a l planning of the road, the s e t t i n g of the grades and curves, the r a i s i n g of finances, and a l l the important decisions as to the policy of the railway. Unfort-unately he was drowned on the T i t a n i c d i s a s t e r of A p r i l 16, 1912. On the morning of A p r i l 25, 1912, h i s death was marked throughout Canada by a f i v e minute silence over the entire Grand Trunk System at 8:30. An i n t e r e s t i n g problem, whioh w i l l never be solved, i s to determine whether or not he foresaw the f i n a n c i a l r u i n which was ahead of the Grand Trunk P a c i f i c . Undoubtedly he must have r e a l i z e d that the railway was getting into very serious d i f f i c u l t i e s and Itawould be sur p r i s i n g i f a man of such perspicacity did not r e a l i z e that ruin lay ahead i f the p o l i c i e s of the o f f i c i a l s did not change. lie was succeeded to the presidency by Edson J . Chamberlin, the vice-president, who was knighted for h i s work on September 9, 1913, and who completed the building of the road. The construction of the railway was supervised by Gollingwood Schreiber, who was chief engineer for the govern-ment, and was the overseer for a l l matters pertaining to the Western D i v i s i o n . He was appointed February 25, 1907, and kept an excellent check on a l l the work. The supervising o f f i c e r of the entire Western D i v i s i o n for the Grand Trunk P a c i f i c was B. B. K e l l i h e r . The actual construction of this section was under chier engineer C. C. Van A r s d o l l , who was nick-133 named "Four-tenths Van" because of his attempts to obtain a four-tenths of one percent grade, and who was honored by having the town of Vanarsdol named afte r him. Three contractors stand out i n the construction of the Grand Trunk P a c i f i c Railway. These were the Foley Brothers, Welch, and Stewart, who b u i l t the entire l i n e from Saskatoon to Prince Rupert. Timothy Foley and M. H. Foley were well-known contractors from St. Paul, Minnesota, who were known i n Canada through t h e i r work on the Canadian P a c i f i c Railway in the f i r s t few years of i t s construction. They had also helped to b u i l d the Great northern and were interested i n the Can-adian Northern. Patrick ?lelch was another well-known contractor from Spokane. John Stewart was the best known of the four. He was a Canadian and was af f e c t i o n a t e l y balled "Jack'? Stewart by the workers, with whom he seems to have been on the best of terms. He died i n Vancouver i n November 1938. These are the men who w i l l be remembered for their work i n building the Grand Trunk P a c i f i c . There were thousands of others, however, without whom the railway would never have been b u i l t . Most of these are now forgotten, but legends have grown up around a few and have lent them a picturesque-ness.which w i l l grow with time. Probably, of a l l the myriad of workers, none has l e f t a more c o l o r f u l story than Big J u l i a . He was just a common laborer, but he i s remembered as the strongest land biggest man on the railway. Carefree and happy-go-lucky, he i s symbolic of the type of men who risked t h e i r l i v e s d a i l y i n order to lay two lines of s t e e l across a wilderness. Has any tale of f i c t i o n a more c o l o r f u l figure, and a more p i t i f u l ending? A swaggering giant, he became entangled with one of the many women who were to be found aloni the l i n e , and as a re s u l t was k i l l e d i n a brawl by a barber. As passing and unimportant as he were the braggadocio and lawlessness which marked the early construction of the Grand Trunk P a c i f i c Railway, and i n Big J u l i a may be seen the irresponsible ruthless l i f e of the laborers who struggled for years but were soon forgotten. Chapter VII. Prince Rupert The story of the building of the Grand Trunk P a c i f i c Railway would not be complete without including an account of the building of Prince Rupert. It was planned and . 1 b u i l t by the railway and i s s t i l l primarily important because i s i s the terminus of the road. Inception, growth, and pros-p e r i t y are a l l dependent on the railway. More than t h i s , i t presents a t y p i c a l picture of the methods of ex p l o i t a t i o n used by the railway and the r e s u l t i n g scandals. Kaien Island, on which Prince Rupert i s situated, was for many years believed to be part of the Tsimpsean Peninsula. This projects about 35 miles north-westerly from the mouth of the Skeena River, wear i t s northern end i s Port Simpson, the o r i g i n a l l y suggested terminus of the railway. About 20 miles south of this place is a long i n l e t known formerly as Tuck's I n l e t , but now as Tuck I n l e t . Kaien Island i s situated at the mouth of t h i s i n l e t . A few miles . further west i s Digby Island, which serves as a protection for Kaien from the rough waters of the P a c i f i c . Prince Rupert i s situated on the s t r a i t between these two islan d s . For many years because of an error i n the Admiralty charts, i t was believed that the harbor was rendered useless by a large obstruction. Charles M. Hays i s given the credi t 1. Prince Rupert was the f i r s t c i t y i n Canada to be planned on paper before a single building was constructed. of* i n s i s t i n g on a resurvey which resulted i n the discovery that the Admiralty chart was in error and that no such impediment to the harbor existed. It i s not certain when Kaien Island was selected as the terminus of the railway. On A p r i l 30, 1904, a secret ©rder-in-Council was passed by the B r i t i s h Columbia government by which an agreement was made with the Grand Trunk P a c i f i c Railway. This b i l l was approved on May 4, 1904, but for some undetermined reason, was kept a secret u n t i l the spring of 1906 At that time, because of the insistence of the opposition, a Select Committee was appointed to enquire into the a c q u i s i t i o n of lands near Kaien Island by the Grand Trunk P a c i f i c Railway Company or other persons. 1 The committee consisted of J . A. Macdonald, J . F. Garden, E. H. Young, W. R. Ross, and C. W. Munro. Although no corruption of the government was proven, the in v e s t i g a t i o n did not prove altogether s a t i s f a c t o r y . Much had been hinted, and the public f e l t that where there was smofee there was probably some f i r e . Several important witnesses, notably Morse and Larsen, were absent. The committee was decidedly prejudiced, as the majority of the members were strong Conservatives, and the following quotation from the V i c t o r i a Daily Times, which i s obviously biased against both the government and the committee, presents, i n an extreme form, a b e l i e f which was general, "The government showed unmistakably t h i s morning that they are prepared to burk the inquiry to the f u l l e s t extent. She Conservative members of 1. Journal of the Le g i s l a t i v e Assembly, 3. C. 1906, Appendix,lxvi i . the committee are lending themselves to every device to keep the evidence back. The chairman, J . F. Garden, showed his partizanship t h i s morning...."^ In support of t h i s i t should be pointed out that the o r i g i n a l appointment of the committee included A. H. B. Macgowan and William Hanson, but the premier had substituted for these two Garden and Young, both Conserva-t i v e s . Obviously the committee was "packed". In b r i e f the secret agreement of A p r i l 30, 1904, was made between the government, represented by the Honorable „R. F. Green, and E. -V. Bodwell,. acting for Peter Larsen. By i t the government granted 10,000 acres at a cost of $1.00 per acre, with the following reservations: one-twentieth of the land was reserved for roads, bridges, and other public u t i l i t i e s a l l minerals and water p r i v i l e g e s ; the right to take materials for public works without cost; one-quarter of the town l o t s that might be l a i d out (by B r i t i s h Columbia law t h i s f r a c t i o n reverted to the crown); not l e s s than 1,000 feet of water frontage; and one-quarter of the land not divided into town l o t s . 2 Peter Larsen was a very wealthy man, an extensive railway contractor, and a wholesale merchant of the united States. He was associated Y/ith James Anderson of V i c t o r i a , who did most of the actual work in B r i t i s h Columbia for him. The l a t t e r T s home i n V i c t o r i a had the same name, Lima, as the s t r a i t between Digby and Kaien Islands. The general b e l i e f 1. V i c t o r i a Daily Times, February 8, 1906. 2» H. C. P., January 21, 1907, 1792. 138. was that he was the spokesman of a group of speculators i n the c a p i t a l c i t y , some of whom..were members of the government. Larsen then went to Montreal and made a deal with Hays and Morse by which the Grand Trunk P a c i f i c was to pay $40,000 to Larsen f o r the grant. Larsen, however, refused t h i s , stating that he did not want immediate gain, but rather desired to e s t a b l i s h a f r i e n d l y connection with the railway company i n the hope of acquiring business whenever the active operations should commence. Por t h i s reason he sold the r i g h t s to the railway for $10,000, which he had paid the government, plus $8,000 which he had spent on surveys of the d i s t r i c t , ae then paid Anderson the $100,000 plus a salary, allowance for expenses, one-sixteenth interest i n the lands on North and .South Porpoise Islands and other places contiguous to Kaien, and also about f i v e square miles of coal lands some distance from the coast. It w i l l be noted that the expense account submitted to the federal government by the railway allows Peter Larsen $26,000 for "terminal land" 1. 1 Apparently he did e s t a b l i s h a " f r i e n d l y connection" with the company. In the investigation, which was, as stated above, far from s a t i s f a c t o r y , many i n t e r e s t i n g f a c t s were brought •to l i g h t . It was shown that much of the early negotiations were conducted i n private homes, espe c i a l l y that of Anderson, and i n private o f f i c e s . Green even went to Seattle for some of the discussions. Anderson showed a tendency to delay in appearing before the committee, s t a t i n g that a close 1. supra, 109. 139. personal f r i e n d had "-Just died, and was not c a l l e d u n t i l almost the end. He produced books and cheque stubs, but they were far from complete, and the remainder could not be found. Insinua-tions were r i f e at the time concerning the intimacy of Mr. and Mrs. Anderson and Green, and much was made of the fact that several times Green had been entertained at the Andersons' home. ..The- Andersons were so incensed by these attacks that they c a l l e d upon the e d i t o r of the V i c t o r i a Times to protest the manner in which th e i r name was being used. A few days l a t e r Mrs. .Anderson l e f t V i c t o r i a . Soon a f t e r the agreement of A p r i l 30, 1904, Bodwell became s o l i c i t o r for the Grand Trunk P a c i f i c Railway, but apparently he had no connection with them while he was arrang-ing the early agreements with the government. After t h i s change he dealt as the representative of the railway with the government. It was shown that the Honorable Mr. Fulton, had protested against the terms at f i r s t , claiming that the government should receive f i v e d o l l a r s an acre instead of one, but for some unknown reason he l a t e r agreed to the price of one d o l l a r . Premier McBride supported the actions of the go government, and e s p e c i a l l y stressed the f a c t that the gov-ernment was to have the f i r s t choice for their 25$ of the land, and that i t had i n s i s t e d that the water front should be divided into alternate sections of 1,000 and 3,000 f e e t . Morse wired h i s i n a b i l i t y to appear because of the pressure of business, since Hays was i n England and Wainwright was i l l . As Peter Larsen was also absent the i n v e s t i g a t i o n lacked many important f a c t s . When the report was presented there were two parts, a majority report by Messrs. Garden, Young, and Ross (the f i r s t two were those who had been appointed by the premier) and a minority report by Macdonald, the leader of the opposition, and Paterson. 1 The report was accepted by a s t r i c t party d i v i s i o n , and i t was agreed that the minority report was out of order and therefore i t was not recorded. The majority report was a complete exoneration of the government actions, as well as the other parties concerned.. Nothing proved that any member (£ the government received any-thing from the land sale, and i t was stated that there was nothing wrong with the actions of Anderson and Larsen. The minority report was much more de f i n i t e and includes the following points (1) The grant had been made from a p r o v i n c i a l reserve established October 12, 1891, but t h i s did not extend to Kaien Island. This was largely due to the fact that the island at • that time was supposed to be part of the Tsimpsean Peninsula, . and the point i s therefore, while t e c h n i c a l l y correct, of l i t t l e importance. (2) Applications to the government were not con^ sidered on t h e i r merits. This i s a clear accusation of partizanship and p o l i t i c s . (3) The government had not dealt d i r e c t l y with the Grand Trunk P a c i f i c Railway Company, but on the contrary had 1. For some unstated reason Paterson took the place of Munro after February 12. 2. Vancouver Daiifey Province, March 8, 1906. dealt with a band of adventurers (male and female') who had applied for the lands f o r purely speculative purposes, to the knowledge of the government; that the government had no com-munication, .©Ither verbal or written, v/ith any representative of the Grand Trunk P a c i f i c p r i o r to the passing of the Order-in-Council of May 1904; and that the telegram of A p r i l 29, which was presented as evidence i n the inve s t i g a t i o n , was merely a move in the game to enable the speculators to contend that they could carry out the o r i g i n a l intent of procuring the establishment of the Grand Trunk P a c i f i c terminus on the lands and to give the government a pretence, a very specious one, that they had heard i n an in d i r e c t way, i f not i n a di r e c t way from the Grand Trunk P a c i f i c , (4) The government had placed i n the hands of Anderson and Larsen one of the most valuable public assets of the province for a barter with the Grand Trunk P a c i f i c , and Anderson had succeeded i n getting an agreement with the Grand Trunk P a c i f i c to pay himself and Larsen f40,000 for the concession. There was no sat i s f a c t o r y evidence given to show the ultimate fate of the f40,000 agreement. (5) The government had no r i g h t to grant land with-out the assent of the Legis l a t u r e . (6) The government took no steps to decide whether the grant was i n $he public i n t e r e s t . In the Investigation Green admitted that the government had made no investi g a t i o n of any point which might be suitable for a port, harbor, or townsite• 142 (7) The provision f o r the di v i d i n g of the foreshore enabled the Grand Trunk P a c i f i c to place the terminal so as to i render the government section almost worthless. (8) Secrecy enabled Larsen and Anderson to obtain other contiguous land. In support of this i t was shown that Anderson had received sections i n diverse pieces of land neat the townsite. The investigation created a great sensation i n the province as a whole, and e s p e c i a l l y i n V i c t o r i a . It was* indeed, very unsatisfactory, and proved l i t t l e of value. To many people i t seemed as i f "Garden, Young, and Ross,were placed upon the committee f o r the purpose of exonerating the chief commissioner 1 and the government, and they have succeeded i n th e i r duty." Although the evidence i n the i n v e s t i g a t i o n was incomplete, and the report had not resulted i n a unanimous exoneration of the government, the opposition had f a i l e d to prove i t s charges of corruption. The r e s u l t l e f t doubts i n the minds of many people , but, without additional evidence, the findings of the majority ' x must be accepted. The next step to purchase land near Prince Rupert was begun by the Grand Trunk P a c i f i c i n 1906. On February 5 N negotiations opened at Old Metlakatla between E.G.Russell, representing the company, and the Indians who owned the reservation on Digby and Kaien Islands and on the Tsimpsean Peninsula. Also present were Bishop Du Vernet and the Indian Agent, Morrow. The negotiations lasted f o r f i v e days , .1. V i c t o r i a Daily Times, March 8 , 1906. 