HISTORICAL SKETCH OF

THE CANADIAN PACIFIC RAILWAY

The construction of a great Railway amid pioneer conditions, through immense stretches of little known country, around the rocky shores of Lake Superior, across the wilderness between the Great Lakes and the Red River, over the vast unsettled prairies of the West and the mighty mountains of the Pacific Coast, was, in itself, a task of herculean proportions. When the country backing the project was divided in opinion as to its practicability and as to methods of construction, and the source of financial support in London found the issue clouded with pessimism and obscured by politics, the greatness of the task looms still more largely upon the pages of history. The personal factor in the record of the Canadian Pacific has never been adequately treated, the romance of that record has still to be dealt with-perhaps at some future time by Sir William Van Horne or Sir Thomas Shaughnessy. In these pages only the practical, business evolution and progress of a great undertaking can be considered.

A passing reference must be made to the history of the project before it was taken hold of by the Company which achieved the triumph of its creation and operation. A British-American transcontinental railway had been the ideal of dreamers for half a century. Thomas Dalton of the old-time Toronto Patriot; Sir Richard Bonnycastle, a British soldier, Engineer and writer in 1846; Sir John Harvey, Governor of Nova Scotia in 1847; Robert Christie, the Canadian historian, and Major Carmichael-Smyth; Joseph Howe, in a prophetic speech in 1851 and the Hon. John Young of Montreal; Chief Justice W. H. Draper at Toronto and Sir E. Bulwer-Lytton in London (1858); the Earl of Carnarvon in 1859 and Sir Sandford Fleming in 1862; were amongst the earlier and more conspicuous believers in the project. On July 1, 1870, the Dominion Government passed an Order-in-Council referring to the proposed entry of British Columbia into Confederation and pledging" the commencement, simultaneously, within two years from the date of Union, of the construction of a Railway from the Pacific towards the Rocky Mountains, and from such points as may be selected east of the Rocky Mountains towards the Pacific, to connect the seaboard of British Columbia with the railway system of Canada and, further, to secure the completion of such Railway within 10 years from the date of Union." In 1871 Mr. Sandford Fleming was appointed by the Dominion Government Engineer-in-Chief of Surveys and made his first Report upon

the subject; a little later Britsh Columbia came into the Confederation (July 20) with a transcontinental railway as one of the conditions.

The Canadian Parliament (35 Vict. Chap. 71, June 14, 1872) approved a general charter for the construction of the Railway by an independent Company. Two Companies applied for and obtained charters-one being composed of Sir Hugh Allan, Hon. J. J. C. Abbott, Donald A. Smith and others, incorporated as The Canadian Pacific Railway Company; the other being organized by the Hon. D. L. McPherson of Toronto. Capital could not be obtained, however, the Government's strong effort to amalgamate the Companies failed and, finally, a charter was given to a re-organized Company with Sir Hugh Allan at its head which undertook to construct and operate the Railway for a land grant of 50,000,000 acres and $30,000,000 of cash subsidy. Serious political complications ensued and, eventually, the Government of Sir John Macdonald was replaced by that of Alexander Mackenzie. An Act was then passed (37 Vic. Chap. 14) and became law on May 26, 1874, repealing the 1872 Act. Under the terms of the new legislation there developed a scheme of gradual construction of isolated lines of road, making use of water stretches on the route, and working, from 1875 onwards, to a period of expected continuity and completeness.

When Sir John Macdonald came into power again, in 1878, he found a situation in which the public had at last grasped, to some extent, the importance of this continental route to the unity and expansion of the Dominion. British Columbia was, also, pressing for the more rapid carrying out of Federal pledges while a steadily increasing measure of national progress promised to provide better revenues to the Government. In 1879 the opportunity presented itself for a development of the project under strong and organized auspices. A Syndicate of Canadian and American capitalists led by George Stephen and J. J. Hill had been latterly operating the St. Paul and Pacific Railway-an American line running through Minnesota to the Canadian border and connecting there with the Pembina and Winnipeg branch of the proposed continental road. Negotiations were commenced with these financiers looking to their assumption of the greater enterprise and, on May 10, 1879, Sir Charles Tupper moved in the House of Commons a series of Resolutions embodying the Government policy. Eventually, on Oct. 21, 1880, a Contract was signed by the Minister of Railways representing the Government of Canada and by George Stephen and Duncan McIntyre of Montreal, J. S. Kennedy of New York, R. B. Angus and J. J. Hill of St. Paul, Morton Rose & Co. of London and Kohn, Reinach and Co. of Paris, representing what was popularly called the C.P.R. Syndicate. The latter body was duly incorporated by Letters Patent on Feb. 16, 1881, following, as The Canadian Pacific Railway Company.

