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UBC Theses and Dissertations

British Columbia Electric Railway Company, 1897-1928 : a British company in British Columbia Roy, Patricia 1970

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THE B R I T I S H COLUMBIA ELECTRIC RAILWAY COMPANY, 1897-1928; A B R I T I S H COMPANY I N B R I T I S H COLUMBIA by PATRICIA E„ ROY B A „ , U n i v e r s i t y o f B r i t i s h C o l u m b i a , 1960 M.A., U n i v e r s i t y o f T o r o n t o , 1963 0  A THESIS SUBMITTED I N PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF Doctor of Philosophy i n t h e Department . of History We a c c e p t t h i s t h e s i s as c o n f o r m i n g t o t h e r e q u i r e d sjbaryaayd  THE U N I V E R S I T Y OF B R I T I S H COLUMBIA M a r c h , 197 0  In presenting this thesis in partial  fulfilment of the requirements for  an advanced degree at the University of B r i t i s h Columbia, I agree that the Library shall make it freely available for reference and study. I further agree tha  permission for extensive copying of this thesis  for scholarly purposes may be granted by the Head of my Department or by his representatives.  It  is understood that copying or publication  of this thesis for financial gain shall not be allowed without my written permission.  The University of British Columbia Vancouver 8, Canada  Date  3 IjJH^UUUf  2- 5 , If ft  The  B r i t i s h Columbia  Electric  R a i l w a y Company, 1897-1928;  A B r i t i s h Company i n B r i t i s h  Columbia  I n t h e t w o d e c a d e s p r i o r t o W o r l d War I , London was t h e c e n t r e o f t h e most e x t e n s i v e f i n a n c i a l e m p i r e Canada v/as p a r t i c u l a r l y 1897,  i n the world.  p o p u l a r among B r i t i s h i n v e s t o r s .  a group of B r i t i s h c a p i t a l i s t s  l e d b y R.M.  In  Horne-Payne,  a successful financier, acquired the e l e c t r i c street railways and e l e c t r i c power f a c i l i t i e s w h i c h  l o c a l e n t r e p r e n e u r s had  i n i t i a t e d i n V a n c o u v e r , New W e s t m i n s t e r British capitalists Electric  The  and V i c t o r i a .  then organized t h e B r i t i s h  The  Columbia  R a i l w a y Company,  c r e a t i o n o f t h e B.C.E R. i n a u g u r a t e d a t h i r t y - o n e 0  year l o n g s y m b i o t i c r e l a t i o n s h i p between B r i t i s h and t h e B r i t i s h C o l u m b i a  public,  Unlike their  capitalists  local  pre-  d e c e s s o r s , B r i t i s h c a p i t a l i s t s h a d a c c e s s t o t h e l a r g e amounts of  c a p i t a l n e c e s s a r y t o r e s c u e an i n f a n t e n t e r p r i s e f r o m t h e  e m b a r r a s s m e n t o f d e p r e s s e d t i m e s and t o e x p a n d i t s o p e r a t i o n s as s o u t h w e s t e r n prosperous  B r i t i s h Columbia  grew r a p i d l y d u r i n g t h e  y e a r s o f t h e K l o n d i k e g e l d r u s h and t h e p r a i r i e  w h e a t boom.  D u r i n g t h e s e y e a r s , t h e B.C.E.R. c o m p l e t e d an  urban s t r e e t r a i l w a y network, b u i l t major  interurban  rail-  ways i n t h e F r a s e r V a l l e y a n d on t h e S a a n i c h P e n i n s u l a and i n t r o d u c e d h y d r o - e l e c t r i c power t o s o u t h w e s t e r n B r i t i s h Columbia.  Thus, t h e B . C E . R . p r o v i d e d i t s customers with,  modern a n d e f f i c i e n t c o n v e n i e n c e s .  ' The B . C E . R . was u n i q u e among C a n a d i a n and u t i l i t y  companies  raised capital closely  of i t s time.  transportation  Many o f t h e s e f i r m s  also  i n B r i t a i n b u t none seems t o h a v e b e e n as  c o n t r o l l e d by a B r i t i s h Board o f D i r e c t o r s ,  company's g e n e r a l manager i n V a n c o u v e r , an a g e n t who c o u l d make no s i g n i f i c a n t  The  f o r e x a m p l e , was o n l decision without the  consent o f t h e Board i n England. A s u p e r f i c i a l survey o f other Canadian u t i l i t y  companies  s u g g e s t s t h a t B r i t i s h Columbians were b e t t e r o f f w i t h a B r i t i s h company t h a n t h e y w o u l d h a v e b e e n w i t h a C a n a d i a n one. its  I n good t i m e s , t h e B.C.E.R. t o o k l o w e r p r o f i t s o p e r a t i o n than d i d comparable Canadian firms?  out o f  i n bad  t i m e s , i t h a d g r e a t e r f i n a n c i a l s t a b i l i t y t h a n many o f i t s Canadian c o u n t e r p a r t s , i s , however,  A c o n c l u s i v e answer  to this  hypothes  must a w a i t d e t a i l e d s t u d i e s o f o t h e r C a n a d i a n  IV  companieso  utility The  b a s i c c o n c e r n o f t h e d i r e c t o r s o f t h e B.C.E.R.  the s e c u r i t y of the expenditures necessary  investment.  without  capital;  t i o n , r e n e w a l s and  being  They would not  c e r t a i n of the  undertake  new  a v a i l a b i l i t y of  the  t h e y set. a s i d e g e n e r o u s sums f o r d e p r e c i a reserves; they  avoided  speculative  s u c h as r e a l e s t a t e d e v e l o p m e n t s ; t h e y b u i l t  few  power f a c i l i t i e s  i n a d v a n c e c f a c t u a l demand and  worked t o t h w a r t  r e a l and  imagined competition  These c o n s e r v a t i v e p o l i c i e s  succeeded.  r a i l w a y or they  actively pri-  governments.  In s p i t e of  times, p a r t i c u l a r l y during,World  B.C.E.R. a l w a y s met  ventures  from other  vate companies o r from m u n i c i p a l or p r o v i n c i a l  c a s i o n a l anxious  was  i t s financial obligations.  War  oc1,  By t h e  the  1920's  t h e company c o u l d f i n a n c e most o f i t s e x p a n s i o n  itself.  U s u a l l y , i t a l s o earned a r e s p e c t a b l e  exploitive  dividend for i t s shareholders.  —  but not  U l t i m a t e l y , i n 1928,  the  share-  h o l d e r s were a b l e t o s e l l  t h e i r holdings t o the  trolled  o f Canada f o r a handsome p r o f i t .  Power C o r p o r a t i o n  B e c a u s e i t was to  act without  a n t a g o n i s m and  a public utility,  —  Canadian-con-  t h e B.C.E.R. was  never  able  c o n s i d e r i n g p o s s i b l e consequences of p u b l i c subsequent government a c t i o n .  Thus, i t a s s i d u -  V  ously c u l t i v a t e d goodwill  generally  and l o b b i e d  governments  with s p e c i f i c r e q u e s t s .  Good r e l a t i o n s with governments were e s s e n t i a l t o the success of the company.  The m u n i c i p a l i t i e s r e g u l a t e d  fares  and c o n t r o l l e d the f r a n c h i s e s without which the company not  operate.  could  Through t h e i r c o n t r o l o f such matters as water  r i g h t s and r e g u l a t i n g agencies, the p r o v i n c i a l and f e d e r a l governments could  a l s o a f f e c t the company.  The B.C.E.R. was  beholden t o the voters who were a l s o i t s customers. the company, though p r o f i t t i n g not  from B r i t i s h Columbia,  impose i t s w i l l on B r i t i s h Columbians.  In sum, could  Errata  p. 92, footnote no. 14.  R. K. Sperling died i n 1908 not  p. 101, paragraph 2, l i n e 8.  1909.  For "July 28" read "July 25."  p. 144. There should be a footnote no. 83» "Sperling to Kidd, December 9, 1910, Box 549." p. 150, footnote no. 93. p. 276, l i n e 16.  For "Sserling" read "Sperling."  For "stopped work" read "voted to stop •work."  pp. 282-3. There i s a numbering error i n the footnotes. Footnote no. 21 does not e x i s t . p. 327» l i n e 2.  For " f i v e years" read "three years."  T  h  e  B r i t i s h Columbia E l e c t r i c  1897-1928;  R a i l w a y Company,  A . B r i t i s h Company i n B r i t i s h  Columbia  Table of Contents  T h e P r e d e c e s s o r s ..... o o . o L o c a l Companies. Victoria. Vancouver. The C o n s o l i d a t e d Company.  I.  II.  A S o l i d F o u n d a t i o n , 1897-1905 B r i t i s h Cap i t a 1. The L o n d o n a n d V a n c o u v e r O f f i c e s . The B o a r d v e r s u s B u n t z e n . S t r e e t Railway Developments. F r a n c h i s e s and t h e " P r o t e c t i v e Clause". •  *.1 1 6 15 34 44 44 t/' 52 V 58 i / ' 68,,.7 8'^"  I I I . The E r a o f E x p a n s i o n , 1905-1913.. The F i n a n c i a l S c e n e . 86 S t r e e t R a i l w a y s i n Vancouver and • Suburbs. 92 \ New W e s t m i n s t e r ' ' a n d t h e I n t e r urbans. 116 Victoria's Electric Railways. 137  86  !  IV.  H y d r o - E l e c t r i c Power D e v e l o p m e n t , 1 8 9 7 - 1 9 1 3 Lake Buntzen P r o j e c t . 154 S t a v e L a k e Power Company. 164 Expanding Mainland F a c i l i t i e s . 17 5 Vancouver I s l a n d o 186  154  V.  Jmxious Times, Combatting The J i t n e y s Government  191  1913-1919 „„„ the Depression. . Regulation.  . .... . 191^ 204 215 ^ v  i vii "Protective Clause". The. Company, " F o r S a l e " . Shortt's Report. Implementing Shortt's Report. A Summary. VI.  L a b o u r R e l a t i o n s , 1 8 9 7 - 1 9 2 8 . . «, P r e l u d e t o t h e 1917 S t r i k e . The 1918 and 1919 S t r i k e s .  V I I . C a n a d i a n i z i n g t h e Company, 1 9 2 0 - 1 9 2 8 A d a p t i n g t o Changed C o n d i t i o n s . H y d r o - E l e c t r i c Developments. Public Regulations. • P u b l i c Ownership. C a p i t a l and Good W i l l . T r a n s f e r t o Canada. '  222_J 23 0 239 24 9 2 63 „ .....«,..«, 266 266 278 ...294 294 303 314330 k. 334 '<'' 342.  V I I I .Conclusion  Bibliography  352  „  376  Append i x e s 1. P o p u l a t i o n o f A r e a s S e r v e d b y t h e B.C.E.R. 2. N e t A n n u a l P r o f i t s and T o t a l R e s e r v e s , 1900-1927. 3. P e r c e n t a g e P r o f i t on C a p i t a l E m p l o y e d Showing D i s c r e p a n c i e s i n C a l c u l a t i o n s . 4. T o t a l C a p i t a l I s s u e s and A n n u a l I n t e r e s t and D i v i d e n d P a y m e n t s , 1 9 0 0 - 1 9 2 7 . 5. P a s s e n g e r s C a r r i e d and K i l o w a t t s o f Power P r o d u c e d , 1 9 0 1 - 1 9 2 8 . 6 . G e n e r a l M a n a g e r s and P r e s i d e n t s ^ 7. D i r e c t o r s o f t h e B . C . E . R . , 1 8 9 7 - 1 9 2 8 . 8. B . C . E . R . — S h a r e and D e b e n t u r e C a p i t a l I s s u e d , 1897-1913. 9. The B.C. Power C o r p o r a t i o n , 1 9 2 8 - 1 9 6 1 .  3 86 386 387 388 389 390 3 91 392 394 396  vxxx  List  of  Charts  1, T h e V i c t o r i a  Predecessors.  2. The M a i n l a n d  Predecessors.  401 402 4 03  3„ T h e BoC.E.R. a n d S u b s i d i a r i e s .  1„ V i c t o r i a  Street Railway Lines,  2. V a n c o u v e r S t r e e t R a i l w a y L i n e s , 3. The M a i n l a n d  Interurban  circa  1914  1890-1928.  405 406  Lines.  4. The H y d r o - E l e c t r i c D i s t r i b u t i o n S y s t e m ,  404  1926  407  ix  Acknowledgments  To a l l t h e i n d i v i d u a l s a n d i n s t i t u t i o n s w h i c h h a v e a s s i s t e d me i n t n e p r e p a r a t i o n o f t h i s t h e s i s , I am d e e p l y i n d e b t e d a n d w i s h t o e x p r e s s ray g r a t i t u d e „ A number o f p e o p l e have been p a r t i c u l a r l y generous w i t h t h e i r a s s i s t a n c e . Mrs„ Anno Y a n d l e , M i s s F r a n c e s Woodward a n d t h e i r a s s i s t a n t s i n the S p e c i a l C o l l e c t i o n s d i v i s i o n of the L i b r a r y of the U n i v e r s i t y o f B r i t i s h Columbia have extended g r a c i o u s h o s p i t a l i t y w h i l e I u s e d t h e B.CoE.R. p a p e r s w h i c h a r e i n t h e i r care. T h e a r c h i v i s t s and l i b r a r i a n s o f t h e P r o v i n c i a l A r c h i v e s a n d L i b r a r y h a v e p r o v i d e d c o u r t e o u s h e l p on many occasions„ My c o l l e a g u e s a t t h e U n i v e r s i t y o f V i c t o r i a h a v e g i v e n f r i e n d l y encouragement and a r r a n g e d s e c r e t a r i a l a s s i s t ance t h r o u g h t h e D e p a r t m e n t o f H i s t o r y and t h e S o c i a l S c i e n c e R e s e a r c h C e n t r e . Two members o f my c o m m i t t e e , Dr„ J o h n N o r r i s a n d Dr.. R o b e r t K u b i c e k , r e a d d r a f t v e r s i o n s o f t h e t h e s i s a n d o f f e r e d many h e l p f u l s u g g e s t i o n s <, My s u p e r v i s o r , D r . M a r g a r e t Ormsby, h a s p a t i e n t l y r e a d t h r o u g h many d r a f t s . At a l l stages she h a s g i v e n c a r e f u l c r i t i c i s m s a n d k i n d e n c o u r a g e m e n t . F o r h e r h e l p , I am s i n c e r e l y g r a t e f u l . My g r e a t e s t d e b t i s t o my parents. They have p r o v i d e d t h e m o r a l s u p p o r t w i t h o u t w h i c h I ' m i g h t n e v e r have embarked on t h e p r o j e c t .  P.E.R. J a n u a r y 26, 1 9 7 0 .  CHAPTER I  THE PREDECESSORS OF THE B.C.E.R.  I n t h e e i g h t e e n e i g h t i e s and n i n e t i e s , when t h e e l e c t r i c light  and t h e e l e c t r i c  and V a n c o u v e r ,  s t r e e t r a i l w a y were v e r y new, V i c t o r i a  s m a l l towns w i t h a s p i r a t i o n s , w e r e d i s t a n t  t h e c e n t r e s o f t e c h n o l o g i c a l development,, had t h e f i r s t , light station  and V a n c o u v e r i n Canada.  New W e s t m i n s t e r s  ystem  ways  w  Y e t , i n 1887, V i c t o r i a  t h e second,  incandescent e l e c t r i c  F u r t h e r m o r e , b y 1891 V a n c o u v e r  shared the longest e l e c t r i c  i n Canada.  interurban  A l l t h r e e c i t i e s had e l e c t r i c  two y e a r s b e f o r e o l d e r C a n a d i a n  cities  and railway  street  rail-  s u c h as T o r o n t o .  P a r t of t h e reason f o r t h e a b i l i t y of B r i t i s h Columbia t o c l a i m " f i r s t s " was, o f c o u r s e , t h e i r  from  cities  l a c k o f commitment  t o o l d e r methods o f i l l u m i n a t i o n and l o c a l t r a n s p o r t a t i o n . major  The•  r e a s o n f o r t h e i r m o d e r n i t y was t h e f a i t h o f l o c a l p r o -  m o t e r s t h a t t h e c i t i e s w o u l d d e v e l o p r a p i d l y a f t e r t h e comp l e t i o n of t h e Canadian  P a c i f i c Railway.  T h i s o p t i m i s m was f e l t m a i n l y w i t h i n t h e c i t i e s 1  themselves,  2 The  c h i e f b e l i e v e r s were t h e p r o m o t e r s o f t h e v a r i o u s  p a n i e s and r e a l e s t a t e the  Sometimes t h e p r o m o t e r s and  a g e n t s w e r e one and t h e same men.  explains the  agents.  the construction  Oak B a y l i n e  Real estate  o f some s c r e e t  railway  i n V i c t o r i a , the Fairview  and t h e W e s t m i n s t e r and V a n c o u v e r Tramway. and t h e i n i t i a l be e x p l a i n e d structed  street railways  com-  speculation  l i n e s s u c h as  l i n e i n Vancouver The l i g h t i n g s y s t e m  i n b o t h c i t i e s , however,  as s i m p l e r e a l e s t a t e  cannot  p r o m o t i o n s ; t h e y were con-  i n a n t i c i p a t i o n of the growth of t h e c i t i e s  as a w h o l e .  The s o u r c e s o f c a p i t a l r a i s e d b y t h e e a r l y c o m p a n i e s r e veals  t h a t V i c t o r i a a s an o l d e r c i t y a n d as t h e e s t a b l i s h e d  trading tal.  c e n t r e f o r B r i t i s h Columbia had c o n s i d e r a b l e  Vancouver  u t i l i t y companies,  capi-  on t h e o t h e r h a n d , h a d t o de-  p e n d on c r e d i t o b t a i n e d f r o m A m e r i c a n s u p p l i e r s l o a n s from t h e London-based  local  o f equipment,  Bank o f B r i t i s h C o l u m b i a , a n d t h e  s a l e o f bonds o r d e b e n t u r e s i n e a s t e r n Canada and i n E n g l a n d . Vancouver  " c a p i t a l i s t s " , with  the possible  exception of David  O p p e n h e i m e r , who was a c t i v e i n s e v e r a l c o m p a n i e s ,  seem t o h a v e  1 The f i n a n c i n g o f e l e c t r i c c o m p a n i e s b y s u p p l i e r s was a common A m e r i c a n p r a c t i c e . H.C. P a s s e r , The E l e c t r i c a l Manuf a c t u r e r s , 187 5-1900, C a m b r i d g e , H a r v a r d U n i v e r s i t y P r e s s , 1953, p . 2 9 ; J.W Hammond, Men a n d V o l t s : The S t o r y o f G e n e r a l E l e c t r i c , P h i l a d e l p h i a , L i p p i n c o t t , 1941, p.89. 0  2 The V a n c o u v e r E l e c t r i c I l l u m i n a t i n g Company, t h e V a n c o u v e r E l e c t r i c R a i l w a y and L i g h t i n g Company a n d t h e W e s t m i n s t e r and V a n c o u v e r Tramway.  3 put  little  o f what money t h e y h a d i n t o l o c a l u t i l i t i e s .  cause V i c t o r i a  utility  sale of stocks  locally,  Be-  companies were f i n a n c e d m a i n l y b y t h e t h e y were i n i t i a l l y  s p a r e d many o f t h e  f i n a n c i a l a g o n i e s w h i c h b e s e t t h e M a i n l a n d f i r m s as s o o n as t h e i m m e d i a t e p o s t - r a i l w a y boom waned. The  depression  which followed  s e v e r a l years of r a p i d ex-  p a n s i o n was e s p e c i a l l y h a r d on t h e s t r e e t r a i l w a y I t was no l o n g e r  p o s s i b l e f o r them t o r a i s e c a p i t a l  i t was a l s o d i f f i c u l t t o f i n d o u t s i d e rate of population  assistance.  growth a l s o l e v e l l e d o f f .  ways, u n f o r t u n a t e l y , their  companies. locally; The u r b a n  The s t r e e t  rail-  had i n v e s t e d a s u b s t a n t i a l p o r t i o n o f  l i m i t e d c a p i t a l a n d c r e d i t on e x t e n s i o n s  into  sparsely  s e t t l e d s u b u r b a n a r e a s s u c h as F a i r v i e w a n d Oak Bay i n a n t i c i pation of continued turned  population  these l i n e s permitted  growth.  When p r o s p e r i t y r e -  the easy d i s p e r s a l of  settlement;  i n t h e i n t e r i m , t h e y were a s e v e r e d r a i n on t h e l i m i t e d resources  capital  of t h e i r b u i l d e r s .  I n an e f f o r t t o s t r e n g t h e n early electric  lighting  their  financial positions the  and s t r e e t r a i l w a y c o m p a n i e s w e n t  t h r o u g h a s e r i e s o f a m a l g a m a t i o n s and re-organizations«, c h a n g e s were common a t t h i s t i m e among s i m i l a r  Such  e n t e r p r i s e s else-  3  where i n N o r t h A m e r i c a ,  I n b o t h V x c t o r i a and V a n c o u v e r t h e  3 C h a r l e s M. Coleman, P_ 53- _jar^ _S_tory o f P a c i f i c Gas and E l e c t r j g _ J ^ g m p _ a n ^ ^ M c G r a w - H i l l , 1952, p.36. i  i  N  e  w  York,  4 electric entities,  l i g h t and s t r e e t r a i l w a y cornpanj.es began as s e p a r a t e emerged as • l i g h t and r a . i l w a y c o m p a n i e s , and u l t i m a t e -  l y became p a r t o f t h e C o n s o l i d a t e d R a i l w a y and L i g h t i n g  Company,  4 the immediate p r e d e c e s s o r  o f t h e B^C.E.R.  It i s probable that i f the e l e c t r i c l i g h t i n g had  remained  independent  operations  of t h e s t r e e t r a i l w a y s , they might  h a v e s u r v i v e d as l o c a l l y - o w n e d c o m p a n i e s .  Unfortunately, the  e a r l y companies d i d n o t p r a c t i c e c o s t a c c o u n t i n g . t h e y were a b l e t o determine  that lighting  Although  s a l e s brought i n  s l i g h t l y more r e v e n u e t h a n s t r e e t r a i l w a y s , t h e y d i d n o t h a v e an a c c u r a t e b r e a k d o w n o f o o s t s b e t w e e n t h e two b r a n c h e s t h e i r businesses  The same c o a l - p o w e r e d  3  served both parts of the e n t e r p r i s e s .  of  steam g e n e r a t o r s Once t h i s  capital  cost  was c o v e r e d , t h e l i g h t i n g d i v i s i o n h a d o n l y t o i n s t a l l  poles  and w i r e s b e f o r e i t c o u l d s e r v e c u s t o m e r s .  railways,  T  The s t r e e t  on t h e o t h e r h a n d , h a d t o make h e a v y i n v e s t m e n t s rolling  s t o c k a n d h a d t o h i r e motormen and c o n d u c t o r s  t h e y c o u l d earn any revenue. t h e r e was n e v e r  Even i n t h e d e p t h s  a shortage of l i g h t i n g customers.  r a i l w a y s , hov/ever, s u f f e r e d f r o m on t h e i r  suburban  lines.  before  of the depression, The s t r e e t  "unused c a p a c i t y " p a r t i c u l a r l y  The c o m p a n i e s c o u l d n o t s u s p e n d  services without r i s k i n g the loss of t h e i r handicap  i n t r a c k s and  franchises.  any Another  o f s t r e e t r a i l w a y s was t h e l i m i t a t i o n i m p o s e d on t h e i r  4 See C h a r t s 1 and 2.  5 fares by f r a n c h i s e  agreements.  able charge f o r e l e c t r i c no p u b l i c  authority —  to regulate  lighting  Concern utility  that  attempted  rates. of the a c t i v i t i e s of p u b l i c  i n B r i t i s h C o l u m b i a c a n be t r a c e d  back t o t h e  o f Amor De Cosmos i n 1859 t o t h e m o n o p o l y o f t h e Public regulation  -- o r t h e p o s s i b i l i t y  remained a f a c t o f p u b l i c u t i l i t y  Columbia. railway  matter  at least i n the e a r l y years —  V i c t o r i a Gas Company. of i t—  l i g h t i n g was s u c h a c o m p l e x  f o rpublic regulation  companies  opposition  The d e t e r m i n a t i o n o f a r e a s o n -  The c i t i e s  imposed  regulations  life  s u c h as maximum  f a r e s a n d s p e e d l i m i t s as c o n d i t i o n s  franchises.  Some f r a n c h i s e  agreements  giving the c i t y the opportunity  in British  of street  also included  street  railway clauses  t o purchase the e n t e r p r i s e  after  a c e r t a i n number o f y e a r s .  T h e r e was, h o w e v e r , no c o n s i s t e n t ownership of p u b l i c u t i l i t i e s . taken heavy services  obligations  s u c h as r o a d s .  established  opposition  The c i t i e s h a d a l r e a d y  f o r the construction  of other p u b l i c  I n New W e s t m i n s t e r , h o w e v e r , t h e c i t y -  came i n t o b e i n g .  Only i n V i c t o r i a d i d t h e  c i t y take over the s t r e e t l i g h t i n g system. s e v e r a l companies  the  under-  i t s own e l e c t r i c a l d i s t r i b u t i o n s y s t e m b e f o r e any  private enterprise  to s e l l  to private  I n Vancouver,  w h i c h were i n f i n a r l c i a l d i f f i c u l t i e s  out t o t h e c i t y but the r a t e p a y e r s refused  companies  by approving such purchases.  tried  t o rescue  B e c a u s e b o t h V i c t o r i a and V a n c o u v e r were s m a l l towns and  because t h e e a r l y u t i l i t i e s  v/ere l o c a l l y p r o m o t e d , i t i s  not  s u r p r i s i n g t o d i s c o v e r mayors and a l d e r m e n , Members o f t h e  L e g i s l a t i v e A s s e m b l y a n d Members o f P a r l i a m e n t  among  l i s t e d as d i r e c t o r s o f t h e v a r i o u s companies.  This  t i o n by p o l i t i c i a n s  participa-  i n the control of public u t i l i t i e s  o n l y minor c r i t i c i s m ; o f s m a l l town l i f e . municipal  those  i t seems t o h a v e b e e n a c c e p t e d Political  caused  as a p a r t  influence, p a r t i c u l a r l y at the  l e v e l , was o f t e n u s e f u l t o t h e c o m p a n i e s when  negotiated  franchises.  E l e c t r i c Railway  they  On t h e o t h e r h a n d , when t h e V a n c o u v e r  a n d L i g h t i n g Company a s k e d f o r c i v i c  a s s i s t a n c e , t h e v o t e r s r e j e c t e d such a i d . were u s e f u l ; b u t t h e r a t e p a y e r s  financial  " F r i e n d s " on C o u n c i l  h a d t h e f i n a l s a y . The u t i l i t y  c o m p a n i e s f r o m t h e i r e a r l i e s t d a y s i n B r i t i s h C o l u m b i a v/ere more d e p e n d e n t on t h e good w i l l  o f t h e p u b l i c t h a n t h e p u b l i c was d e -  p e n d e n t on them.  