2.Because of his p o s i t i o n , R.F. Green was the focus of the insinuations of the opposition. The inves t i g a t i o n f a i l e d to discover any facts which upheld these charges, and the implications concerning the character of Green must-be recognized as f a l s e . t 142. (7) The provision f o r the d i v i d i n g of the foreshore enabled the Grand Trunk P a c i f i c to place the terminal so as to render the government section almost worthless. (8) Secrecy enabled Larsen and Anderson to obtain other contiguous land. In support of t h i s i t was shown that Anderson had received sections i n diverse pieces of land near the townsite. The investigation created a great sensation i n the province as a whole, and e s p e c i a l l y i n V i c t o r i a . I t was, indeed, very unsatisfactory, and proved l i t t l e of value. To many people i t seemed as i f IGarden, Young, and Ross, were, placed upon the committee fo r the purpose of exonerating the chief commissioner and the government, and they have succeeded i n t h e i r duty." 1 Although the report had f a i l e d to prove any sign of corruption or personal gain in the government, i t s incompleteness, combined at the end with the resignation of Green as Minister of Public Works, resulted i n a f e e l i n g of doubt and mistrust by the majority of the people. The next step to purchase land near Prince Rupert was begun by the Grand Trunk P a c i f i c i n 1906. On February 5 negotiations opened at Old Metlakatla between E. G. Russell, representing the company, and the Indians who owned the re^ servation on Digby and Kaien Islands and on the Tsirapsean Peninsula. Also present were Bishop Du Vernet and the Indian Agent, Morrow. The negotiations lasted for f i v e days, 1. V i c t o r i a Daily Times, March 8, 1906. 143 Russell wished to buy the whole reservation f o r $5.00 per acre, but the Indians refused and demanded $10.00. The agreement was signed on Saturday, February 10, and by i t the Indians agreed to s e l l 13,519 acres at a price o f $7.50 each. On March 28, 1906, the Grand Trunk P a c i f i c applied to the Department of Indian A f f a i r s for the r i g h t to purchase t h i s land. I t took much longer, however, to make an agreement with the B r i t i s h Columbia government, f o r i t was determined to use i t s power of veto as allesrer to force several concess-ions from the rail w a y . 1 This attitude not only caused a quarrel with the Grand Trunk P a c i f i c , but also resulted i n a decided s t r a i n between the Conservative government of B r i t i s h Columbia and the L i b e r a l government at Ottawa. In the ex-change of l e t t e r s Richard McBride showed himself equal to the pressure from Ottawa, i n one instance he wrote, "I beg to state that the action of the Federal government i n connection with Indian reservations i n B r i t i s h Columbia has been so un-s a t i s f a c t o r y of elate that, as at present advised, t h i s government does not intend to enter into any other further arrangements with the Indian a u t h o r i t i e s . " 2 Had th i s been done i t would have been a great blow to the railway plans*, but 1. supra, 103. 2. Correspondence between the government of Canada and, the  government of B r i t i s h Columbia r e l a t i n g to the Application  of the Grand Trunk P a c i f i c Railway-Company to acquire a  portion of the Metlakatla Indian Reserve, B. C. Government P r i n t i n g Bureau, 1908. The above quotation was written on March 3, 1907. i t was only part of the game by which McBride forced the r a i l -way to build from the west and agree to his other demands. The agreement with the B r i t i s h Columbia government was signed on February 28, 1908, over two years a f t e r the agreement with the Indians. By i t the province received $2.50 an acre, as well as the quarter of the land that was reconveyed to the govern-ment by law. The survey of 2ij000 acres of Prince Rupert town-s i t e was to be completed by October 1, 1908. It was to be approved,by the Commissioner of Lands and Works, and t h e province agreed to pay one-quarter of the eost and to appoint one surveyor. The province v/as to receive every fourth 1,000 feet of waterfront. A l l land outside of the township area, whether i t be the o r i g i n a l 10,000 acre grant or the new 13,519 acre allowance, was to be divided into water frontage 1,000 feet long by 150 feet wide, or into 40 acre blocks, by October 1, 1909. Street ends which ran into the sea were always to remain open to the public. The railway agreed not to expropriate any water frontage belonging to the province. The company obtained a 60 feet right-of-way on Kaien Island, and i t was required to s t a r t construction work at Prince Rupert by June 1, 1908, and work continuously eastward. This clause and the c l a r i t y with which i t i s worded, so that there iB no p o s s i b i l i t y of the railway beginning at Prince Rupert and then not Continuing s t e a d i l y eastward, speaks well f o r the astuteness of Richard McBride and shows that he did not leave anything to the good intentions or honesty of the Grand Trunk P a c i f i c . Three other minor clauses stated that the railway 145. company must buy i t s supplies i n the province i f possible, must pay the p r e v a i l i n g wages fo r labor, and that i t was to be tax exempt on these lands u n t i l 1921. 1 The f i n a l agreement with the Grand Trunk; P a c i f i c was a very desirable one f o r B r i t i s h Columbia, and due credit must be given to S i r Richard McBride for the manner i n which he fought the company and obtained t h e i r consent to h i s demands. He played them at t h e i r own game, and won. As a result of his work i t was determined that the railway would not have a strangle-hold on Prince Rupert as the Canadian P a c i f i o had obtained i n Vancouver, that the businessmen and workers of the province would be protected, and that the railway must build from the B r i t i s h Columbia end. As a res u l t of these agreements the Grand Trunk P a c i f i c Railway controlled 22,519 acres. These consisted of 12,579 acres on Kaien Island, 6,700 acres on Digby Island, and 4,240 acres on the Tsimpsean Peninsula. It also con-t r o l l e d about 50 acres on eight small islands nearby. Prince Rupert began with the Grand Trunk P a c i f i c Railway. In 1906, when the f i r s t survey party arrived on Kaien Island, there were about 15 small buildings b u i l t on the townsite, and on November 23 of that year the post o f f i c e was opened. An attempt was made by the railway to prevent people s e t t l i n g i n the new c i t y before i t was planned and sold. An inte r e s t i n g example i s John Houston, a p o l i t i c i a n from Nelson, B r i t i s h Columbia, who attempted to publish a 1. Prince Rupert Empire, March 7, 1908 146. newspaper there. His f i r s t few issues were printed i n Vancouver and mailed to Prince Rupert. When he f i n a l l y landed his presses i n the l a t t e r c i t y , they were seized and locked up by the railway company, i n an attempt to prevent independent establishments, but the s h e r i f f freed them and the f i r s t news- • paper of Prince Rupert, The Empire, was begun. In i t s f i r s t e d i t ion i s gives a n in t e r e s t i n g picture of the town a t that time. N o n e of the land has b e e n subdividediihto l o t s and blocks. No person has been allowed to locate on i t , and there i s neither a hotel nor lodging house. Traders are discouraged by the G r a n d T r u n k P a c i f i c . There are. however, located the C a n a d i a n Bank of Commerce, two hardwares, one druggist, two doctors, one barber, one butcher, and two construction com-panies. The customs and post o f f i c e are i n tents. The Grand Trunk P a c i f i c i s represented b y James H . BaCon, the harbor engineer, and <j. ti. P i l l s b u r y , the assistant engineer. The Church of England i s under Bishop Du Verney, but the Presbyterian church has not been permitted to locate. The t o t a l population i s 123 whites, 15 J a p s , 3 Indians and 9 Chinese. There are 14 white women and 11 c h i l d r e n . 2 The f i r s t sod on the western e n d of the railway was turned on May 7, 1908. Surveying of the townsite was done during the year. On October 19 the p r o v i n c i a l government concluded arrangements with the Grand Trunk P a c i f i c Town a n d Sevelopment Company by which i t agreed to advance |200,000 for three years a t 5$ for the improvement of the townsite. 3 1. This i s probably a r e f l e c t i o n of the influence of Senator Cox, who was president of the bank at that time. 2. Prince Rupert "Empire, July 20, 1907. A l l the people i n the town are to be found l i s t e d i n this issue. Another early description of the town i s to be found i n the Vancouver Daily Province, January 19, 1907, 42. 3. Prince Rupert Empire, October 24, 1908 147. There was some discussion of the survey i n the Legislature on February 21, 1909, when i t was shown that a sum of $280,000 •had been set aside for t h i s , which was an average of $15,00 per acre as compared to $.25 for surveying other parts of the 1 province. 1 During the period of negotiations a subtle ad-v e r t i s i n g campaign was c a r r i e d on to acquaint probable pur^-chasers with the opportunities of Prince Rupert. The name was chosen as theoresultfof a contest, the harbor was praised i n magazines and newspapers, and the future of the c i t y as a trade center f o r the Orient was stressed. The most glar i n g misstatement published was that the r a i n f a l l was 13 inches N for the year 1908, when i t should have been 13 f e e t . So l i t t l e was known of this section of the country at that time that t h i s error probably went unnoticed by most of the readers. On May 29, 1909, with about 2,000 spectators, the auction of l o t s commenced i n Vancouver under C. S. Rand. The sale lasted for f i v e days i n Vancouver and two i n V i c t o r i a . 2400 l o t s were sold, one-half of which belonged to the gov-ernment and the other-to the company. Westhaven Brothers of Seattle bought the f i r s t l o t . The record price for a l o t 50 by 100 feet v/as $16,500 for the corner of McBride and Second Streets. Terms were one-quarter cash and the remainder was to be paid in three years or less with interest at six 1. 1'innipeg Free Press, February 25, 1909. c f . L e g i s l a t i v e  Journals B.C., February 25, 1909, resolution 189. 2. Laut, Agnes, "Railroad Fight for Canada", The WorId's Work, May 1909. p.11600. This a r t i c l e gives an excellent account of early Prince Rupert and the track building near i t . 148. percent. Several l o t s were reserved for purchase hy private sale, and i t was announced on June 18, 1909, that the parties who had reserved these were to pay almost double the amount 1 agreed on. In May 1909 the f i r s t municipal e l e c t i o n was held, and Fred Stork was elected mayor. The assessment of the c i t y was set at $1.5,330,166-, of which the Grand Trunk P a c i f i c was responsible for $7,728,450. The railway company protested t h i s assessment vigorously. It was ppintededut that 340 acres of t h i s property could not be sold u n t i l 1963 under the terms of the Dominion Act and to confirm to the bond mortgages. Charles M.. Hays suggested that the c i t y tax the railway only $6,000 fo r 15 years. - When the council proved stubborn the Grand Trunk P a c i f i c resorted to i t s usual threatening methods. Hays spoke 6f Port Simpson during the negotiations, and the im-p l i c a t i o n was an obvious threat. Moreover the railway announced that i t did not intend to bui l d a hotel and to make other improvements under the circumstances. It was pointed out that Fort William had granted a subsidy of $300,000 and tax exemption for 15 years and that Edmonton likewise had been l i b e r a l . In two l e t t e r s to the c i t y council Hays stated: "Our next important work on hand i s a f l o a t i n g dry-dock, but I do not wish to take any further steps in con-nection with t h i s work u n t i l the question of taxation has been disposed o f , " 3 and, "The land cannot be sold and therefore 1. Prince Rupert Daily News, June 18, 1909. 2. Prince Rupert Optimist, September 6, 1910. 3. i b i d . , Sept. 9, 1910. Letter dated June 28, 1910. does not p a r t i c i p a t e in increasing value as other property.... The point that I think you and your council are overlooking i s whether you s h a l l o f f e r inducement for further expenditures on the part of the Grand Trunk P a c i f i c Railway, or whether you w i l l he content with what you have at the present time.""1" Smithers spoke threateningly of, "The m i l l i o n d o l l a r hotel which Prinoe Rupert might have had." 2 In November 1910 the c i t y assessor quoted the tax expected from the railway as $101,497.50; the Board of Trade suggested a compromise of $15,897.50. Hays offered $5,000 per annum for twenty years i n l i e u of a l l taxes payable during that period, including a l l land sold or leased by the railway, and i n return i t would donate s i t e s for a c i t y h a l l , reservoir 3 and cemetery, to the c i t y . The f i n a l agreement was made on June 8, 1911. By i t the railway agreed to pay $15,000 i n taxes f o r 1910 and for the next 10 years. The c i t y was to receive 100 feet of waterfront from the railway and another 100 feet from the B r i t i s h Columbia government, as well as 58 other pieces of land. The Grand Trunk P a c i f i c agreed to s t a r t a $20,000,000 4 drydock and other work immediately, Work was begun on the drydock on July 7, and within the next two months on the station and round-house. In 1907 the Grand Trunk P a c i f i c Inn was b u i l t at Knoxville on Rupert Road, and 1912 was moved to a new s i t e on 1. Prince Rupert Optimist.September 9, 1910. Letter dated July 20, 1910. 