Meanwhile, the Contract had been presented to the House of Commons on Dec. 13, 1880, by Sir C. Tupper and, after prolonged and keen discussion, was passed and assented to by the Crown on Feb. 15, 1881-44 Vict. Chap. 1. By its terms the Company was to receive from the Government of Canada a cash subsidy of $25,000,000 and a land grant of 25,000,000 acres, under certain definite and restricted conditions. They were to construct the road to the Pacific within ten years and afterwards to operate it; they were to have the right of way through public lands and the necessary ground for stations, docks, etc.; Steel rails, telegraph wire and other articles for use were to be duty free. The sections of railway built or building-135 miles from Winnipeg eastward to Rat Portage, a branch line running 65 miles from Winnipeg to Emerson near the United States boundary, 300 miles of road from Rat Portage to Lake Superior, and 213 miles from Port Moody on the Pacific Coast to Kamloops in British Columbia-were to be handed over by the Government to the Company and unfinished portions were to be completed by the Government. The whole 713 miles were estimated at a total value and cost of $35,000,000. All the Company's property connected with the road and its capital stock were to be free of taxation. The Company was given the right to construct branch lines along its route, to establish Steamship lines and to build and operate Telegraph lines. The Government also undertook that for 20 years no line south of the Railway should be chartered by the Dominion, or by any Province created by it, in such a way as to permit of competition in the West.

It

The work before the new Company was not an easy undertaking. The difficulties of construction were enormous; the engineering skill needed to overcome them now seems to have been little short of the marvellous; the costliness of many portions of the Line was as great as the obstacles of nature were threatening. required gigantic faith to enter upon the plan of construction; immense energy and financial skill to carry it through. Nor were conditions very favourable to the large monetary operations which were necessary. The initial capital of the Company was $5,000,000 issued at par, and this was increased in May, 1882 to $25,000,000-the new stock being allotted to existing shareholders at 25 per cent. of par. The larger shareholders were George Stephen (23,411 shares), D. McIntyre & Co. (18,534 shares), J. S. Kennedy & Co. (17,558 shares), J. J. Hill (19,509 shares), R. B. Angus (19509 shares), D. A. Smith (19,509 shares), Martin Rose & Co. (29,364 shares). Arrangements were made (Shareholders' Meeting, July 19, 1881) for the issue of $25,000,000 of Bonds with Sir Alexander Campbell, Hon. A. Mackenzie and Samuel Thorne of New York as Trustees. Of these Bonds $18,333,000 were outstanding on Dec. 31, 1883, after the redemption of a portion by Land sales-and the deposit of

$5,000,000 with the Government as security under the Contract. The financial difficulties of this period are illustrated by the fact that on Dec. 29, 1881, it was decided to issue Preferred Stock in accordance with the Charter and that none was actually sold while at the first annual meeting on May 10, 1882, the sale of the remainder of the authorized capital stock of the Company was approved at a rate of 25 cents on the dollar but was not disposed of. On Nov. 28, 1882, the Capital Stock was again increased to $100,000,000 and $40,000,000 of this was sold at an average price of 52 per cent.; leaving the Company's paid-up eapital stock as $65,000,000 with which to finance a Line from Callander Station, near Lake Nipissing, Ontario, to the Pacific Coast. Under its Charter, however, the Company was authorized to issue Preference Stock to an amount not exceeding $10,000 per mile of its Main Line and branches, and to issue Land Grant Bonds to the amount of $25,000,000 secured by mortgage upon its entire Land Grant and bearing interest at 5 per cent.

