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

University of British Columbia

In the two decades prior to World War I, London was the centre of the most extensive financial empire in the world. Canada was particularly popular among British investors. In 1897, a group of British capitalists led by R.M. Horne-Payne, a successful financier, acquired the electric street railways and electric power facilities which local entrepreneurs had initiated in Vancouver, New Westminster and Victoria. The British capitalists then organized the British Columbia Electric Railway Company, The creation of the B.C.E.R. inaugurated a thirty-one year long symbiotic relationship between British capitalists and the British Columbia public, Unlike their local predecessors, British capitalists had access to the large amounts of capital necessary to rescue an infant enterprise from the embarrassment of depressed times and to expand its operations as southwestern British Columbia grew rapidly during the prosperous years of the Klondike gold rush and the prairie wheat boom. During these years, the B.C.E.R. completed an urban street railway network, built major interurban railways in the Fraser Valley and on the Saanich Peninsula and introduced hydro-electric power to southwestern British Columbia. Thus, the B.CE.R. provided its customers with, modern and efficient conveniences. The B.CE.R. was unique among Canadian transportation and utility companies of its time. Many of these firms also raised capital in Britain but none seems to have been as closely controlled by a British Board of Directors, The company's general manager in Vancouver for example, was on an agent who could make no significant decision without the consent of the Board in England. A superficial survey of other Canadian utility companies suggests that British Columbians were better off with a British company than they would have been with a Canadian one. In good times, the B.C.E.R. took lower profits out of its operation than did comparable Canadian firms? in bad times, it had greater financial stability than many of its Canadian counterparts , A conclusive answer to this hypothesis, however, must await detailed studies of other Canadian utility companies the basic concern of the directors of the B.C.E.R. was the security of the investment. They would not undertake new expenditures without being certain of the availability of the necessary capital; they set aside generous sums for depreciation , renewals and reserves; they avoided speculative ventures such as real estate developments; they built few railway or power facilities in advance c factual demand and they actively worked to thwart real and imagined competition from other private companies or from municipal or provincial governments. These conservative policies succeeded. In spite of occasional anxious times, particularly during, World War 1, the B.C.E.R. always met its financial obligations . By the 1920's the company could finance most of its expansion itself. Usually, it also earned a respectable — but not exploitive — dividend for its share holders. Ultimately, in 1928, the shareholders were able to sell their holding s to the Canadian-controlled Power Corporation of Canada for a handsome profit. Because it was a public utility, the B.C.E.R. was never able to act without considering possible consequences of public antagonism and subsequent government action. Thus, it assiduously cultivated goodwill generally and lobbied governments with specific requests. Good relations with governments were essential to the success of the company. The municipalities regulated fares and controlled the franchises without which the company could not operate. Through their control of such matters as water rights and regulating agencies, the provincial and federal governments could also affect the company. The B.C.E.R. was beholden to the voters who were also its customers. In sum, the company, though profiting from British Columbia, could not impose its will on British Columbians.

Text

2012-03-08

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http://hdl.handle.net/2429/41218

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University of British Columbia

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