2. i b i d . , September 17, 1910. 3. i b i d . , November 4, 1910. Letter dated October 26, 1910. 4. i b i d . , June 8, 1911. 150. Center Street. It burned on December 14, 1912, and was r e b u i l t i n 1913. On August 4, 1913, a large hotel, valued at |2,000,000 v/ith 15 stories and with 50 rooms was contracted to Archie McDougall. The railway attempted to lay a track around the waterfront, hut the council protested. However, they with-drew the protest on being assured that the lays would be f i l l e d only as far as the s i t e of the cold storage plant. The Grand Trunk P a c i f i c took no notice of t h i s agreement and f i l l e d past them to Seal Cove. It was not u n t i l too late that the council r e a l i z e d what had been done. Alderman P'arcy Tate summarized their feelings i n the matter when he said, "The c i t y has been.handed a gold b r i c k . " 1 Another s i m i l a r example of t h i s disregard for the r i g h t s of others by the Grand Trunk P a c i f i c is shown i n the protest which six Prince Rupert companies presented to the Railway Commission. They complained that, while they had been lessees of land on 2 Cameron Bay f o r some years, the railway company had blocked i t by a s o l i d embankment. It was shown that the Grand Trunk P a c i f i c had not received approval for t h i s section of the road, but i n spite of t h i s had i l l e g a l l y begun to construct i t . The railway was ordered to leave an opening 30 feet wide to permit the passage of scows. 3 1. Prince Rupert Daily Hews'? July 4, 1911. 2. There seems to be a number of names for t h i s indentation, such as Cameron Bay, Cow Creek, Cow Bay, and Market Cove. 3. Sessional Paper 1913, J2Q C o ) , 295. 151 A similar case occurred on the Prince Rupert west l i n e , where the company had proceeded without permission but could not complete the work without i t . It was found that, "The requiring of the approval of the route map by the Minister of Railways, the required plan, p r o f i l e , and book of reference to be prepared and f i l e d with the Board, were a l l overlooked by the company. Instead of proceeding as the law required, work was commenced and stone f i l l s were constructed across t i d a l lands, and access from the harbor to the l o t s of sewrarl persons, including a sawmill, was cut o f f . 1 Thus i t may be seen that Prince Rupert owes much, both good and bad, to the Grand Trunk P a c i f i c , but the r a i l -way also owes much to the c i t y . What had aeen a useless bay 2 i n 1903 became a c i t y by 1910. The history of thi s change shows more c l e a r l y than i n any other place the attitude of the Grand Trunk P a c i f i c Railway - i t s p o l i t i c a l influence, the rumors of graft, i t s money-making methods, and i t s blackmail-ing system. The Grand Trunk P a c i f i c Railway made Prince Rupert, but i t was with a s e l f i s h motive and by dubious methods. Todj^r, as the c i t y t r i e s to develop, i t need f e e l l i t t l e gratitude towards the company which gave i t b i r t h . 1. Sessional Paper 20(c) 1915, 294. 2* The population grew as follows: 1907 - 150 1908 - 650 1909 - over 2,000 1910 - 5,000 1920 - 6,900 152. Chapter ¥111. The Cost of the Grand Trunk P a c i f i c To an economist the financing and mounting costs of the Grand Trunk P a c i f i c Railway offe r a wide and f e r t i l e f i e l d f o r exploration, but to one who i s not an economist the i n t r i c a c i e s of obtaining money f o r the railway are much too involved to be thoroughly understood. So important i s thi s phase i n the f a i l u r e of the railway, however, that i t cannot be ignored i n any thesis on the Grand Trunk P a c i f i c . The history of the railway reveals how the o r i g i n a l estimates were far from correct, and i t i s possible to trace the reasons for the mounting costs through the years. In the o r i g i n a l contract for the construction of the railway the suggested figures for the cost, which i t was expected the government would guarantee, were $30,000 a mile on the National Transcontinental, $13,000 on the p r a i r i e section, and $30,000 on the mountain section. In 1914 and 1915 the figures amounted to roughly $88,500 per mile f o r the National Transcontinental, $145,180 for the p r a i r i e section, and between $97,035 and $102,975 f o r the mountain s e c t i o n . 1 In 1918 the average cost of. a l l the Grand Trunk P a c i f i c l i n e s was estimated at over $73,000 per m i l e . 2 The enormity of t h i s cost can best be appreciated !• H. C. D. 19.14, February 19, 922. 2. Jackman, W. T., Economic P r i n c i p l e s of Transportation, Toronto, 1935, 42. by a comparison with the costs of other Canadian railways. The cost of road and equipment of the Canadian Northern was estimated at ;i?43,786 per mile, but that of the Grand Trunk P a c i f i c was $85,276.1 The funded debt of the Canadian P a c i f i c was f18,000 per mile, that of the Canadian Northern was $32,588 but that of the Grand Trunk P a c i f i c was $73,000. 2 In 1903 S i r Wilfred Laurier had introduced the Grand Trunk P a c i f i c scheme by stating that the cost would not be greater than §13,-000,000 to the country f o r the entire, transcontinental railway. Robert Borden i n reply estimated the cost at the "extreme" figure of $13,000,000 for the p r a i r i e s and $28,000,000 for the mountains. rhe Grand Trunk P a c i f i c Railway was c a p i t a l i z e d i n the o r i g i n a l contract at $45,000,000. The National Transcontinental Railway had been estimated at $61,415,000, but the actual cost was $159,881,197.' T&e actual cost of the Grand Trunk P a c i f i c i s more d i f f i c u l t to determine, because of the number of subsidiary companies and other interests which i t had. The t o t a l construction cost might be best taken at a figure of $113,612,011.4 Altogether the railway had cost approximately three times the o r i g i n a l estimate. 1. Railway Inquiry Commission, 1917, x i i i . 2. Jackman, op..cit., 42-44. 3. Railway Inquiry Commission, 1917, x x i i i . 4. i b i d . , 56. The detailed summary i s as follows: Main l i n e , p r a i r i e , $27,801,998 Malin l i n e , mountain, 65,782,278 Branch Lines Co. 19,849,778 Saskatchewan Railway 17 7,957 154 The reasons for this enormous increase were numerous. The competition which ein sued from the b u i l d i n g of the Canadian Northern and the development of the Canadian P a c i f i c caused the cost of materials and labor to sky-rocket. In 1909 i t was pointed out that laborers' wages, which were $1.25 to $1.50 per day i n 1903, were then I2.25.1 Oh the mountain section the wages soared to $3.50 per day and even then the men would not 2 work s a t i s f a c t o r i l y . Ties had increased from between 25 and 28 cents to 50 and 60 cents, and even at that price were scarce. Timber for culvert and t r e s t l e s increased from 30 637 32 cents to 38 cents. Steel r a i l s gained from $25' <br $28 per ton to $35 or $36, and besides th i s a duty of $7.00 per ton was added. Another reason f o r the high cost was the standard of construction adopted, at the insistence of Hays. The road-bed was b u i l t on a par with the l i n e from Montreal to Toronto. The r a i l s used were 80 pounds to the yard instead of 65 pounds, making a difference of 23 tons to the m i l e . 3 The high standard achieved i s shown by the following condemning quotation: [The Yellowhead^)' i s the lowest pass to the P a c i f i c coast...the a l t i t u d e of the track being not more than 4,000 feet. Except for twenty miles of what i s calle d a pusher grade, where the grade i s about one percent, the rest of the l i n e does not exceed a half of one percent. The bridges are of stone and s t e e l . Material for them had to be transported by r i v e r and other expensive methods, so that the cost was greatly increased. The well-established and economical method of building such a road i s to b u i l d p i l e and wooden bridges, temporary structures, and use1 them u n t i l they cease to be safe, and then to substitute 1. H.C.D. 1909, 5128. 2. Railway Inquiry Commission, 1917, 82. 3. H. C. D. 1909, 5128. 155. a more permanent material, which can he transported over the l i n e s of railway at the lea s t cost. To secure the low grades of which I have spoken, the immense t r e s t l e s over ravines i n the p r a i r i e provinces and elsewhere along the l i n e have heen constructed with a view to t h e i r being f i l l e d up with d i r t and thus made permanent. It would have been more economical to begin with less favorable grades and gradually better them as the t r a f f i c j u s t i f i e d i t . " 1 The d i v i s i o n of r e s p o n s i b i l i t y between the govern-ment and the company resulted in lack of economy and mounting costs. There have been many ruuors and investigations charging that much of t h i s waste was a r e s u l t of p o l i t i c a l influence and g r a f t , but no proof has been forthcoming to e s t a b l i s h a clear case for these charges. An investi g a t i o n by a Royal Commission i n 1914 resulted in the following findings: (a) that the Transcontinental Railway Commission, the Grand Trunk P a c i f i c and those having charge of the construction of the railway did not con-sider i t necessary or desirable to practise or encourage economy i n the building of the road; (b) that without including the money which was expended unnecessarily i n building the railway east of the St. Lawrence River, there was an uneconomic expenditure of f40,000,000 i n i t s construction. The main reasons for these conclusions were (a) that the Government com-mitted the country to the construction of the railway of .4 percent grades against eastbound and .6 percent against westbound without knowing whether these grades f i t t e d the country and with very l i t t l e information as to the cost of building such a railway, (b) that the tables of figures drawn up to enable the engineers to equate the value of the grades and curvatures were based upon the assumption that the road would at once receive the maximum t r a f f i c i t was possible to carry over a single track of low gradients, (c) that the conditions for submitting tenders for the construction of the raod was so onerous as to discourage competitive bidding. 1. Grand Trunk A r b i t r a t i o n , 1931:$ 1184 .Railways rnd 19 21 , 184., 156. As early as 1908, those i n charge of the project were informed by the chief engineer i n charge of con-struction that the road would cost at least one hundred percent more than the highest estimate previously given to parliament. With a l l t h i s information before them...we do. not find any recommendations.or protest ...for retrenchment. 1 The other causes for the high cost of the railway are worth noting. The railway was so long i n being opened that there was a large amount of accumulated interest due and unpaid before i t began i t s service, and the preliminary surveys had calculated the li n e to be about 130 miles shorter than i t was necessary to b u i l d . 2 The huge amount of money needed for t h i s vast undertaking was obtained by bonds, loans, and grants of money or land. The bonds v/ere. of several types, and were guaranteed by the Grand Trunk Railway, the Dominion government, p r o v i n c i a l governments, and, i n the case of some sub s i d i a r i e s , by the Grand Trunk P a c i f i c Railway Company i t s e l f . Loans were made from the Dominion government. Land grants had been d i s -continued by the federal government i n 1896, but the provinces gave l a v i s h l y . Many towns and c i t i e s added grants of land fo r the p r i v i l e g e s of haying the railway b u i l t to them. Gash subsidies were obtained from these c i t i e s , as well as from the ""5 p r o v i n c i a l governments. It must be again noted that although the government guaranteed bonds and loaned money to the r a i l -1. Sessional Paper 125,"" 1914. cf. Fournier, L. T., Railway Nationalization i n uanada, Toronto, 1935, 21. 2. G. A. R. 1909, 605. 3. The Dominion Bureau of S t a t i s t i c s pupplied the following summary of p r o v i n c i a l aid to the Grand Trunk P a c i f i c : (continued next paga) way i t did not expect to have any actual expenses except for the interest for seven years on the mountain section, which i t paid, and from which Laurier derived his figure of $13,000,000. The money for the railway was expected to he raised by the sale of bonds, and u n t i l 1910 th i s method s u f f i c e d . In 1905 Hays procured r a t i f i c a t i o n by parliament of three mort-gages, 1 the f i r s t being for £14,000,000 f i r s t mortgage bonds on the Grand Trunk P a c i f i c guaranteed by the Dominion of Canada, the second for £4,150,000 second mortgage bonds unconditionally guaranteed as to p r i n c i p l e and interest by the Grand Trunk 2 Railway and for £1,550,000 f i r s t mortgage bonds on the Lake Superior branch unconditionally guaranteed by the Grand Trunk Railway. These bondsissues were a l l successful and resulted i n $30,000,000 being placed at the c r e d i t of the company i n London. In 1906 an issue of $25,000,000 of debenture stock was authorized. This was to be a charge on the railway and equipment subsequent to the l i e n s authorized by the o r i g i n a l 3.(continued) Ontario - for Lake Superior Branch $376,320 B r i t i s h Columbia - on account of Fraser River bridge 350,000 Fort William - 300,000 - on account of bridge 50,000 Edmonton - on account of terminals 100,000 1. Statutes, 1905, ch. 98. 2. These were divided into £2,100,000 on the p r a i r i e section and £2,050,000 on the mountain section. contracts and was guaranteed by the Grand Trunk Railway. By 1911 only about $8,000,000 of this stock had not been i s s u e d . 1 In 1907 two further issues were made. The f i r s t , for $5,000,000 was oversubscribed, but the second, for $10,000,000 was taken up much mbmshx^ly-In 1909 Hays pushed through parliament an act increas-ing the issue of guaranteed stock to £18,500,000. This gave him £2,500,000 of additional stock, over £8,000,000 of which was issued by June 1918. He also increased the debentures stock up to £l0,000,000.ofpar.tso£tthislisum was. used for the ac q u i s i t i o n of the bonds of the Grand Trunk P a c i f i c Terminal Elevator at Fort W i l l i a m . 2 "Altogether i n 1918, out of a t o t a l c a p i t a l i z a t i o n of $816,512,540, there was $190,568,540 (88$) of bonds and $25,944,000 (12$) of stock. Such a large proportion of the c a p i t a l i z a t i o n in the form of funded debt meant there was accorrespondingly large amount of fixed charges. In 1918 these fixed charges amounted to $8,456,408 per annum." From 1909 loans and guarantees by both federal and p r o v i n c i a l governments were numerous. It was with great g l e e that the Conservative party, led by Borden, reminded Laurier of his statement i n 1903 that, The sum t o t a l of the money to be paid by the government for the construction of the l i n e from Moncton to the P a c i f i c w i l l be i n the neighborhood of $12,000,000 or $13,000,000 and not a cent more. However, the opposition r e a l i z e d that the railway had advanced too f a r to be stopped and therefore they offered l i t t l e 1. Lovett, H. A., op.cit., 164. 2. i b i d . , 161. 