The organization meeting of the new Company took place at Montreal on Feb. 17, 1881, when the first Board of Directors was selected as follows: George Stephen (President), Duncan McIntyre (Vice-President), Richard B. Angus and James J. Hill, John S. Kennedy, Henry Stafford Northcote and Pascoe Du P. Grenfell of London, Baron J. de Reinach of Paris. On Dec. 7, 1881, Mr. McIntyre became 1st Vice-President and R. B. Angus 2nd Vice-President. A. B. Stickney had been already appointed (Feb. 17) General Superintendent of the Western Division and on Jan. 1, 1882, W. C. Van Horne, General Superintendent of the Chicago, Milwaukee and St. Paul Railway, became General Manager of the C.P.R.

It is impossible here to more than faintly indicate the obstacles in the way, the struggles, vicissitudes and personal sacrifices which had to be faced during various periods of the enterprise by the men in control of the project. In London, where most of the money had to be obtained, a lukewarm feeling existed toward the enterprise. Moneyed men were influenced by the natural hostility of the Grand Trunk Railway toward this new and formidable competitor; by the tremendous difficulties which nature had placed in its path; and by the double fact of so many millions of English capital having been already invested in the Grand Trunk and of more millions being required to meet the possible success of new and powerful competition. It was of course fully expected and understood that the C.P.R. could not remain a simple link between Montreal and the West but would seek Eastern connections and make itself, in time, a great continental line. There were also political complications and the debates of Parliament in January, 1881, in March, 1882, and in February, 1884, afforded ample aid to pessimists or hostile critics at home or abroad.

Meantime construction-which commenced in June, 1881

had to proceed, branch lines be built or purchased, connections made with important points from the Atlantic Coast to the Pacific Ocean. By the end of 1881 the Canada Central Railway (105 miles) had been acquired, construction was proceeding between Callander and Sault Ste. Marie, the portion of the Quebec, Montreal, Ottawa and Occidental Railway (commonly known as the North Shore Line) between Montreal and Ottawa, via St. Jerome and Aylmer, had been purchased for $4,000,000-together with its branch lines, the Laurentian and St. Eustache Railways-and 163 miles were constructed on the prairie west of Winnipeg. At the end of 1882, 748 miles were under operation. The main line had been completed 347 miles from Montreal to Callander and the difficult work along the north-western shore of Lake Superior610 miles from Sturgeon River to Thunder Bay-was proceeding steadily. Mr. Van Horne's policy as General Manager was energetic, even strenuous. He believed that the road should be and must be built and that it could not be properly styled the Canadian Pacific Railway until it became a through continental line independent of United States roads. Hence the early rush of 10,000 men into the Lake Superior region-a waste of forest, rock and muskeg where every mile of road had to be hewn, blasted or filled up. From Winnipeg westward the main line was completed and in operation 512 miles to Swift Current; a branch line from Winnipeg, southwesterly, 100 miles to Pembina on the international boundary, was also finished; while, in Ontario, a branch line of 100 miles running from Carleton Place to Brockville connected the main line with the New York State railway system.

Altogether on Dec. 12, 1882, there were 500 miles of road built by the Government and equipped by the Company, 1,230 miles built or acquired by the Company, 213 miles being completed by the Government under the original Contract, and 1,363 miles under construction by the Company. The rolling stock owned by the Company consisted of 146 Locomotives, 87 Passenger cars, 1,003 Freight cars, 3,449 Platform cars. Despite isolated, disconnected and incomplete conditions, the gross earnings of the Eastern Division in 1881 were $519,677 and of the Western Division (8 months) $441,813. For both Divisions in 1882 the gross earnings were $3,326,920. The financial position at this time (Dec., 1882) showed the issue of $25,000,000 Land Grant Bonds of which $5,000,000 were held by the Government; the sale of 6,452,000 acres of land at $17,222,000 to apply on redemption of these Bonds; the assumption of obligations in the purchase or amalgamation of subsidiary lines from Montreal or Brockville to Callander of about $5,500,000; the availability of 18,548,000 acres of land for sale or security in the further progress of the undertaking. In these early years of the undertaking, it may be added here, the Chief Engineers in charge of construction were General Rosser and Messrs. James and Smellie for short periods.