As  e a r l y a s 1862 g a s l i t t h e m a i n s t r e e t s , many c o m m e r c i a l  b u i l d i n g s and some homes i n V i c t o r i a . a locally-owned  f i r m , e a r n e d handsome d i v i d e n d s  f i f t e e n percent. h i g h rates„  The V i c t o r i a Gas Company, of twelve t o  Customers, however, f r e q u e n t l y complained o f  During  a prolonged  dispute with the c i t y  over  s t r e e t l i g h t i n g r a t e s , t h e company t e m p o r a r i l y c u t o f f t h e s t r e e t lamps.  Although  the e l e c t r i c  a r c l i g h t had been p e r f e c t e d  7  o n l y two y e a r s e a r l i e r , t h e V i c t o r i a  City  C o u n c i l i n 1881 a d -  vertised  f o r tenders  "for  the  of Victoria  with the Electric L i g h t . T w o  City  groups submitted o f f e r s  the exclusive privilege  to build  street,  lighting  ratepayers agreed t o borrow t h e necessary funds.  of lighting  towers; the When t h e  c i t y a s c e r t a i n e d t h a t t h e c o s t w o u l d be g r e a t e r t h a n it  abandoned t h e i d e a o f e l e c t r i c s t r e e t  Two y e a r s l a t e r ,  towers.  towers, i t terminated i t s  C o u n c i l was  provided by t h e  c o n t r a c t w i t h t h e Gas Company and  r a t i f i e d a c o n t r a c t w i t h McMicking« Council, realizing  independently  When t h e C i t y  s a t i s f i e d w i t h t h e degree of i l l u m i n a t i o n  anticipated  lights.  i n 1 8 8 3 , R.B. M c M i e k i n g  i n s t a l l e d three lighting  local  Within the year, the  t h a t M c M i e k i n g was m a k i n g a $ 3 , 0 0 0 . a n n u a l 6  profit, The  City  e x e r c i s e d i t s option t o purchase t h e l i g h t i n g  t r i e d t o improve t h e s t r e e t l i g h t i n g by i n s t a l l i n g  three additional the  system.  t o w e r s b a s e d on t h e S p e r r y s y s t e m .  Because  S p e r r y l i g h t s b l i n k e d , w e r e e x p e n s i v e t o o p e r a t e a n d were  f r e q u e n t l y o u t o f o r d e r , t h e C i t y C o u n c i l , on t h e a d v i c e o f its  electrician,  lighting  R.B. M c M i c k i n g , i n s t a l l e d t h e B a l l s y s t e m o f  i n 1889.  I t i s more t h a n c o i n c i d e n t a l t h a t M c M i c k i n g  - was a l s o a r e p r e s e n t a t i v e o f t h e B a l l E l e c t r i c 5 ' & Chas  Victoria  L i g h t Company  C o l o n i s t , May 14, 1 8 8 1 , p . 2.  Col^ist, E- Rcld f e r n , J  u  p  n  e  3  S e e  < ' '' Mayor o f V i c t o r i a , 2 6  1 8 8 4  a  ° ' Ic^S 3^ l  S  ^ S M l i ! E ° l L ^ V i c t o r i a , 1883, p. 10.  of  Canada? . T e c h n i c a l l y , t h e B a l l , system combined  lights  gave V i c t o r i a  c o m p l e t e and f i n e s t " The  with the existing  " i n p r o p o r t i o n t o i t s p o p u l a t i o n t h e most electric  l i g h t s y s t e m on t h e P a c i f i c  l i g h t s , h o w e v e r , r e a l l y l e f t much t o be d e s i r e d .  Coast.  Rapidly  e x p a n d i n g s u b u r b s were i l l - s e r v e d , new h i g h b u i l d i n g s i n t h e downtown a r e a o b s c u r e d much o f t h e l i g h t and t h e l i g h t i n g e n g i n e e r c o n s u l t e d t h e almanac c i d i n g whether to  r a t h e r t h a n t h e s k i e s when d e -  o r n o t t o t u r n on t h e l i g h t s .  The C o u n c i l w a n t e d  improve t h e system b u t t h e r a t e p a y e r s were u n w i l l i n g t o  approve t h e n e c e s s a r y e x p e n d i t u r e s . faction  Victoria  of enjoying e l e c t r i c street l i g h t i n g  had t h e s a t i s a t a remarkably-  e a r l y date b u t she had t o pay a p e n a l t y i n t h e form o f o b s o l e t e equipment.^ The lighting for  S p e r r y Company w h i c h i n s t a l l e d t h e " i m p r o v e d " s y s t e m i n 1886 a l s o d e m o n s t r a t e d  incandescent l i g h t i n g  i n d o o r u s e . The S p e r r y r e p r e s e n t a t i v e s t h e n c a n v a s s e d  Victoria-for the  street  customers.  A p p a r e n t l y t h e y were r e s p o n s i b l e f o r  organization of the Victoria  Electric  I l l u m i n a t i n g Company.  T h i s u n i n c o r p o r a t e d p r i v a t e company l a c k e d e x c l u s i v e o r m o n o p o l y privileges.  The d e t a i l s  o f i t s formation a r e obscure but i t can  be s u r m i s e d t h a t M c M u l l e n , an a g e n t f o r t h e S p e r r y Company, and 7 See M c M i c k i n g t o t h e B a l l C o m p a n y , F e b r u a r y 16, C o r r e s p o n d e n c e , O u t w a r d , 1888-1890, p„100 (PABC).  1889,McMicking  8 C o l o n i s t , J u l y 7, 1889, p.4; R e p o r t o f t h e E l e c t r i c L i g h t C o m m i t t e e i n C i t y o f V i c t o r i a , A n n u a l R e p o r t , 1890, p . 53.  9 S.Z.  M i t c h e l l , a S e a t t l e e l e c t r i c i a n , p r o m o t e d t h e scheme,  b u i l t a p l a n t and t h e n t u r n e d i t over t o l o c a l c a p i t a l i s t s l e d b y R . P . R i t h e t , a l e a d i n g m e r c h a n t , and M c M i c k i n g . In t h e f a l l  o f 1886 t h e S p e r r y e l e c t r i c i a n s b e g a n t o work  on t h e i n c a n d e s c e n t - i n s t a l l a t i o n . t u r n e d t h e l i g h t s on a t t h e f i r s t  On J a n u a r y 2 9 , 1 8 8 7 , t h e y incandescent e l e c t r i c  light  9 s t a t i o n i n Canada.  The p l a n t h a d c a p a c i t y f o r 400 s i x t e e n  c a n d l e power l a m p s ; t h e company c l a i m e d t o h a v e c u s t o m e r s f o r a l l t h e lamps.  The V i c t o r i a E l e c t r i c  however, remained ness  Illuminating  Company,  a small firm serving only the central  busi-  area. L i g h t i n g was n o t t h e o n l y u s e o f e l e c t r i c i t y w h i c h i n -  terested Victorians. advancing  E l e c t r i c s t r e e t r a i l w a y t e c h n o l o g y was  rapidly i nthe late 1880 s. !  1 0  I n September 1888,  two V i c t o r i a n s , C a p t . J . D . W a r r e n , a s t e a m b o a t owner a c t i v e i n the sealing  i n d u s t r y who c l a i m e d t o r e p r e s e n t e a s t e r n a n d l o c a l  i n t e r e s t s a n d $100,000 c a p i t a l , a n d H.F. H e i s t e r m a n , ance a n d " l a n d  agent,  an i n s u r -  submitted separate applications t o the C i t y  C o u n c i l f o r p e r m i s s i o n t o c o n s t r u c t and o p e r a t e an e l e c t r i c s t r e e t railway through t h e s t r e e t s o f V i c t o r i a .  A majority of  9 A J L a w s o n , " G e n e r a t i o n , D i s t r i b u t i o n a n d Measurement o f E l e c t r i c i t y f o r L i g h t and Power....;." ^^S^^B^Sl--!^. Canadian S o c i e t j i _ o f _ j C i ^ ^ v o l . I V ( 1 8 9 0 ) , p. 184. 10 See P a s s e r , E l e c t r i c a l j t e r i ^  c h . XV-XVII.  10 .  the  s t r e e t and e l e c t r i c  l i g h t committee o f t h e C o u n c i l  favoured  W a r r e n ' s scheme b e c a u s e he h a d n o t a s k e d f o r a m o n o p o l y .  The  C o u n c i l t h e n g r a n t e d t h e s t r e e t r a i l w a y f r a n c h i s e t o W a r r e n and h i s a s s o c i a t e s who i n t u r n a s s i g n e d  i t t o the National  Tramway and L i g h t i n g Company ( N E „ T 0  other  V i c t o r i a n s had  incorporated.  0  Electric  & L.) w h i c h t h e y and t h r e e  11  Under i t s p r o v i n c i a l c h a r t e r , t h e N.E.T. & L . h a d an authorized  c a p i t a l o f $250,000.  d o l l a r u n i t s and w i d e l y  d i s t r i b u t e d l o c a l l y , p r o b a b l y as a  means o f c o u r t i n g s u p p o r t . applied t o the c i t y of  The s h a r e s w e r e s o l d i n t e n  Within  a s h o r t t i m e t h e N,E T.& L. a  f o r f i n a n c i a l a i d i n t h e form of a guarantee  5% i n t e r e s t f o r t w e n t y y e a r s on a $40,000 l o a n  0  In return  f o r t h i s g u a r a n t e e , t h e company p r o p o s e d t h a t t h e c i t y h a v e a representative The  on t h e B o a r d o f D i r e c t o r s .  s o c i a l and economic advantages o f t h e e l e c t r i c  r a i l w a y a p p e a l e d t o Victorians„  According  street  t o the Colonist, the  s t r e e t c a r w o u l d p e r m i t w o r k i n g m e n and m e c h a n i c s t o " b u i l d themselves pleasant low-priced,  homes i n l o c a l i t i e s where l a n d i s p l e n t i f u l and  and where t h e y may grow t h e i r own v e g e t a b l e s and  r a i s e t h e i r own p o u l t r y and d r i n k  i n t h e p u r e and h e a l t h -  I.12 giving 1  1  ozone„  C o l o n i s t , N o v e m b e r 1, 1888, p„4; B r i t i s h C o l u m b i a ,  52 V i c , c , 39. . 12 C o l o n i s t ,May 2,  1889, p. 2-.  Statutes,  11 Once t h e c i v i c v o t e r s the  construction contract  o f f i c i a l opening of the t o a s t s , the Four cars t o the  approved the and  ordered four cars.  c a r s b e g a n r e g u l a r s e r v i c e on F e b r u a r y 22,  r e c e i p t s the  seemed an  cars  only  five cents,  The  Park  day's  Although  the  company c o m p l i e d b y t o b u i l d up  a r e a w h i c h was  o r d e r i n g more c a r s  s p a r s e l y s e t t l e d , and  company a l s o i n d i c a t e d t h a t  c o n s t r u c t i o n o f l i n e s t o C a d b o r o Bay Saanich. P e n i n s u l a .  a g r i c u l t u r a l and  were not b u i l t b u t ,  and  more by  t o the n a v a l base  p l a t i n g the  i t was  at  contemand  to  the  Both a r e a s were s p a r s e l y s e t t l e d  recreational potential.  These  lines  a f t e r t h e E s q u i m a l t l i n e v/as c o m p l e t e d ,  company a n n o u n c e d p l a n s  t o d o u b l e t r a c k e x i s t i n g l i n e s and  e x t e n d t h e F o r t S t r e e t l i n e one b e a c h and  the  Pandora S t r e e t t o Fernwood Bead,  The  b u t had  issued  s e r v i c e and  Esquimalt.  of t h e  share-  line,,  announcing plans  end  The  began c o n s t r u c t i o n of  p u b l i c soon demanded more f r e q u e n t The  and  first  Board of D i r e c t o r s ,  and  almost  foundry  t h e c a r s c o l l e c t e d $350.  unanimously r e - e l e c t e d the  Beacon H i l l  From t h e  i n s t a n t success„  a n o t h e r $15,000 w o r t h o f s t o c k  an  1890.  o f f e r e d a f i f t e e n m i n u t e s e r v i c e on F o r t S t r e e t  t o the Outer Wharf.  holders  an  champagne  J u b i l e e H o s p i t a l , on D o u g l a s S t r e e t , t o t h e  f a r e was  company l e t  After  s t r e e t r a i l w a y system w i t h  t h r o u g h James Bay  lines.  scheme, t h e  and  t o t h e D r i v i n g P a r k and  a h a l f miles  t o Oak  Agricultural Hall,  and  Bay to  the to  12 extend the  Douglas  Victoria of  street  Street  land  half  a  owners were q u i c k  railways  announced the  line  on  land  values.  c o n s t r u c t i o n of  the  mile.  to  appreciate  When t h e Esquimalt  the  company line,  effect  first  the  news 13  "at  once t o o k  The  Oak  which  Bay  every  L a n d and  included  C.T.  the  idea of the  more t h a n t h r e e h o u s e h o l d s  dents  of  Oaklands  and  of  $11,000 i n t e n m i n u t e s between t h e i r residents  areas  subscribed Street0  Mount T o l m i e  lines  As  Bay  assist  the  But  i t s name s u g g e s t s ,  i n the  at the  the  r a i l w a y operations„  of  Incorporation only mentions  8, 1 8 9 0 ,  404  market." firm  there  time.-^  were  Resi-  subscribed,  c o n s t r u c t i o n of lines.  extension  Mount of the  a  Iink  :  Tolmie line  Oaklands, Cedar H i l l  or  time.  N0E0T.& L.  d i d not  Although the objects  confine  preamble  relating  of  itself  i t s Act  to transportation,  p.l  14 RoM. H o r n e - P a y n e , C h a i r m a n ' s R e p o r t o f t h e B.C.E.RoJZ F e b r u a r y 1902, p.8  p.  although  at the  car  none o f t h e  street  * See map,  o f f the  i n Saanich  existing  built  line  Bay  $15,000 t o w a r d s  was  Colonist, April  Oak  i n Oak  to  1 3  route  t r a m c o m p a n y among i t s mem-  Cedar H i l l  to  and  from Douglas  the  Improvement Company, a r e a l e s t a t e Dupont of  bers , promoted the no  s a l e a b l e l o t on  /to  the  Shareholders  13 a c l a u s e i n t h e a c t empowered t h e N.E„T. & L. t o s e l l city for lighting lighting the  systems  and power purposes,, already operating  city-owned s t r e e t  a t i n g Company.  lights,  electri-  There were, however, t h r e e t h e Gas  Company,  and t h e V i c t o r i a E l e c t r i c  Illumin-  E l e c t r i c i t y had now  in Victoria;  shown i t s s u p e r i o r i t y t o  g a s ; t h e s t r e e t l i g h t i n g s y s t e m d i d n o t compete i n c o m m e r c i a l and r e s i d e n t i a l l i g h t i n g ;  and t h e V . E . I , w h i c h h a d r e a c h e d i t s  c a p a c i t y d i d not e n j o y monopoly p r o t e c t i o n . tial in  and c o m m e r c i a l f i e l d s w e r e s t i l l  the f a l l  w i t h F.H.  o f 1890,  Since the  open, t h e N E 0  0  residen-  T. &  L.,  a n n o u n c e d t h a t i t had s i g n e d a c o n t r a c t  Osgood o f t h e Thompson-Houston Company o f L y n n ,  M a s s a c h u s e t t s t o c o n s t r u c t an i n c a n d e s c e n t l i g h t i n g p l a n t t o 15 produce the cheapest l l l u m x n a n t rn the In  city.  t h e e a r l y 1 8 9 0 ' s , when V i c t o r i a was  growing  f o r i t s 1300  steadily,  the  M.E.  T. & L. soon f o u n d c u s t o m e r s  lights  By  the  fall  o f 1891 t h e company h a d t o i n s t a l l a d d i t i o n a l e q u i p -  c  ment and add a new  w i n g t o t h e power h o u s e i n o r d e r t o c o p e w i t h  i n c r e a s e d demand.  I n 1893 t h e company p u r c h a s e d a $50,000  ing  light-  p l a n t which i t promised, would treble,, w i t h t h e a i d of t h e  proposed C o l d s t r e a m waterpower  plant,  i t s lighting  capacity,,  The g e n e r a l d e p r e s s i o n w h i c h b e g a n i n 1893 d i d n o t  im-  15 C o l o n i s t , O c t o b e r 12, 1890, p . 5. The e v i d e n c e i s n o t c l e a r b u t t h e l i g h t i n g o p e r a t i o n s may h a v e b e e n c o n d u c t e d b y a s e p a r ate s y n d i c a t e w h i c h u s e d t h e N.E.T. & L . s power h o u s e . a  14 mediately  a f f e c t t h e N.E.T„ & L.  At the annual  general  meeting  e a r l y i n 1894 t h e c h a i r m a n d e s c r i b e d a s a t i s f a c t o r y s t a t e o f affairs.  A f e w d a y s l a t e r , he r e p o r t e d t h a t a l l £.100,000 w o r t h  of f i v e percent  d e b e n t u r e bonds h a d b e e n t a k e n b y M e s s r s . S p e r l i n g  & Co., E n g l i s h s t o c k b r o k e r s .  With the proceeds of these  D  t h e company p r o p o s e d t o redeem i t s c u r r e n t d e b t , rolling later,  s t o c k and t r a c k a g e i n February  bonds  add t o i t s  and expand i t s power p l a n t .  A year  1895, t h e company, w h i c h h a d c h a n g e d i t s name 17  to  the Victoria  Electric  Railway  and L i g h t i n g Company  reported  a s u r p l u s o f $16,791.92 '-'despite t h e g e n e r a l c o m p l a i n t times The  a n d t h e d i s p o s i t i o n o f e v e r y o n e t o w a r d r i g i d economy."  s u r p l u s , h o w e v e r , was n o t p r o f i t ;  cluded  i n operating expenses.  1 8  i n t e r e s t had n o t been i n -  T h r e e and a h a l f months  R o b t . D u n s m u i r a n d Sons and t h e U n i o n C o l l i e r y aggregating  secured  later,  judgments  some $9,000 a g a i n s t t h e V.E.R. & L. w h i l e t h e Sayward  Lumber Company and o t h e r s ing  of hard  ' attached  d e p a r t m e n t o f t h e company.  amounts o w i n g t o t h e l i g h t -  A county c o u r t judge  immediately  p l a c e d t h e V.E.R. & L. i n r e c e i v e r s h i p . In A p r i l  1896 t h e " p r o p e r t y , b u s i n e s s  t h e V.E.R. & L . Company were a u c t i o n e d bondholders.  Although  and f r a n c h i s e " o f  on b e h a l f o f t h e E n g l i s h  t h e company's a s s e t s -- t h i r t e e n  miles  16 F„S„Barnard, " E a r l y H i s t o r y o f t h e B r i t i s h C o l u m b i a E l e c t r i c R a i l w a y Company L t d . " T y p e s c r i p t , J u l y 1 9 2 1 , Box 65. 17 B r i t i s h C o l u m b i a , S t a t u t e s , 57 V i c , c . 6 3 . 18 C o l o n i s t , F e b r u a r y  13, 1895, p . 5.  of  t r a c k , seventeen  c a r s , two t r a i l e r s and  facilities  for  o p e r a t i n g 4650 s i x t e e n c a n d l e power lamps and s m a l l power s a l e s w e r e va  l u e d a t $497,000, t h e y y i e l d e d o n l y $340,000 w h i c h  -  was 19  about  $35,000 l e s s t h a n t h e t o t a l d e b e n t u r e s  p u r c h a s e r was  F.S.  B a r n a r d M.P.  of V i c t o r i a ,  outstanding. a member o f an  E n g l i s h f i r m , t h e C o n s o l i d a t e d R a i l w a y Company w h i c h was on t h e  Tne  active  mainland. iii  U n t i l the Canadian  P a c i f i c R a i l w a y d e c i d e d i n 1884  extend i t s t r a n s c o n t i n e n t a l l i n e twelve m i l e s westward P o r t Moody t o t h e G r a n v i l l e t o w n s i t e , o n l y a few people  l i v e d i n the t h r e e lumbering communities  shores of Burrard I n l e t . its  The  was  hundred along the  i n c o r p o r a t e d i n 1886.  Its  c i t y , h o w e v e r , d i d n o t grow a t a  uniformly r a p i d rate through i t s f i r s t  decade.  i t grew v e r y q u i c k l y ; t h e n i t a l m o s t s t a g n a t e d . r e c o r d e d a p o p u l a t i o n o f 13,685; b y 1896, o n l y 19,000.  from  A f t e r the r a i l w a y decided t o extend  l i n e , the C i t y of Vancouver  f u t u r e seemed a s s u r e d .  to  A l t h o u g h Vancouver  had  For f i v e The  1891  years census  t h e p o p u l a t i o n v/as  immediately  developed  t r a d i n g c o n n e c t i o n s w i t h A u s t r a l a s i a and t h e " O r i e n t , h e r merc h a n t s were f r u s t r a t e d t h e i r more i m m e d i a t e Victoria 1 9  <-> ^  in their  attempts t o wrest the t r a d e of  h i n t e r l a n d away f r o m o l d e r c e n t r e s s u c h  and Spokane.  The  c i t y a l s o f a i l e d t o a t t r a c t many  C o l o n i s t , A p r i l 12, 1896, nli  „  „ ^ , ^ , ,  ^ ^ -  Z S n r . n a  p. 1  5.  Por-«-i>-t-  . 197.9.  ID.  99.  as new  16 industries.  A s u b s t a n t i a l p a r t o f V a n c o u v e r ' s g r o w t h was  based  on f a i t h i n i t s f u t u r e , p a r t i c u l a r l y  f a i t h i n the appreciation  of  a mecca f o r r e a l  r e a l estate values.  The c i t y was  estate  and f i n a n c i a l a g e n t s who p r o m o t e d a w i d e v a r i e t y o f e n t e r p r i s e s , e s p e c i a l l y r a i l w a y s and m i n e s . first  The boom g r o w t h o f V a n c o u v e r ' s  f i v e y e a r s f o l l o w e d b y f i v e y e a r s o f d e p r e s s i o n and a  l a c k o f l o c a l c a p i t a l r e s o u r c e s e x p l a i n s i n l a r g e measure Vancouver had f u n c t i o n i n g e l e c t r i c u t i l i t i e s h i s t o r y and why t h o s e c o m p a n i e s  One  why  so e a r l y i n h e r  failed.  of the u t i l i t i e s which d i d not f a i l  —  possibly  b e c a u s e i t s c a p i t a l needs were r e l a t i v e l y s m a l l and i t s profits high —  was  t h e V a n c o u v e r Gas Company w h i c h h a d  been  21 c h a r t e r e d by s e v e r a l V i c t o r i a r e s i d e n t s was  incorporated.22  opened t h e way  D e l a y s i n t h e c o m p l e t i o n o f t h e gas  place i n V i c t o r i a  of t h e debate w h i c h had t a k e n  o v e r t h e r e l a t i v e m e r i t s o f gas and  electri-  As i n V i c t o r i a , t h e s t r e e t l i g h t s were t h e c e n t r e o f  attention. called  works  f o r the introduction of e l e c t r i c l i g h t i n g i n  V a n c o u v e r and f o r a r e p e t i t i o n  city.  even b e f o r e t h e c i t y  E a r l y i n November 1886 t h e V a n c o u v e r C i t y  f o r t e n d e r s f o r t w e l v e s t r e e t l i g h t s b u t was  Council  unable t o  c h o o s e b e t w e e n t h e two methods o f i l l u m i n a t i o n . 21 A.A. G r e e n , C.D. Rand and D r . G»L. M i l n e . 22 B r i t i s h C o l u m b i a , .SJtjatutejs, 3 9 V i c . , c.27; V a n c o u v e r Gas Company, M i n u t e Book, p . 5; V a n c o u v e r News, November 27, 1887.  While the c u s t o m e r s , an  Gas  Company made c o n s t r u c t i o n  electric  company p r o m o t e d b y  Tacoma p r o c e e d e d w i t h b a s i c cured the  p l a n s and  R.R.  G i l t n e r of  o r g a n i z a t i o n a l work.  c i t y ' s p e r m i s s i o n t o e r e c t p o l e s and  transferred this i n g Company and  franchise  nessmen.  Giltner  se-  s t r i n g wires,  t o the- V a n c o u v e r E l e c t r i c  s o l d t h i r t y - s i x p e r c e n t of the  company i n s m a l l  sought  Illuminat-  shares i n t h i s  l o t s t o f o r t y - t h r e e d i f f e r e n t Vancouver b u s i -  G i l t n e r then obtained  the  contract  to construct  the  23 works. and  On  "the  1887,  system convinced the the  C i t y Council  a l l sides.  On  A d v e r t i s e r boasted that o t h e r c i t y of her  New  2  light."  Y e a r ' s Day,  s i z e i n the world."  on sur~  favour-  growing d i s s a t i s f a c t i o n of the  d e s i r a b i l i t y of  1888  "Vancouver i s b e t t e r  w o u l d t h i n k o f p u t t i n g up  The  slow construction of the  turned  e x p r e s s i o n s of  I l l u m i n a t i n g Company's p r o p o s e d one  for street lighting.  electric  the  c i r c u i t was  s t e a d y and  e l e c t r i c . l i g h t s , the  w i t h m a k e s h i f t o i l l a m p s , and  one  of the  g r a t i f i c a t i o n were h e a r d on  comment on t h e  cepting  part  l i g h t s b u r n e d b r i g h t and  p r i s e and able  A u g u s t 5,  year  the  gas ac-  contract  News-  l i g h t e d than  A v i s i t o r noted that  a house w i t h o u t a t e l e p h o n e  any "no and  5  When a c i v i c b y - l a w r e q u i r e d h o t e l  saloon keepers to provide  and  a minimum s t a n d a r d o f l i g h t i n g , many  o f them, h o w e v e r , i n s t a l l e d c o a l o i l lamps w h i c h were c h e a p e r 23 Once t h e l i g h t s w e r e f u n c t i o n i n g , G i l t n e r w i t h d r e w f r o m t h e company. He had p r o b a b l y i n t e n d e d t o make h i s p r o f i t as a p r o m o t e r and c o n t r a c t o r . 24 V a n c o u v e r D a i l y N e w s - A d v e r t i s e r , A u g u s t 6, 1887, 2 5 D o u g l a s S l a d e n , On t h e C a r s and O f f , L o n d o n , Ward, L o c k  18 electricityo  than  also  Dissatisfaction  with  developed.  c o n t r o v e r s y over  veals ties  the and  During  role  his  the  urged  increase  the  council  Alexander„  pleased Then, city  to  should  seems t o be public  to  power  take the  lamps  utilities  that  Mayor  the  v/as  26  News-Advertiser,  January  27  News-Advertiser,  August  October  1,  as  c l a i m e d he i f he  gas.^6  contract,  did  in  Alderman  would  could  Oppenheimer  suggestion  either  shareholder  Company,  —  lights  and  substitute  a  electric  i n Vancouver.  cause  he  find  be a  that  system,,  This  of m u n i c i p a l ownership The  council  5,  1888  28,  1888;  1888;  buyer  suggested  lighting  hired  an  expert,  power  0  November  October  3,  5,  1888.  