3. Jackman, W. T., op.cit., 42. opposition to the h i l l authorizing the f i r s t loan to the Grand Trunk P a c i f i c . "Public f a i t h and public honor demand that the contract be carried out, ""'"stated Borden, and at another time, "The country has embarked upon this project and I agree that 2 the work must not stop." In thesesignificant sentences he reveals why t&$ Conservatives advanced money for the completion of the road when they succeeded to o f f i c e i n 1911. Further loans were made to the company i n 1913, 1914 1916, 1917, and 1918. As the years passed the c r e d i t of the company slumped. Whereas the f i r s t issues were oversubscribed, the l a t e r ones were taken up more slowly, and In 1913 the loan brought only 97 cents on the d o l l a r . The f i r s t two loans were issued at 4$, the.next two at 5$, but the l a s t two paid 6fo. Even today Canadian bonds in London are regarded with mistrust as a r e s u l t of the money which was invested i n the 3 Canadian Northern and Grand Trunk P a c i f i c . The Grand Trunk P a c i f i c cost an immense sum, It was a great and expensive project, but the price was f a r i n excess of what i t should, have been, and the problem of financing i t • was one that tested the a b i l i t i e s of the builders to the utmost. In studying the ways i n which this was achieved the following quotation, which was written i n 1903, takes on an added s i g n i f i c a n c e : 1. Borden's Autobiography, 225. 2. H.CD. 1909, 5117. 3. For a f u l l account of the Grand Trunk P a c i f i c funded debt see Appendix I I I . 160. Government guarentees of int e r e s t ; government issue of debentures by way of loan to railway eompanies; government guarantee of railway bonds; dire c t issue of government bonds to railways with a f i r s t mort-gage on the company's properties; release of govern-ment loans by placing them behind other loans; composition of government claims, - and i f there i s any other way that human ingenuity could devise, i t i s reasonably certain that the Canadian govern-ment has made f u l l use of i t . . The Canadian P a c i f i c Kailway had been a marvel of financing, and had been a great s t r a i n on Canada. Apparently, however, the Canadian people had not been impressed by the methods of railway f i n a n c i e r s to the extent of being wary of another similar scheme. After the fi a s c o of the Grand Trunk P a c i f i c and Canadian Northern, i t may be expected that they w i l l be much more careful i n trusting to the good f a i t h and fine promises of the next great organization which promises "a national transcontinental f o r $13,000,000." 1. Le Rossignol, £., "Railway subsidies in Canada and the united States." Canadian Magazine,XX. March 1903, 419. 161. Chapter IX. The Last Years of the Grand Trunk P a c i f i c i From the time of i t s conception the Grand Trunk Railway was c r i t i c i z e d hy i t s f i n a n c i a l and p o l i t i c a l opponents and there were many predictions that i t would either f a i l i t -s e l f or else bring harm to the country in some other way. In the debate oyer the f i r s t contract i n 1903 the opposition t^'t attacked the b i l l more strenuously than at any other time, and two of them made statements which, probably by hazardous guessing, foretold ihepart the f i n a l r e s u l t s of the road. The Honorable Israel Tarte said, "When the ten years are over, i f the road i s not paying, the government w i l l be approached by the Grand Trunk P a c i f i c and w i l l be urged 1 not to exact i n t e r e s t . " The other man to prophecy success-- f u l l y was Samuel .Hughes, a strong opponent of the l i n e north of the Great Lakes. He stated, "I f a i l to see where the government expects the Grand Trunk P a c i f i e or the Grand Trunk Railway, eit h e r of them, w i l l ever operate t h i s north shore road." 2 In the l i g h t of subsequent events the words of these men may show a remarkable perspicacity, but they were more probably lucky guesses by two pessimistic opponents to the scheme. In spite of such gloomy sentiments from a few, however, the mass of the people believed i n the railway, f o r these were boom times, and i t was impossible to r e a l i z e that .1. H. C. D. 1903, 9660. 2. i b i d . , 11902. 162. depressions and f a i l u r e could come to Canada for many years, i f they occurred at a l l . Moreover, at f i r s t the railway seemed j u s t i f i e d . Population was mounting, industry was t h r i v i n g , and everyone was enjoying the prosperity of the times. But the bubble burst, and i n a few years the railway was beset.by d i f f i c u l t i e s and problems which even the most pessimistic had not foreseen, In the Grand Trunk P a c i f i c the period of depression was accentuated by the active competition of the other roads, by increasing costs, by the depredations of speculators, and by the influence of p o l i t i c s . The f i r s t sign.of the trouble which was to p i l e up on the Grand Trunk P a c i f i c became obvious i n 1909 when the railway was forced to apply to the government for a loan of $10,000,000. This should have been a warning, but i t was unheeded by both government and di r e c t o r s , and the work went b l i n d l y forward. w0n Mr. Hays' death i n 1912 i t must have been clear to the chairman and new president that both the Grand Trunk andiGrand Trunk P a c i f i c were headed for bank-ruptcy unless a new basis of carrying forward the venture could be f o u n d . S m i t h e r s interviewed Borden i n that year and apparently desired to be released from the National Transcontinental contract b i t was refused. No new p o l i c y was evolved to improve conditions. This could hardly be expected, for at that time the railways were s t i l l b uilding f u r i o u s l y , and the next year is recognized as the supreme year i n railway expansion. "By 1914 there were more than LLovett, op.cit., 166. 2. Borden's Autobiography, 383 163. 30,000 miles of road i n operation, with some eight or ten l i n e s more in" various stages of completion; "Canada ranked f i f t h among the world's countries i n t o t a l mileage, and e a s i l y f i r s t in mileage i n proportion to p o p u l a t i o n . ^ Compared to the United States, " A l l eight provinces (omitting Prince Edward Island) have nearly 2§ times the railway mileage per capita 2 of the 26 states d i r e c t l y affected hy border influences." This favorable picture was but an outer s h e l l , however, for the railway structure was i n an advanced state of decay. A period of extreme depression followed the boom years. Land speculation collapsed and wheat pri c e s dropped. To add to the confusion the war brought additional s t r a i n . The cost of labor and materials went s t i l l higher, immigra-t i o n v i r t u a l l y ceased, and the international money markets closed. "During 1917," states Robert Borden, "we continued to be oppressed with the d i f f i c u l t i e s of the railways. The War had exercised a powerful and destructive influence upon the prospects of the Canadian Northern,tthe Grand Trunk, and the Grand Trunk P a c i f i c . The cost of f u e l , material and labour was greatly increased so that the net earnings f e l l to an alarming extent. Owing to the condition of the money markets, these railways were unable to dispose of s e c u r i t i e s which. 3 had been guaranteed by Federal and P r o v i n c i a l l e g i s l a t i o n . " The railway structure of Canada collapsed. 1. Skelton, 0. D. L i f e and Letters of Sir Wilfred Laurier, Toronto. 1921. 415. 2. Wilgus, Wm. J . The Railway Interrelations of the united  States and Canada, New Haven, 1937, 23. 3. Borden's Autobiography, 648. To understand the f a i l u r e of the Grand Trunk P a c i f i c Railway i t i s necessary to re f e r f i r s t to the o r i g i n a l agree-ments and contracts,. Because the Grand Trunk had not heen w i l l i n g to support a complete new transcontinental railway the project had heen divided into two sections, the Western D i v i s i o n being b u i l t by the Grand Trunk P a c i f i c Railway Company and the Eastern D i v i s i o n by the government under the name of the National Transcontinental Railway. The governmanitt under- ; took to guarantee payment of p r i n c i p a l and i n t e r e s t on the issue of bonds made by the company for the construction of the Western D i v i s i o n for a ^ p r i n c i p a l amount equal to 75% of „v the cost of construction, but t h i s was not to exceed $15,000 per mile on the p r a i r i e section. It also undertook to pay interest on the mountain section bonds for the f i r s t seven years, and for the succeeding three years i f the company should be unable to do so. These three years were to be c a p i t a l i z e d and repaid. On the other hand the Grand Trunk P a c i f i c undertook to lease the eastern d i v i s i o n on completion and to operate i t for f i f t y years, the f i r s t seven of which should be free of ren t a l , and the remainder at a cost of three percent of the cost of construction per annum. In addition the company agreed to equip both d i v i s i o n s with complete and modern r o l l i n g stock, the f i r s t equipment of the completed road to be of a value of at least $20,000,000, of which not l e s s than $5,000,000 were to be assigned to the Eastern D i v i s i o n . It has been shown that the costs of the railway were f a r above the o r i g i n a l estimates. This affected the ren t a l which the Grand Trunk P a c i f i c was to pay, and explains why there was d i f f i c u l t y over the leasing of a l l sections east of Winnipeg. The f i r s t problem arose over the l i n e from Sioux Lookout, which was the junction of the National Transcontinent-a l and the Port William branch of the Grand Trunk P a c i f i c , and Winnipeg. Obviously the branch l i n e would be i s o l a t e d without some agreement with the other road. On December 4, 1912, the government and the company requested S i r William Whyte of Winnipeg to act as sole a r b i t r a t o r and to set a re n t a l for that section of the National Transcontinental which ran between Winnipeg and Sioux Lookout, pending the completion of the remainder of the railway, he decided that, "A f a i r r e n t a l for the use of that portion of the road would be a sum equal to two percent of the cost of that portion of the railway, includ-ing the shops, and in addition a sum equivalent to ten percent of the cost of actual work done at the shops of the Eastern D i v i s i o n , and a further sum of twelve and a h a l f percent of the t o t a l cost of work done other than f o r the Eastern Div-i s i o n . " 1 The company and government signed an agreement.to thi s e f f e c t on December 20, 1912, but the company f a i l e d to take out a lease. The Western Di v i s i o n was completed i n 1914 and the Eastern D i v i s i o n i n 1915. On January 13, 1915, the Minister of Railways, Honourable E-. Cochrane, wrote to E.. J . Chamberlain, president of the Grand Trunk P a c i f i c , suggesting that, i n view 1. Grand Trunk A r b i t r a t i o n , 1921, 129. of the nearness of the completion of the National Transcontin-ental Railway, conferences should begin to make arrangements for the dr a f t i n g of a lease by the government to the company of the Eastern D i v i s i o n . On January 14, Chamberlain r e p l i e d , asking f o r a statement of the cost of construction on which the company would be required to pay three percent as r e n t a l . The statement submitted by the minister showed a t o t a l cost of |174,661,354, to December 31, 1914. It v/as pointed out by Cochrane, however, that the intere s t was to be only c a l -culated on the cost of work, and that t h i s figure included money paid i n cash expenditure, interest charges, cost of shops and terminals, and unpaid holdback and progress estimates On March 25, 1915, Cochrane wrote, "The government, having been advised that the Eastern D i v i s i o n , for purposes of operation, had been reported by the chief engineer of the Transcontinental Railway Commission as completed and ready to be leased, i s of the opinion that i t i s i n the public interest that such a lease be now entered into." 1- On A p r i l 27, Cham-be r l a i n r e p l i e d that he could not see his way to ask h i s directors for authority to execute the lease. Three reasons were, given f o r t h i s decision. The o r i g i n a l cost of construc-t i o n had been estimated at |61,415,000, but the cost to date had been "§149,479,550, not including the i n t e r e s t . Secondly, the company claimed that the Eastern D i v i s i o n was not as yet completed i n accordance with the agreement. F i n a l l y , the company contended that the road had not been constructed i n 1. Grand Trunk A r b i t r a t i o n 1921, I.3':Q'« . 167* accordance with the Act of 1904 or on sound business p r i n c i p l e s , and that the completion of the most important section to the company, that between Winnipeg and Cochrane, had been delayed, to the great loss of the company. I t must be admitted that i n the f i r s t of these points the railway had a legitimate comp-l a i n t , but i t was shown by the Drayton-Acworth report that the other two were f a l l a c i o u s . 1 In the l i g h t of subsequent actions i t would seem as i f the Grand Trunk P a c i f i c o f f i c i a l s had no intention of taking the lease and were simply playing for more time. When the company declined to rent the National Trans-continental the 1,355.95 miles which constituted the l i n e west of Quebec were taken over for operation as part of the Canadian Government Railway System and were put i n operation as such.on June 1, 1915. The r o l l i n g stock was obtained from the Inter-c o l o n i a l Railway instead of the Grand Trunk P a c i f i c Company. At the beginning of the following month the Lake Superior Branch of the Grand Trunk P a c i f i c was leased by the Canadian government railwaysffi©r 999 years at a rental of $600,000 a year, with the option 6f> purchase a f t e r March 31, 1936, for $13,333,333. The operation of the National Transcontinental and the Lake Superior Branch was regarded by the government as only a temporary s o l u t i o n 2 to a problem, "which, l i k e the Old Man of the Sea, was continually upon our shoulders and would not 1. Railway InquirgryCommission, 1917 , xxx-xxxi. 2. Grand Trunk A r b i t r a t i o n , 1921, 131. 168 be shaken o f f . " 1 This b e l i e f must have been changed by the end of the year, f o r on December 10, 1915, the government was "approached by Mr. Smithers to take the Grand Trunk P a c i f i c and i t s branch l i n e s from the Grand Trunk railway, on condition that the l a t t e r surrender the common stock of the Grand Trunk P a c i f i c to the government. The l a t t e r , however, postponed the issue by the loans of 1916, 1917, and 1918. when the f i r s t of these loans, was made i t was r e a l i z e d that the railways were i n a desperate p o s i t i o n , and the government had one of three choices, to permit the railway to go into the hands of a receiver, to permit default and take ph y s i c a l possession of the systems, or to afford temporary aid pending an inv e s t i g a t i o n . The reasons f o r adopting the t h i r d a lternative were given i n the following statements by the Right Honourable S i r Thomas White, the Minister of Railways, each of v/hich deals with one of the courses open to the government: I believe that the collapse of the two railway systems i n question, with the involvement of the Grand Trunk, would have a most disastrous e f f e c t upon our entire c r e d i t , federal, p r o v i n c i a l , municipal, and i n d u s t r i a l . It appears to me that at t h i s , of a l l times, we should Jealously guard the f a b r i c of our c r e d i t . Under the circumstances the Government f i n d themselves unable to favorably regard, the contingency of allowing the two roads, with the probable involvement of a t h i r d , to go into l i q u i d a t i o n . If we were not i n the midst of a war and confined i n our financing to thi s side of the A t l a n t i c , i f we had not before us the formidable burden of the War, with no prospect of i t s early termination, i t would not appear to me to be so serious an obligation, to take over the financing of these two railway systems.... 1. Borden's Autobiography, 446. 2. i b i d . , 644. The investigation into the railway s i t u a t i o n wa.s held i n 1917. The Commission consisted of A. H. Smith, S i r Henry L. Drayton, and W..M. Acworth, 1 and the report i s commonly known as the "Drayton-Acworth Report", probably because i t was the suggestions of these two, rather than those of Smith which were followed. They proposed "that p r a c t i c a l l y a l l the railways i n Canada, with the exception of the Canadian P a c i f i c and the American l i n e s , should be turned over to a corporation to be managed by a board of trustees appointed by 2 the Government." As a resu l t of t h i s report the loans came to an end i n 1918. Moreover, On September 10 of that year, i t refused to guarantee a note for the Grand Trunk and the 3 company was forced to underwrite the note elsewhere. On February 18, 1919, the railway proposed that the government take over the Grand Trunk P a c i f i c and branches, repaying the Grand Trunk a l l indebtedness, and that an agreement be made between the Grand Trunk i n the east and the Canadian Government Railways i n the west. The Government refused this proposal.^ The company thereupon n o t i f i e d the government that i t would not be able to meet the interest due upon i t s secur-i t i e s an March 1, and once again the government refused a i d . As a r e s u l t , on March 4 the company suddenly n o t i f i e d the government that i t would be unable to continue operation of the Grand Trunk P a c i f i c a f t e r March 10. The government, faced 1. Mr. Acworth was c a l l e d i n to f i l l the place of S i r George Paish, who was.obliged to resign during the inquiry on account of i l l - h e a l t h . 2. Borden's Autobiography, 648. 3. Grand Trunk A r b i t r a t i o n , 1921, 132. 4. Ibid. , 133. with the possible cessation of the railway, passed an Order i n Council appointing the Minister of Railways receiver of the Grand Trunk P a c i f i c Railway System, to become e f f e c t i v e at midnight on March 9. With t h i s step the government accepted the r e s p o n s i b i l i t y of operating the complete transcontinental railway which had been conceived by S i r Wilfred Laurier and the Grand Trunk o f f i c i a l s i n 1903. Negotiations with the company resumed, and again the government refused to release the Grand Trunk from i t s western obligations, except as part of an arrangement with the government to transfer the whole Grand Trunk group. Such an arrangement was concluded towards the end of the year and r a t i f i e d by the parliament. A jo i n t committee of management for the railways was. appointed, partly by the government and pa r t l y .by the Grand Trunk. It assumed control on May 1, 1920. On July 12 the operation of the Grand Trunk P a c i f i c was en-trusted to the Canadian^Northern Board. 1 A r b i t r a t i o n on the value of the companies was not completed by the spe c i f i e d date, A p r i l 9, 1921, and was allowed to lapse for two months. It was revised, and on September 7, 1921, by a majority award the committed declared 2 the Grand Trunk equity shares to be without value. An appeal to the Privy Council was dismissed. This was the last 1. Development of Railways and Transportation i n Canada. Department of Transport, Ottawa. 1937. After the Drayton-Acworth report the government assumed almost immediate control of the Canadian Northern Railway, which was operated by i t s own board, reconstituted by the government. Bpp.16 and 17. 2. Grand Trunk A r b i t r a t i o n , 1921. 147. attempt of the company to retrieve the railway from government ownership and i t f a i l e d . The formal u n i f i c a t i o n of the Grand Trunk and i t s associates with the Canadian National Railways was completed on January 1, 1923. From that time the Grand Trunk and Grand Trunk P a c i f i c Railways, with their subsidiaries were part of the Canadian National Railways. ! The collapse of the Grand Trunk and i t s associates was a severe blow to the prestige and cr e d i t of Canada, as Bor-den and h i s cabinet had feared. The question now a r i s e s , !'uWhy did the Grand Trunk P a c i f i c f a i l ? " The answer to this i s to be found i n four basic f a c t s : that i t was b u i l t i n boom times and begun too o p t i m i s t i c a l l y , that the cost was excessive, that p o l i t i c a l and other outside influences entered into i t , and that the competition of other railways was too intense. By 1903 the era of prosperity i n Canada was i n f u l l swing. I t was i n that year that the f i r s t great grain blockade occurred. Business and immigration were increasing and the f e e l i n g of the country was one of general optimism.. It v/as because of this s p i r i t that the government, and the people, were w i l l i n g to support almost any type of expansion without studying i t too c a r e f u l l y . Especially i n railways did the country f e e l i t s e l f ready f o r almost unlimited development. Because of this mood the Grand Trunk P a c i f i c project was accepted as a natural growth, and few believed that i t would present injurious .competition to the other roads as i t was >' believed that the country would need three r a i l r o a d s . In 1905 one writer went so f a r as to state, "There w i l l be ample room fo r another railway, and perhaps two, north of the Grand trunk P a c i f i c . " 1 When the Grand Trunk P a c i f i c was launched, i t was re a l i z e d that the population d i d not warrant such expansion. It was pointed out, however, that, "In the west railways have always preceded settlement. Railways grew f a s t e r because of government a i d . " Another writer stated that, "While the country i s new and sparsely populated the railways of Canada w i l l be able to earn l i t t l e more than the running expenses, cost of improvements, and i n t e r e s t on bonds. As population and wealth increase the net revenue of the railway w i l l also increase i n geometrical r a t i o . " 2 For some years i t seemed as i f t h i s a t titude was j u s t i f i e d . Immigration was very rapid and the lands near the railways were r a p i d l y f i l l e d . In 1909 i t was said, "Six years ago you could get the best quality v i r g i n lands i n B r i t i s h Columbia within d r i v i n g distance of a r a i l r o a d . Today you cannot get free lands of f i r s t quality i n B r i t i s h Columbia within two weeks drive of a railroad.' You cannot get good arable land i n B r i t i s h Columbia with&ntreasonable distance of a market under twenty-five d o l l a r s an acre i n the Nechaco.. the best land has been picked out and i s held i n values ranging from the t h i r t i e s to the Hundreds. In A l b e r t a . . . i n the ranch country, a l l the land has been homesteaded or i s 1. Burpee, Lawrence «J., "How Canada i s Solving her Transport-ation Problem':', Popular Science Monthly. September 1905,455 2. LeRossignol, «J. E. "Railway subsidies in Canada and the United States", Canadian Magazine XX, March 1903,419. CHART I . Comparison of Railway Mileage, population, railway revenues, and motor vehicle r e g i s t r a t i o n s , 1876 - IS06. (Senate Investigation, 1938. 36.) A331 'tC -9C ~TZ face, p nA being held by big companies." 1 When i t i s r e a l i z e d that the two provinces mentioned i n t h i s a r t i c l e were the l a s t of the four western provinces to be settled, the apparent extent of Canada's development can be r e a l i z e d . However, when t h i s statement was made the writer f a i l e d to r e a l i z e f u l l y the significance of two f a c t s . The f i r s t of these was that the greatest section of these provinces was being held by spec-ulators, rather than homesteaders and s e t t l e r s , This meant that the country was not developing as much as t h i s a r t i c l e would seem to indicate. The other f a u l t of t h i s writer was that she attributed the demand f o r land to the f a c t that the railways were being b u i l t across Canada and opening i t . Un-fortunately she did not see that Canada was not passing through a stage of natural growth but was i n a "boom" era, and that the prosperity of the times was not founded on sound business enterprise and a g r i c u l t u r a l development. We cannot condemn her too severely f o r t h i s , however, f o r one of the e v i l s of a boom i s that i t i s not recognized u n t i l the ensuing depression a r r i v e s . A study of the growth of railways and population from 1873 to the present day shows a s u r p r i s i n g l y p a r a l l e l r e l a t i o n s h i p . In both revenues and mileage the railways show a substantial increase u n t i l 1918, and from that year there has been very l i t t l e increase. From 1918 a graph*-' showing the railway mileage and population increase would be 1. Laut, Agnes C. "The Hailroad Fight for Canada", The  World's Work, May 1909. 11605. 8. Senate investigation, 50. p r a c t i c a l l y p a r a l l e l . I t would seem from t h i s that the men who were responsible for the railway p o l i c y of the early years of the century are not to be blamed f o r t h e i r hopes, as they could not at that time see the cessation of immigration, the- war,or the serious competition which the automobile would offe r a f t e r 1916. Had the immigration figures continued to r i s e a f t e r 1914 as they had for the twenty years previous who can say but that the railways of Canada might not have succeeded? Even had the population of the provinces equalled that of the United S t a t e s 1 i n proportion to the railway mileage i t i s possible that the railways of Canada would have succeeded f i n a n c i a l l y . The end of the "boom" era was unforeseen. During the furious a c t i v i t y of the f i r s t few years of the railway i t seemed as i f prosperity would never end. The r e s u l t v/as much premature, much misdirected, much p a r a s i t i c a c t i v i t y . The Grand Trunk P a c i f i c is one of the most obvious develop-ments to include a l l of these three charges. When i t v/as b u i l t , the b e l i e f was that i t could not f a i l , a n d i t was b u i l t i n spite of the f a c t that plans were incomplete, that the country through which i t was to pass was l a r g e l y unknown, and that the future of the Canadian Shield and the West was i n d e f i n i t e . Money was cheap and was spent f r e e l y . Speculation e s p e c i a l l y i n land, was common, and fortunes were made and l o s t r a p i d l y . "The project...appealed to the imagination of the country and awakened a response which drowned the voice of prudence and caution." 2 But the accounting was to come. 1. c f . Wilgus, o p . c i t . , 23. "On the p r M r i e s Canada has 7.88, the United States border states have 4.90 miles of railway per 1,000 inhabitahts." 2. Borden's Autobiography, 117. By 1910 the era of prosperity had passed, and a period of depression set i n . Money became scarce, wheat prices and land prices dropped, The nearer the railway came to completion the tighter became the money markets and the higher went prices and the costs of construction. The beginning of the war aggravated the s i t u a t i o n s t i l l more, and the r e s u l t was the utter collapse of the transportation system of Canada. The cost of the National franseontinental and the Grand Trunk P a c i f i c Railways has been shown to have been so far above the o r i g i n a l estimates that the adjective "excessive does not begin to describe i t . One of the most important factors in the tremendous sum which the r a i l r o a d s cost was the high standard of construction which had been i n s i s t e d upon throughout the entire project. This p o l i c y has been b i t t e r l y attacked and i s s t i l l the source of much controversy. The Honorable W. H. Taf t, i n his minority report on the Grand Trunk a r b i t r a t i o n , makes the following statements: The contract required that the Grand Trunk P a c i f i c should be constructed with the same standard of excellence as that maintained in the Grand Trunk main l i n e between Montreal and Toronto. The result was that the cost of the Grand Trunk P a c i f i c was excessive, as indeed was that of the Transcontin-ental. The Grand Trunk P a c i f i c runs through the Yellowhead Pass.... This i s the lowest pass to the P a c i f i c Coast in either Canada or the United States,... Except f o r twenty miles of what i s c a l l e d a. pusher grade, where the grade i s about one percent, the grade of the rest of the l i n e does not exceed a half of one percent. The bridges are of stone and s t e e l . Material f o r them had to be transported by r i v e r and other expensive methods, so that the cost was greatly increased. The well-established and economical method of b u i l d i n g such a road iss to b u i l d p i l e and wooden bridges, temporary structures, and use them u n t i l they cease to be safe and then to substitute a more permanent material, which can be transported over the l i n e s of steel at least cost. To secure the low grades of which I have spoken, the immense t r e s t l e s over the ravines in the P r a i r i e Provinces and elsewhere along the lin e have heen. constructed with a view to their being f i l l e d up with d i r t and thus made permanent. It would have been much more economical to begin with less favor-able grades and gradually better them as the growth of t r a f f i c j u s t i f i e d it....The gathering of business depends a good deal upon the character and extent of the branch l i n e s . In this respect, the Grand Trunk P a c i f i c i s at a disadvantage. Its branch l i n e s have heavier grades and are less in number and extent than those of the other l i n e s and not so well placed/' 1 Although at f i r s t t h i s pessimistic attitude was apparently well deserved, i t would not seem that in the long run the insistence on good grades was a mistake. It i s true that twenty years ago the population and development of the country did not warrant such a high standard, but today, when the question of amalgamation and discontinuance of p a r a l l e l l i n e s i s being very much discussed, the superiority of Charles M. Hays' project i s evident. The investigation of the railways held by the Senate in 1938 repeatedly shows this fact to be true. It i s common knowledge that the Canadian Northern lin e did not stand up as well as the Grand Trunk P a c i f i c on the p s a i r i e s . One of the most b i t t e r l y opposed sections in the planning of the r a i l r o a d was the l i n e through the Maritimes. It was feared that t h i s would compete with the Inteoranlonial and at the same time o f f e r no improvement to the old l i n e . Today the l i n e b u i l t by the Transcontinental i s 44.1 miles shorter than the other, and the other advances made possible by the new l i n e are shown in the following quotations from the 1. Grand Trunk A r b i t r a t i o n , 1921, 184. 