the  of  the  generating hydro-electric  Vancouver World,  David  street  lighting  however, shares  or  0  of  utili-  Mayor  the  the  A J o Lawson o f M o n t r e a l , t o i n v e s t i g a t e possibility  re-  ownership.  street  Illuminating  1888,  first  1888,  investigate  admitted  over  lights  in public  provided by  of the  his thirty  i n November,  street  lights  grocer, noting general displeasure  Alexander,  sell  street  municipal  i n January  illumination  Electric  the  towards  d i s c u s s i o n s of the  readily  of the  politicians  attitudes  o f Works  candle  Vancouver  R.H.  of  quality  civic  a wholesale  Board  Oppenheimer the  early  i n a u g u r a l address  degree  the  During  of  illustrates  Oppenheimer, with  The  the  1888;  19 from C a p i l a n c Creek. of  the l i g h t i n g  28 (  The w h o l e idea, o f m u n i c i p a l o w n e r s h i p  s y s t e m was p u r e l y p r a g m a t i c ; i t was n o t b a s e d on  any p h i l o s o p h i c f o u n d a t i o n s o f s o c i a l i s m .  D a v i d Oppenhoinaer  s u g g e s t e d t h a t t h e c i t y t a k e over the system s i m p l y because the company was  in financial  difficulties;  a m u n i c i p a l takeover would  f r e e h i m and h i s a s s o c i a t e s f r o m a f i n a n c i a l b u r d e n .  The  of  utilities  t h e company i t s e l f  suggesting p u b l i c ownership of  r e c u r s i n the h i s t o r y of the s u c c e s s o r s of the Vancouver  idea  Electric  I l l u m i n a t i n g Company b u t o n l y when t h e y a r e i n f i n a n c i a l l y barrassing  positions.  The V a n c o u v e r E l e c t r i c culty.  I l l u m i n a t i n g Company was  I t c o u l d n o t b o r r o w money e a s i l y ,  r i s i n g , p r o f i t s were f a l l i n g  and consumers w e r e c o m p l a i n i n g  by  Nevertheless, through  i n f l u e n c e o f A l d e r m a n I s a a c Oppenheimer,  D a v i d Oppenheimer,  in diffi-  e x p e n d i t u r e s were  about the i n e f f e c t i v e n e s s of the l i g h t . the  em-  the Vancouver E l e c t r i c  the brother of  I l l u m i n a t i n g Company,  p r o m i s i n g t o i n s t a l l t h e e f f i c i e n t and e f f e c t i v e Thompson-  Houston l i g h t i n g  s y s t e m , won  o v e r two o t h e r tenderers„ s o n - H o u s t o n s y s t e m was Vancouver E l e c t r i c  the s t r e e t  lighting  contract  The d e c i s i o n t o i n s t a l l t h e Thomp-  of u l t i m a t e s i g n i f i c a n c e f o r the  I l l u m i n a t i n g Company; t h e f i n a n c i a l  nego-  2 8 W o r l d , November 5, 1888; N e w s ^ A d v e ^ i s e ^ , November 29, 3 888 A u g u s t 22, 1889. Lawson's r e p o r t was u n f a v o u r a b l e b e c a u s e o f t h e c o s t and t h e r i g h t s o f t h e W a t e r Works Company.  20 tiations tion by  necessary  to introduce  of the Vancouver  t h e amalgamation  Company  idea  Company,  sufficient of  1888.  other  Railway early city the  itself.  before  The e x p i r a t i o n businessmen  Company.  with  a population  optimism  In  i t scharter  t o organize  Company  of less  the city  unable  another  Street  to raise  i n the spring t h e way f o r  Vancouver  Street  projects  technology  so  in a  13,000 i s i n d i c a t i v e o f  city.  the second  permission  o f Vancouver  i n Vancouver  opened  railway  than  i n t h e young  received  Illuminating  of street railway  of street  Company  Vancouver  expired  charter  forma-  Company.  i n 1 8 8 6 , was  i t s p r o v i n c i a l charter',  Railway within  present  Electric  The o r i g i n a l  The appearance  i n t h e development  and L i g h t i n g  Railway  of this  2 9  led to the  a street railway  incorporated  capital  local  Street  of constructing  as o l d as t h e c i t y  Railway  Railway  o f the Vancouver  and t h e Vancouver  The was  Electric  the system  Vancouver  to construct  a  Street  railway  and t o c a r r y p a s s e n g e r s  on i t "by  i  the  force  the  ...Company  Vancouver  • 29  o r power o f a n i m a l s - o r s u c h may  deem  City Council  A.G. F e r g u s o n ,  C & P #R o  expedient granted  motive  I n November  a thirty  "a c a p i t a l i s t "  other  year  power as 1888 t h e  franchise.  a n d H. A b b o t t  of the  This  21 permitted  t h e company  construction a  speed  tem  schedule  limit  cents.  t o use c e r t a i n and s p e c i f i e d  also  retained  a t t h e end o f t h e t h i r t y  but outlined  operating rules  o f s i x m i l e s p e r hour  The c i t y  streets  a n d a maximum  the option  years  including  fare  t o purchase  o r t o renew t h e  a  of  five  the  sys-  contract  30 for  additional  agreement The  was  people  unable  five  year periods.  a requirement  o f Vancouver,  t o subscribe;  that  toother local  investment  however, were  only thirteen  feature  either  took  be  of the encouraged.  unwilling  advantage  or  o f the  investment opportunity. Originally, horses their  rather motive  t h e Vancouver  than  Street  electricity  power,  as m o t i v e  the directors  concerned  with  financing  the  fall  o f 1889 t h e y w r o t e  early  firms  i n the United  questing  estimates  Railway  as w e l l  power.  of the Street as w i t h  t o seven  costs.  prospects  of the Vancouver  Street-  Railway,  suppliers  to "please state  terms,  a n d how  you  take  would  company system  30  i n payment."  decided t o i n s t a l l i n the four  British  Adveirtijyar,  cars  Columbia,  November  6,  Finally,  were  During electrical  outlining  they  asked  much s t o c k  i n December,  a l r e a d y on  were  of Montreal r e -  t h e Thompson-Houston  which  Railway  different  After  t o use  In choosing  technology.  S t a t e s and t o A . J . Lawson of equipment  planned  the  potential at par  1889, t h e  electrical  order.  Through  S t a t u t e s , 49 V i c , c . 31; News1888.  its  F . H , Osgood  agent,  pany  was  ment. cash  and  Houston  policy  part  Houston  had  a means  firms  electricity  provide  was  and  benefit  by  might  Light  power  and  system.  By  31  The  merger.  was  improved  buildings  Thompson-Houston  new  generat-  their  the  house  street  economies  utility  company  to  Electric  Railway  and  the o l d  in  were  companies  They  built  arc lights.for  alternating  t h e y were  i n Vancouver,  The  weak;  the system p h y s i c a l l y .  o f 1890  be  t h e same p o w e r  re-organized  a new  Thompson-  A  electric  they introduced  the  amalgamation.  s y s t e m and  the Vancouver  they installed t h e end  use  financially  the t h i r d  the  Both would  lighting  situation,  Its directors  station,  lighting  principal  and  were  R a i l w a y and  co-ordinating  they could  their  i n Vancouver,  financially new  ease  company,  Company.  for their  could  f o r the  for part  Thompson-  Company t o a d o p t  move.  operation  operate  Street  logical  Both companies  the  pay-  customers.  a  electricity  by  Com-  i n part  equipment  devised  of obtaining  Specifically,  new  been  the motive  railway.  The  electrical  Illuminating  system provided of the  of stock  of both the Vancouver  Electric  activities. to  as  decision  Vancouver  of s e l l i n g  securities  Company  The  ing  the Thompson-Houston  p r e p a r e d t o t a k e $5,000 w o r t h  This  merger  of Seattle,  incandescent  lighting actively  Company p r o b a b l y  street  most  of  the  soliciting  encouraged  the  a  new  customer?, and  plant.  were c o n t e m p l a t i n g e x t e n s i o n s  Although the  l i g h t i n g p l a n t was  V.E.R. & L. Company was al  rewarding of the fifty-three lighting On  per  expanded, by  having to refuse  incandescent l i g h t s .  The  requests  I n 1891,  J u n e 26,  1890,  t h e V.E.R. & L.  long  l i n e ran  Granville Street bridge.  f o r example,  street railway.  the  This three  and  f r o m t h e power h o u s e , t h r o u g h  the  Within  end  a few weeks t h e  b u i l d i n g a b e l t l i n e t h r o u g h F a i r v i e w on t h e  of False Creek.  By t h e t i m e t h e F a i r v i e w  opened on November 13,  1891,  preliminary negotiations i n t h e West End  The  t h e most,  Company a l s o began  commercial d i s t r i c t s of the c i t y t o the north  Stanley  the  additior  c e n t o f t h e t o t a l r e c e i p t s came f r o m  Vancouver's f i r s t  a half mile  and  1892  for  l i g h t i n g b u s i n e s s was  Company's o p e r a t i o n s .  power  division.  operating  gan  t o the  along  the  company south  l i n e was  t h e Company was  t o b u i l d along  of  also  be-  side  formally undertaking  Hastings Street  East  Robson S t r e e t t o E n g l i s h Bay  and  Park.  s t r e e t r a i l w a y , u n l i k e the  h a r d h i t by the problem of  lighting  business,  "unused c a p a c i t y * " '  Though  v/as the  c o m p l e t i o n o f t h e F a i r v i e w l i n e d o u b l e d t h e Company's m i l e age,  t h e r e v/ere o n l y 186  h o u s e h o l d s i n F a i r v i e w and  the  32 a d j a c e n t Mount P l e a s a n t 32  Williams"  district.  I t i s obvious that  B r i t i s h Columbia D i r e c t o r y ,  such  1891,pp.126-166.  24 a s m a l l g r o u p c o u l d not. s u p p o r t an e l e c t r i c the  railway.  Company h o p e d i t w o u l d s h a r e i n t h e e x p e r i e n c e  s t r e e t r a i l w a y companies i n N o r t h A m e r i c a ; f o l l o w t h e railway„  The V.E.R.& L  0  Yet,  of other  settlers  would  Company h o p e d t o p a y f o r  the F a i r v i e w l i n e by t h e s a l e o f s i x t y - e i g h t l o t s  i t would r e -  c e i v e f r o m t h e C.P.R., t h e c h i e f l a n d o w n e r i n V a n c o u v e r , i n r e t u r n f o r a promise t o run a r e g u l a r twenty minute s e r v i c e over the route ment," r e f u s e d  The C.P.R., w h i c h h a d "a v e r y c a s t i r o n  a  t o surrender  agree-  t h e l o t s u n t i l t h e V.E.R. & L.  Company p o s t e d a bond to' i n s u r e c o n t i n u a t i o n o f t h e s e r v i c e . The  V.E.R. & L. Company's f i n a n c i a l s i t u a t i o n was s o p o o r ,  i t c o u l d n o t o b t a i n a bond.  The a p p r o x i m a t e l y  $150,000 c o s t  o f t h e F a i r v i e w l i n e -— f i v e t i m e s t h e o r i g i n a l e s t i m a t e had  —  p u t t h e V.E.R. & L. Company d e e p l y i n t o d e b t .  The  F a i r v i e w l i n e was c o m p l e t e d j u s t a b o u t t h e t i m e  t h e e f f e c t s o f e c o n o m i c depx~ession were f i r s t b e i n g  that  felt i n  Vancouver; s e t t l e r s d i d not f o l l o w t h e s t r e e t c a r t r a c k s .  The  d i r e c t o r s blamed t h e F a i r v i e w l i n e , w i t h i t s average monthly operating operations  l o s s e s o f $1,000 f o r t h e $9,000 l o s s on r a i l w a y during  1S92. T h i s  l o s s c a n c e l l e d two-thirds of  the p r o f i t s earned by t h e l i g h t i n g p a r t o f t h e b u s i n e s s  which  e v e n a t t h i s e a r l y d a t e was much more p r o f i t a b l e t h a n t h e street  railway.  25 The its  c h i e f concern  shaky f i n a n c i a l p o s i t i o n .  means t o r a i s e it  of theV  funds.  . E . R .  & L. Company was t o e a s e  I tresorted t o a variety of  T h r o u g h t h e Bank o f B r i t i s h  Columbia  o b t a i n e d money f r o m o r d i n a r y bank l o a n s , o v e r d r a f t s a n d  bonds.  I t t r i e d t o p l a c e bonds w i t h f i n a n c i a l h o u s e s i n  London, Boston fall  a n d M o n t r e a l b u t t h e p o o r money m a r k e t s i n t h e  a n d w i n t e r o f 1890-1891 p r e v e n t e d  a $250,000 b o n d i s s u e .  t h e Company f r o m p l a c i n g  Finally, thedirectors  a c c e p t e d an  o f f e r o f t h e Y o r k s h i r e Guarantee and Loan C o r p o r a t i o n t o t a k e t h e bonds a t a s i x p e r c e n t d i s c o u n t on t h e c o n d i t i o n t h a t t h e Y o r k s h i r e C o r p o r a t i o n would nominate a d i r e c t o r . V c E . R .  & L . Company a l s o a g r e e d  3 3  The •  t o i s s u e an a d d i t i o n a l  $138,000 w o r t h o f t r e a s u r y s t o c k b u t , i n s p i t e o f a s s u r a n c e s t h a t " t h e p o s i t i o n and p r o s p e c t s  o f t h e Company /are/ i n e v e r y  way s a t i s f a c t o r y a n d j u s t i f y t h e s h a r e h o l d e r s none o f t h e s h a r e h o l d e r s  i n subscribing"  applied f o r additional  stock. ^  One o f t h e means p r o p o s e d t o e x t r i c a t e t h e V  3  . E . R .  & L.  Company f r o m i t s f i n a n c i a l d i f f i c u l t i e s was t h e s a l e o f i t s assets t o the c i t y .  During  t h e 1890 c i v i c e l e c t i o n  D a v i d Oppenheimer, a c a n d i d a t e  f o r mayor a n d a m i n o r  campaign, share-  33 The Y o r k s h i r e C o r p o r a t i o n was a B r i t i s h f i r m o r g a n i z e d i n 1889 t o d e a l i n m o r t g a g e s p a r t i c u l a r l y i n B r i t i s h C o l u m b i a . 34 H.T. C e p e r l e y t o s h a r e h o l d e r s , November 1 1 , 1890, V . Company, M i n u t e s o f B o a r d o f D i r e c t o r s , 1891-1894, p . 1 1 .  E . R . & L .  26 holder and  i n t h e Company  other  idea  public  vived to  utilities  of municipal  campaign.  franchise." interested  ownership  0  Company  T h e Company, in selling  and t h e c i t y  were  ways w e r e  delayed  was  —  a live  the street  be m u n i c i p a l l y  however,  Council  was  at a price.  of railway  wrote  whose c r e d i t o r s were p r e s s i n g , Negotiations  election  elected  mayor,  T h e new  the  and  When F r e d  $555,000.  during  plant  issue.  of selling  This  Oppenheimer r e -  o f 1891 t h e C i t y  "re purchase  railway  owned.  scarcely discussed  on t h e p r i c e and methods  confident  of the city  that  address,  by a c i v i c  O p p e n h e i m e r , was  idea  should  I n t h e summer  t h e V.E.R. & L  but  suggested  In h i s inaugural  the idea.  .Company  again  i n which  Cope,  purchasing  o f payment  followed  the street  rail-  was  supported  by  t h e V . E . R . & L . C o m p a n y was  out t o the c i t y ,  Council  who  between t h e  could  so  i traised i t s price to  n o t make u p i t s m i n d .  t h e Company  apparently  The  faded  35 away.  Then,  suggested issue  that  December 1892, t h e V.E.R. & L .  the City  Council  o f V.E.R. & L . b o n d s .  the  city  ing  system.  an o p t i o n  shareholders 35  m  In r e t u r n ,  t o purchase  The C o u n c i l which submitted  guarantee  Directors,.  and  t o the electors.  (August  give  light-  s e v e r a l V.E.R. & L .  January  18, 1 8 9 1 . V.E.R.& L . Company, 1889, 1891, p.161  on an  t h e Company w o u l d  included  Vancouver D a i l y News-Advertiser,  September  the interest  the street railway  the proposal  Company  rate-  8, 1 8 9 1 ,  Minutes  29,1891).  The  of Board of  p a y e r s , however, r e j e c t e d t h e i d e a by a s u b s t a n t i a l  majority.  D u r i n g t h e d i s c u s s i o n s w i t h t h e c i t y , t h e company's c i a l s i t u a t i o n had worsened. Columbia of  I n A p r i l 1893 t h e Bank o f B r i t i s h  t h e p e r s o n a l endorsement o f t h e d i r e c t o r s .  S u p p l i e r s were  The Company c o u l d o n l y o f f e r  seven p e r c e n t o r s t o c k i n whole o r p a r t payment.  1, 1893,  finan-  refused t o extend f u r t h e r c r e d i t without t h e s e c u r i t y  a l s o p r e s s i n g f o r payment. at  J W  t h e V.E.R. fk  notes  On J u n e  I.. Company i n f o r m e d i t s s h a r e h o l d e r s t h a t  the t r u s t e e s f o r t h e debenture h o l d e r s had taken over t h e Company.  A t t h i s t i m e , t h e Company's a s s e t s w e r e w o r t h 37  $383,167.06; i t s l i a b i l i t i e s The  were $531,859,44,  C i t y C o u n c i l again debated  t a k i n g o v e r t h e Company.  As t h e C i t y seemed t o be t h e o n l y p o s s i b l e b u y e r , t h e Y o r k s h i r e C o r p o r a t i o n o f f e r e d t o r e - n e g o t i a t e t h e terms  of the  bonds a t a more f a v o u r a b l e r a t e i f t h e C i t y t o o k o v e r . C o u n c i l , h o w e v e r , c o u l d n o t a g r e e on an o f f e r . bund Company r e m a i n e d  The  Thus, t h e m o r i -  i n t h e hands o f i t s c r e d i t o r s who c o n -  t i n u e d t o operate i t , double t r a c k e d p a r t of the o r i g i n a l t h r o u g h t h e downtown a r e a a n d e x t e n d e d to  incandescent  line  lighting  a d d i t i o n a l areas o f t h e c i t y ,  36 V a n c o u v e r D a i l y N e w s - A d v e r t i s e r . . , J a n u a r y 5, 1892, 7, 1893, M a r c h 2 8 , 1893, May 7, 1893." 37 V.E.R.& L . Co. t o S h a r e h o l d e r s , J u n e 1,1893. V.E.R.& L. Co. S h a r e h o l d e r s ' M i n u t e s , 1892-1894.  March  Copy i n  28 During  t h e C i t y C o u n c i l ' s d i s c u s s i o n s o f t h e V.E.R. & L.,  D a v i d Oppenheimer s u g g e s t e d  t h a t h i s W e s t m i n s t e r and V a n c o u v e r  Tramway Company w o u l d be w i l l i n g  t o rent the f a c i l i t i e s  V.E.R, & L. Company a t a r a t e w h i c h w o u l d c o v e r b o n d The  Tramway o p e r a t e d  an e l e c t r i c  m i n s t e r and V a n c o u v e r o  of the  interest.  i n t e r u r b a n b e t w e e n New W e s t -  I t s o r i g i n a l promoters were t h r e e  New  3 8  W e s t m i n s t e r men,  and D a v i d O p p e n h e i m e r .  The i n t e r u r b a n p r o -  v i d e d a s h o r t d i r e c t r o u t e between t h e c i t i e s  i n comparison  with the c i r c u i t o u s twenty-five mile r a i l route v i a Port Moody and t h e C.P.R. The  p r o m o t e r s o f t h e W. & V.T. h a d b e e n more  interested  i n t h e r e a l e s t a t e p o t e n t i a l o f t h e d i s t r i c t between t h e c i t i e s t h a n i n t h e c o n s t r u c t i o n and o p e r a t i o n o f an e l e c t r i c railway.  Before undertaking  solicited  l a n d g r a n t s f r o m p r i v a t e owners and t h e p r o v i n c i a l  government.  c o n s t r u c t i o n of the l i n e  they  The p r o v i n c e g r a n t e d a f r e e r i g h t o f way b u t w o u l d  o n l y p r o v i d e an a d d i t i o n a l g r a n t e q u a l t o t h e l a n d d o n a t e d b y 39 p r i v a t e owners.  T h i s r e q u e s t f o r a l a n d g r a n t a p p e a r s t o be  t h e o n l y r e q u e s t f o r d i r e c t f i n a n c i a l a s s i s t a n c e by any o f t h e e a r l y e l e c t r i c u t i l i t y companies. 38 H.V.Edmonds and S . T . M a c K i n t o s h , r e a l e s t a t e and i n s u r a n c e a g e n t s , and B e n j a m i n D o u g l a s , "a c a p i t a l i s t . " 39  B r i t i s h Columbia,  p.1583.  S e s s i o r ^ P a ^ s , 1894,  p . 1384 and  29 Although  t h e W. & V.T. e a s i l y o b t a i n e d  a r i g h t o f way  t h r o u g h p r o v i n c i a l government l a n d s , i t e n c o u n t e r e d  con-  s i d e r a b l e h o s t i l i t y when i t s o u g h t a f r a n c h i s e t o b u i l d m i l e s o f t r a c k from t h e c i t y Vancouver.  three  l i m i t s t o t h e c e n t r e o f downtown  The e d i t o r o f t h e N e w s - A d v e r t i s e r ,  f o r example,  o b j e c t e d t o p r i v a t e o w n e r s h i p o f a v a l u a b l e f r a n c h i s e and c o n t r o l o f t h e s t r e e t s b y Mayor O p p e n h e i m e r .  W i t h i t s good  f r i e n d s on C i t y C o u n c i l , t h e Tramway, h o w e v e r , was a b l e t o work o u t an a r r a n g e m e n t w i t h t h e V.E.R. & L. Company and the C i t y .  The C i t y r e c e i v e d t h e r i g h t t o b u y t h e Tramway  l i n e w i t h i n t h e C i t y on two months' n o t i c e a t a p r i c e t o 'be f i x e d by a r b i t r a t i o n . L i k e t h e V.E.R. & L. Company, t h e W. & V.T. s o u g h t t o finance i t s e l f w i t h loans obtained  f r o m t h e Bank o f B r i t i s h  C o l u m b i a on t h e p e r s o n a l n o t e s o f t h e d i r e c t o r s and b y d i r e c t calls  on t h e s h a r e h o l d e r s .  The l a t t e r method, h o w e v e r ,  v i d e d o n l y a s m a l l p a r t o f t h e Company's c a p i t a l .  pro-  The W.&V.T  a l s o depended on c r e d i t f r o m i t s s u p p l i e r s c h i e f l y t h e Edison  Electric  Company.  When t h e t w e l v e m i l e l o n g W. & V.T. was opened e a r l y i n October 1891, t h e i n t e r c i t y e l e c t r i c r a i l w a y m i l e a g e o f 40 Canada was d o u b l e d  0  The e v e n t , h o w e v e r , was n o t i c e d  only  40 J o h n F. Due, T b e ^ I j i ^ c j ^ t ^ ^ Canada, T o r o n t o , U n i v e r s i t y o f T o r o n t o P r e s s , 1966, p . 6 .  30 b y r e a l e s t a t e a g e n t s who a d v e r t i s e d s m a l l h o l d i n g s o f a h a l f a c r e o r more on o r n e a r t h e t r a m l i n e . was s l o W o  Settlement of the area  Most o f t h e t r a c k r a n t h r o u g h f o r e s t .  The  t r a f f i c came a l m o s t e x c l u s i v e l y f r o m t h e t w o c i t i e s end o f t h e l i n e and t o a l i m i t e d e x t e n t f r o m  initial  at either  arrangements  made w i t h t h e G r e a t N o r t h e r n R a i l w a y t o c a r r y p a s s e n g e r s and e x p r e s s f r o m New W e s t m i n s t e r t o V a n c o u v e r . O p e r a t i n g r e v e n u e came i n s l o w l y .  On t h e f i r s t  eight  months o f o p e r a t i o n , t h e b a l a n c e s h e e t showed a d e f i c i t o f $8,500.  P.N. S m i t h , t h e S e c r e t a r y - T r e a s u r e r o f t h e Company  o p t i m i s t i c a l l y b e l i e v e d t h a t a f t e r making accounts, t h e r e c e i p t s would  adjustments i n the  "more t h a n c o v e r t h e c o s t o f  o p e r a t i n g a n d i n t e r e s t on o v e r d r a f t and n o t e s .  F i n a n c e s , h o w e v e r , were a m a j o r p r o b l e m ; i n t e r e s t l a t e d on i n t e r e s t .  accumu-  By t h e summer o f 1892 t h e E d i s o n Company  a s k e d f o r payment o r b e t t e r s e c u r i t y and t h e Bank o f B r i t i s h C o l u m b i a began t o r e m i n d t h e Company o f i t s o v e r d r a w n The  account.  s h a r e h o l d e r s , though eager t o a p p l y f o r a d d i t i o n a l s h a r e s ,  were r e l u c t a n t t o pay assessments.  The Company managed t o g e t  t h e M o n t r e a l S a f e D e p o s i t Company t o a c t as t r u s t e e f o r a $500,000 i s s u e o f F i r s t M o r t g a g e d i d n o t p r o d u c e any i m m e d i a t e  bonds.  income.  These bonds, Throughout  however,  1893, n o t e s  41 P.N. S m i t h t o D. O p p e n h e i m e r , June 24, 1892, W. & V.T. L e t t e r Book.  continued to f a l l due, press f o r payment. off  men  the Bank and s u p p l i e r s continued  In 1893  the Tramway reduced wages and  as an economy measure.  In June 1894,  laid  Heavy i n t e r e s t payments made i t  impossible f o r the Company t o break even. worsened.  to  The  situation  the Bank of B r i t i s h Columbia which  had secured a judgment against the W.  & V.T.  advised i t  would not pay the i n t e r e s t on the Tramway bonds when they due  fell  in July. It  over.  seemed l i k e l y t h a t the bondholders would have t o take The Y o r k s h i r e Corporation began t o n e g o t i a t e with  C i t y as a p o t e n t i a l purchaser P.N.  of the Tramway.  In the meantime,  Smith t r i e d d e s p e r a t e l y t o prevent the bondholders from  taking over.  