177. investigation by the Senate held in 1938: Q. But you t o l d us that 100 t r a i n miles on this l i n e was equl-'/ valent to 155 on the I n t e r c o l o n i a l Railway...and my quest-ion was, how much of that i s due to the longer haul, and how much to worse grades? - A. It i s a l l due to grades. A. This shows that 55 percent more t r a i n miles are required on the I.C.R. than on the N.T.R. to handle the same amount of t r a f f i c without regard to the more adverse weather conditions on the I.C.R. That i s another thing we are up against. I have known a snowfall i n the Matapedia Valley of 168 inches, and of t r a f f i c being t i e d up s e r i o u s l y , whereas, inland, on the Transcon-t i n e n t a l , we did not meet with that condition. We have also had washouts. I remember on one occasion when the Canadian P a c i f i c had a washout and had to divert i t s t r a f f i c over our l i n e . . . We never had any-thing of that kind on the National Transcontinental. The snowfalls are more even, and the winds not as great. The I n t e r c o l o n i a l , being exposed to the Bay of Ghaleur and the Northumberland S t r a i t , gets some t e r r i f i c weather conditions. It may also be remarked that an increased grain move-ment, for instance, r e s u l t i n g i n greater average gross tons per car, would raise t h i s percentage. The second section of the National Transcontinental to be b i t t e r l y attacked i s the 400 to 500 mile s t r e t c h north of the Great lakes. I t was f e l t during the early years of the railway that there were neither the population nor the resources to j u s t i f y i t s construction. S i r Robeirt Borden, in his memoirs, gives the following as one of his reasons for opposing the railway: Canada, at that time, had a population of less than s i x m i l l i o n and already had established one great transcontinental... The great Western Provinces were separated from the Eastern by four hundred miles of t e r r i t o r y of such character that i t could not be ex-pected to sustain any considerable population, a l -though i t might contain vast mineral worth. A t e r r i -tory so unoccupied tended to exaggerate the divergence between the East and the West; and the cost of trans-porting goods and products across i t greatly handi-capped trade. The territory...was almost wholly un-inhabited; and.any considerable population along the i l Sgnate Investigation, 1089, 1126. 178. l i n e of railway eould not be expected for many years.... In the l i g h t of these conditions and in view of sub-sequent events, i t seems clear that the national trans-continental railway from Quebec to Winnipeg should have been commenced as a colonization road and should have been gradually extended as settlement demanded.1,1 This quotation may be taken as a sample of the b e l i e f s held by the opponents to the scheme in i t s early years. By 1917 the only change in t h i s b e l i e f was that i t was more common.The section across the barren land north of Lakes Superior and Huron"was condemned almost u n i v e r s a l l y : There are now three trunk l i n e s running through the comparatively empty country north of Lake Superior. The through t r a f f i c w i l l be shared...between the three routes. But we may assume that the Canadian P a c i f i c Railway w i l l be able to r e t a i n on i t s own th.rou.gh route a l l the t r a f f i c which i t i t s e l f originates * And the two routes w i l l only get the balance to carry. It cannotv we think, be expected that t h i s balance w i l l -be s u f f i c i e n t f o r a good many years to come to make these two l i n e s self-supporting. It seems to have been generally assumed that they would a f f o r d an important outlet f o r the grain of the P r a i r i e Provinces, Evidence that we have before us seems to show that only quite a small f r a c t i o n of the grain exported from these provinces has hitherto followed the r a i l as f a r as Montreal. The proportion that goes by way of r a i l to the A t l a n t i c seaboard must be even smaller.^ • The above quotation i s an excellent example of the general f e e l i n g which was common in Canada u n t i l a few years ago. The emphasis was on the use of t h i s route as a grain outlet. It had been SommonQn when the railway was beginning, #o speak of the f a c i l i t i e s at the head of the lakes as the "Spout of the hopper", and now i t was r e a l i z e d that the "spout" was as large as the hopper i t s e l f " . V^hereas i n 1903 there had 1. Borden's Autobiography, 115. 2. Railway Inquiry Commission , 1917. Ixxx, Ixxxi. been a grain blockade because of the lack of f a c i l i t i e s , now i t was feared that there were too many outlets, and that there was not enough grain to make the new l i n e p r o f i t a b l e . The chief opposition, besides the older-established Canadian P a c i f i c , w,as the development of the water route. Another i n t e r e s t i n g part of t h i s quotation i s that which mentions the Maritimes, who s t i l l f e e l that they do not receive t h e i r f a i r share of the wheat chop. But the c r i t i c s who have condemned the railway because they looked at i t chief l y ' a s a grain c a r r i e r forgot one important f a c t . This road was more than an outlet f o r the p r a i r i e s , i t was also to act as an agent i n the opening of the new t e r r i t o r i e s of. northern Ontario and Quebec. The success of t h i s aim during the l a s t few years can be s een from the following: One of Canada's chief natural resources on which the great pulp and paper and c e l l u l o s e industries depend i s the vast coniferous forests in northern Ontario and Quebec, served almost exclusively by the Canadian National. From the point Of view of mineral development we are only beginning to realize the wealth which i s stored in the geological formation known as the LaSGce'htian Shield... .The Canadian National Railways traverses the Laurentian Shield with main and branch l i n e s and i t i s , therefore, no accident that most of the mining development which has taken place i n Canada in the l a s t 10 years had been along the l i n e s of the Canadian National. Consider, too, that in the highly i n d u s t r i a l i z e d section of the country, which w i l l continue to draw i t s stimulus from the development of the north, the Canadian National i s pre-eminent in serving every i n d u s t r i a l center and I think you w i l l r e a l i z e . . . that the p o t e n t i a l i t i e s of the System are very great* If development takes place without a needless duplic-ation of l i n e s of railway which would serve only to increase expenses and divided the t r a f f i c , the broad outlook...is decidedly encouraging. 1 1. Senate Investigationml958, 1055. The quotation is.taken from the evidence presented by S. J. Hungerford. To abandon th i s p o t e n t i a l l y r i c h and productive north country appears to me as an i n d u s t r i a l imposs-i b i l i t y and from a r a i l r o a d viewpoint the proposal to abandon or degrade t h i s Transcontinental road shows a lack of understanding of the conditions. It i s a burden, there i s no question of that; But i t i s building up the country, and i t runs through a r i c h t e r r i t o r y . It runs through the be st mining t e r r i t o r y in northern Ontario and Quebec... It does not pay at the present time, but there i s a future to t h i s country that must not be overlooked. 1 From these two excerpts i t can be seen thafe, although the National Transcontinental was b u i l t at a time when there v/as apparent, use for i t as a grain c a r r i e r , and although i t failed, to be a success i n this way, i t has nevertheless more than proven i t s worth by opening the vast wealth of t h i s country which has hitherto been considered barren. It i s in t e r e s t i n g to note the warning.by Hungerford against duplic-ation of railroads i n that country, vii i c h would cause the former National Transcontinental to lose i t s future value to the c i t i z e n s of Canada. It i s duplication which has been the chief cause of i t s f a i l u r e in the past, and i t i s to be hoped that the same mistake w i l l not ruin i t s future. Another section of the railway which has become predominantly a wheat c a r r i e r i s the l i n e from Winnipeg to Fort William. The Canadian P a c i f i c Railway o f f i c i a l s admit that of the three transcontinental l i n e s serving t h i s t e r r i t o r y the National Transcontinental - Grand Trunk P a c i f i c l i n e i s the most economical. Although they claim that t h e i r own l i n e i s better because i t i s double tracked, they admit that t h e i r grade on eastbound t r a f f i c i s no better and that 1. Senate Investigation,1938, 1097, Evidence of W.A.Kingsland. , 181. th e i r grade on westbound t r a f f i c i s i n f e r i o r . One of the most serious problems on the route of the Grand Trunk P a c i f i c i s the section from Jasper to Prince Rupert. This section was supposed to develops trade with the Orient, but the trade f a i l e d to materialize. Prince Rupert was f a r off the main steamship lines,, and the steamship service which the Grand Trunk P a c i f i c was expected to b u i l d never became trans-oceanic. Although the exponents of the Grand Trunk P a c i f i c had advertised widely that t h i s road would cut two days time to the Orient from the route v i a New York to San Francisco, they f a i l e d to state that the extra 500 miles' land haul which this route would have would more than cancel any advantages gained i n time. It i s because of th i s extra land haul that Prince Rupert has never threatened Vancouver as a grain outlet. Another important reason for the f a i l u r e of the g Grand Trunk P a c i f i c i s the lack of feeders or branches. The two which wouldhhave been the most important f a i l e d to materialize. These were the P a c i f i c Great. Eastern, which was never connected to the main l i n e of the Grand Trunk P a c i f i c , and the l i n e to the Peace River block. Should these be completed, there i s every reason to believe that the mountain section of the Grand Trunk P a c i f i c w i l l pay dividends. If they are not completed i t i s doubtful whether this section w i l l pay for many years, i f at a l l . The f i n a l reason for the f a i l u r e of the mountain 1. Senate Investigation, 1938. 635. 2. See map 2. section i s the. dearth of population, r e s u l t i n g l a r g e l y from lack of markets and the great amount of unprofitable or marginal land. The area around Tete Jaune, f o r example, i s known l o c a l l y as "Starvation F l a t s " . There are sections of great f e r t i l i t y scattered along the l i n e , however, and i t i s possible that, i f the P a c i f i c Great Eastern were completed, and a route opened to the southern markets, that settlement might increase enough to make the railway p r o f i t a b l e . No signeof any such development i s apparent at present, and there-fore the future of t h i s section of the railway must be accepted as unprofitable. Two weaknesses of the Grand Trunk P a c i f i c stand out on the p r a i r i e s . T&ese are the lack of good branch lines and feeders, and the competitive duplication of other railways. In spite of the f i n e promises of the Branch Lines Company, only eight branch l i n e s were b u i l t i n the P r a i r i e Provinces. Two of these, one to the coal mines and the other to Calgary, are b u i l t i n Alberta and the remainder are a l l i n Saskatchewan. They represent several hundred miles of s t e e l , but are meager when compared to the branches of the other great railway companies. Moreover, they were usually b u i l t to places which were already served by the Canadian P a c i f i c or Canadian Northern, and t h e i r construction was i n f e r i o r . This lack of good branchelines as feeders from the west was one of the greatest, i f not the greatest, weaknesses of the Grand Trunk P a c i f i c . It has been shown that the moti<ve of the company v/as to use the branch l i n e s as a means of extract-ing further gain from the governments of the Dominion and the provinces, and when the depression following 1910 caused money to he scarce the branches were gradually discontinued. In f a i l i n g to supply i t s e l f with s u f f i c i e n t sources of supply the Grand Trunk P a c i f i c f a i l e d i n i t s primary object, to become i t s e l f a feeder f o r the Grand Trunk System i n the east. In a study of the weaknesses of the Grand Trunk P a c i f i c System the problem of competition cannot be overemphas-ized. I t has been said that t h i s railway, "Reached scarcely a foot of t e r r i t o r y not already served i n Manitoba, and but l i t t l e i n Alberta and Saskatchewan." 1 This statement i s too p o s i t i v e , as i n some cases the Grand Trunk P a c i f i c did precede the other l i n e s , but these occasions were few. As a general rule i t i s correct to say that the Canadian P a c i f i c and Canadian Northern preceded the Grand Trunk P a c i f i c through the p r a i r i e country. Por t h i s reason the l a s t railway must be held l a r g e l y responsible f o r the r e s u l t s which followed the excessive competition. The a r b i t r a t o r s of the Grand Trunk problem i n 19£1 severely attacked.the Grand Trunk P a c i f i c project. " I t would be d i f f i c u l t to imagine a more misconceived project...For nearly half the distance of nine hundred miles westward from Winnipeg the main l i n e was con-structed close to and between the l i n e s of the Ganadian P a c i f i c and Ganadian Northern Companies. For the remaining thousand miles to Prince Rupert the main l i n e traverses f o r the most part a d i f f i c u l t country, lar g e l y mountainous, whose development 1. Newell, J . P. "A Review of the Grand Trunk Railway A r b i t r a t i o n " , Engineering News Record, XC, February 1,1923, 212. for the purpose of furnishing l o c a l t r a f f i c must awaict s e t t l e -ment and business enterprise, and terminates at Prince Rupert, a port as yet without any considerable t r a n s - P a c i f i c or other external trade. For two hundred miles or more thi s section of the lin e p a r a l l e l s the Canadian Northern Railway so cl o s e l y that part of the r a i l s of each has been taken up and both railways, now under government control, use the same tracks. When i t is considered that the Grand Trunk P a c i f i c was b u i l t for the whole distance of eighteen hundred miles from Winnipeg to Prince Rupert at a very high standard of construction and at enormous cost, p a r t i c u l a r l y i n the moun-tai n section, the magnitude of the mistake of going forward with t h i s enterprise i s apparent. The branch l i n e s .in the P r a i r i e Provinces are wholly inadequate as feeders to the main l i n e s , providing a s t r i k i n g l y flnfavorable contrast to the number and mileage of the branch l i n e s of both the Canadian P a c i f i c and Canadian Northern Companies i n t h i s t raffic-producing area. Part of the Grand Trunk P a c i f i c Branch Lines system was badly situated i n t e r r i t o r y t r i b u t a r y to i t s r i v a l s . As a r e s u l t of i t s location to the main l i n e and i t s want of e f f i c i e n t feeders, the Grand Trunk P a c i f i c Railway Company w i l l not share proportionately with i t s r i v a l s i n the t r a f f i c which may be expected with the progressive settlement and development of the P r a i r i e Provinces. , t h l The location of i t s branches was a great mistake of the Grand Trunk P a c i f i c , but t h i s was aggravated by the 1. Grand Trunk A r b i t r a t i o n , 1921, 175. 185. fact that i t was usually the l a s t railway to b u i l d to any important center. This increased the cost of construction and handicapped the company i n the gaining of business. "For the value of land taken up f o r the right of way and c i t y entrances i s greater as population increases - to b u i l d a second l i n e to these places i s greater than the f i r s t , then a t h i r d l i n e comes i n at another increase i n c o s t . " 1 The c r i t i c s of the Grand Trunk P a c i f i c Railway have a no reason to condemn i t e n t i r e l y for building into the p r a i r i e s . It has been shown that many unexpected events caused the company to meet d i f f i c u l t i e s which were unforeseen and unexpect-ed by a l l of Canada. Most of the country at the time of the railway's inception was blinded by the wave of prosperity which was sweeping i t , and to them the project appeared not only possible but pr o f i t a b l e and necessary. The p r a i r i e s were expected to f i l l up with s e t t l e r s , and i f immigration had continued during the war years as i t had during the f i r s t decade of the century, i t would have undoubtedly added much to the transportation needs of the west. Of the two r i v a l s , the Canadian Northern and the Canadian P a c i f i c , the former was a young company, and, although i t was r e a l i z e d to be ambitious, there was nothing to forecast that i t would become as great ay system as the others. In 1903 i t had only 1,276 miles, nearly a l l of which were i n Manitoba. Moreover, the Grand Trunk o f f i c i a l s did not believe that the government would support i t as well as the Grand Trunk P a c i f i c project. 1. Biggar, E. B. The Canadian Railway Problem, Toronto. 1917. 163. "How could the raen behind the l a t t e r believe that such a new l i n e could hope to compete with an organization which v/as backed by the s o l i d and well-established Grand Trunk Eailway? Borden supported t h i s theory, f o r he states, "It i s possible that Mr. Hays underrated the a b i l i t y and resourcefulness of his r i v a l . " 1 Undoubtedly the o f f i c i a l s of the Grand Trunk •Pacific believed that the Ganadian Northern would collapse from the competition of a better b u i l t , better organized, and f i n a n c i a l l y sounder l i n e . The Grand Trunk o f f i c i a l s must have known that the Ganadian P a c i f i c was unpopular 2, e s p e c i a l l y in the west where monopoly has always been unpopular. 3 More than t h i s , the f a c i l i t i e s of the e x i s t i n g railway were inadequate f o r the demands of the tremendous grain crops. A feeder from the west was a necessity to the Grand Trunk o f f i c i a l s , but they did not see that the construction of t h i s would result in com-p e t i t i o n from a strong Canadian Northern and the b u i l d i n g of numerous branch lines i n the northern p r a i r i e s by the Can-adian P a c i f i c . There i s no doubt that the m u l t i p l i c i t y of the roads on the p r a i r i e s was disastrous. Had there been some co-ordina-t i o n or systematic planning to avoid duplication, a l l three roads might hate remained solvent. -But i n th e i r r i v a l r y , in their fear of the other roads, they b u i l d branches indiscrim-1.Borden's Autobiography, sfc09 2. Senate investigation, 999. 3. Dr. W. N. Sage was present when the Grand Trunk P a c i f i c reached Calgary and states that the second l i n e was en t h u s i a s t i c a l l y welcomed because i t was hoped that com-p e t i t i o n would r e s u l t i n a decrease in p r i c e . inately,aand, instead of bu i l d i n g to those sections which had a need fo r transportation, they made e f f o r t s to construct roads to those d i s t r i c t s which had already the densest popu-l a t i o n , and therefore had r a i l r o a d f a c i l i t i e s . Railroads were b u i l t for miles p a r a l l e l to each other, and i t has been said of the l i n e between Saskatoon and Unity that the l i n e s , "Are almost within a b i s c u i t toss for quite a long pieoe."l When such conditions exist i t i s not d i f f i c u l t to see why the Canadian National Railway believes today that there are 2200 miles of r a i l r o a d i n Canada which could be eliminated. 2 With such duplication, i t is obvious that the uniting of the Canadian Northern and the Grand Trunk P a c i f i c with the Canadian' Government Railways i n 1921 should r e s u l t i n great savings. But this was not to be. True there was some elimination, the most noteworthy being the l i n e through the Yellowhead, but another factor entered which prevented the economy which should have been possible. As the railway was a government one, the problem of cessation of service was influenced by p o l i t i c s , for every settlement b i t t e r l y opposed the elimination of the l i n e s which served i t . More than t h i s , as a government railway, the new system was faced with the fact that i t was the duty of the government not to consider only p r o f i t , but also to remember that railways must be run for the public welfare. Short l i n e s which year by year 1. Senate Investigation, 321 and 396. This section i s one of the most controversial eases of duplication on the p r a i r i e s today. 2. i b i d . , 1072. resulted i n a d e f i c i t were found to be the only outlets for many small d i s t r i c t s which had grown up as a r e s u l t of the construction of the railway. The government could not with-draw the t r a i n service from these places and leave them with no modern transportation f a c i l i t i e s . Therefore i t was forced to continue many trains which continued to lose money and yet could he neither eliminated nor expected to improve. Today the p r a i r i e provinces have two great systems. There i s s t i l l much duplication, and i n many places there are lines which are unprofitable. Two- solutions o f f e r themselves. The f i r s t i s the elimination of one system or the other, which would r e s u l t i n monopoly. The other i s the continuation of the two systems, but a close co-operation between them and a gradual cessation of a l l unnecessary d u p l i c a t i o n . There are many things to be said in. favor of mon-opoly. It would r e s u l t -in a u n i f i e d system with no wasteful overlapping. It would mean more equality of rates, for the l i n e would not be fiorced to cut rates in those sections which had competition while i t maintained high rates, i n those d i s t r i c t s where i t had a monopoly. It would mean better service, for the running times of the trains could be better d i s t r i b u t e d . The opportunities of e f f e c t i v e saving are almost unlimited: general overhead expenses; the readjustment of t a r i f f s and t r a f f i c ; l e s s t r a f f i c s o l i c i t a t i o n and advertising; economies i n operation of both passenger and greight t r a i n s ; purchasing; accounting and s t a t i s t i c s ; hotels, express, t e l e s graphs, and other subsidiaries to the r a i l r o a d s ; terminals; 189. and the economic value of the materials which would be realeased for use. But monopoly has i t s e v i l s , and the acceptance o f such a system might lead to many r i s k s , the " P o s s i b i l i t y of i n -adequate service, of i n e f f i c i e n c y , of carelessness, and of p o l i t i c a l d i f f i c u l t i e s . " 1 In favor of monopoly in Canada, attention has been drawn to southern Alberta, where the Canad-ian P a c i f i c had v i r t u a l control and where the people are getting excellent service. But i t must be pointed out that this was not always so, and, as shown above, before the other lines b u i l t into the p r a i r i e s , the service was inadequate. More-over, the excellence of t h i s service might be regarded as a r e s u l t of the fear of competition, not only from the two other Ganadian l i n e s but also from those American companies which have always shown a desire to branch into .Canada.2 In considering the al t e r n a t i v e to monopoly, a close co-operation between the two companies, i t w i l l be seen that not only areaD.ll savings of monopoly possible, but the benefits of competition w i l l be maintained. "A s i g n i f i c a n t feature of the debates i n Parliament on the Canadian National-1. Senate Investigation, 1938, 473. 2. c f . Richardson, R. L. "Government Ownership of Railways", Canadian Magazine. November 1900, p.61. The Ganadian P a c i f i c , which at that time had a monopoly and subsidy from Montreal to Winnipeg,charged about twice as much as i t s subsidiary from New York to Minneapolis, which had no subsidy but competition from 9 other l i n e s . Ganadian P a c i f i c Railway Act of 1933 was that the members of a l l p o l i t i c a l p a r t i e s stood almost as a unit i n opposition to the p o l i c y of railway amalgamation." 1 The best s o l u t i o n of the problem of Ganadian transportation i s undoubtedly.the maintenance of the two systems, but a close understanding between them, which would resu l t i n the elimination of duplication. For some time the pains which w i l l r e s u l t may seem in j u r i o u s , but the r e s u l t w i l l be the b i r t h of a trans-portation system which w i l l serve Canada adequately and p r o f i t a b l y . The Grand Trunk P a c i f i c Railway was b u i l t b l i n d l y as the r e s u l t of a v i s i o n . But unforeseen circumstances and influences proved that t h i s v i s i o n was l i t t l e more than a dream, and the project f a i l e d to achieve i t s expected r e s u l t s . The lack of a complete plan, the high costs, the depredatory influence of unscrupulous f i n a n c i e r s , the ambitions of p o l i t i c i a n s , the unforeseen competition from other roads, and a depression which reached i t s climax i n the Great War, were the factors which made the Grand Trunk P a c i f i c a f a i l u r e . Today, however, i t seems as i f t h i s r a i l r o a d i s to j u s t i f y i t s e l f . Closely united with a great system of r e a d s , operated with the purpose of making i t a servant of Canada rather than a revenue producer, and serving the two great sections of the country which promise the most in future years, i t w i l l yet become a valuable asset. In the past the Grand Trunk P a c i f i c has injured Canada seriously, but i t i s 191 not too much to expect that, i n the near future i t w i l l prove to be one of the greatest causes of Canadian prosperity. It w i l l provide an outlet for the r i c h areas of northern Quebec, Ontario, and B r i t i s h Columbia. It w i l l bring raw materials to the i n d u s t r i a l sections of Canada and c i v i l i z a t i o n to the wilderness. Greatest of fall, i t w i l l be a strong bond i n the unifying of Canada into a great nation. A P P E N D I X Appendix I. Summary of Contracts Let by the Grand Trunk P a c i f i c Railway Company 3€ I. LARGS CONTRACTS POR GRADING THE RQ1DBED, BUILDING CULVERTS, AND SMALL BRIDGES: Date of Contract Name of Contractor Location of Work Miles Amount June 22,1907 Treat and Winnipeg-Portage Johnson, l a P r a i r i e Brantford,0nt. or Winnipeg, Man. 54 200,000 Aug. 2, 1905 McDonald and Portage .la McMillan Com- P r a i r i e -pany, Winnipeg, Touchwood H i l l s . Man. 275 1,672,000 February 20,1906 Treat and Johnson QU'Appelle Valley 53 Canadian W.line Sec.6,Tp.27,140 White Company,R.13, W.2nd Mer., Montreal, Quebec. to W.line Sec.24, Tp.36,R.C.W.,3rd Mer. 298,000 770,000 February 20, 1906 January 4, 1908 Foley Bros., Larson and Company, Battle f o r d . F6lgy,Welch and Stewart, Kenora • W.line Sec.24, Tp.36, R.6,W.3rd Mer., to a point near Edmonton,Alta East l i n e of Sec. 13, Tp.53, R.24, W. 4th Mer., to east bank of Wolf Creek. 316 2,500,000 129 1,200,000 March 16,1908 Prince Rupert-Copper River 100 5,200,000 H as reported i n the House of Commons Debates, A p r i l 10, 1907, p. 7006; A p r i l 13, 1908, p.6637; July 11,1908, p.13613; and A p r i l 5, 1909, p.. .3987. I I . OTHER CONTRACTORS FOR ROADBED, CULVERTS, AND SMALL BRIDGES» John Bradley, J . R. Booth, Messrs. Bishop and Huek, C. H. Richards, C. Frost. PII. STEEL RAILS (to be delivered to Fort William, Port Arthur, or Quebec, as s p e c i f i e d ) : Lake Superior Steel Corporation Dominion Iron and Steel Company Algoma Steel Company U. S_. Steel ProductsSEiXChaugeOCompany . IV. STEEL BRIDGES: Messrs. John Gunn and Son, masonry and sub-structures. The May Sharps Construction Company, masonry and sub-structures. The Canadian Bridge Company, superstructures. V. BUILDINGS: Messrs. McDiarmid and Company. VI. FENCING: Canadian Steel and Wire Company. VII. TRACKLAYING AI© BALLASTING: The Grand Trunk P a c i f i c Railway Company. 194 Appendix I I . LOCATION AND MILEAGE OF THE GHAND TRUNK PACIFIC LINES * Ontario Mission Terminals to Empire Ave. Junction 2.26 miles Midway to Dog River Junction 28.89 Conmee to Superior Junction 159.56 Manitoba x Woodward Ave. Junction Winnipeg to P a c i f i c Junction to Great Northern Junction, Portage l a P r a i r i e 52.42 x Portage l a P r a i r i e to Rivers to I n t e r p r o v i n c i a l Boundary near Victor 157.56 Conns, at Portage l a P r a i r i e , P e t r e l , Knox .80 Branches and Spurs 6.98 Saskatchewan x Interprovincial Boundary near Victor to M e l v i l l e to Watrous to Biggar to In t e r p r o v i n c i a l Boundary near Artland 415.02 Connections at Yorath 0.24 M e l i i l l e s to Canora 54.71 Connections at Yorkton 0.14 Biggar to Loveraa 103.45 Oban to Battleford 48.25 Connections at B a t t l e f o r d , between Porter and Cutknife Subs. 0162 M e l v i l l e to Q,u?Appelle Junction to c r a i k Junction to Riverhurst 206.07 West leg of Wye at West Yd., Regina 0.23 West Yard to G. T. P. Station, Regina 2.97 Boundary Wye - North Switch to South Switch 0.34 Connections at Regina 0.14 Boundary Wye to Northgate 154.32 Talmage to Weyburn 13.60 Young to CudwcEth Junction to Junction at Prince Albert 110.88 Battleford to Carruthers 46.28 Connection at Battleford 0.21 Branches and Spurs 4.51 Alberta # x Inte r p r o v i n c i a l Boundary at Artland to Wain-wright to East Jet. North Edmonton to West J e t . 