He wrote t o Montreal c a p i t a l i s t s such as the  Hanson Brothers and H.S.  Holt and t o the Toronto  promoter, W i l l i a m Mackenzie. cate t o amalgamate the W.  & V.T.  i n v e s t o r s were not i n t e r e s t e d .  syndi-  and the V.E.R. & L. Company company.  Eastern  Vancouver voters r e j e c t e d a  proposal t h a t the C i t y take over the Tramway. the W.  railway  He t r i e d t o form a new  and to purchase p r e f e r r e d stock i n the new  1894,  the  & V.T. went i n t o r e c e i v e r s h i p .  On August  10,  Smith, a c t i n g  as t r u s t e e , continued h i s attempts t o r e f i n a n c e the Company. F i n a l l y , the Bank of B r i t i s h Columbia^ and the Y o r k s h i r e Company agreed t o take $700,000 worth of bonds at 95 i f an a d d i t i o n a l $150,000 worth of c a p i t a l were put i n t o the Company.  In  spite  of Smith's  In January  1895,  the Montreal  efforts,  interest  the  of  $ 1 , 7 4 0 was  S a f e Deposit. Company.  t o have s u f f i c i e n t and  the r e f i n a n c i n g  interest  funds  scheme  due  The  on  failed.  bonds h e l d  d i r e c t o r s , who  on h a n d t o p a y  o f f the  claimed  sinking  i n a r r e a r s , were soon overthrown  by  by  fund  the  share-  holders „  Even b e f o r e W.  & V.T.  had  Safe Deposit w o u l d be in  New  Light  been imminent.  a u c t i o n e d on  The  of the  infant  which  had  duction  of s t a p l e s  w i t h her s u c h as  the  from the  lumber and  general depression.  was  with British utilities  was  F.S. and  capital. over.  transportation to sustain  international panic  of  economy b a s e d p r i m a r i l y  Australian  Montreal  their  times.  vulnerable to fluctuations  in. t h e A m e r i c a n and  1895,  the  Consolidated Railway  c a p i t a l necessary  resulted  of  f o r $2 8 0 , 0 0 0 —  connections  hard  end  a s s e t s o f t h e W.&V.T,  followed the American banking  Columbia,  ceded the  18,  p r o v i d e d modern u r b a n  through  times  British  larly  close  lacked the  enterprises  crises  —  f o r the  the  a t T r a p p ' s A u c t i o n Room  l o c a l promoter of e l e c t r i c  but  These hard  1895  purchaser  acting  Company w h i c h h a d  lighting  January  A p r i l 13,  of V i c t o r i a ,  day  On  Company a d v e r t i s e d t h a t t h e  Local entrepreneurs and  corporate revolution,  Westminster.  Barnard  The  the  1893. on  m i n e r a l s , was  i n the  economy.  A  demand f o r l u m b e r h a d The  r e p e a l of the  financial  the  pro-  particudecline pre-  Sherman. S i l v e r  33 Purchase A c t b y t h e American government i n 1 8 9 3 s e v e r e l y l i m i t e d t h e markets f o r t h e mines o f t h e B r i t i s h C o l u m b i a i n terior.  Over n i n e t y p e r c e n t o f t h e m i n i n g  by c o a s t a l " c a p i t a l i s t s "  i n t h e K o o t e n a y and B o u n d a r y  b e t w e e n 1890 and 1900 f a i l e d . Sea  companies promoted  4 2  districts  The d e c i s i o n o f t h e B e h r i n g  S e a l i n g A r b i t r a t i o n T r i b u n a l i n 1893 t o l i m i t . C a n a d i a n  access  t o B e h r i n g S e a s e a l s e f f e c t i v e l y ended V i c t o r i a ' s  p r o f i t a b l e s e a l i n g i n d u s t r y and c a u s e d a d i r e c t c a p i t a l  once loss  43 o r i g i n a l l y e s t i m a t e d t o be $1,289,008. d e c l i n e a l s o depressed talists"  real estate values.  The g e n e r a l e c o n o m i c Small l o c a l  "capi-  who h a d s p e c u l a t e d i n r e a l e s t a t e , e s p e c i a l l y i n 44  Vancouver, l o s t h e a v i l y .  And, t h e i n t e r n a t i o n a l  financial  c r i s e s a l s o r e s t r i c t e d t h e a v a i l a b i l i t y o f o u t s i d e c a p i t a l on w h i c h V a n c o u v e r , and t o a l e s s e r e x t e n t , V i c t o r i a , h a d d e pended f o r t h e i r The  shortage  development. o f c a p i t a l a n d t h e g e n e r a l d e p r e s s i o n were  responsible for the f a i l u r e of the local e l e c t r i c  l i g h t and  42 J . S . C h u r c h , " M i n i n g Companies i n t h e West K o o t e n a y and Boundary Regions o f B r i t i s h Columbia: C a p i t a l F o r m a t i o n and F i n a n c i a l O p e r a t i o n s , " U.B.C.,M.A. T h e s i s , 1961, p p . 2 0 4 - 5 . C o a s t a l i n v e s t o r s were t h e l e a s t s u c c e s s f u l o f a n y mine o w n e r s . 43 F . W , Howay, B r i t i s h C o l u m b i a , V a n c o u v e r , S . J . C l a r k e , 1914, v o l . I I , p . 4 6 5 . The c l a i m s were f i n a l l y a s s e s s e d a t $463,454. 44 F o r f u r t h e r d e t a i l s on t h e d e p r e s s i o n i n V a n c o u v e r , s e e my " R a i l w a y s , P o l i t i c i a n s and t h e D e v e l o p m e n t o f t h e C i t y o f V a n c o u v e r as a M e t r o p o l i t a n C e n t r e , 1886-1929," U n i v e r s i t y o f T o r o n t o , M„A. T h e s i s , 1 9 6 3 , c h a p t e r I I , p a s s i m .  34  s t r e e t r a i l w a y companies. way and L i g h t i n g Lighting  By 1895 t h e V i c t o r i a  Company, t h e V a n c o u v e r  Electric  Electric  Rail-  R a i l w a y and  Company, and t h e W e s t m i n s t e r and V a n c o u v e r Tramway  w e r e i n receivership„  As a r e s u l t o f t h e i n i t i a t i v e  of the  Bank o f B r i t i s h C o l u m b i a and t h e Y o r k s h i r e C o r p o r a t i o n , t h e major c r e d i t o r s  o f t h e Vancouver  E l e c t r i c R a i l w a y and L i g h t i n g  Company and t h e W e s t m i n s t e r and V a n c o u v e r Tramway, t h e m a i n l a n d u t i l i t y companies the  w e r e amalgamated and r e o r g a n i z e d i n 1895 as  C o n s o l i d a t e d R a i l w a y and L i g h t i n g  Company.  iv  The  C o n s o l i d a t e d R a i l w a y and L i g h t i n g  eventually gained control the  Victoria  transitional  o f t h e t w o m a i n l a n d c o m p a n i e s and  E l e c t r i c R a i l w a y and L i g h t i n g s t a g e between  Company w h i c h  Company, marks a  t h e e a r l y companies  moted and managed l o c a l l y u s i n g c a p i t a l  from wherever  be o b t a i n e d and t h e B.C.E.R. w h i c h was p r o m o t e d i n England using B r i t i s h c a p i t a l solidated  Company  w h i c h were p r o -  and c o n t r o l l e d  almost e x c l u s i v e l y .  t h e name i s a p p r o p r i a t e —  was  p a r t l y i n B r i t i s h C o l u m b i a and p a r t l y i n E n g l a n d . managed l o c a l l y b u t u s e d B r i t i s h  i t could  The Conpromoted  I t was  capital.  Once t h e y h a d i n c o r p o r a t e d t h e . C o n s o l i d a t e d R a i l w a y and Lighting tion  Company, t h e Bank o f B C 0  0  and t h e Y o r k s h i r e C o r p o r a -  a p p r o a c h e d F.S. B a r n a r d , a p r o m i n e n t V i c t o r i a  businessman  3 a n d Member interest stock  of Parliament.  R.M.  Horne-Payne  brokers  Electric  They  and L i g h t i n g  amalgamating  the Victoria  Consolidated  Railway  Payne  was  William  visiting  Van H o m e  vestigating  further the  information.  bentures Barnard  could  raise  i n 1094, i n  the recently  Company.  potential  Barnard  their  then  Railway  of Kootenay  obtained  Corporation. Railway  claims  £ 1 0 0 , 0 0 0 o f new  ofS i r and i n mines.^  asked f o r  an o p t i o n  Both  from  financial  and L i g h t i n g  against  chartered  I n 1894, H o r n e -  i n Barnard's proposal,  Consolidated  to satisfy  of the V i c t o r i a  early  of the Canadian P a c i f i c  interested  t o take  with  t h e London  C o l u m b i a as t h e g u e s t  Bank and t h e Y o r k s h i r e  agreed  t h e bonds  and L i g h t i n g  British  & Company,  Company  firm  the investment  Horne-Payne,  him t o endeavour t o  of Sperling  who h a d a c q u i r e d  Railway  asked  houses  Company d e -  t h e o l d companies i f  capital  t o be used  solely  .45 Barnard a l s o i n t e r e s t e d Horne-Payne i n i n v e s t i n g i n a Kootenay m i n i n g v e n t u r e , t h e L a n a r k C o n s o l i d a t e d M i n i n g and S m e l t i n g Company, w h i c h B a r n a r d a n d s e v e r a l o t h e r V i c t o r i a n s owned. I n 1895 t h e L a n a r k became t h e L i l l o o e t , E r a s e r R i v e r a n d C a r i b o o G o l d F i e l d s L t d . i n w h i c h H o r n e - P a y n e a n d R.K. S p e r l i n g w e r e among t h e o r i g i n a l s u b s c r i b e r s . ( C h u r c h , " M i n i n g C o m p a n i e s , " p p 29- 93-94, 294.) B a r n a r d was t h e m a n a g i n g d i r e c t o r o f t h e L . F . R . & C . G . F . L t d . I n May, 1897 B a r n a r d a p p e a r e d w i t h Thomas Dunn, a V a n c o u v e r h a r d w a r e m e r c h a n t , Wm. F a r r e l l , J . H . P a y n e , R.M. H o r n e - P a y n e , R.N. L a u r i e a n d F . G . V e r n o n a s d i r e c t o r s o f t h e S u n s h i n e M i n e w h i c h was r e g i s t e r e d i n L o n d o n . ( B . C . R e v i e w , v o l . 1, May 2 9 , 1 8 9 7 , p . 6 3 ) . F o r d e t a i l s o f B a r n a r d ' s m e e t i n g s w i t h H o r n e - P a y n e s e e F.R. G l o v e r , " B i r t h o f t h e B.C.E.R. C o m p a n y , " B . C . E l e c t r i c E m p l o y e e s ' ^ ^S^BiBS,' ° ( O c t o b e r 1 9 2 8 ) , p p . 5-7. v  o  l  X  I  36 for  improvements.  A f t e r the  went t o L o n d o n , met the Railway  1895  Parliamentary  H o r n e - P a y n e and  Amalgamation S y n d i c a t e .  o f H o r n e - P a y n e s a s s o c i a t e s , was J  felOO,000  necessary  & L. Company and  by Horne-Payne. t h e W.  & V.To  manager, B a r n a r d o f t h e new  prepared  t o advance  the  creditors.  the system, developing  Barnard  had  & L. Company.  a slight  become r e c e i v e r o f  As  r e c e i v e r and  and  general  organization improving  n e g o t i a t i n g w i t h the  lighting  and  cities.  Amalgamation  i m p r o v e m e n t i n t h e economy, t h e C.R.  Company i m p r o v e d t h e plans  represented  w i t h ' s u c h r o u t i n e m a t t e r s as traffic  between  i n L o n d o n , he became r e c e i v e r  W i t h the promise of funds from the R a i l w a y c a t e and  intermediary  a l s o concerned h i m s e l f w i t h the  Company and  of  composed  the B r i t i s h c a p i t a l i s t s  In August, w h i l e  formation  syndicate,  t o a c t as an  I n A p r i l 1895  o f t h e V a n c o u v e r E.R.  the  Barnard  This  to s a t i s f y the  B a r n a r d ' s m a i n r o l e was t h e C.R.  arranged  Session  r a i l w a y s y s t e m s and  Syndi&  L.  made  f o r t h e f u t u r e i n c l u d i n g t h e d e v e l o p m e n t o f w a t e r power  a t Seymour C r e e k . ^ 46 B a r n a r d u s e d t h e p r o s p e c t o f c h e a p w a t e r power i n an a r g u ment w i t h t h e C i t y o f V a n c o u v e r o v e r t h e r e n e w a l o f t h e s t r e e t l i g h t i n g c o n t r a c t . The C i t y was unhappy a b o u t t h e C.R.C.'s h i g h r a t e s . B e f o r e t h e c o n t r a c t e x p i r e d i n 1895, t h e C i t y c a l l e d for tenders. Barnard bought out a p o t e n t i a l l y s e r i o u s r i v a l , t h e W e s t e r n E l e c t r i c L i g h t , H e a t i n g and Power Company, b u t was f o r c e d t o o f f e r a s u b s t a n t i a l r e d u c t i o n i n o r d e r t o g e t t h e c o n t r a c t . A f t e r r e d u c i n g t h e p r i c e f r o m an a v e r a g e o f 33£ p e r l i g h t p e r n i g h t t o 27%$, B a r n a r d was s t i l l a b l e t o r e p o r t t h a t s t r e e t l i g h t i n g r e t u r n e d "a r e m u n e r a t i v e f i g u r e . " Barnard t o S h a r e h o l d e r s , A u g u s t 24, 1896, Box 3 34.  37 By  1895, the depression  fewer business dustries and in  failures  was s l o w l y l i f t i n g .  than  i n previous  was a d v a n c i n g  quietly.  t h e economy were r e f l e c t e d ability  were  some n e w i n -  were e s t a b l i s h e d , t h e r e a l e s t a t e business  building  the  years,  There  These s l i g h t  was  reviving  improvements  i n increased net earnings  of the Consolidated  Company t o e a r n  and i n  enough t o pay  47 interest. that  E c o n o m i c g r o w t h was a l s o d e m o n s t r a t e d b y t h e f a c t  t h e Vancouver  lighting  p l a n t was n e a r i n g  a d d i t i o n , t h e C o m p a n y was p r e p a r i n g  to build  line  on Robson S t r e e t , a m a i n t h o r o u g h f a r e  able  residential district  ment  Powell Street l i n e .  purchase The traffic  insisted  streets  to  and t o r e a c t i v a t e arrangeCouncil  should  railway lines  have t h e o p t i o n t o 48 after five years.  C o m p a n y was a l s o i n t e r e s t e d i n d e v e l o p i n g  for the interurban.  t h e Tramway g r a n t e d  Park;  b u t t h e Vancouver C i t y  that the City  any of t h e s t r e e t Consolidated  through the fashion-  The Company w a n t e d a l o n g t e r m  f o r t h e use o f these  successfully  downtown l i n e s ;  In  a new s t r e e t c a r  o f t h e West End, t o S t a n l e y  d o u b l e t r a c k some e x i s t i n g the  capacity.  reduced  In order  t o encourage  f a r e s t o bona f i d e  settlement,  settlers.  Company a l s o a s k e d t h e P r o v i n c i a l Government t o o f f e r  The  more  47 B a r n a r d t o R.H. S p e r l i n g , J a n u a r y 2 , 1 8 9 6 , C o n s o l i d a t e d R a i l w a y Company, L e t t e r B o o k , 1895-1896. 48 Vancouver D a i l y News-Advertiser, A p r i l paper supported the c i t y ' s c o n t e n t i o n .  9, 1 8 9 5 .  This  38 reasonable stumpage cleared the  terms  fees  of  industry  land.  the  along  When t h e originally pate  mainland  &  the  Victoria  L.  became p a r t  49 1896,  Payne,  with  the  on  Railway  E.R.  about. the  of to  1896 look  ( i t had  and  Light  Horne-Payne  0  Correspondence,  Chairman's  a  Report,  major  Company.  Sperling company  street  On  May  2,  13,  Inward, February  and  HorneCo. then  acting May  for  1,  1896  officially  s i x of h i s r a i l w a y and  1896,  C„F  1895, 1902,  0  their  i n -  i t s name) h e l d i t s  Lands  1895,  associates  the Consolidated  shortened  1895-1896;  &  the  Company.  the  March  On  Company  and  of  to p a r t i c i -  Barnard,  over  t o C h i e f Commissioner Book,  after  amalgamate  highest bidder.  recently  Turner,  L.  When  F.S.  Co. to  &  Victoria  1896,  the  &  they hoped  Victoria this  1895  they  Only  r e p l a c e l o g g i n g as  Consolidated Railway  C.R.C.,Letter  Premier's  slow.  Sperling  investments.  to J H.  was  as  and  spring  Barnard  manager,  however,  bolts  Horne-Payne  the  Company  shingle  cancel  Yorkshire Corporation  to bring  Vancouver  to  the  Electric  mining  cedar  and  and  Company, was  of  the  Railway  B.C.  land  9  i t s assets i n A p r i l ,  C.R.  terior  of  i n November  the  visited  made  Settlement,  t r a m l i n e  Bank  anxious  auctioned  who  C o n s o l i d a t e d Company,  foreclosed  In  the  companies  P a y n e was  government  century d i d farming  invited  i n the  of  for settlers  their  turn  to buyers  and  Gibson, British  W o r k s , May traffic Columbia,  ( P A B C ) ; R.M. p.  6.  Horne-  22,  " f i r s t meeting  o f p r o v i s i o n a l d i r e c t o r s - nominees o f t h e  Y o r k s h i r e and t h e Bank - and e l e c t e d p e r m a n e n t o f f i c i a l s w i t h m y s e l f / " B a r n a r d / as P r e s i d e n t , Mr. H o r n e - P a y n e , V i c e - P r e s i d e n t , M e s s r s . F a r r e l l , T a t l o w and Loewen t h e o t h e r d i r e c t o r s . " choice of p r o v i s i o n a l directors  The  indicates the l i m i t s of l o c a l  c o n t r o l i n t h e Company.^0  . At this  f i r s t meeting  various debentures of  the directors consolidatedthe  i n t o one c h a r g e o f £250,000 a t 4%%.  t h i s was e x c h a n g e d f o r e x i s t i n g  Half  f i r s t m o r t g a g e b o n d s ; one  q u a r t e r was u s e d t o p a y f o r t h e V i c t o r i a E l e c t r i c R a i l w a y and L i g h t i n g Company, p a r t o f t h e r e m a i n d e r was s o l d a t 95 and 5  a n o t h e r p a r t was u s e d as s e c u r i t y on a d v a n c e s f r o m L o n d o n . The  1 x  f u t u r e seemed p r o m i s i n g ; - t h e new Company was c o m p l e t e , t h e  economy was i m p r o v i n g and t h e Company h a d p r o m i s e s  of  adequate  c a p i t a l f r o m t h e R a i l w a y A m a l g a m a t i o n s y n d i c a t e and was a b l e t o p l a n e x t e n s i o n s and t h e c o n s t r u c t i o n o f w a t e r power p l a n t s on Seymour C r e e k n e a r V a n c o u v e r Then d i s a s t e r s t r u c k . w i t h passengers  and a t G o l d s t r e a m n e a r  Victoria.  On May 24, 1 8 9 5 , a s t r e e t c a r  crowded  en r o u t e t o E s q u i m a l t t o s e e a m i l i t a r y and  50 F.S. B a r n a r d , " E a r l y H i s t o r y o f t h e F o r m a t i o n , o f B r i t i s h C o l u m b i a E l e c t r i c R a i l w a y Company L i m i t e d , P r e c e d e d b y t h e Cons o l i d a t e d R a i l w a y Company," t y p e s c r i p t , J u l y , " 1 9 2 1 , Box 6 5 . C . J . Loewen, a V a n c o u v e r f i n a n c i a l , r e a l e s t a t e , l o a n and i n s u r a n c e a g e n t was B a r n a r d ' s b r o t h e r - i n - l a w . R.G. T a t l o w , a f u t u r e p r o v i n c i a l c a b i n e t , m i n i s t e r was a V a n c o u v e r b r o k e r , Of t h e 6,469 s h a r e s i s s u e d i n t h e C.R.C., 4,838 were t a k e n b y B a r n a r d ; 680 went t o D a v i d Oppenheimer and 469 t o H o r n e - P a y n e and H.M. Hubbard i n T r u s t . Q u a l i f y i n g s h a r e s were a l s o i s s u e d t o t h e d i r e c t o r ' s . J . B u n t z e n t o E.A. B e n n e t t , M a r c h 10, 1899, Box 7 3 . 51 B a r n a r d t o S h a r e h o l d e r s , A u g u s t  24, 1896, Box 3 34.  40 naval display f e l l Ellice  bridge  cause  Victoria's  collapsed.  l i v e s , many o t h e r s Consolidated  into  were  F i f t y - f o u r passengers injured.  Company d i r e c t l y  of the overcrowding  t h a t t h e C i t y was g u i l t y bridge  As a r e s u l t  launched against certain the  that  bridge  of the car.  the  advances.  objection that the  liability  first  were  since  t h a t any  •  Amalgamation Syndicate,  however, w i t h -  W i t h h e a v y damage c l a i m s  Company c o u l d  not offer  pending,  any s e c u r i t y f o r  Other p o t e n t i a l sources  o f c a p i t a l s u c h as  Any form o f second  mort-  t h e o n l y p o s s i b l e s e c u r i t y , was open t o t h e  i f any o f t h e l i t i g a n t s  a  judgment,  w o u l d e x c e e d t h e Company's r e s o u r c e s  and " t h e  mortgagees would, under t h e i r  possession,  speci-  t h e Company w o u l d b e c o v e r e d b y i n -  B a n k o f B . C . t h o u g h t t h e same w a y .  gage, apparently  because t h e  responsible  Barnard claimed  •  Consolidated  decided  to the original  t h e Company w o u l d n o t be h e l d  drew i t s f i n a n c i a l s u p p o r t .  further  The j u r y a l s o  T h e C o m p a n y ' s l e g a l c o u n s e l was  ^9  the  j u r y found t h e  of the accident, several law suits  t h e Company.  The R a i l w a y  their  f o r t h e a c c i d e n t be-  according  belonged t o the C i t y .  J i  lost  of contributory negligence  successful action against  surance.  The c o r o n e r ' s  responsible  had n o t been c o n s t r u c t e d  fications.  h a r b o u r when t h e P o i n t  and t h e p r o s p e c t  obtained  deed, be e n t i t l e d  of those  h o l d i n g second  t o take mortgages  •52 B a r n a r d t o R. N o r t h a l l L a u r i e , j o i n t m a n a g e r , R.A. S y n d i c a t e , J u n e 1 8 , 1 8 9 7 , C.R.C. L e t t e r B o o k , 1 8 9 5 - 1 8 9 6 .  41 or charges  g e t t i n g t h e i r money w o u l d be e x c e e d i n g l y d o u b t f u l . "  U n t i l t h e Railway Amalgamation Syndicate d e f i n i t e l y dec i d e d e a r l y i n A u g u s t t h a t i t would no l o n g e r advance  funds,  t h e C o n s o l i d a t e d Company h a d p r o c e e d e d w i t h e x t e n s i o n s  and i m -  p r o v e m e n t s w o r t h $19,000 more t h a n t h e a u t h o r i z e d l o a n o f $100,000.  The R a i l w a y A m a l g a m a t i o n S y n d i c a t e and o t h e r  ors expected and  t h e Company w o u l d u s e l o a n s t o p a y c a p i t a l  creditcosts  r e s e r v e o p e r a t i n g revenues t o pay debenture i n t e r e s t .  n a r d , hov/ever,  Bar-  had used o p e r a t i n g revenue f o r c a p i t a l c o s t s .  When t h e S y n d i c a t e r e f u s e d t o p r o v i d e f u n d s b e y o n d t h e o r i g i n a l l o a n , t h e C o n s o l i d a t e d Company h a d no money t o p a y o v e r d u e d e benture  interest.  On H o r n e - P a y n e s a d v i c e , B a r n a r d !  t o t h e Bank o f B.C. f o r an a d v a n c e . was t a k i n g s t e p s t o c o l l e c t it  held. As  appealed  The Bank r e p l i e d t h a t i t  i n t e r e s t p a s t due on t h e  debentures  5 4  a r e s u l t o f t h e P o i n t E l l i c e b r i d g e d i s a s t e r and t h e  overconfidence  o f t h e Managing D i r e c t o r , B a r n a r d ,  h o l d e r s once more f o r e c l o s e d .  the debenture  On O c t o b e r 13, 1896, W i l l i a m  53 A.C. M i t c h e l l - I n n e s t o B a r n a r d , August. 3, 1896, Box 334; B a r n a r d t o S h a r e h o l d e r s , A u g u s t 24, 1896, Box 334. 54 B a r n a r d t o M i t c h e l l - I n n e s , A u g u s t 3, 1896, C.R.C, L e t t e r Book, 1895-1896; M i t c h e l l - I n n e s t o B a r n a r d , A u g u s t 10, 1894, Box 334; Manager o f Bank o f B.C., V a n c o u v e r t o B u n t z e n , S e p t ember 12, 1896, Box 334; H o r n e - P a y n e t o B a r n a r d , September 9, 1896, C.R.C. L e t t e r Book, 1895-1896.  42 Farrell the  of  the  Company.  were  no  He  electric  lights  In December assets  next  of  Railway  to  the  the  the  of  receiver  i t s assets.  Investment  railways  i n Vancouver  through  Yorkshire  Consolidated  street  operate  o w n e r s h i p went  1896  and  auction  s i x months  continued  the  an  became t h e  of  There  55 "  the  London,  Corporation  advertised  buyers.  During  In  Yorkshire  Company.  and  Victoria.  s e v e r a l changes  Corporation  Company t o  and  agreed  a new  to  of  hand.  sell  the  firm, the  This  new  company,  to  second  w  Colonial  in  turn,  57 sold  the  property  British  Columbia  gistered meeting  f o r £462,000 Electric  i n London on  April  8,  on  Railway  April  1897.  3,  a  Company.  1897,  Several  held of  the  new  fxrm,  This  the  company,  its first  re-  Board  d i r e c t o r s of  the  new  58 company 55  had  Wm.  Letter  Farrell Book,  November 56  been  1896,  Because  the  the  only  barest  57 CR.  Harold &  L.  B.C.E.R. 58  F.S.  Montague, R.K.  Co.  made  Barnard;  Sperling.  of a  of  Syndicate  1896, 16,  C.R.C. 1896,p.5;  R.M  Co.,  0  of  of  the  almost  June  27,  Horne-Payne; London;  Company now  lay  Company  in  reveal  transactions.  director  a profit  the  the. C o n s o l i d a t e d  these  to Davidson,  &  13,  Colonist,October  c o n t r o l of  records  Brown,  Hall  Railway Amalgamation  C.R.C.,October  Victoria  financial sketch  Brown  the  p.8.  local  G.  of  employees,  1895-1896;  18,  England, the  to  members  R.N.  B.C.E.R., c l a i m e d  £50,000 1921, A.C  Laurie,  on  Box  the  sale to  65.  Mitchell-Innes CP.  the  Norton  of  and  the  43  Both the c a p i t a l London. res  and t h e c o n t r o l o f t h e new  f i r m came from  W i t h i n the year, Barnard, the o n l y d i r e c t o r normally  i d e n t i n B r i t i s h C o l u m b i a , had  managing  "arranged t o r e s i g n "  director.  Local capitalists,  w i t h more o p t i m i s m t h a n c a p i t a l ,  b e e n a b l e t o p r o v i d e modern e l e c t r i c transportation the f i n a n c i a l  lighting  and  i n southwestern B r i t i s h Columbia;  they lacked  resources necessary to sustain t h e i r  of  t o use t h e s t r e e t r a i l w a y t o a d v a n t a g e .  the B r i t i s h Columbia  Electric  enterprises  The  sufficformation  R a i l w a y Company marked t h e  f i n a l p a s s i n g o f c o n t r o l t o London f r o m t h e hands o f would-be c a p i t a l i s t s . Vancouver, V i c t o r i a  The  major e l e c t r i c  and New  had  urban  t h r o u g h h a r d t i m e s o r t o w a i t f o r t h e c i t i e s t o grow iently  as  Westminster  utilities were now  local  in  owned and  a d m i n i s t e r e d b y a B r i t i s h company o p e r a t i n g i n B r i t i s h  Columbia,  CHAPTER I I  A SOLID FOUNDATION, 1897-1905  i  I n c o n t r a s t t o i t s p r e d e c e s s o r s , t h e B.C.E.R. was s o u n d l y f i n a n c e d company f u n c t i o n i n g Columbia.  Being s u b j e c t t o the v i c i s s i t u d e s  and bond m a r k e t s , funds.  i n a prosperous  The  a British  of the stock  i t d i d n o t e n j o y an u n l i m i t e d s u p p l y o f  s o u n d n e s s o f t h e company was  of the r e l u c t a n c e of the d i r e c t o r s  l a r g e l y the  t o spend  result  c a p i t a l before  a c t u a l l y r a i s i n g i t , t h e i r r e f u s a l , except i n  emergencies,  t o r a i . s e c a p i t a l o t h e r t h a n b y t h e , s a l e o f s t o c k s and  long  t e r m d e b e n t u r e s , and t h e i r g e n e r a l u n w i l l i n g n e s s t o e x p a n d t h e i r o p e r a t i o n s w i t h o u t c o n v i n c i n g e v i d e n c e of immediate t u r n s from a d d i t i o n a l  investments.  t h e s h o r t a g e o f c a p i t a l was p r o f i t a b l e new  Between 1897  and  a g r e a t e r problem than  1905, finding  o p p o r t u n i t i e s f o r investment i n B r i t i s h  Columbia.  The b a s i c d i f f i c u l t y o f t h e B.C.E.R. was ' r e c o n c i l i n g a v a i l a b i l i t y of c a p i t a l w i t h the d e s i r e s of B r i t i s h f o r more s t r e e t power.  r a i l w a y s and a d d i t i o n a l  This d i f f i c u l t y  re-  the  Columbians  electric lights  and  most c l e a r l y e x p r e s s e d i n t h e t e n s i o n 44  b e t w e e n t h e London B o a r d o f D i r e c t o r s , who capital, the  had t o r a i s e  and t h e management i n V a n c o u v e r , who  company's p h y s i c a l f a c i l i t i e s ,  good w i l l  -- was  the  had t o d e v e l o p  e a r n a p r o f i t and  p a r t i c u l a r l y a c u t e b e t w e e n 1897  establish  and  1905,  T h i s c o n f l i c t b e t w e e n t h e c a u t i o n o f t h e B.C.E.R.'s L o n d o n f i n a n c i e r s and t h e e n t h u s i a s m o f t h e V a n c o u v e r management f o r e x p a n s i o n i s a m a j o r theme o f t h e f i r s t p e r i o d o f t h e B.C.E.R.'s history.  N e v e r t h e l e s s , i n s p i t e of t h i s c o n f l i c t , or perhaps  because  o f i t , t h e B.C.E.R. s u c c e e d e d i n e s t a b l i s h i n g a  foundation —  solid  f i n a n c i a l l y and p h y s i c a l l y —  b e t w e e n 1897  and  t h e two decades p r i o r t o W o r l d War  I , London was  the  1905. In  c e n t r e o f t h e most e x t e n s i v e f i n a n c i a l e m p i r e i n t h e w o r l d . The  E n g l i s h money m a r k e t s w e r e d e e p l y i n v o l v e d i n o v e r s e a s i n -  vestment.  From t h e s e m a r k e t s , p a r t i c u l a r l y  c a p i t a l flowed t o a l l p a r t s of the w o r l d . l y p o p u l a r among B r i t i s h  ors.  from t h a t of London, Canada was  especial-  By 1913 t h e r e were more  B r i t i s h f u n d s i n Canada t h a n i n any o t h e r o v e r s e a s c o u n t r y s a v e the  U n i t e d States.-'-  B r i t i s h i n v e s t o r s c o u l d choose  from a  g r e a t v a r i e t y o f C a n a d i a n i s s u e s w h i c h were q u o t e d on t h e London and, t o a l e s s e r e x t e n t , on t h e p r o v i n c i a l s t o c k e x c h a n g e s . Government and r a i l w a y s e c u r i t i e s were t h e most p o p u l a r i n v e s t -  1 A.R H a l l , The London C a p i t a ] . M a r k e t and A u s t r a l i a , 187 01914, C a n b e r r a , A u s t r a l i a n N a t i o n a l U n i v e r s i t y , 1963, p. 11. 0  merits b u t B r i t i s h money went i n t o p u b l i c u t i l i t y m i n i n g e n d e a v o u r s and r e a l e s t a t e  companies,  speculations.  B o t h d o m e s t i c and o v e r s e a s c o m p a n i e s c a t e r e d  t o the  d i f f e r i n g needs o f i n v e s t o r s b y o f f e r i n g v a r i o u s k i n d s o f o r d i n a r y and p r e f e r e n c e investing public.  s h a r e s as w e l l as d e b e n t u r e s t o t h e  Ordinary  shares d i d not promise a dividend,  every year but o f f e r e d the highest  rate of dividend  of p r o s p e r i t y .  o f w h i c h t h e r e were  Preference  v a r i e t i e s , had f i r s t the  investor  shares,  c l a i m on d i v i d e n d payments and  i n times several  promised  ." a r e a s o n a b l y s e c u r e t h o u g h modest r e t u r n .  benture holders  normally  but had t h e g r e a t e s t  received  the lowest rate of r e t u r n  s e c u r i t y of investment.  I f t h e company  f a i l e d t o pay i n t e r e s t , t h e debenture holders  had f i r s t  on  companies,  i t s assets.  followed  De-  The B.C.E.R., l i k e most o t h e r  claim  t h e custom o f i s s u i n g d i f f e r e n t forms o f s e c u r i t i e s .  Between 1897 and 1913, t h e B.C.E.R. r a i s e d o v e r £9,000,000 at comparatively Columbia. the  cheap r a t e s i n B r i t a i n f o r use i n B r i t i s h  A b o u t s i x t y p e r c e n t o f t h i s c a p i t a l was r a i s e d b y  s a l e o f d e b e n t u r e s , an i n c r e a s i n g l y p o p u l a r f o r m o f i s s u e  since i t permitted t h e company. a t 4%%.  e x i s t i n g shareholders  t o retain control of  E i g h t y p e r c e n t o f t h e s e d e b e n t u r e s were  issued  I n t h e y e a r s b e t w e e n 1897 and 1913 when t h e company  r a i s e d most o f i t s c a p i t a l , t h e a v e r a g e E n g l i s h bank r a t e  47 fluctuated paid  bond  Canadian  between  3,00%  interest  at  industrial  bond  the  B.C.E.R. c a n  4.94%  and  5.33%.  raised  Not  o n l y was  small  a  be  most  per  the  issuing  their  usual  evidence  B . C . E . R . was  the  of  even  years, during  company  Preference  closely  available indeed  those  government and of  of  3.68%,  Canada  and  investment  compared,  the  paid  B.C.E.R.'s  These of a  were  with between  and  "safe"  readily  sold.  to  the  investment. suggests  orphans'  justifiable.  capital  L l attractive  stockholders  "widows'  The  that  stock."  the  received regular dividends,  and  past  to holders  Except  Such  during  years,  dividends  Stock.  of  shares.  about  a  anxious  5%  cent  B . C . E . R . was  a l l shareholders  t o pay  kind  denomination  r e p u t a t i o n f o r s a f e t y was  war  3.43%  i s s u e s , the  forty  i n v e s t o r , but  limited the  by  The  3  remaining  was  4.93%.^  r a t e s between  which  The  and  prudence of  permitted  Cumulative  the  Perpetual  4  •i .2 C.K.  Hobs on,  Mac.millan,  1914,  The  Export  of  British  Capital,  New  York,  p . 190.  3 J a c o b ' V i n e r , Canada's Balance of I n t e r n a t i o n a l Indebtedness, 1 9 0 0 - 1 9 1 3 , C a m b r i d g e , H a r v a r d U n i v e r s i t y P r e s s ' , 1924, p . 98. 4 Cumulative P e r p e t u a l P r e f e r e n c e s t o c k was a relatively new form o f p r e f e r r e d s h a r e ' d e s i g n e d t o overcome o b j e c t i o n s t o o r d i n a r y p r e f e r e n c e s h a r e s w h i c h , i n t h e c a s e o f many c o m p a n i e s , h a d l i t t l e security. Cumulative Perpetual Preference shareholders had f i r s t r i g h t t o dividends.. T h e c o m p a n y was o b l i g e d t o p a y a n y a r r e a r s on t h e s e s h a r e s b e f o r e p a y i n g d i v i d e n d s on any other shares.  48 During prosperous  p e r i o d s t h e r e w e r e o n l y two  on t h e company's a b i l i t y h o l d e r s o f D e f e r r e d and company was  t o p a y handsome d i v i d e n d s t o Preferred Ordinary shares.  establishing  i t s e l f and w h i l e i t was  r a p i d l y i t u s e d much o f i t s p r o f i t s  f o r new  on d i v i d e n d s was  their political h i g h e r wages. The  expanding  L a t e r , - t h e main  the f e a r of angering customers  P r e f e r r e d shares  u s u a l l y p a i d o n l y 5% t o  8% p a i d t o h o l d e r s o f D e f e r r e d O r d i n a r y S t o c k the l e a s t preference i n time  not e x t r a o r d i n a r i l y h i g h .  d u s t r i a l s t o c k , was t h e B.C.E.R. was  paying  p a y i n g . 8%.  p r o s p e r i t y b e f o r e t h e war, and  When t h e  lighting  The  and  l e a d e r s o r o f s t i m u l a t i n g e m p l o y e e demands f o r  s t o c k w h i c h had was  the  capital projects  or f o r the c r e a t i o n of generous r e s e r v e . f u n d s . limitation  limitations  The  the  of a d v e r s i t y  1912,  the l a s t f u l l  while  year  6 12%.  i t s cheap c a p i t a l because i t s  f i n a n c i a l a g e n t and t h e c h a i r m a n o f i t s B o a r d , being c a r e f u l l y tuned  of  o t h e r C a n a d i a n tramway c o m p a n i e s  e n t e r p r i s e s were p a y i n g d i v i d e n d s o f 6% t o  B.C.E.R. e n j o y e d  —  C.P.R,, a g i l t - e d g e i n -  1 0 % on i t s o r d i n a r y s h a r e s in  6%.  R.M.  t o t h e s t a t e o f t h e money  5 Canadian P a c i f i c Railway, Annual Reports,  Horne-Payne  markets,  1912-1918,passim.  6 The London / 0 n t a r i £ 7 S t r e e t R a i l w a y and t h e S h a w i n i g a n Wate and Power Company p a i d 6%; t h e M o n t r e a l Tramways,7^%; t h e T o r o n t o R a i l w a y Company, 8%; t h e M o n t r e a l L i g h t , Heat and Power Company, 1.0%; and t h e W i n n i p e g E l e c t r i c R a i l w a y Company, 12%. Thomas S k i n n e r , e d . , The S t o c k E x c h a n g e Y e a r Book, L o n d o n , 19.13, p a s s i m .  49 d e l a y e d i s s u e s whenever c o n d i t i o n s were u n f a v o u r a b l e . d e l a y s , which  These  i n the long run c o n t r i b u t e d t o t h e success o f  t h e company, w e r e l a r g e l y r e s p o n s i b l e f o r t h e t e n s i o n b e t w e e n t h e Board  i n London and t h e management i n V a n c o u v e r . 7  Horne-Payne,' a p r e c o c i o u s " f i n a n c i a l g e n i u s ' understanding of B r i t i s h  investors.  He c l a i m e d  had a shrewd  responsibility  f o r i n v e s t i n g $500,000,000 o f B r i t i s h c a p i t a l i n C a n a d i a n j e c t s i n c l u d i n g t h e B.C.E.R. and t h e C a n a d i a n  Northern  pro-  Railways.  T h r o u g h o u t h i s r e l a t i o n s h i p w i t h t h e B.C.E.R. h e - p e r i o d i c a l l y t h r e a t e n e d t o u s e h i s f i n a n c i a l i n f l u e n c e -in London a g a i n s t t h e p r o v i n c i a l government o r m u n i c i p a l i t i e s w i t h t h e w e l l - b e i n g o f t h e B.C.E.R.  i f they  Although l o c a l  interfered governments  d i d n o t a l w a y s h e e d t h e s e w a r n i n g s , H o r n e - P a y n e n e v e r gave a r e a l demonstration  o f t h e e x t e n t o f h i s f i n a n c i a l power.  7 D-B. Planna . T r a i n s o f R e c o l l e c t i o n , T o r o n t o , M a c m i l l a n ^ 1924, pp. 243-245. H o r n e - P a y n e was i n h i s l a t e t w e n t i e s when he o r g a n i z e d t h e B.C.E.R. 8 H o r n e - P a y n e was t h e o n l y member o f t h e C a n a d i a n N o r t h e r n Board n o t n o r m a l l y r e s i d e n t i nToronto. H i s work i n r a i s i n g c a p i t a l was v i t a l f o r t h e s u c c e s s o f t h e C.N.R.; h o w e v e r , h i s r o l e i n f o r m i n g C a n a d i a n N o r t h e r n p o l i c y does n o t seem t o h a v e b e e n an i n f l u e n t i a l o n e . He k e p t t h e i n t e r e s t s o f t h e B.C.E.R. and t h e C.N.R. q u i t e s e p a r a t e . The t w o r a i l w a y s competed i n t h e E r a s e r V a l l e y and on t h e S a a n i c h P e n i n s u l a . I n t h e p u r c h a s e o f t h e V a n c o u v e r Gas Company and t h e b u i l d i n g o f t h e M i l l s i d e e x t e n s i o n t o t h e C a n a d i a n W e s t e r n Lumber Company m i l l and t o w n s i t e , M a c k e n z i e and Mann and t h e B.C.E.R. c o - o p e r a t e d as b u s i n e s s m e n , n o t as c l o s e a s s o c i a t e s o r f r i e n d s .  50 H o r n e - P a y n e ' s l o n g c a r e e r w i t h t h e B.C.E.R.  he was  c h a i r m a n o f t h e B o a r d f r o m 1897 u n t i l 192 8 when t h e company was s o l d t o t h e N e s b i t t , Thomson i n t e r e s t s — of t h e c o n t i n u i t y i n t h e p e r s o n n e l  o f t h e B.C.E.R.'s B o a r d .  Two o t h e r o r i g i n a l d i r e c t o r s , F.S. B a r n a r d equally long s e r v i c e . than t e n y e a r s .  9  i s indicative  and G.P. N o r t o n h a d  Many o t h e r d i r e c t o r s s e r v e d  The r e c o r d s  f o r more  i n V a n c o u v e r do not. f u l l y r e v e a l  the e x t e n t of each d i r e c t o r ' s p e r s o n a l h o l d i n g s  i n t h e company.  Some d i r e c t o r s h e l d o n l y t h e i r £500 w o r t h o f q u a l i f y i n g o n l y o n e , R.K. S p e r l i n g , was l i s t e d , largest shareholders. which t h e evidence  i n 1909, among t h e t e n  I n t h e same y e a r  (the o n l y year f o r  i s a v a i l a b l e ) , H o r n e - P a y n e h e l d £25,250  worth of Deferred Ordinary  Stock  i n h i s own name o r a b o u t 4%  of t h e issued stock of t h a t c l a s s .  The e v i d e n c e  indicates  t h a t the d i r e c t o r s d i d not s e p a r a t e l y or c o l l e c t i v e l y anywhere n e a r a m a j o r i t y o f t h e s h a r e s . t h e i r personal pecuniary earned a p r o f i t .  shares;  hold  I t was, h o w e v e r , t o  a d v a n t a g e t o e n s u r e t h a t t h e company  I t was c u s t o m a r y t o a l l o w t h e d i r e c t o r s t o  d i v i d e 1 0 % o f t h e p r o f i t s among t h e m s e l v e s a f t e r  5% h a d b e e n  p a i d on t h e i s s u e d capital„ 9 See A p p e n d i x 9. S t o c k Exchange Y e a r Book, 1 9 0 1 , p . 7 4 1 . Of a l l t h e t r a m way and o m n i b u s • c o m p a n i e s l i s t e d i n . t h e S t o c k E x c h a n g e Y e a r Book i n 1 9 0 1 , t h e B.C.E.R. was t h e o n l y one w i t h t h i s p r o v i s i o n , The B.C.E.R. r e t a i n e d t h i s c u s t o m o f g i v i n g d i r e c t o r s a s p e c i a l s h a r e i n t h e p r o f i t s u n t i l 192 8. 1  0  51 H o r n e - P a y n e h a d f i r s t become i n t e r e s t e d i n B r i t i s h Columbia through  h i s work w i t h S p e r l i n g & Co., t h e London  s t o c k b r o k e r s who o r i g i n a l l y  f l o a t e d t h e B.C.E.R.  I n 1903,  t h e B r i t i s h E m p i r e T r u s t Company w h i c h h a d b e e n f o r m e d a yeare a r l i e r t o c a r r y on a f i n a n c i a l b u s i n e s s agents, panies  r e g i s t r a r s and s e c r e t a r i e s f o r c o l o n i a l and o t h e r took  com-  over t h e t a s k o f making f i n a n c i a l arrangements f o r  t h e B.C.E.R.  F o r many y e a r s  p i r e T r u s t Company s h a r e d Lombard S t r e e t . for  and t o a c t as t r u s t e e s  t h e B.C.E.R. and t h e B r i t i s h  Em-  o f f i c e s on S t . N i c h o l a s L a n e o f f  H o r n e - P a y n e a c t e d as c h a i r m a n o f t h e B o a r d  b o t h c o m p a n i e s and t h e r e was some o v e r l a p p i n g i n t h e  d i r e c t o r s h i p s o f t h e two f i r m s .  Without reference t o the  records  o f t h e B r i t i s h E m p i r e T r u s t Company o r l i s t s  holders  o f t h e B.C.E.R., i t i s i m p o s s i b l e t o d e t e r m i n e t h e  e x t e n t t o w h i c h t h e T r u s t Company i t s e l f If  i t was t y p i c a l o f i t s k i n d —  t h i n k t h a t i t was n o t — placed the savings  of share-  i n v e s t e d i n t h e B.C.E.  and t h e r e i s no r e a s o n t o  i t probably  d i r e c t l y and i n d i r e c t l y  o f many s m a l l and medium B r i t i s h i n v e s t o r s  i n t h e B.C.E.R. and o t h e r C a n a d i a n e n t e r p r i s e s i n w h i c h i t h a d II' an i n t e r e s t .  This close r e l a t i o n s h i p with the B r i t i s h  Empire  T r u s t Company gave t h e B.C.E.R. e n t r e e t o B r i t i s h m a r k e t s ; i t did  n o t , h o w e v e r , g u a r a n t e e a s t e a d y and u n l i m i t e d f l o w o f  B r i t i s h c a p i t a l t o B r i t i s h Columbia." 11 T h e s e i n c l u d e d t h e C a n a d i a n N o r t h e r n R a i l w a y s and i t s man} a s s o c i a t e d c o m p a n i e s , t h e W i n n i p e g E l e c t r i c R a i l w a y and t h e C a n a d i a n W e s t e r n N a t u r a l Gas, L i g h t , H e a t and Power Company o f Calgary.  11 Raising  i t s c a p i t a l i n E n g l a n d , t h e B.C.E.R- was n o t  u n i q u e among c o m p a n i e s o p e r a t i n g i n Canada a t t h e t i m e .  Most  B r i t i s h i n v e s t o r s i n Canada, h o w e v e r , p e r m i t t e d C a n a d i a n s t o manage t h e i r b u s i n e s s e s t h e m s e l v e s . J  £l  What was u n u s u a l a b o u t  t h e B.C.E.R. was t h e c l o s e c o n t r o l w h i c h t h e B o a r d o f D i r e c t o r s , and p a r t i c u l a r l y H o r n e - P a y n e , e x e r c i s e d o v e r t h e company.  As  t h e company d e v e l o p e d and p r o s p e r e d , t h e B o a r d g a v e t h e l o c a l management g r e a t e r f r e e d o m o f a c t i o n i n m a k i n g d e c i s i o n s  on  r o u t i n e m a t t e r s b u t no m a j o r d e c i s i o n was e v e r made w i t h o u t l e n g t h y d i s c u s s i o n s b y c a b l e and l e t t e r b e t w e e n t h e management i n V a n c o u v e r and t h e B o a r d i n L o n d o n .  The manager i n V a n -  c o u v e r was o n l y an o f f i c i a l o f t h e company.  H i s task, was t o  i n t e r p r e t t h e needs o f B r i t i s h C o l u m b i a t o t h e d i r e c t o r s  as  b e s t he c o u l d and t o e x e c u t e t h e d e c i s i o n s o f t h e London B o a r d . U n l i k e t h e d i r e c t o r s o f modern c o r p o r a t i o n s who a r e o f t e n t h e t o o l s o f management, t h e management o f t h e B.C.E.R. was  very  much t h e s e r v a n t o f t h e d i r e c t o r s . When t h e B.C.E.R. was o r g a n i z e d i n 1897, t h e d i r e c t o r s r e t a i n e d F.S. B a r n a r d as m a n a g i n g d i r e c t o r .  Barnard found i t  12 C P . Howland, " I n t r o d u c t i o n , " t o H e r b e r t F e i s , E u r o p e ; t h e W o r I d ' s B a n k e r , 187 0-1914, New Haven, Y a l e U n i v e r s i t y P r e s s , 1930, p. i x ; s e e a l s o C l a r k C. S p e n c e , B r i t i s h I n v e s t m e n t s and t h e A m e r i c a n M i n i n g F r o n t i e r , 1860-1901, I t h a c a , C o r n e l l U n i v e r s i t y P r e s s , 1958, p p . 92-93; F.W. F i e l d , C a p i t a l I n v e s t m e n t s . i n C a n a d a , M o n t r e a l , M o n e t a r y Times o f Canada, 1911, p.22  53 difficult the  t o be m e r e l y a manager.  Without the sanction of  B o a r d , he i n c o r p o r a t e d t h e V a n c o u v e r  Power Company and s p e n t  money on c a p i t a l a c c o u n t b e f o r e t h e B o a r d a p p r o p r i a t e d t h e s e sums."'  -3  W i t h i n a y e a r , B a r n a r d " a r r a n g e d t o r e s i g n " h i s mana-  g e r i a l post.  He c o n t i n u e d t o s e r v e on t h e B o a r d b u t , as h i s  u s u a l r e s i d e n c e was V i c t o r i a , he d i d n o t a t t e n d t h e B o a r d meeti n g s w h i c h were h e l d  i n London.  B a r n a r d ' s s u c c e s s o r as manager was J o h a n n e s B u n t z e n , a Dane who h a d m i g r a t e d t o V a n c o u v e r bookkeeper  i n 1890 and who h a d become  o f t h e V.E.R. & L. Company and l a t e r , b u s i n e s s .  manager o f t h e C o n s o l i d a t e d R a i l w a y and L i g h t i n g  Company. 14  Though g r a c e d w i t h t h e t i t l e ,  "manager," B u n t z e n  more t h a n t h e a u t h o r i t y o f a s u p e r v i s o r .  had  little  Indeed, t h e d i r e c t o r s  wished t o designate him "General Superintendent," a t i t l e he r e j e c t e d  on t h e g r o u n d s  t h a t i n North American  which  usage such a  15  name i m p l i e d an e x p e r t e l e c t r i c i a n . 13 A.Eo Knos t o B u n t z e n , May 25, 1898, Box 687; H i r a m W i l l i a m s t o B a r n a r d , November 24, 1897, Box 687; M i n u t e s o f t h e B o a r d o f D i r e c t o r s , F e b r u a r y 21, 1898, Box 687. 14 F.R. G l o v e r , "Mr. J . B u n t z e n , " B.C.E.E.M., v o l . V (November 1 9 2 2 ) , p p . 4-5. B u n t z e n ' s s a l a r y i s i n d i c a t i v e o f t h e company's a p p r e c i a t i o n of h i s s e r v i c e s . I n 1898 i t v/as- r a i s e d f r o m $200 t o $250 p e r m o n t h . L a t e r , i t was r a i s e d t o $5,000 p e r y e a r and on A p r i l 1, 1902 t o $ 6 , 0 0 0 From t i m e t o t i m e B u n t z e n r e c e i v e d a d d i t i o n a l bonuses. I n 1898 he was g i v e n 75 s h a r e s o f f u l l y p a i d - u p s h a r e s v a l u e d a t L10 e a c h . I n 1903 he h a d a s i x months' h o l i d a y and was g i v e n $2,000 ' f o r t r a v e l e x p e n s e s . F o r compara t i v e p u r p o s e s , i n 1904, motormen and c o n d u c t o r s e a r n e d 20-27 9 per hour. o  15 B u n t z e n t o F r a n c i s W i l l i a m s , J a n u a r y 27, 1898, GLB, #1.  54 Throughout t h i s  e a r l y p e r i o d , the o r g a n i z a t i o n of  company i n B r i t i s h C o l u m b i a was as g e n e r a l manager o v e r  uncomplicated,.  the  Buntzen  acted  a l l operations i n B r i t i s h Columbia w i t h  16 A.T.  Goward  as l o c a l manager i n V i c t o r i a  of l o c a l managers i n New various superintendents The  c a r e e r o f one  Westrainster. and  and  a succession  Under t h e managers v/ere  operating personnel.  of the f i r s t  superintendents  illustrates  t h e c l o s e c o n n e c t i o n w h i c h t h e company m a i n t a i n e d , w i t h i t s Board. was  R.H.  S p e r l i n g , t h e son o f R.K.  Sperling, a director,  an e l e c t r i c a l e n g i n e e r by p r o f e s s i o n .  C o l u m b i a v / i t h H o r n e - P a y n e i n 1896, CoR.  He  came t o B r i t i s h  r e m a i n e d t o work f o r t h e  & L. Company and became t h e B.C.E.R. 's f i r s t  ent i n V i c t o r i a .  I n 1902  S p e r l i n g moved t o V a n c o u v e r as  engineer  and  in  he became g e n e r a l manager, a p o s i t i o n he  1905,  general superintendent.  u n t i l h i s r e t u r n t o England' i n 1914. his  first  superintend--  On B u n t z e n s 1  chief  retirement ably held  Sperling probably  got  j o b w i t h t h e company b e c a u s e o f h i s f a m i l y c o n n e c t i o n s  he r o s e t o t h e g e n e r a l m a n a g e r s h i p on h i s own  merits.  