166.37 East Jet. Switch to lOOst St. Edmonton 3.45 H (Taken from mimeographed b u l l e t i n Location and Mileage of  Railways of Canada, January 1st, 1924, Dominion Bureau of S t a t i s t i c s , Transportation Branch, Ottawa, 1925.) 195 Alberta (cont'd) 121st St. Edmonton to Union Jet. to Lobstick (m. 73.50 labaumun Sub.) 72.11 Connections at Edmonton 0.57 x Chip'Lake (M.86.90 Wabaumun" Sub.) to Obed (M. 35.33 Brule Sub'.") 77.88 x Snaring (M*94.94) to Jasper to Geikie 20.81 Bickerdale Junction to Lovett 55.33 ...a...Coal Spur to Mountain Park 31.BCD $ Leyland to Luscar 5.11 Tofielddto Jet. with Stratheona sub. near Camrose 23.27 Battie-Duhamel Conn, to Mirror to Barlow Jet. to Calgary 169.46 Battle Junction Wye 0.36 B r i t i s h Columbia x Red Pass Junction to McBride to Prince George to Smithers to Prince Rupert 676.76 ..x indicates Main Line. # In Alberta, at the time of t h i s report, much of the Grand Trunk P a c i f i c Lines had been torn up between Edmonton and Red Pass Junction and the Canadian Northern Lines used. These sections were as follows: Lobstick to Chip Lake 13.40 miles > Obed to Snaring 59.61 Geikie to Red Pass Junction35.50 ® B u i l t by Mountain Park Coal Company and contracted to S.T.P . $ B u i l t by Luscar C o l l i e r y Company and contracted to G.T.P. Appendix III. Funded Debt outstanding Description of Security Rate. % F i r s t Mortgage Gold Ster-l i n g Bonds 1962 3 St e r l i n g Bonds 1962 4 Total F i r s t Mortgage Lake Sup-e r i o r Branch 1955 4 Second Mortgage Series A and B 1955 4 Debenture Stock Perpetual 4 Seven Year Secured Notes (1921) . 5 Total F i r s t Mortgage Bonds (four issues) 4 and 4-| Dominion Gov't.Loan 1909 4 Dominion Govt. Loan 1913 4 Dominion Govt. Loan 1914 5 Dominion Govt. Loan 1916 5 .Dominion Govt. Loan 1917 6 .Dominion Govt. Loan 1918 6 Tota l Grand Total Annual Interest December 31, 1918. P r i n c i p a l Guaranteed by $68,133,333 Dominion gov't 8,.440,848 " ^76,574,181 $ 7,533,000 Grand Trunk Ry. 20,169,000 34,879,253 9,720,000 $72,301,253 $16,786,440 Alberta and Saskatchewan v.: governments. $10,000,000 Grand Trunk Ry. 15,000,000 » 6,000,000 No guaranted 7,081,783 5,038,054 7,471,400 $50,591,237 216,253,111 8,456,408 from Correspondence regarding Grand Trunk Railway Acquisition and Memorandum Respecting the Same, Sessional Paper No.90, 1919, 42. 197 Appendix IV  Comparison of Grand Trunk P a c i f i c and other  North American Railways Summits Max. Tractive Gross cap-Railway No. Height Max.Grades Elevation Kesistence a c i t y of (feet) (feet/mile) (feet) (lbs./ton) engine (tons) G.T.P. G. N... N. P. U.P. 8 Santa Fe 6 3,712 5,202 4,146 3,375 5,569 5,532 2,849 8,247 to 3,537 7,510 to 3,819 C. R*R . 2*- 5,299 4,308 26 116 116 116 185 237 6,990 19,987 17,830 18,575 34,506 23,106 14 50 50 50 76 96 2,041 572 572 572 376 298 Summarized from Canadian Annual Review, 1907. 119. Winnipeg Free Press, December 5, 1908 19® BIBLIOGRAPHY !• Books of special value; Borden, Henry. Robert L a i r d Borden: His Memoirs. Toronto, the MacMillan Company. 1938. This i s an i n t e r e s t i n g account of the l i f e of S i r Robert Borden, but reveals l i t t l e new material and adds nothing of importance to the facts which can be obtained from the House of Commons debates. Dafoe, John W. C l i f f o r d S i f t o n i n Relation to His Times. Toronto. The Macmillan Company. 1951. This i s the standard authority on S i f t o n and has much good material r e l a t i n g to the attitude of S i f t o n and western Canada. There i s l i t t l e p a r t i c u l a r mention made of the railway. Fournier, L e s l i e I., Railway Na t i o n a l i z a t i o n i n Canada, Toronto, The MacMillan Company. 1955. This book presents an excellent summary of the early history of Canadian Railways and gives excellent summaries on the important reports and commissions concerning railways. Glazebrook, G. P. de T., A History of Transportation i n Canada. Toronto. The Ryerson Press. 1958. This i s a very long but i n t e r e s t i n g account. It gives a much broader view of the subject than most books, and i s e s p e c i a l l y i n t e r e s t i n g for i t s p o l i t i c a l background. Note: p.331 - government guaranteed f i r s t mortgage bonds on p r a i r i e section to the amount of f13,000 per mile (should be to 75$ of amount not exceeding $13,000) p.332 - Eastern D i v i s i o n was to be leased rent free for three years (should be seven years). Jaekman, W. T. Economic P r i n c i p l e s of Transportation. Chicago, and" lewiYork? '.':A-,;^ W;oShawrfiompany}s.yl926. This i s the best book on the economic side of the Canadian Railway s i t u a t i o n . It i s a necessary background to any study of t h i s kind. Jaekman, W. T. Economic P r i n c i p l e s of Transportation. Toronto. University of Toronto Press. 1935. : This i s a revised edition of the book l i s t e d above, and i s therefore of more value. 199 Lovett, Henry Almon, Canada and the Grand Trunk. 1829^1924. Toronto, Goodchild. 1924. No study of the Grand Trunk or i t s a f f i l i a t e s would be complete without t h i s small volume. It presents a very summarized account of the railway, but stresses the economic side rather than the p o l i t i c a l . Skelton, Oscar D. L i f e and Letters of S i r Wilfred Laurier, Toronto. S. B. Gundy, Oxford University Press. 1921. An excellent, sound, and authoritative book on Laurier. From his account of the B l a i r resignation i t would seem that his material would need to be checked to c e r t i f y that what he presents as fact i s not opinion. Skelton, 0. D. The Kailway Builders. Toronto. Glasgow, Brook and Company. 1916. Volume 32 of Chronicles of Canada Series. This gives the clearest and most concise account of the railways of Canada to be found. Talbot, f-r\. The Making of a Great Canadian Railway. Toronto. The fflusson Book Company, Lts. 1912. This presents a picture of the railway as seen at the time of construction. It i s f u l l of c o l o r f u l incidents and • describes i n d e t a i l the actual building of the road from an eyewitness. It does not foresee the future except i n glowing terms. Interesting but unimportant. Thompson, N., and Edgar, Major *T. H. Canadian Railway Devel-opment from E a r l i e s t Times. Toronto. The MacMillan Company of Canada. 1933. This gives the impression of being a "paste and s c i s s o r s " volume. It has a good summary but l i t t l e i n t e r p r e t a t i o n . Wilgus, William J . The Railway Interrelations of the United States and Canada. New Haven. Yale University Press. 1937. Although fundamentally an economic study t h i s work i s well worth reading f o r the background i t presents of Canadian railway problems.-Wrong, George M. The Canadians, The Story of a People. Toronto. The MacMillan Company of Canada. 1938. 1 This i s a general survey of Canadian h i s t o r y but presents a very valuable background to t h i s topic. On page 428 he speaks of Vancouver as the fourth largest c i t y i n Canada, and on page 396 states that the f i r s t Canadian Northern t r a i n arrived i n Vancouver 1905, which should be 1915. 200 2. Books of general use: Biggar, E. B. The Canadian Railway Problem. Toronto, The Macmillan company of Canada. 1917. Black, Norman Fergus. A History of Saskatchewan and the Old Northwest. Regina. Northwest H i s t o r i c a l Society.1913. Burpee, Lawrence J . Sandford Fleming, Empire Builder. -Oxford University Press. 1915. Burt, A. L. Romance of the P r a i r i e Provinces. Toronto. W."J. Gage & Company. 1931. Carrothers , w. A. Emigration from the B r i t i s h I s l e s , London, P. S. King and Son. 1929. Clapham, J . H. An Economic History of Modern B r i t a i n . I I I . Cambridge, at the University Press. 1938. David, L«-0. Laurier. Beauceville, Quebec. L'eclaireur, Ltd.- 1919. . . . England, Robert. The Colonization of Y/estern Canada. London. P.S. King and Son. 1936. Jones, E l i o t . P r i n c i p l e s of Railway Transportation. New York, The MacMillan Company. 1924. Muir, Ramsay. A Short History of the B r i t i s h Commonwealth I I . New York. World Book Company. 1927. Skelton, Oscar D. The Canadian Dominion (Chronicles of America Series, 49} New Haven, Yale University Press. 1921. Williamson, James A. A Short History of B r i t i s h Expansion. New York, The MacMillan Company. 1931. Wittke, C a r l . A History of Canada. Toronto. McClelland and Stewart. 1935. 3. Standard Books of Reference: Cambridge History of the B r i t i s h Empire VI. Cambridge University Press. 1930. Ch. XX. Oliver, E. H. Settlement of the P r a i r i e s , 1867-1914. Ch. XXI. Wallace, W. Stewart. Conservative and L i b e r a l Administration, 1885-1911. Ch. XXII. Howay, Judge F. W, Settlement and Progress of B r i t i s h Columbia. Ch.XXIII. Jaekman, W. T. Communication. Canada and Its Provinces. Edited Shortt and Doughty. T. A. Constable, at Edinburgh University Press f o r the Publishers' Association of Canada. 1913. Vol. X. McLean, S. J . National Highways. Vol. XIX. Ol i v e r , Edmund H. Alberta and 'Saskatchewan. Canadian Annual Review of Public A f f a i r s . Edited J . C a s t e l l Hopkins, The Annual Review Publishing Company. 1902-1915. Canadian Men & Women of the Time. Edited Henry James Morgan Second E d i t i o n . Toronto. Yto. Briggs. 1912. Makers of Canada Series X. Toronto, Oxford University Press, 1926. McNaughton, John. Lord Strathcona. Vaughan, W. S i r William Van Horne. Moody's Railroads. New York. Moody's-Investor's Service. 1936. Poors Manual of the Railroads. New York. Poors Railroad Manual Company. 1902-1914. Standard Dictionary of Canadian Biography. Edited Charles G. D. Roberts and Arthur Turnbull. Toronto. Trans^Canada Press. 1934. 4. Magazines and P e r i o d i c a l s ; American Economic Review. September 1917. A r t i c l e by W. W. Swanson. B r i t i s h Columbia Magazine X. No. 8. August 1914. p. 401-404. "Through the heart of B r i t i s h Columbia." Canadian Journal of Economic and P o l i t i c a l Science. February 1939. book review by H. A. Innis. Canadian Magazine Richardson, R. L. Govern&ent Ownership of Railways. Vol. 16, November, December 1906. A r t i c l e , People and A f f a i r s , V o l . 17. September 1901. 485. Howey, Jolrn. ?/hen Edmonton and Prince Albert are connected by Railway. Vol. 18. - March 1902. 456. Le Rossignol, J.E. Railway Subsidies i n Canada and United States. Vol.20. March 1903. 419. S i f t o n , Honorable 0. The weeds of the Northwest. V o l . 20. March 1903. 425. Carman, Albert R., Charles M e l v i l l e Hays, Val.2®. May 1903. Patterson, N. The Grand Trunk P a c i f i c . Vol.26. A p r i l 1906. 506. Warman, Cy. Prince Rupert. V o l . 30. March 1908. 395. Wells, George C. The Transportation System of Canada. Vol. 38. February 1912. 385. McGaffey, Ernest. The T r a i l of .the Iron Horse. V o l . 44 Jan. 1915. 819. Smith, J. Gordon. Pushing Back the F r o n t i e r . V o l . 45. Sept. 1915. 379. Engineering Magazine A r t i c l e , Canadian Railway Construction, v o l . 38. January 1907, 688. McFarlane, George C , Building a New Transcontinental Railroad, Vol.36. November 1908.840. Talbot, F. A. The Grand Trunk P a c i f i c Railway. Vol. 48. October - November 1,911. Engineering News Reeord. Newell, J . P. V o l . 90. February 1, 1983. 811. L i t e r a r y Digest. A r t i c l e , The Check to Canadian Railroad Building. Vol.50 February 87, 1915. 458. The Nation A r t i c l e , Vol. 81, August 31, 1905. 178. North American Review Charlton, J . Another Canadian Transcontinental Railway. Vol. 179. October 1904. 591. Outlook A r t i c l e , Canada s New Transcontinental Railway. Vol. 85 July 81, 1906. 636. Yv'ashbum, Stanley. Opening a New Empire. Vol. 95. July 83, 1910. 657. Popular Science Monthly Burpee, Lawrence J . How Canada i s Solving her Trans-portation Problem. September 1905.455'. Quarterly Journal of Economics. King, W. L. Mackenzie The National Transcontinental Railway. V o l . 19. November 1904. 186. Review of Reviews Chambers, E. T. D. The Trans-Canada Railway, V o l . 87. A p r i l 1903. 453. Laut, Agnes 0. Trend of P o l i t i c a l A f f a i r s i n Canada. Vol. 30. November 1904. 574. Knappen, T. MacFarlane. Western Canada i n 1904. v o l . 30. November 1904. 578. Seribners.Magazine Lumsden, Hugh. D. Canada's New Transcontinental Railway. Vol. 40. July 1906. 73. 203 farman, Cy. The Grand Trunk P a c i f i c Y o l. 40. July 1906. 77. The World's Y/ork Gurwood, J'. O l i v i e r . E f f e c t of the American Invasion. Vol.X. September 1905. 6607. Laut, Agnes C. The Railroad Eight for Canada. Yol.XIV. May 1909. 11595. The Westward Hoi Magazine. Cameron, Agnes Deans cock O'the North. Vol.V. October 1907. 624. Havens, Harold. The Building of the Grand Trunk P a c i f i c . Vol. VI. May 1910. 261. 5. Newspapers: Colonist, V i c t o r i a 1903-1914. Daily News, Prince Rupert 1911-1914. Empire, Prince Rupert 1907-19.29. Fort George Herald, Fort George 1912-1914. Free Press,. Winnipeg 1908-1910. Int e r i o r News, Aldermere 1910-1914. Omineca Herald, Hazelton 1908-1913. Optimist, Prince Rupert. 1919-1911. Province, Vancouver 1903-1914, May 28, 1938. 6. Pamphlets, Reports, and Maps: Beatty, E. W. The Case f o r Railway u n i f i c a t i o n . Montreal. The Canadian P o l i t i c a l Science Association. 1934. Grand Trunk Railway Company of Canada, SfJmi-r-Annual Reports, 1903-1914. The Grand Trunk P a c i f i c Railway - The Only All-Canadian Koute. no publisher - no date (1910 ?) The Grand Trunk P a c i f i c Railway - A History of the Project. Pamphlet of L i b e r a l Party, no date (1904 ?) The Trans-Canada Railway - advertising pamphlet, no publisher, no date (.1903 ?) The Truth about Two Railways, Ottawa, The Canadian L i b e r a l party. 1915. Map of Grand Trunk P a c i f i c Railway and Connections. March 1903. Grand Trunk P a c i f i c Timetable. A p r i l 21, 1920. 7. Government Publications.: Debates of House of Commons, Ottawa, 1903 - 1915. Debates of the Senate, Ottaws, 1903 - 1915. Sessional Papers, Ottawa, 1903 - 1915. Sessional Papers of B r i t i s h Columbia, 1903 - 1915. Journal of L e g i s l a t i v e Assembly, B r i t i s h Columbia, 1903 - 1915. Statutes of Canada, 1903 - 1915. Statutes of B r i t i s h Columbia 1903 r- 1915. Land B u l l e t i n s , Bureau of P r o v i n c i a l Information, V i c t o r i a , 1931 - 1934. Canada Year Book, Dominion Bureau of S t a t i s t i c s , 1903 - 1938. Correspondence Between Government of Canada and Government of B r i t i s h Columbia r e l a t i n g to the Application of the Grand Trunk P a c i f i c Railway Company to acquire a portion of Metlakatla Indian Reserve. Ottawa,1908. Report of Royal Commission to Inquire into Railway Transporta-ti o n of Canada. Ottawa, 1917. Annual Report of Department of Railways and Canals, Ottawa, 1921. Includes tow appendices, "Acquisition of the Grand Trunk" and "Grand Trunk A r b i t r a t i o n " . Development of Transportation i n Canada, Department of Transport. Ottawa, 1937. Location and Mileage of Railways of Canada, January 1, 1924. Department of Trade and Commerce, Ottawa, 1928. (mimeographed) Proceedings of a Special Committee of the Senate to Enquire into and Report upon the Best Means of Relieving the Country from i t s Extremely Serious Railway Problem. Ottawa, 1938. 

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