The  d i r e c t o r s would not s a c r i f i c e the s a f e t y of the investment order t o p r a c t i c e  in  nepotism.  16 Goward, o f W e l s h b i r t h , b e g a n as a j u n i o r o i l e r i n t h e Rock Bay s t e a m p l a n t i n 1890 and s e r v e d b r i e f l y as a c o n d u c t o r w i t h t h e N.E.T. & L. Company, He r e t i r e d i n 1945 as v i c e - p r e s i d e n t o f t h e B.C.E.R. a f t e r h a v i n g s p e n t h i s e n t i r e c a r e e r w i t h t h e company i n V i c t o r i a .  In  L o n d o n , t h e company o p e r a t e d  a s e c r e t a r y as t h e c h i e f e m p l o y e e . s e c r e t a r y , who  was  from a s m a l l o f f i c e The  main f u n c t i o n of  an o f f i c e r o f t h e company, was  the  to transmit  i n f o r m a t i o n f r o m E r i t i s h C o l u m b i a t o t h e B o a r d and As he was  with  vice versa.  i n an e x c e l l e n t p o s i t i o n t o g a i n an o v e r a l l v i e w o f  t h e company, t h e s e c r e t a r y ' s p o s i t i o n was  u s e d as a  g r o u n d f o r management.  a c t e d as s e c r e t a r y  F r a n c i s Hope, who  f r o m 1898  t o 1905,  manager.  L a t e r , George K i d d , a c h a r t e r e d a c c o u n t a n t ,  three years  training  moved t o V a n c o u v e r as a s s i s t a n t g e n e r a l served  as s e c r e t a r y - b e f o r e moving t o V a n c o u v e r as  a n t g e n e r a l manager t o r e p l a c e Hope who  assist-  returned to England  b e c a u s e o f poor, h e a l t h . B u n t z e n and h i s s u c c e s s o r s k e p t t h e B o a r d of operations  i n B r i t i s h Columbia.  well-informed  Routinely, they  w e e k l y r e p o r t s on s t r e e t r a i l w a y t r a f f i c  submitted  r e c e i p t s , monthly r e -  p o r t s on t h e number o f l i g h t i n g and power c o n n e c t i o n s q u e n t r e p o r t s on a c c i d e n t s and m a t t e r s t h e company.  c e i v e d i n London and a f f a i r s before  fre-  of g e n e r a l i n t e r e s t  These r e p o r t s were n o t m e r e l y f i l e d  the chairman of the Board read every  and  to  i n London:  l e t t e r t h e company r e -  s p e n t some t i m e e a c h m o r n i n g on t h e B.C.E.R.  attending t o h i s other business  interests.  B e c a u s e o f t h e i r r e s p o n s i b i l i t y f o r t h e company's  capital,  t h e B o a r d i n s i s t e d on a u t h o r i z i n g a l l b u t v e r y r o u t i n e o p e r a t i n g expenditures  and  expected  t o be  informed  of c u r r e n t  operating  56 costs.  The  Board, however,  informed of developments  d i d not always keep Buntzen  a f f e c t i n g t h e company.  well-  He d i d n o t  a l w a y s r e c e i v e r e p o r t s o f t h e company's a n n u a l m e e t i n g .  Ex-  c e p t f o r t h e C a n a d i a n s h a r e h o l d e r s whose d i v i d e n d s were p a i d t h r o u g h h i s o f f i c e , he knew o n l y ' v a g u e l y t h a t  " t h e Company's  p r o p e r t y i s owned b y a l a r g e number o f p e o p l e o f d i f f e r e n t r a n k s in life  a t home and i n B r i t i s h C o l u m b i a .  Many o f whom a r e e n 17  t i r e l y dependent  on t h e x r i n v e s t m e n t s f o r t h e i r  income...."  O r d i n a r y c o m m u n i c a t i o n s were v i a l e t t e r w h i c h t o o k two weeks e a c h way.  C a b l e s were used w i t h i n c r e a s i n g f r e q u e n c y  as t h e company grew, m a i n l y t o s e n d m o n t h l y r e p o r t s t o L e t t e r s were u s e d m a i n l y f o r m a t t e r s o f f i n a n c e and tions.  B u n t z e n , however,  The  London.  appropria-  o b j e c t e d t h a t a p p r o p r i a t i o n s were as  i m p o r t a n t as o p e r a t i n g r e s u l t s t h e c a b l e more o f t e n .  about  and p e r s u a d e d t h e B o a r d t o use  a v a i l a b i l i t y of r a p i d  communication  b y c a b l e s t r e n g t h e n e d t h e c o n t r o l o f t h e d i r e c t o r s o v e r day t o d a y d e c i s i o n s as w e l l as o v e r l o n g t e r m p o l i c i e s .  U n f o r t u n a t e l y , n e i t h e r l e t t e r s nor cables c o u l d convey t o the Board the r a p i d growth of B r i t i s h Columbia at the t u r n of the century.  On s e v e r a l o c c a s i o n s , B u n t z e n a s k e d f o r t h e e s t -  a b l i s h m e n t o f a l o c a l a d v i s o r y c o m m i t t e e t o a s s i s t h i m i n making 17 B u n t z e n t o Hope, A u g u s t 9, 1901, LFGM, 1901; Hope t o B u n t z e n , F e b r u a r y 9, 1900, Box 688.  57 r e c o m m e n d a t i o n s t o t h e Board,. c l a i m i n g t h a t t h e r e was investors  'This r e q u e s t , t h e B o a r d  "a v e r y s t r o n g f e e l i n g "  i n f a v o u r o f d i r e c t management t h r o u g h  among  denied, British  an E n g l i s h  18 Board  o f Directors„ Buntzen a l s o suggested  t h a t t h e s a l e o f some s h a r e s  in  t h e p r o v i n c e w o u l d p a y handsome r e w a r d s i n g o o d w i l l : The v e r y .nature o f o u r b u s i n e s s c o m p e l s us t o a p p e a l t o t h e g e n e r a l p u b l i c f o r s u p p o r t , and i t i s a b s o l u t e l y n e c e s s a r y f o r us t o be on good t e r m s w i t h t h e p u b l i c . . . /but"/ . . .the Company i s c o n s i d e r e d an o u t s i d e r , a l l i t s money goes t o E n g l a n d . Of c o u r s e , you c a n n o t e x p l a i n t o e v e r y b o d y , t h a t a l l t h e p r o f i t s and e v e n more, a r e e x p e n d e d on t h i s s i d e o f t h e A t l a n t i c , t h e c r y o f " M o n o p o l i s t s , " and " E n g l i s h B o n d h o l d e r s " i s a l w a y s i n t h e a i r and you h a v e no s h a r e h o l d e r s o r i n v e s t o r s 19 7  p r e s e n t t o ta.ke t h e Company's p a r t . Buntzen probably exaggerated  the e x t e n t of the a g i t a t i o n  t h e company's E n g l i s h o w n e r s h i p .  against  N e v e r t h e l e s s , Horne-Payne r e -  l u c t a n t l y s e t a s i d e fc20,000 o f a £.120,000 i s s u e o f P r e f e r r e d O r d i n a r y S t o c k t o be  u n d e r w r i t t e n i n B r i t i s h C o l u m b i a and  s i x hundred c o p i e s of the prospectus was  to the p r o v i n c e .  a d v e r t i s e d l o c a l l y and t h e p r o s p e c t u s  hi,810  o f s h a r e s w e r e t a k e n up  fcl,190  were p u r c h a s e d  circulated.  i n B r i t i s h C o l u m b i a and,  b y company o f f i c i a l s .  sent  The  issue  Only of t h e s e ,  B u n t z e n ' s hope o f  18 B u n t z e n t o Hope, F e b r u a r y 24, 1900, GLB, #5,- H o r n e - P a y n e t o B u n t z e n , J a n u a r y 10, 1900, Box 7 3; B u n t z e n t o Hope, S e p t ember 14, 1898, LFGM, 1898; B u n t z e n t o N o r t o n , F e b r u a r y 5, 1904, Box 73; B u n t z e n t o N o r t o n , A p r i l 27," 1904, Box 73. 19 B u n t z e n t o H o r n e - P a y n e , May  17,  1898,  Box  73.  58 having  many l o c a l s h a r e h o l d e r s t o l e n d hirn m o r a l s u p p o r t i n  n e g o t i a t i o n s w i t h t h e c i t y and t h e p r o v i n c i a l g o v e r n m e n t The  failed.  i s s u e h a d b e e n s o l d a t a t w e n t y p e r c e n t premium, t h a t i s ,  a &10 s h a r e c o s t i l l ,  a n d E n g l i s h income t a x h a d t o b e p a i d on  d i v i d e n d s s i n c e t h e company was r e g i s t e r e d i n E n g l a n d . t h e B.C.E.R. a r r a n g e d t o h a v e i t s s h a r e s q u o t e d and M o n t r e a l Stock Exchanges.  The p r o b l e m  I n 1900  on t h e T o r o n t o  of English  income  t a x e s and l o s s e s on c u r r e n c y e x c h a n g e , h o w e v e r , made B.C.E.R. shares u n a t t r a c t i v e t o Canadian  i n v e s t o r s . T h e B.C.E.R.  h a d made a t o k e n g e s t u r e t o g e t l o c a l s h a r e h o l d e r s ; I t c o n t i n u e d t o be a B r i t i s h company o p e r a t i n g i n B r i t i s h w i t h i t s l o c a l manager a c t i n g o n l y as t h e a g e n t  Columbia  of t h e d i -  r e c t o r s i n England.  iii  Between 1898 a n d 1901 w h i l e V a n c o u v e r r a p i d l y r e c o v e r i n g from t h e doldrums  and V i c t o r i a were  of the m i d - n i n e t i e s , t h e  s u p p l y o f c a p i t a l i n t h e London money m a r k e t s was l i m i t e d . U n i t e d Kingdom i t s e l f  The  "was e x p e r i e n c i n g an i n v e s t m e n t boom  on a s c a l e t h a t p r o v i d e d ample d o m e s t i c o p p o r t u n i t i e s f o r c a p i t a l 20 H o r n e - P a y n e t o B u n t z e n , September 28, 1898, Box 687; Hope t o B u n t z e n , May 6, 1899, Box 683; B a r n a r d t o B u n t z e n , November 3, 1898, Box 47 0; B u n t z e n t o H o r n e - P a y n e , F e b r u a r y 11, 1903, Box 7 3 ; V i c t o r i a C o l o n i s t , November 17, 1898, p p . 2 , 5. H o r n e - P a y n e a l s o f e a r e d t h a t s h a r e s m i g h t g e t i n t o t h e hands o f c r e d i t o r s o f t h e p r e d e c e s s o r companies who h a d i n t e r e s t s c o n t r a r y t o t h o s e o f t h e o r d i n a r y s h a r e h o l d e r s . (Horne-Payne t o B u n t z e n , A u g u s t 1 3 , 1898, Box 6 6 7 ) . M o n t r e a l and T o r o n t o i n t e r e s t s t o o k up L3,660 w o r t h o f s h a r e s . (Hope t o Buntzen,May .6,1899,Box 688)  59 and l a b o u r . "  "  About: t h i s  time, a s e r i e s of  international  and i m p e r i a l c r i s e s : t h e S p a n i s h - A m e r i c a n War, War,  t h e R u s s o - J a p a n e s e War  and rumours  the Anglo-Boer  o f wars w i t h F r a n c e  and i n C h i n a , p e r i o d i c a l l y a f f e c t e d c a p i t a l m a r k e t s .  Pros-  p e r i t y i n B r i t i s h C o l u m b i a and t i g h t money i n L o n d o n c a u s e d a s e r i e s o f d i s a g r e e m e n t s between These d i f f e r e n c e s by remote The  B u n t z e n and t h e B o a r d .  i l l u s t r a t e the d i f f i c u l t y of administration,  control. immediate  f i n a n c i a l needs  The p r e d e c e s s o r c o m p a n i e s  o f t h e B.C.E.R. were g r e a t .  had n e i t h e r m a i n t a i n e d t h e  r a i l w a y and l i g h t i n g s y s t e m s i n f i r s t i n s t a l l e d t h e newest s o p o o r was  c l a s s c o n d i t i o n nor  and most e f f i c i e n t e q u i p m e n t .  Indeed,  some o f t h e t r a c k and r o a d - b e d t h a t r e s i d e n t s  some p a r t s o f V a n c o u v e r  of  c o m p l a i n e d t h a t t h e y had t o move b e -  cause of the v i b r a t i o n s caused by the s t r e e t c a r s . h a d t o make l a r g e e x p e n d i t u r e s on new s t o c k as w e l l as on t h e d e v e l o p m e n t p l a n t , and on a d d i t i o n a l l i g h t i n g April,  street  road-beds  The  and on  compan rolling  o f t h e G o l d s t r e a m power  c a p a c i t y i n Vancouver.  In  1898, t h e c a p i t a l f u n d s o f t h e company were e x h a u s t e d .  The p r o s p e c t s o f r a i s i n g more money w e r e u n c e r t a i n .  By  summer, a s u c c e s s f u l s t o c k i s s u e seemed l i k e l y , b u t w i t h o u t c a s h i n hand t h e B o a r d a p p r o v e d few c a p i t a l e x p e n d i t u r e s and even p l a c e d management i n t h e p o s i t i o n o f h a v i n g t o v i o l a t e 21 K e n n e t h B u c k l e y , C a p i t a I F o r m a t i o n i n Canada, 1896-1930, T o r o n t o , U n i v e r s i t y o f T o r o n t o P r e s s , 1955, p. 5.  60  i n s t r u c t i o n s by p a y i n g f o r c a p i t a l e x p e n d i t u r e s f r o m c u r r e n t e a r n i n g s w h i c h were supposed  t o be r e s e r v e d t o meet  interest  2?  and d i v i d e n d  payments.  F o r B u n t z e n , t h e i n c r e a s i n g demand f o r s e r v i c e , larly  for electric  -desperate.  lighting  i n V a n c o u v e r , made t h e  particu-  situation  As e a r l y as- J a n u a r y 1 8 9 8 he had r e p o r t e d t h a t t h e  demand f o r l i g h t  i n Vancouver  w o u l d soon e x c e e d t h e s u p p l y .  The B o a r d g a v e h i m no c o m f o r t .  Finally,  i n November 1 8 9 8 , he  wrote t o the d i r e c t o r s , d e s c r i b e d Vancouver's e x p l a i n e d t h a t l a c k o f power h a d street lights  r a p i d growth  forced the e x t i n c t i o n  on f o u r o c c a s i o n s and p r o d u c e d a p o o r  incandescent l i g h t  and  of  quality  f o r c o m m e r c i a l and i n d u s t r i a l u s e .  He  warned: P e o p l e w i l l n o t s t a n d any l o n g e r , d a r k and d i s m a l s t r e e t s , o r s t o r e s where t h e lamps a r e l i t t l e b e t t e r t h a n c a n d l e s . I know i t may be s a i d t h a t t h e Company c a n n o t e r e c t a new S t a t i o n w i t h o u t t h e n e c e s s a r y f u n d s , b u t i n t h a t c a s e one o f two t h i n g s must o c c u r ; e i t h e r t h e money must be b o r r o w e d f o r t h e p u r p o s e , o r t h e Company must be c o n t e n t t o a c c e p t competition„23 22 B.C.E.R,, C h a i r m a n ' s R e p o r t , F e b r u a r y 1 9 0 2 , p . 5 ; Hope t o B u n t z e n , A p r i l 2 7 , 1 8 9 8 , Box 6 8 7 ; M i n u t e s o f t h e B o a r d o f D i r e c t o r s , O c t o b e r 2 8 , 1 8 9 8 , Box 6 8 7 . The g r o s s l y e x a g g e r a t e d r e p o r t s o f t h e New W e s t m i n s t e r f i r e , September 1 0 , 1 8 9 8 , w h i c h r e a c h e d London t e m p o r a r i l y i n t e r f e r e d w i t h t h e B.C.E.R.'s u s u a l a b i l i t y t o b o r r o w s h o r t t e r m f u n d s f r o m London b a n k s . (Horne-Payne t o B u n t z e n , S e p t ember 1 4 , 1 8 9 8 , Box 6 8 7 ) . 23 B u n t z e n t o Hope, November 1, 1 8 9 8 , GLB  #1.  61 The p r o b l e m was s o p r e s s i n g t h a t B u n t z e n  s p e n t $6,500 f o r a  new b o i l e r and i n c a n d e s c e n t dynamo w i t h o u t w a i t i n g f o r t h e u s u a l a p p r o v a l of a p p r o p r i a t i o n s by t h e Board. t h e Board had j u s t succeeded  Fortunately,  i n i s s u i n g £120,000 o f P r e f e r r e d  O r d i n a r y S t o c k and was a b l e t o c o v e r t h e e x p e n d i t u r e . In s p i t e of the apparently improving f i n a n c i a l the Board  picture,  continued t o follow a conservative p o l i c y .  o f $94,000 was a l l o t t e d  f o r new e x p e n d i t u r e s , p a r t i c u l a r l y  improvements i n t h e l i g h t i n g b u t $122,240 o f e a r l i e r  A sum  s y s t e m s i n V a n c o u v e r and V i c t o r i a ,  appropriations, mainly f o r the r e -  b u i l d i n g o f s t r e e t r a i l w a y t r a c k s and t h e e x t e n s i o n o f t h e New W e s t m i n s t e r  c a r l i n e t o Sapperton  were c a n c e l l e d .  Al-  t h o u g h a g r o s s p r o f i t o f £30,189 seemed t o j u s t i f y a l a r g e r d i v i d e n d t h a n 4%  on o r d i n a r y s h a r e s , t h e s u r p l u s was  ferred to reserves.  D e s p i t e t h i s c a r e f u l husbanding  s o u r c e s , t h e B o a r d was a g a i n " e n t i r e l y w i t h o u t f u n d s penditure."  Once more B u n t z e n  transof r e f o r ex-  made h i s p l a i n t i v e c r y o f t h e  n e e d t o i n c r e a s e t h e power s u p p l y i n V a n c o u v e r and t o d o u b l e track the car l i n e s .  He r e p e a t e d h i s w a r n i n g ,  "these t h i n g s  a r e a b s o l u t e l y n e c e s s a r y , and i f we c a n n o t do them, o t h e r s w i l l come f o r w a r d who  can."  2 4  24 M i n u t e s o f t h e B o a r d o f D i r e c t o r s , May 5, 1899, Box 688; Hope t o B u n t z e n , O c t o b e r 19, 1899, Box 688; B u n t z e n t o Hope, November 13, 1899, LFGM, 1899.  62 Horne-Payne could he  not  suggested t h a t because  markets were so  tight  Vancouver w i t h  the  Ordinary  so, the shares.  By  years, the as t r u s t  that the  to  not  dividends  ordinary dividends  money to  and  on  Preference  consecutive  shares  In the  eligible  meantime,  the  o n l y c o n s o l a t i o n Horne-Payne o f f e r e d t o h i s manager  the  observation  to  any  possible  t h a t c a p i t a l w o u l d be  do  i t s ordinary  for three  under E n g l i s h law.  supply  essential to  C o m p a n y c o u l d make i t s p r e f e r e n c e  investments  the  I m p e r i a l Bank t o  i t was  t o pay  Indeed,  "look  on D e b e n t u r e s  Although  anxious  paying  A n g l o - B o e r War,  Company had  dividends  Shares."  B o a r d was  of the  a d d i t i o n a l funds.  a s s i s t a n c e of the  us w i t h m o n e y f o r t h e and  offer  was  equally unavailable  rival.  Buntzen r e i t e r a t e d for a clear-cut policy  the  need f o r more f u n d s .  He  asked  statement:  A r e we t o f o l l o w up t h e g r o w t h o f B r i t i s h C o l u m b i a c i t i e s and e x t e n d o u r l i g h t i n g s y s t e m as t h e c i t y e x t e n d s a n d r u n new c a r s e r v i c e w h e r e s u c h s e r v i c e , i n our judgment h e r e , i s r e q u i r e d ? Or w i l l t h e Company be s a t i s f i e d t o ' d o t h e b u s i n e s s t h e y a r e now d o i n g a n d l e a v e i t t o o t h e r s t o t a k e u p t h e hew b u s i n e s s w i t h t h e k n o w l e d g e t h a t a n y new company c o m i n g i n w i l l n o t be s a t i s f i e d w i t h s u c h new g r o u n d o n l y , b u t w i l l a l s o c u t i n t o o u r p r e s e n t b u s i n e s s as s o o n as t h e y h a v e a f i r m f o o t i n g i n t h e City. The  B o a r d was  They informed  willing  to risk  the  p&ssiblity  Buntzen t h a t once the  25 H o r n e - P a y n e t o B u n t z e n , J a n u a r y  of  competition.  I m p e r i a l Bank l o a n  10,  1900,  Box  73.  of  63 $ 7 5 , 0 0 0 was  e x p e n d e d , a n d u n t i l a new p r e f e r e n c e  c o u l d be s u c c e s s f u l l y profitable  Board p r e f e r  "floating  you, i f i t involves  running a l l the risks  at fixed debt  how m u c h o r how  dates."  of competition....to the money on c a p i t a l a c c o u n t  P r i v a t e l y , Horne-Payne a d v i s e d  i s t h e g r e a t enemy o f J o i n t  has brought  fur-  i t must be r e f u s e d . . ./ipecause/. . .the  they would run by borrowing  payable  and  "no m a t t e r  b u s i n e s s may b e o f f e r e d  ther capital outlay  risks  floated,  issue  more good c o n c e r n s  re  that,  Stock, e n t e r p r i s e  t o bankruptcy  than  any  26 other cause."  Buntzen  now h a d a c l e a r - c u t  policy  ment: t h e Board d i d n o t want t o e x p e r i e n c e t h e agonies  of t h e i r predecessors, they would  course.  Buntzen  were p r e p a r e d vice  t o ignore public  u n t i l t h e whole  pressure  r i s k , h o w e v e r , was n o t t h a t g r e a t .  any  potential rival, difficulty The  always  private  i n raising  Board sympathized  f o r more c a p i t a l  prudent  directors  f o r improved  ser-  The B o a r d knew  or p u b l i c , would a l s o  that  have  funds. w i t h Buntzen's  f o r necessary expansion;  have t h e funds  The  a  f i n a n c i a l p i c t u r e was m o r e f a v o u r a b l e .  The  great  financial  follow  w o u l d h a v e t o do l i k e w i s e .  state-  available  continual calls they simply d i d not  t o meet h i s r e q u i r e m e n t s .  26 B u n t z e n t o H o p e , F e b r u a r y 2 4 , 1 9 0 0 , G L B , #5; Hope t o B u n t z e n , March 2 0 , 1 9 0 0 , Box 688; Horne-Payne t o B u n t z e n , M a r c h 2 1 , 1 9 0 0 , Box 7 3 .  64  The  company s u c c e s s f u l l y  Ordinary of  stock  existing  i n 1901  debts,  t e r was  available  d i d not  expect  capital  f o r two  sibility  but,  f o r new  "or  j e c t , the funds of  Two  i s s u e an shares  manner t h e  age  of c a p i t a l  fifteen  i n the  funds  development of Coquitlam  h a l f was  available  the  that a substantial part  preference of the  pos-  earnings  shareholders worth  V a n c o u v e r P o w e r Comconsider  This  conducive  increase i n  for a specific water power,  Stock.  capi-  major  To  Again,  r a t h e r than  pro-  supply  The  worth less short-  ordinary dividend for  i n stock  o f new  quar-  directors  for capital expenditure.  paid  a  company i s s u e d £7 5,000  a l s o meant t h a t t h e t o be  the  may  Perpetual Preference  months had  than  a d d i t i o n a l £220,000  company."  for ordinary needs, the  payment  p o r t i o n of  later,  directors  hov/ever, p r o v i d e d  than  and  years  to purchase  5% C u m u l a t i v e  And  issue additional  aside a large  for the p r o s p e r i t y of the talization,  reserves, less  They warned s h a r e h o l d e r s  Board t o  i n any  Preferred  a l l o w i n g for the  expenditures.  to set  t o meet e x p e n d i t u r e s .  pany  and  able to  years.  of having  of debentures  after  dividends  t o be  authorized the  i s s u e d £ 6 4 , 0 0 0 v/orth o f  in  appropriations.had  the  cash to  27 be  met  from c u r r e n t earnings .  27 H o p e t o B u n t z e n , A u g u s t 7 , 1 9 0 1 , Box 6 8 9 ; H o r n e - P a y n e t o B u n t z e n , J a n u a r y 1 7 , 1 9 0 3 , B o x 7 3 ; H o p e t o B u n t z e n , J a n u a r y 23 1 9 0 3 , Box 690; B . C . R e v i e w , v o l . 8 ( A u g u s t 1 7 , 1 9 0 1 ) , p . 3 9 5 ; v o l . 1 1 ( S e p t e m b e r 13 , 1 9 0 2 ) , p . 139,- v o l . 11 ( O c t o b e r 4 ,1902) , p . 177 . D u r i n g 1 9 0 1 - 1 9 0 2 t h e f i s c a l y e a r was c h a n g e d t o c o n f o r m w i t h C a n a d i a n g o v e r n m e n t r e q u i r e m e n t s f o r a n n u a l r e t u r n s . As p a r t o f t h e t r a n s i t i o n f r o m one y e a r e n d d a t e t o a n o t h e r , t h e B . C . E . R , had a f i f t e e n month y e a r .  D u r i n g n o s t o f 1903 market  and p a r t o f 1904 t n e L o n d o n  c o n t i n u e d t o be d i f f i c u l t ;  even t h e C a n a d i a n  capital government  and t h e C a n a d i a n N o r t h e r n and Grand T r u n k R a i l w a y s had culty in getting  loans.  The  diffi-  B.C.E.R. d i d n o t make a p l a n n e d  i s s u e o f L50,000 p r e f e r e n c e s h a r e s w h i c h would have eased t h e company's " v e r y t i g h t p o s i t i o n as r e g a r d s money." v/as t h e c a p i t a l  So  serious  s i t u a t i o n t h a t t h e d i r e c t o r s had t o r e s o r t t o  b o r r o w i n g L l 0 0 , 0 0 0 on t h e b a s i s o f two y e a r p r o m i s s o r y n o t e s b e a r i n g 6% The  28 interest.  directors  a d v i s e d Buntzen t h a t i n s p i t e of h i s  " s p l e n d i d r e t u r n s " he w o u l d h a v e t o c u t down as f a r as p o s s i b l e on e x i s t i n g a p p r o p r i a t i o n s and on f u r t h e r c a p i t a l penditures.  ex-  T h i s meant s h e l v i n g a p r o p o s e d one and a h a l f  mile extension of the s t r e e t r a i l w a y l i n e through a r a p i d l y d e v e l o p i n g r e s i d e n t i a l a r e a of Vancouver c u r t a i l i n g p l a n s f o r new g r o w t h o f V a n c o u v e r was  rolling  t o the cemetery  s t o c k and m a c h i n e r y .  and  The  o u t p a c i n g t h e company's c a p i t a l r e -  sources .  Because  of the Board's  i n a b i l i t y t o k e e p up w i t h t h e  'needs o f V a n c o u v e r , d i s a g r e e m e n t s p e r i o d i c a l l y d e v e l o p e d b e 28 N o r t o n t o B u n t z e n , March 16, 1904, Box 73; C l i f f o r d S i f t o n t o W i l f r i d L a u r i e r , O c t o b e r 10, 1903, L a u r i e r p a p e r s , No. 77742 ( M i c r o f i l m i n t h e L i b r a r y o f t h e U n i v e r s i t y o f B r i t i s h C o l u m b i a ) ; Hope t o B u n t z e n , F e b r u a r y 12, 1904, Box 691; Hope t o B u n t z e n , J a n u a r y 20, 1904, Box 73; B.C.E.R.Annual R e p o r t and B a l a n c e S h e e t , 1904 and 1905. The B.C.E.R. p a i d 4%% on i t s d e b e n t u r e s .  66 tween  "the  t h e B o a r d and B u n t z e n .  The. manager c o m p l a i n e d  Board, w i t h o u t l o c a l knowledge,  that  and w i t h o u t b e i n g i n  t o u c h w i t h B r i t i s h C o l u m b i a p e o p l e , c a n n o t p o s s i b l y f o r m an independent o p i n i o n of our b u s i n e s s h e r e . must be a c a s e o f f u l l t r u s t i n t h e i r else replacing these o f f i c i a l s . . . . "  With the Board i t  local officials, T h i s was  not the  o c c a s i o n on w h i c h B u n t z e n h a d t h r e a t e n e d t o r e s i g n B o a r d d i d n o t p r o v i d e more c a p i t a l . requests f o r the appointment  or first  i f the  He a l s o r e p e a t e d h i s  of a l o c a l advisory  committee  and f o r a v i s i t o f t h e d i r e c t o r s t o B r i t i s h C o l u m b i a . years e a r l i e r ,  i n 1901, H o r n e - P a y n e s 1  v i s i t to  Three  Vancouver  and r e a l i z a t i o n o f t h e g r o w t h o f t h e a r e a had e a s e d t h e difficult  r e l a t i o n s w h i c h t h e n e x i s t e d between t h e Board  and management.  F i n a l l y , Buntzen suggested t h a t t h e r e would  b e no d i f f i c u l t y  " i n f i n d i n g a l l t h e money we want f o r new  c o n s t r u c t i o n i n Canada." Canadian government,  banks  b o r r o w money i n L o n d o n , c a p i t a l market  In view of the f a c t that  the  and r a i l w a y s were a t t e m p t i n g t o  Buntzen s 1  i d e a of t h e  Canadian  seems s u r p r i s i n g l y n a i v e . ^ 9  29 B u n t z e n t o Hope, F e b r u a r y 3, 1904, LFGM, 1904; B u n t z e n t o N o r t o n , F e b r u a r y 6, 1904, Box 73; N o r t o n t o B u n t z e n , M a r c h 16, 1904, Box 7 3 . At t h i s t i m e B u n t z e n and t h e B o a r d had a n o t h e r s l i g h t m i s u n d e r s t a n d i n g i n connecti.on w i t h t h e company's c o n t r i b u t i o n s to p r o v i n c i a l p o l i t i c a l p a r t i e s . The d i r e c t o r s m i l d l y c e n s u r e d B u n t z e n f o r s u c h d o n a t i o n s . T h i s annoyed B u n t z e n who c o m p l a i n e d t h a t he d i s l i k e d h a v i n g " t o a t t e n d t o t h e l o b b y i n g  67  The  Board c o u l d o n l y counsel p a t i e n c e .  They agreed  that  e s s e n t i a l w o r k s must c o n t i n u e , t h e y r e c o g n i z e d t h a t t h e company needed t o keep pace w i t h t h e growth of t h e c i t i e s , t h e y a d m o n i s h e d , " i f money c a n n o t be g o t and  out  a t a g i v e n moment,  j u s t a t a t i m e when demands a r e somewhat l a r g e r t h a n  the D i r e c t o r s f e e l t h a t a l i t t l e of p l a c e , "  but  usual  c a u t i o n on t h e i r p a r t i s n o t  F o r t u n a t e l y , f o r b o t h t h e B o a r d and  Buntzen,  and w i r e p u l l i n g w h i c h i n t h i s c o u n t r y i s c o n s i d e r e d n e c e s s a r y i n order t o get a f a v o r a b l e h e a r i n g from the r u l i n g b o d i e s . " ( B u n t z e n t o Hope, December 1 2 , 1903,GMLB, 1 9 0 3 ) . To a s s u a g e B u n t z e n , G.P. N o r t o n , a d i r e c t o r , e x p l a i n e d t h a t t h e B o a r d p l a c e d a b s o l u t e c o n f i d e n c e i n B u n t z e n ' s d i s c r e t i o n and h i s u n d e r s t a n d i n g " o f t h e t e n o r o f our f o r m a l r e p l i e s t o you through t h e S e c r e t a r y . " (Norton t o Buntzen, January 20, 1904, Box 7 3 ) . T h i s i n c i d e n t i n 1 9 0 3 i s one o f t h e two d i r e c t r e c o r d s i n t h e B.C.E.R. p a p e r s o f t h e company m a k i n g a p o l i t i c a l d o n a tion. The o r i g i n a l l e t t e r ( B u n t z e n t o Hope, O c t o b e r 2 9 , 1 9 0 3 ) e x p l a i n s t h e method o f p o l i t i c a l d o n a t i o n s and i s q u o t e d e x t e n s i v e l y below: When you g e t t h e September t r a n s c r i p t s you w i l l f i n d a c a s h payment o f $ 1 2 0 0 t o me f o r ' s p e c i a l s e r v i c e ' , one h a l f o f t h e amount c h a r g e d t o t h e B.C.E.R,, & t h e o t h e r h a l f t o t h e Power Co. The amount r e p r e s e n t s our c o n t r i b u t i o n t o t h e Campaign Funds o f t h e two p a r t i e s i n t h e r e c e n t P r o v i n c i a l E l e c t i o n s , $ 1 0 0 0 t o t h e C o n s e r v a t i v e P a r t y t h a t won, $ 2 0 0 t o t h e L i b e r a l s who l o s t . We must be on good t e r m s w i t h both p a r t i e s . Our c o n t r i b u t i o n was t h e same as made by o t h e r l o c a l C o r p o r a t i o n s w i t h l a r g e i n t e r e s t s . There was no t i m e t o s u b m i t t h e m a t t e r t o L o n d o n , b u t I d i s c u s s e d , w i t h Mr. R.H. S p e r l i n g who a g r e e d w i t h me. I may s a y t h a t we a r e a s k i n g t h e Government c o n s t a n t l y f o r g r e a t f a v o r s and we a r e g e t t i n g them. P l e a s e d r o p me a "personal l i n e a p p r o v i n g o f t h e payment t h a t I may show t h e auditors. 8  The o n l y o t h e r r e c o r d i s o f a $50 d o n a t i o n made by A.T.Goward t o t h e V i c t o r i a C o n s e r v a t i v e A s s o c i a t i o n i n 1913 on b e h a l f o f t h e B.C.E.R. ( S p e r l i n g t o Goward, May 1 9 , 1 9 1 3 , Box 7 1 4 ) .  68 t r a d e i n B r i t a i n was  B e g i n n i n g to r e v i v e a f t e r the post-Boer  War  amount o f c a p i t a l a v a i l a b l e f o r o v e r -  depression.  The  seas investment i n c r e a s e d r a p i d l y . t h e B o a r d was  By t h e s p r i n g c f  1904  a b l e t o r a i s e some f u n d s among i t s f r i e n d s  l a r g e r s h a r e h o l d e r s . During the year i t succeeded  and  in issu3 n  i n g £140,000 w o r t h o f v a r i o u s c a t e g o r i e s o f s t o c k . ~ was  again easier.  The  Money  u  c a p i t a l demands o f t h e B.C.E.R. how-  e v e r , k e p t pace w i t h t h e c a p i t a l s u p p l y . iv  D e s p i t e p e r i o d i c s h o r t a g e s o f c a p i t a l , t h e B.C.E.R. i n v e s t e d $6,771,990 i n B r i t i s h C o l u m b i a b e t w e e n 1897  and  3] 1905,  ~ W i t h t h e s e funds i t b u i l t  on t h e work o f i t s p r e -  d e c e s s o r s and u n d e r t o o k a number o f new  projects.  s t r e e t r a i l w a y l i n e s were i m p r o v e d , s e t t l e m e n t was couraged along the interurban route, the l i g h t i n g was  e x t e n d e d and o l d f r a n c h i s e s were r e v i s e d .  t o s e r v e Vancouver  ensystem  Of t h e  p r o j e c t s , t h e most i m p o r t a n t , were t h e d e v e l o p m e n t e l e c t r i c power f a c i l i t i e s  Old  and  new  o f hydroVictoria,  30 Hope t o B u n t z e n , March 5, 1904, Box 691; Hope t o B u n t z e n , A p r i l 23, 1904, Box 681; R e p o r t o f N o r t o n & S l a d e , a u d i t o r s , J u l y 9, 1917, Box 89. 31 Chairman's 105-1.424.  A d d r e s s t o t h e A n n u a l M e e t i n g , 1912,  Box  t h e purchase o f t h e Vancouver c a t i o n of t h e Vancouver  Gas Company and t h e  and L u l u I s l a n d R a i l w a y .  ment o f e a r l i e r e n d e a v o u r s , t h e c r e a t i o n o f new  electrifiThe  develop-  ones and a  g e n e r a l e x p a n s i o n o f b u s i n e s s i n B r i t i s h C o l u m b i a made t h e y e a r s b e t w e e n 1897  and 1905  a p e r i o d of s o l i d development  l a i d the foundation for future I t was was  and  growth.  i n t h e t r a n s p o r t a t i o n department  t h a t t h e B.C.E.R.  c l e a r l y a b l e t o b u i l d on t h e work o f i t s p r e d e c e s s o r s  and t o p r o f i t  from B r i t i s h Columbia's r a p i d growth a f t e r  K l o n d i k e boom.  Vancouver's  Fairview l i n e provides the best  example o f t h e B.C.E.R. p r o f i t i n g predecessors.  the  from t h e e f f o r t s of i t s  I n 1898, B u n t z e n r e g a r d e d t h i s  l i n e t o "a  f a r d i s t a n t s u b u r b " as " t h e w o r s t l e g a c y l e f t t h e Company f r o m t h e r e a l e s t a t e s p e c u l a t i o n s o f f o r m e r y e a r s " and gested closing  i t down.  out h i s i d e a .  W i t h i n the y e a r , Vancouver's  t o grow r a p i d l y .  F o r t u n a t e l y , Buntzen d i d not  Although lots  carry  p o p u l a t i o n began  i n F a i r v i e w were s e l l i n g f o r  l i t t l e more t h a n h a l f t h e p r i c e l i s t e d selling.  sug-  i n 1891, t h e y w e r e  Buntzen obtained the t i t l e t o the s i x t y - e i g h t l o t s  w h i c h t h e C.P.R. had p r o m i s e d t h e V.E.R. & L. Company b y a g r e e i n g t o r u n a t w e n t y m i n u t e s e r v i c e between F a i r v i e w t h e downtown a r e a .  3 2  and  F a i r v i e w developed q u i c k l y i n s p i t e of  32 B u n t z e n ' s R e p o r t , O c t o b e r 12,1897,Box 7 3 ; B u n t z e n t o Hope, J u l y 23 ,1898,LFGM 1898,-Minutes o f • t h e B o a r d o f D i r e c t o r s , F e b r u a r y 13,1900,Box 688;Buntzen t o H o u e . J a n u a r y 27,1900, LFGM, 1900;VDP, A p r i l 10, 1900,p.1., f  70 i t s muddy s t r e e t s and "bad s i d e w a l k s . first  D u r i n g 1900 and t h e  few months o f 1 9 0 1 , t h e c i t y i s s u e d b u i l d i n g  f o r $164,000 w o r t h o f h o u s e s i n F a i r v i e w . were r e a s o n a b l e ; and  permits  The l a n d p r i c e s  t h e t e r m s , a t t r a c t i v e t o c l e r k s and a r t i s a n s ;  assessments f o r c i t y t a x e s ,  low. Improving t h e F a i r v i e w  s e r v i c e h a d r e q u i r e d some p r e c i o u s  capital; the Fairview  line, 33  however, c o n t r i b u t e d handsomely t o s t r e e t r a i l w a y  profits.  A s e c o n d example o f t h e B.C.E.R. b e n e f i t i n g f r o m t h e w o r k o f i t s p r e d e c e s s o r s . was t h e i n t e r u r b a n l i n e . 1900  this  traffic  l i n e , which r e l i e d  for business,  a l m o s t e x c l u s i v e l y on i n t e r c i t y  produced comparatively  After the turn of the century, minster  Prior to  little  revenue.  t h e a r e a b e t w e e n New W e s t -  and V a n c o u v e r came i n t o i t s own.  S e t t l e r s , many o f  whom h a d come f r o m t h e N o r t h West T e r r i t o r i e s and M a n i t o b a i n search the  of a milder  c l i m a t e , moved i n t o t h e a r e a ,  l a n d , b u i l t homes and p l a n t e d  cleared  g a r d e n s and o r c h a r d s .  a t t r a c t s e t t l e r s , t h e B.C.E.R. a d v e r t i s e d t h e a r e a o p e r a t i o n w i t h r e a l e s t a t e a g e n t s who s u b d i v i d e d  To  a n d , i n co-  the land  i n t o one and. two a c r e p l o t s , o f f e r e d s p e c i a l i n d u c e m e n t s s u c h 33 The B.C.E.R. l o t s s o l d f o r p r i c e s r a n g i n g f r o m $340 t o $47 5 e a c h d e p e n d i n g on l o c a t i o n . The t e r m s were l / 5 t h c a s h and f o u r y e a r s t o p a y t h e b a l a n c e a t 6% i n t e r e s t . The B.C.E.R. a l s o o f f e r e d one y e a r ' s f r e e t r a n s p o r t a t i o n t o one member o f e a c h s e t t l e r ' s f a m i l y . VDP, J u n e 1, 1904, p . l .  as " f r e e " t r a n s p o r t a t i o n and e a s y t e r m s t o nev; s e t t l e r s . t h o u g h many new s e t t l e r s  Even  e s t a b l i s h e d themselves along the  W e s t m i n s t e r Wagon r o a d r a t h e r t h a n a l o n g t h e t r a m l i n e , t h e i n t e r u r b a n f r e i g h t c a r s c a r r i e d t h e i r e g g s , p o u l t r y and v e g e t a b l e s t o market.  B y 1 9 0 3 , t h e B.C.E.R. p u t on a " S t r a w b e r r y  S p e c i a l " t o h a n d l e p a r t o f t h e f r u i t c r o p and o b t a i n e d new and l a r g e r f r e i g h t c a r s t o h a n d l e g e n e r a l f r e i g h t . t h e s e t t l e r s were f u l l t i m e f a r m e r s . i n t h e a r e a t o e n j o y cheap  Many w o r k i n g m e n  l a n d and l o w t a x e s .  6:30 t r a i n s .  3 4  Specials" —  settled  I n 1904, t h e  B.C.E.R. i n a u g u r a t e d a h a l f h o u r l y s e r v i c e and u s e d c a r s on t h e " S e t t l e r s '  Not a l l  larger  t h e 4:30, 5:30, and  The i n t e r u r b a n h a d become a v i a b l e  p r i s e serving both t h e i n t e r c i t y t r a f f i c  enter-  and t h e nev/ s e t t l e r s  between t h e c i t i e s . W i t h i n New W e s t m i n s t e r , t h e B.C,E,R. a l s o c o n c e n t r a t e d on d e v e l o p i n g t r a f f i c  f o r an e x i s t i n g  line.  The c i t y  line,  c o m p l e t e d b y t h e W e s t m i n s t e r S t r e e t R a i l w a y Company i n 1 8 9 1 , had n e v e r p a i d .  I n 1900, i t s a v e r a g e m o n t h l y r e c e i p t s o f  $420. c o v e r e d o n l y s l i g h t l y more t h a n h a l f t i n g expenses.  i t s monthly opera-  To p r o v i d e r e v e n u e , B u n t z e n p r o p o s e d t o e x -  34 The B.C.E.R. c o n t r i b u t e d $50 f o r a s p e c i a l w r i t e - u p on Burnaby w h i c h a p p e a r e d i n T h e Farmers'' A d v o c a t e (Winnipeg) , J a n u a r y 4, 1905, p p . 22-24, Copy i n Box 519. I n t h e c a s e o f l o t s a t C o l l J h g w o o d , t h e B.C.E.R. s o l d p a s s e s t o Mahon,McFarl a n d and M a h o n , r e a l e s t a t e agents,who t h e n added t h e c o s t o f t h e pass t o t h e p r i c e o f t h e l a n d .  72  tend the  l i n e to Sapperton,  a d i s t r i c t of s a w m i l l s  ing class  homes.  estimated  t o be $ 1 2 , 0 0 0 was n o t a p r e s s i n g n e c e s s i t y  delayed  several  The S a p p e r t o n  line,  the cost  and w o r k -  o f w h i c h was and. was  times because of shortages of c a p i t a l .  t h e l i n e was opened i n 1 9 0 0 , i t e a r n e d a s t e a d y Three years l a t e r ,  the B . C . E . R . constructed  revenue.  a special  i n New W e s t m i n s t e r t o s e r v e a b r i c k y a r d n e a r Q u e e n ' s This  freight  After  s p u r p r o v i d e d an a v e r a g e o f two c a r s  line Park.  per  day  f o r t h e i n t e r u r b a n and t h u s c o n t r i b u t e d t o t h e g e n e r a l b e i n g of the  company. ^ 3  I n V i c t o r i a , as i n New W e s t m i n s t e r , followed a p o l i c y of developing  traffic  the B . C . E . R , for e x i s t i n g  routes  r a t h e r t h a n u n d e r t a k i n g t h e c o n s t r u c t i o n o f major new Though V i c t o r i a h a d b e n e f i t e d its  well-  aftermath,  lines.  f r o m t h e K l o n d i k e boom and  h e r p o p u l a t i o n grew r e l a t i v e l y more  slowly  36  than Vancouver's.  The y o u n g e r  Victoria's  r o l e as t h e  province.  In s p i t e  leading commercial centre  of her r e l a t i v e  r e t a i n e d many o f h e r t i e s The p r e s e n c e  decline,  . 3 5 B u n t z e n t o F.R. G l o v e r J u l y I I , 1 9 0 0 , GLB # 6 .  over  the  Victoria  still  province.  " o l d " f a m i l i e s gave t h e c i t y  Summer t o u r i s t s , w i n t e r v i s i t o r s  36 See A p p e n d i x 1.  of  w i t h the i n t e r i o r of the  o f a number o f  a i r of wealth.  c i t y had g r a d u a l l y taken  and t h e  (New W e s t m i n s t e r C i t y C l e r k ) ,  an navy  73 also played  an i m p o r t a n t  role  f o r t u n a t e l y , t h i s t r a d e was r a i l w a y revenues tended s p e c i a l events  such  of a s e a s o n a l n a t u r e .  Bay  Thus,  o r a c o n c e r t i n one  this special business.  He  of the  The  with a  parks.  Goward, w o r k e d h a r d  to  changed t h e o v e r h e a d s i g n s  on t h e s t r e e t c a r s t o make t h e r o u t e s more a t t r a c t i v e tourists.  street  of a f l e e t t o E s q u i m a l t ,  l o c a l manager i n V i c t o r i a , A.T.  develop  Un-  t o f l u c t u a t e w i t h t h e w e a t h e r and  as the v i s i t  b a s e b a l l game a t Oak The  i n V i c t o r i a ' s economy.  to  " E s q u i m a l t " c a r , f o r e x a m p l e , became t h e  " E s q u i m a l t H a r b o u r and N a v a l Y a r d "  c a r and t h e  "oak  Bay"  car  37 v/as r e - l a b e l l e d  "Oak  Bay B e a c h . "  I n 1905  t h e Company added  an open o b s e r v a t i o n c a r t o V i c t o r i a ' s r o l l i n g  s t o c k and  tributed flyers advertising sightseeing trips to arriving  passengers  a t t h e C.P.R, d o c k .  A unique f e a t u r e of the s t r e e t r a i l w a y business t o r i a was  Bay.  limits  around E s q u i m a l t  1897  be-  Road, S a a n i c h Road  T h i s t r e n d towards d i s p e r s e d s e t t l e m e n t which  p a r t i c u l a r l y evident after was  in Vic-  the tendency for.permanent r e s i d e n t s t o s e t t l e  yond t h e c i t y Oak  dis-  benefited t r a f f i c  and was  returns but  i n s u f f i c i e n t t o make i t f e a s i b l e t o r e v i v e s e r v i c e on  Douglas S t r e e t l i n e from Burnside t o the c i t y l i m i t s Tolmie  Avenue.  at  I n d e e d , no e x t e n s i o n s were made t o t h e  37 Goward t o B u n t z e n ,  A u g u s t 29,  1904,  Box  483.  the  13.5  74 m i l e s o f t r a c k t h e E.C-.E.R. h a d a c q u i r e d i n 1897 u n t i l 1905 when t h e Gorge E x t e n s i o n was c o m p l e t e d .  This l i n e ,  s u b s i d i z e d b y l a n d owners a l o n g i t s r o u t e , s e r v e d  partly  a seasonal  t r a d e t o t h e Gorge P a r k w h i c h t h e B.C.E.R. d e v e l o p e d public picnic  as a.  site.  I n V a n c o u v e r , w h i c h was r a p i d l y e m e r g i n g as t h e m e t r o p o l i s o f t h e p r o v i n c e , t h e B.C.E.R. was s l i g h t l y more a c t i v e i n b u i l d i n g new l i n e s . hov/ever,  new l i n e s were b u i l t  quired l i t t l e To  Because o f t h e s h o r t a g e  o n l y when t h e y r e -  direct capital outlay.  a v e r y l i m i t e d e x t e n t , t h e B.C.E.R. was p r e p a r e d t o  v e n t u r e i n t o new a r e a s . Greer's  or operated  of c a p i t a l ,  The C.P.R. v/hich owned t h e l a n d a t  B e a c h , as K i t s i l a n o was t h e n known, w a n t e d t o b u i l d  a r a i l w a y l i n e t o develop  t h e a r e a f o r r e c r e a t i o n a l and r e s i -  d e n t i a l purposes.  The C.P.R. p r o p o s e d t o h a v e t h e B.C.E.R.  operate the l i n e .  B u n t z e n was i n t e r e s t e d ; i f t h e C.P.R.  w o u l d a g r e e t o e r e c t t h e o v e r h e a d w i r i n g as w e l l as l a y t h e track.  H o r n e - P a y n e , who was i n V a n c o u v e r a t t h e t i m e , r e -  j e c t e d t h e p r o p o s a l s i n c e he d i d n o t b e l i e v e t h a t r e v e n u e s w o u l d meet t h e e s t i m a t e d t e n d o l l a r s p e r day o p e r a t i n g e x penses.  Three years l a t e r ,  i n 1904, t h e C.P.R. o f f e r e d t h e  B.C.E.R. t w e l v e a c r e s o f l a n d , w o r t h an e s t i m a t e d  $30,000 i n  r e t u r n f o r a d a p t i n g t h e l i n e f o r e l e c t r i c a l o p e r a t i o n and  75 providing was  3 Pt a m i n i m a l s e r v i c e . 38  almost completely f i l l e d ;  be t h e n e x t d i s t r i c t  B y t h i s t i m e t h e West End t h e K i t s i l a n o a r e a seemed t o  t o be opened f o r m i d d l e and h i g h c l a s s  r e s i d e n t i a l u s e . The a r r a n g e m e n t  b e t w e e n t h e C.P.R. and t h e  B.C.E.R. was made as p a r t o f t h e ' V a n c o u v e r R a i l w a y Agreement,  and L u l u  Island  B o t h t h e e l e c t r i f i e d V. & L . I . and t h e  K i t s i l a n o s t r e e t c a r b e g a n s e r v i c e on J u l y 4, 1 9 0 5 . The  C.P.R. w h i c h h a d i n c o r p o r a t e d t h e V. & L . I . i n  1891 p l a n n e d t o o p e r a t e i t as an e l e c t r i c r a i l w a y b e t w e e n downtown V a n c o u v e r  and t h e N o r t h Arm o f t h e F r a s e r  River.  The d e p r e s s i o n o f t h e m i d - n i n e t i e s and some u n c e r t a i n t y as t o whether  a l i n e t o L u l u I s l a n d s h o u l d be b u i l t  c o u v e r o r New W e s t m i n s t e r d e l a y e d c o n s t r u c t i o n . d r a m a t i c r e v i v a l i n t h e l o c a l economy i n t h e l a t e  from VanWith the nineties,  t h e C.P.R. r e n e w e d i t s p l a n s and c o m p l e t e d s u r v e y s w h i c h i n d i c a t e d i t would be cheaper t o b u i l d t o L u l u I s l a n d from Vanc o u v e r r a t h e r t h a n f r o m New W e s t m i n s t e r .  The C.P.R. t h e n  s u g g e s t e d t h a t t h e B.C.E.R. l e a s e and o p e r a t e t h e l i n e . B u n t z e n was d o u b t f u l ; t h e t r a f f i c m i g h t b e r e m u n e r a t i v e o n l y d u r i n g t h e s a l m o n c a n n i n g s e a s o n and t h e V. & L . I . m i g h t draw traffic  away f r o m t h e i n t e r u r b a n l i n e t h r o u g h B u r n a b y .  f o r e he d i d n o t p u r s u e t h e m a t t e r .  There-  I n 1900, a f t e r t h e C.P.R.  38 B u n t z e n t o Hope, J u l y 2 3 , 1898, LFGM, 1898? B u n t z e n t o Hope, March 10, 1904, GMLB, 1904.  76 had s t a r t e d c o n s t r u c t i o n , H a r r y A b b o t t , t h e p r e s i d e n t of t h e V. & L . I . , a g a i n s u g g e s t e d t h a t t h e B.C.E.R. s h o u l d o p e r a t e the ject  line.  B u n t z e n s u b m i t t e d a p r o p o s i t i o n t o t h e C.P.R. s u b -  t o t h e a p p r o v a l o f t h e B.C.E.R.'s B o a r d .  however,  seems t o h a v e b e e n d r o p p e d u n t i l December 1901 when  Buntzen suggested resuming n e g o t i a t i o n s . the  The m a t t e r ,  The c o m p l e t i o n o f  L a k e B u n t z e n w a t e r power p r o j e c t w o u l d p r o v i d e t h e B.C.E.R.  w i t h a s u r p l u s o f power w h i c h c o u l d be u s e d t o e l e c t r i f y V. & L . I .  The C.P.R., however,  the  d e c i d e d t o use s t e a m power  when i t b e g a n s e r v i c e on t h e V. & L . I . on J u l y 14, 1902.  The  B.C.E.R. and t h e C.P.R, d i d n o t resume n e g o t i a t i o n s u n t i l  late  in  1904. B u n t z e n was  ran  a n x i o u s t o l e a s e and e l e c t r i f y t h e l i n e  which  f r o m t h e s o u t h end o f t h e G r a n v i l l e S t r e e t b r i d g e a t  F a l s e Creek t o t h e s a w m i l l i n g c e n t r e o f Eburne  ( M a r p o l e ) and  a c r o s s t h e N o r t h Arm o f t h e F r a s e r R i v e r t h r o u g h t h e r i c h cultural of  land of L u l u I s l a n d t o the f i s h i n g  and c a n n i n g c e n t r e  S t e v e s t o n a t t h e mouth o f t h e F r a s e r R i v e r .  mated t h e c o s t o f e l e c t r i f i c a t i o n a n t i c i p a t e d an a n n u a l p r o f i t  agri-  Buntzen  esti-  t o be a b o u t $100,000 and  o f $20,000.  Summertime, when  39 B.C., S t a t u t e s , 54 V i c , c 60; H. A b b o t t t o D„ Oppenh e i m e r , F e b r u a r y ~ 1 3 , 1894, Box 324; Knos t o B u n t z e n , June 18, 1898, Box 687; B u n t z e n t o Hope, J u l y 23, 1898, GMLB, 1898; H. A b b o t t t o B u n t z e n , May 1, 1900, Box 324; B u n t z e n t o R. Marp o l e , December 17, 1901, Box 3 3 9.-  77  the canneries  a t t r a c t e d w o r k e r s a n d t o u r i s t s , was t h e b u s y  season f o r t h e l i n e .  The c a n n e r i e s , t h e E b u r n e m i l l a n d f a r m  produce p r o v i d e d t h e main revenue.  T h e r e was l i t t l e  settle-  ment b e t w e e n F a l s e C r e e k a n d E b u r n e b u t t h e C.P.R. w h i c h owned the land planned  t o develop  i t as a h i g h c l a s s r e s i d e n t i a l  area. The  agreement between t h e  B.C.E.R.  and t h e  C P . R .  for  t h e o p e r a t i o n o f t h e V. & L . I . i n c l u d e d an a r r a n g e m e n t f o r t h e h a n d l i n g o f each o t h e r s ' f r e i g h t . the r e a l beginning way  of the  B.C.E.R.'s  i n t h e Lower F r a s e r V a l l e y .  do t h e  C.PoR.'s  The  T h i s a r r a n g e m e n t marked r o l e as a t e r m i n a l B.C.E.R.  rail-  undertook t o  switching f o r the sawmills south of False  Creek; i n r e t u r n , t h e  C . P . R .  agreed t o s w i t c h  B.C.E.R.  Lulu  I s l a n d f r e i g h t cars from G r a n v i l l e S t r e e t t o t h e C a r r a i l S t r e e t terminus running  of the  B.C.E.R.  i f the c i t y objected t o the  o f f r e i g h t c a r s on t h e s t r e e t s .  agreed t o handle  C.P.R.  The  B.C.E.R.  also  f r e i g h t c a r s b e t w e e n S t e v e s t o n and  t h e G r a n v i l l e S t r e e t B r i d g e a t a f i x e d c h a r g e p e r c a r and t o 40 r u n no o t h e r r a i l w a y company's c a r s o v e r t h e r o a d .  40 B u n t z e n t o B.C.E.R.. ( L o n d o n ) , December 12, 1904, Box 324; B u n t z e n t o Wm. Whyte, Second V i c e - P r e s i d e n t , C.P.R., September 26, 1904, Box 323; TOP, J a n u a r y 2 1 , 1905, p . l  7 8  The  immediate operating  l e s s s a t i s f a c t o r y than a n t i c i p a t e d . r e l u c t a n t t o use  the r a i l  r e q u i r e d more h a n d l i n g  fk L . I . were  r e s u l t s of t h e V. The  s a l m o n c a n n e r s were  line extensively since r a i l  than water-borne shipments.  freight Freight  r e c e i p t s became d e p e n d e n t on a g r i c u l t u r a l p r o d u c t s f o r w h i c h t h e B.C.E.R. o f f e r e d s p e c i a l commodity r a t e s . ^ 1 o f t h e V.  & L . I . , however, l a y i n p a s s e n g e r t r a f f i c  d e v e l o p e d q u i c k l y a f t e r t h e C.P.R. s u b d i v i d e d tween t h e  c i t y l i m i t s a t 1 6 t h Avenue and  A f t e r the  B.C.E.R.'s E r a s e r  1910, The  t h e V. V.  The  & L . I . c a r r i e d a great  ment w h i c h l a i d  a foundation  (49th  for future  be-  Avenue),  completed i n  d e a l of general  & L . I . a g r e e m e n t , t h e r e f o r e , was  which  i t s land  Magee  V a l l e y l i n e was  future  freight.  another s o l i d  achieve  growth.  v Two  v e r y important but  unspectacular  achievements a l s o helped t o l a y a s o l i d  street  railway  foundation.  These  a c h i e v e m e n t s were t h e c o n s o l i d a t i o n of t h e V a n c o u v e r s t r e e t railway franchises clause"  and  the arrangement of the  i n the Vancouver C i t y  "protective  Charter.  41 H. Hemlow, Manager, L u l u I s l a n d B r a n c h , t o S p e r l i n g , A u g u s t 26, 1905, Box 324; " F r e i g h t R a t e s f o r L u l u I s l a n d R a i l w a y , " Box 4-42.  79 Although  t h e b a s i c frcsmchi.se which, t h e B.C.E.R. i n -  h e r i t e d from i t s predecessors Vancouver S t r e e t Railway had. n e g o t i a t e d  separate  The t e r m s o f t h e s e  d i d n o t e x p i r e u n t i l 1918, t h e  and t h e V a n c o u v e r E.R. & L. Company l e a s e s f o r each s t r e e t r a i l w a y  l e a s e s v a r i e d b u t on t h e l i n e s t o S t a n l e y  P a r k and E n g l i s h B a y t h e l e a s e was r e n e w a b l e e v e r y years.  I t was due f o r f i r s t r e n e w a l i n 1 9 0 0  t e r m l e a s e s meant " t h a t e v e r y over...the  line.  best paying  5 years  five  These  0  the C i t y could  short take  p a r t s . . . o r b u y them and t r a n s f e r them  t o some c o m p e t i n g company."  Though n o t e x p e c t i n g  the c i t y  t o t a k e over t h e system i n t h e immediate f u t u r e , Buntzen f e a r e d t h e p o s s i b i l i t y o f a C i t y C o u n c i l "where a m a j o r i t y o f t h e members w e r e f a d d i s t s o r demagogues whose o n l y obj e c t was t o p a n d e r t o t h e a n t i - c o r p o r a t i o n and a n t i - m o n o 42  poly  Ideas." B u n t z e n was a n x i o u s  term, f r a n c h i s e s .  t o c o n s o l i d a t e t h e v a r i o u s short-  He recommended that, t h e company n e g o t i a t e  an a g r e e m e n t w i t h t h e c i t y s o t h a t a l l the" agreements w o u l d e x p i r e i n 1919 when t h e l a t e s t o f t h e o r i g i n a l was due t o e x p i r e .  In r e t u r n f o r t h i s time  agreements  extension,  42 Memo b y B u n t z e n , A u g u s t 1, 1914, London l e t t e r s , I n w a r d , #1; B u n t z e n t o Hope, F e b r u a r y 27, 19,01, LFGM, 1901; B u n t z e n t o Hope, A u g u s t 3, 1899, Box 7 3 .  80  B u n t z e n s u g g e s t e d t h a t t h e B.C.E.R. i n c r e a s e t h e p e r c e n t a g e of  e a r n i n g s i t p a i d f o r t h e use o f t h e c i t y s t r e e t s .  In  p r i n c i p l e , t h e Board approved but a d v i s e d Buntzen t o t r y to  g e t t h e p e r c e n t a g e b a s e d on n e t r a t h e r t h a n g r o s s e a r n 43  i n g s and t o e x t e n d t h e f r a n c h i s e t o t h i r t y y e a r s .  With  t h i s apparent a p p r o v a l , Buntzen proceeded t o n e g o t i a t e the  with  c i t y b y o f f e r i n g t o i n c r e a s e t h e company's p a y m e n t s .  He  s u g g e s t e d t h a t a c o n s o l i d a t e d a g r e e m e n t w o u l d e l i m i n a t e many c l a s h e s b e t w e e n t h e c i t y and t h e company as e a c h l e a s e came up f o r r e n e w a l a n d w o u l d a s s i s t t h e company i n r a i s i n g  funds  for  expansion.  The u n w i l l i n g n e s s o f t h e C o u n c i l t o r e l i n q u i s h  its  r i g h t s t o p u r c h a s e t h e B.C.E.R. l i n e s b r o u g h t t h e s e e a r l y  n e g o t i a t i o n s t o an e n d . Buntzen s t i l l  4 4  desired t o consolidate the franchises.  When t h e c i t y r e q u e s t e d a h a l f - m i l e e x t e n s i o n o f t h e W e s t m i n s t e r Avenue l i n e t o t h e c i t y l i m i t s , a n d a m i l e e x t e n sion of the Powell Street l i n e  f r o m C a m p b e l l Avenue t o Cedar  Cove, B u n t z e n o f f e r e d t o b u i l d t h e e x t e n s i o n s i n r e t u r n f o r 43 B u n t z e n t o Hope, A u g u s t 3 , 1 8 9 9 , Box 7 3 . The B.C.E.R. had been p a y i n g a p e r c e n t a g e s l i d i n g f r o m 3 t o 1 2 % b a s e d on o n e - n i n t h o f t h e g r o s s r e c e i p t s , i . e . a maximum o f 1 - 1 / 3 % o f the t o t a l g r o s s . Buntzen proposed a s c a l e o f 1 t o 1 0 % based on t o t a l g r o s s r e c e i p t s . ( M i n u t e s o f B o a r d o f D i r e c t o r s , A u g u s t 2 2 , 1 8 9 9 , Box 6 8 8 ) . 44 VDP, J u l y 7, 1 9 0 0 , p . 6 ; J u l y 2 8 , 1 9 0 0 , p.6,- O c t o b e r 15, 1900, p.7.  81  franchise consolidation., this proposal.  The  C o u n c i l was  In s p i t e of Buntzen s 1  willing  t o accept  i n s i s t e n c e on t h e need  t o work i n harmony w i t h t h e c i t y and h i s a s s u r a n c e t h a t t h e e x t e n s i o n s would not.  o n l y c o s t $15,000 t o $20,000, t h e B o a r d  was  Once a g a i n , t h e B o a r d , e v e r c a u t i o u s about, i t s f i n a n -  c i a l statements, f a i l e d t o understand the s i t u a t i o n  in British  C o l u m b i a d e s c r i b e d b y t h e i r manager.  Though, a c c e p t i n g t h e s l i d i n g  scale i n principle,  the  B o a r d t h o u g h t t h e company c o u l d g e t t h e c i t y t o a g r e e t o a l o w e r p e r c e n t a g e b a s e d o n l y on e x c e s s e a r n i n g s r a t h e r on g r o s s e a r n i n g s .  In t h i s ,  v i c e o f un-named " f r i e n d s " , who  had l a r g e e l e c t r i c  B u n t z e n who  t h e B o a r d depended on t h e a d (probably Mackenzie  and Mann)  r a i l w a y i n t e r e s t s , r a t h e r than  p a i d more t o t h e c i t y t h a n , d i d t h e B.C.E.R. sure of Buntzen's  led  on  c l a i m e d t h a t , under the excess e a r n i n g s a r r a n g e -  ment, t h e s t r e e t r a i l w a y s o f T o r o n t o , MontreaJ. and  in getting  than  Hamilton  T h i s near  cen-  p o l i c y , coupled with continuing d i f f i c u l t i e s  f u n d s f o r n e c e s s a r y e x t e n s i o n s and  B u n t z e n t o s u g g e s t t h a t he m i g h t r e s i g n .  improvements, His threat  v i n c e d the Board of the s e r i o u s n e s s of the s i t u a t i o n .  con-  They  p r o m p t l y a d v i s e d h i m t o go ahead i m m e d i a t e l y , i f d e l a y w o u l d be d a n g e r o u s , b u t a s k e d h i m , i f p o s s i b l e , t o w a i t u n t i l H o r n e Payne 's p l a n n e d v i s i t t o V a n c o u v e r . W h i l e H o r n e - P a y n e v/as i n V a n c o u v e r ,  The d e l a y was  possible.  he a p p r o v e d t h e scheme.  82  In October, 1901, the C i t y C o u n c i l agreed t o c o n s o l i d a t e franchises payments,  i n r e t u r n f o r t h e BoC.E.R.'s p r o p o s e d s c a l e o f the extension  o f t h e W e s t m i n s t e r . Avenue and  S t r e e t l i n e s and t h e a c c e p t a n c e o f c e r t a i n r e g u l a t i o n s as  the  a maximum f i v e c e n t f a r e , f r e e p a s s e s f o r c i v i c  Powell such  officials,  a s p e c i f i e d s c h e d u l e o f minimum s e r v i c e , and a s p e e d l i m i t 8-10 m i l e s p e r  The the  hour.  settlement  s D  of the franchise question  company's p r o b l e m s w i t h t h e c i t y .  Vancouver  of  end  E a r l y i n 1904 t h e  C i t y C o u n c i l began t o d i s c u s s  an amendment t o t h e  c i t y c h a r t e r removing the " p r o t e c t i v e c l a u s e " r e l a t e d t o commercial l i g h t i n g .  d i d not  i n s o f a r as i t  When t h e B.C.E.R.  objected,  46  the  C o u n c i l a g r e e d t o abandon t h e i d e a . The  " p r o t e c t i v e c l a u s e " had been added  C i t y Charter  to the  i n 1 9 0 1 as a r e s u l t o f B u n t z e n ' s  Vancouver  lobbying f o r  p r o v i n c i a l l e g i s l a t i o n t o reduce the l i k e l i h o o d o f  municipal  4 5 B u n t z e n t o Hope, F e b r u a r y 2 7 , 1 9 0 1 , GMLB, 1 9 0 1 ; B u n t z e n t o T.F. M c G u i g a n , F e b r u a r y 1 1 , 1 9 0 1 , GMLB, 1 9 0 1 ; Horne-Payne t o B u n t z e n , A p r i l 3, 1 9 0 1 , Box 7 3 ; B u n t z e n t o H o r n e - P a y n e , A p r i l 2 3 , 1 9 0 1 , GMLB, 1 9 0 1 ; B.C.E.R. (London) t o B u n t z e n , M a y 1 7 , 1 9 0 1 q u o t e d i n B u n t z e n t o Hope, May 1 8 , 1 9 0 1 , GMLB;McGuigan t o B u n t z e n , O c t o b e r 1 5 , 1 9 0 1 , Box 6 3 7 . C o p i e s o f t h e agreement may be f o u n d i n Box 7 3 . A u s e f u l s h o r t summary i s i n c l u d e d i n Adam S h o r t t , R e p o r t o f C o m m i s s i o n e r A p p o i n t e d t o I n v e s t i g a t e t h e Economic C o n d i t i o n s _ and O p e r a t i o n s o f t h e B r i t i s h C o l u m b i a E l e c t r i c R a i l w a y Company and S u b s i d i a r y Companies,V i c t o r i a , K i n g ' s P r i n t e r , 1 9 1 8 , p p . 8-9. 4 6 M c G u i g a n t o B u n t z e n , J a n u a r y 5, 1 9 0 4 , Box  637.  83 or p r i v a t e c o m p e t i t i o n .  The " p r o t e c t i v e c l a u s e "  t h e B.C.EoR. a g a i n s t newcomers b y making  protected  " i t c o m p u l s o r y on  t h e p a r t o f t h e C i t y t o b u y o u t o u r Company, b u t n o t any o t h e r Company t h a t m i g h t w i s h t o come i n and compete" w i t h t h e B.C.E.R.  When r a i s i n g new c a p i t a l , t h e B.C.E.R. u s e d  this  clause t o assure investors of the u n l i k e l i h o o d of competition. And, w h e n e v e r t h e V a n c o u v e r C i t y C o u n c i l began t o d i s c u s s amendments t o t h e c i t y c h a r t e r w h i c h m i g h t i n t e r f e r e w i t h t h e c l a u s e , t h e B.C.E.R. r e f e r r e d t o t h e " p r o t e c t i v e c l a u s e " as t h e b a s i s . • 43 of x t s fund r a i s i n g . Buntzen's justification.  fear of municipal competition  had c o n s i d e r a b l e  The i d e a o f p u b l i c o w n e r s h i p o f r a i l w a y s  and m u n i c i p a l u t i l i t i e s  was b e i n g  frequency throughout Canada.  4 4  discussed with increasing  Such t a l k was p a r t i c u l a r l y  VDP, J a n u a r y 8, 1900, p . 5 . The 1895 c l a u s e r e f e r r e d t o g a s , w a t e r and t e l e g r a p h s as w e l l . B.C., S t a t u t e s , 58 V i c . , c . 68, s e c . 16, s.s„ 6A; VDP, J a n u a r y 16, 1900, p . 8 ; J a n u a r y 30", 1900, p . 2 ; B u n t z e n t o Plope, September 7, 1900, LFGM, 1900; - « ' S t a t u t e s , 64 V i c , c.54 s e c . 125, s . s . 4-9; B u n t z e n t o T.P. McGuigan, J a n u a r y 4, 1904, Box 637; 4  B  3  c  44 F o r examples s e e J . C a s t e l l Plopkins , comp. , C a n a d i a n A n n u a l R e v i e w , T o r o n t o , A n n u a l R e v i e w P u b l i s h i n g Company, 1901, p.419; 1904, pp.59-66; 1905, p p . 130-137. The b e s t example o f a publ i c l y - o w n e d u t i l i t y c r e a t e d d u r i n g t h i s p e r i o d i s t h e HydroE l e c t r i c Power C o m m i s s i o n o f O n t a r i o . Some s p e c i f i c examples o f a g i t a t i o n f o r p u b l i c o w n e r s h i p i n V a n c o u v e r i n c l u d e a 1901 r e s o l u t i o n o f t h e T r a d e s and L a b o r C o u n c i l c a l l i n g f o r t h e p u r c h a s e o f e i t h e r t h e w h o l e o f t h e B.C.E.R. s y s t e m o r t h e l i g h t i n g p l a n t a l o n e ; a p e t i t i o n s i g n e d b y 1100 V a n c o u v e r r e s i d e n t s f a v o u r i n g government o w n e r s h i p o f r a i l w a y s and t h e e n d o r s a t i o n by t h e B o a r d o f T r a d e o f a r e s o l u t i o n f a v o u r i n g n a t i o n a l ownership of telegraph l i n e s .  84 d i s t r e s s i n g t o t h e E n g l i s h d i r e c t o r s who were f a m i l i a r t h e e f f e c t s o f m u n i c i p a l c o m p e t i t i o n on p r i v a t e l y - d o w n e d . . panies  with com-  45  i n English cities.  explains the directors'  This English experience  almost  probably  paranoic fear of municipal  competition„ Once t h e f r a n c h i s e s w e r e c o n s o l i d a t e d and t h e " p r o t e c t ive clause" achieved,the  B.C.E,R. c o u l d make p l a n s w i t h a  f a i r d e g r e e o f c e r t a i n t y t h a t i t w o u l d own t h e c i t y l i n e s and h a v e no d i r e c t s t r e e t r a i l w a y c o m p e t i t i o n a t l e a s t u n t i l 1919 T h e s e a g r e e m e n t s p r o v i d e d t h e b a s i s on w h i c h t h e Company made plans  f o r suburban expansion.  T h e y were p a r t o f t h e . s o l i d  f o u n d a t i o n l a i d b e t w e e n 1897 and 1 9 0 5 . By 1 9 0 5 , t h e B.C.E.R., t h r o u g h  t h e work o f i t s B r i t i s h  B o a r d o f D i r e c t o r s a n d i t s l o c a l manager, J o h a n n e s had  established a solid  had  reduced  foundation f o r f u t u r e growth.  the p o s s i b i l i t y of competition through  tective clause."  I t had strengthened  It  t h e "pro-  the p o s i t i o n of the  s t r e e t railways without great expenditures promoting  Buntzen,  of c a p i t a l by  t r a f f i c , b y a r r a n g i n g t o o p e r a t e t h e V. & L . I .  f o r t h e C„P.B.o and b y j u d i c i o u s e x t e n s i o n s t o e x i s t i n g s u c h as t h e S a p p e r t o n  branch  i n New  lines  Westminster.  45 J . H . Clapham, An E c o n o m i c H i s t o r y o f M o d e r j i _ B r j t ^ i n New Y o r k ' M a c m i l l a n , " l 9 3 8 , v o l . I l l , p p . 137-138. :  >  85 The  cautious  approach of t h e d i r e c t o r s t o expansion  seems t o b e o n l y tism.  funds  always  at a uniformly  steady rate  available i n sufficiently  l o c a l demands. ated tension basic  large  From time t o t i m e , t h i s  reasons  forthis  munication by l e t t e r  capital  q u a n t i t i e s t o meet lack  of c a p i t a l  cre-  Board t o give  t e n s i o n , h o w e v e r , v/ere t h e d i s t a n c e Columbia, the l i m i t a t i o n s  and c a b l e ,  and t h e w i s e  t h e i r manager u n l i m i t e d  though they recognized h i s a b i l i t y the  o r t o have  between t h e B o a r d and t h e manager i n V a n c o u v e r .  between London and B r i t i s h  the  conserva-  I t was a l s o t h e c o n s e q u e n c e o f t h e i r i n a b i l i t y t o  raise  The  p a r t l y the r e s u l t of t h e i r innate  o f com-  reluctance  authority  of  even  and h i s u n d e r s t a n d i n g o f  local situation,,  When c a p i t a l was a v a i l a b l e i t was s p e n t o n p r o j e c t s as  hydro-electric plants,  lighting  way i m p r o v e m e n t s w h i c h y i e l d e d  ent  i n short, which  a solid  boom c o n d i t i o n s  rail-  through  of long-run gain. foundation.  expansion, t h e Board's c a r e f u l s u p e r v i s i o n ,  f i n a n c i n g meant t h a t the  laid  and s t r e e t  immediate p r o f i t s  e f f i c i e n c y and gave t h e p r o s p e c t projects,  extensions  such  They were This  prud-  and sound  t h e B.C.E.R. was w e l l - p r e p a r e d t o m e e t o f t h e years between  1905 and 1 9 1 3 .  CHAPTER I I I  THE ERA OF EXPANSION,  1905-1913  i  Between 1897 and 1905 t h e d i r e c t o r s and management of  the B»C.E R 0  tween  to  0  laid a solid  1905 and 1913 t h e y e x t e n d e d and b u i l t upon t h i s  1905 and 1913,. c i t y lines  Many new p r o j e c t s were undertaken, between Four i n t e r u r b a n r a i l w a y l i n e s were b u i l t ,  were i m p r o v e d , s e r v i c e was i n c r e a s e d , new  suburban l i n e s  t e r e d new t e r r i t o r y Peninsula. and  base  c r e a t e one o f t h e l a r g e s t e l e c t r i c a l e n t e r p r i s e s i n t h e  B r i t i s h Empire.^  and  f o u n d a t i o n f o r t h e company; b e -  city  were c o n s t r u c t e d and t h e B„C„.E R. e n 0  s u c h as t h e F r a s e r V a l l e y and t h e S a a n i c h  To p r o v i d e power t o o p e r a t e t h e e n l a r g e d  t o meet i n c r e a s i n g demands f o r l i g h t  system  and power, t h e  company expanded, t h e L a k e B u n t z e n - L a k e C o q u i t l a m d e v e l o p m e n t , b u i l t , a new h y d r o - e l e c t r i c p l a n t a t J o r d a n R i v e r and p u r c h a s e d power f r o m t h e S t a v e L a k e Power Company. T h i s e x p a n s i o n v/as p o s s i b l e b e c a u s e o f t h e c o n t i n u e d  1 H o r n e - P a y n e t o t h e A n n u a l G e n e r a l M e e t i n g o f t h e B.C.E.R, December 10, 19.12. Copy i n 105-1424. 86  87  growth  o f B r i t i s h Columbia,  and b e c a u s e o f t h e c o m p a r a t i v e  a v a i l a b i l i t y of B r i t i s h c a p i t a l during these years.  The f l o w  o f B r i t i s h c a p i t a l o v e r s e a s began t o i n c r e a s e s h a r p l y l a t e i n 1904, r e a c h e d a p e a k i n 1907, and t h e n , a f t e r a d e c l i n e i n 1908 and 1 9 0 9 , a d v a n c e d  towards  new r e c o r d s .  The F i n a n c i a l  T i m e s e s t i m a t e d t h a t b e t w e e n 1906 and 1913 B r i t i s h  investment  3 i n Canada i n c r e a s e d b y £246 , 77 8 , 200 „  During these years  t h e B.C.E.R. i s s u e d L6,500,000 w o r t h o f s h a r e s and d e b e n t u r e s and  f r e q u e n t l y o b t a i n e d a premium on i t s s t o c k .  4  The amount o f c a p i t a l d i r e c t l y i n v e s t e d i n t h e B.C.E.R. i n c r e a s e d w i t h o u t i n t e r r u p t i o n f r o m £118,7 95 i n 1905-1906 t o £1,035,54 9 i n 1912-1913.  I n e v e r y y e a r t o o , l a r g e sums  w e r e i n v e s t e d i n s u b s i d i a r y c o m p a n i e s w h i c h were o f t e n d e s i g n e d t o e a r n good w i l l  i n t h e community as w e l l as p r o f i t s .  The i n v e s t m e n t p a i d w e l l ; n e t e a r n i n g s showed a s t e a d y and i m p r e s s i v e i n c r e a s e f r o m $98,097 i n 1905-1906 t o $401,836 in  1912-1913 and t h e i n v e s t e d c a p i t a l u s u a l l y e a r n e d b e t w e e n 2 See A p p e n d i x  1.  3 C i t e d i n M e r r i l l D e n i s o n , Canada's F i r s t B a n k , T o r o n t o , M c C l e l l a n d & S t e w a r t , 1967, v o l . 1 1 , p.294. A c c o r d i n g t o A.K. C a i r n c r o s s , Home and F o r e i g n I n v e s t m e n t , 1 8 7 0 - 1 9 1 3 , Cambridge U n i v e r s i t y P r e s s , 1953, pp.4-1-42, a p p r o x i m a t e l y $2,500,000,000 was b o r r o w e d a b r o a d b y C a n a d i a n s b e t w e e n 1900 and 1913. By 1913, Canada h a d r e c e i v e d t h e l a r g e s t s h a r e o f any c o l o n y o r overseas country o f B r i t i s h investment abroad. Herbert Feis, E u r o p e ; t h e W o r l d ' s B a n k e r , 187 0-1914,New Haven, Y a l e U n i v e r s i t y P r e s s ( P u b l i s h e d f o r t h e C o u n c i l on F o r e i g n R e l a t i o n s ) , p. 23. 4 See A p p e n d i x  10.  5., See A p p e n d i c e s  2 and 3.  88 f o u r and f i v e p e r c e n t each y e a r .  5  T h e r e was o n l y one r e a l c h e c k on t h e p a n s i o n d u r i n g t h e s e years., fear o f m u n i c i p a l ownership.  B.C.E.R,,  's e x -  T h a t c h e c k was t h e d i r e c t o r s ' T h e y were s t i l l  a c u t e l y aware  o f t h e e f f e c t s o f m u n i c i p a l o w n e r s h i p i n E n g l a n d and t h e y knew o f t h e d i f f i c u l t y o f r a i s i n g money i n E n g l a n d f o r p r o j e c t s threatened by n a t i o n a l i z a t i o n . ^  In B r i t i s h  Columbia,  municipal p o l i t i c i a n s  f r e q u e n t l y spoke o f t h e d e s i r a b i l i t y  of p u b l i c ownership.  I n 1906, V a n c o u v e r  p r o p e r t y owners  a p p r o v e d a p l a n f o r a m u n i c i p a l l y owned e l e c t r i c  lighting  7  system.  S i x y e a r s l a t e r , i n 1912, t h e V a n c o u v e r  City  Council  s e c u r e d an amendment t o t h e c i t y c h a r t e r a u t h o r i z i n g t h e c i t y t o r e s e r v e $500,000 o f i t s b o r r o w i n g power e a c h y e a r i n o r d e r t o e s t a b l i s h a fund enabling i t t o purchase t h e s t r e e t way l i n e s  i n 1919.  8  Fears of p u b l i c ownership  rail-  conditioned  a l m o s t e v e r y d e c i s i o n t h e d i r e c t o r s made a b o u t e x p a n d i n g facilities. in  This fear also explains t h e i r sustained  "protective  their  interest  clauses."  6 S.G. C h e c k l a n d , "The M i n d o f t h e C i t y , 1870-1914,"Oxford E c o n o m i c P a p e r s , n . s . v o l . 9 ( O c t o b e r 1 9 5 7 ) , p . 269„ 7 VDP, J a n u a r y 12, 1906, p.l„ 8 B . C . E . R o ( V a n c o u v e r ) t o B . C . E . R . "(London), F e b r u a r y 10, 1912, Box 42A-696.  89 In  order t o reduce t h e l i k e l i h o o d of m u n i c i p a l ownership  and i n o r d e r t o c r e a t e a h a r m o n i o u s  environment  f o r t h e com-  p a n y , t h e B.C.E.R. c a r e f u l l y c u l t i v a t e d good w i l l . pany e x p e r i m e n t e d w i t h a L o c a l A d v i s o r y Committee of  consisting  t h r e e l e a d i n g B r i t i s h C o l u m b i a n s ; F.S. B a r n a r d who h a d  many b u s i n e s s i n t e r e s t s couver of  The com-  M.L.Ac  i n t h e p r o v i n c e , R„G. T a t l o w , a V a n -  and M i n i s t e r o f F i n a n c e , and Mayor W.H.  New W e s t m i n s t e r .  Keary  These a d v i s o r s were