Part 8 (1/2)
In contrast to most of his contemporaries, who sought wealth as an avenue to political influence, Smith recognized that in the primitive environment of his time it was injinitely easier to parlay political connections into lucrative private ventures, often supported by the public purse. ”For forty years his personality stands out in every political crisis in the Dominion,” noted WTR. Preston, one of Smith's many political foes. ”He has had far more to do with the defeat and victory of political parties since Confederation than all other influences combined.... On many imporiant occasions Parliament, without being aware of the fact, simply registered his decrees.”
Smith's view ot'public life paralleled his approach to business. He believed political parties were no different
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from commercial corporations-handy conveyances to be boarded and abandoned at will, according to which one best served his personal purposes at any given moment. Smith was aware of no conflicts of interest in his adroit manoeuvrings between the private and public sectors because his interests never conflicted, they were, one and all, designed to advance his fame and his fortune. ”His philosophical disposition to accept the inevitable never deserted him,” noted Preston. ”His standard of political honour was not high, but it served.”
Smith vacillated in his support between the Conservative and Liberal parties, equally disloyal to both and trusted by neither. He once complained that he would not consign owners.h.i.+p of his grandmother's toothbrush to the ordinary politician-even if his own record proved the understatement of that taunt.
The buccaneering that characterizes developing economies found its most virulent expression in Canadian railway promotion. By 191 i, when major construction ran out of steam, Canada had 40,000 miles of rails, built with government cash, subventions or bond guarantees worth more than $1.3 bill1ion-plus the giveaway of 65,000 square miles including some of the finest wheat-growing land on earth. Yet despite these extravagant provisions, nearly every mile of every track was privately owned. Financing a new railway usually ineant its promoters would set up secretly controlled construction companies, then negotiate inflated contracts with themselves, collecting hefty profits at both ends of each deal. At the same time, they would award themselves bloated debenture offerings in return for artificial corporate services, reducing their balance sheets to rivers of red ink.
They would then turn to Ottawa and demand subsidies to cover fiscal overruns, either bribing ininisters to ensure bailouts or threatening to embarra.s.s the government by halting construction-or both.
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And yet the railways did get built, and they provided the essential infrastructure for the transcontinental economy, yanking an embryonic Dominion into the new century. The railways' promoters and operators became folk heroes, Canada's version of the great American robber barons-reviled and envied, riding about in their ornate private cars, gesturing with fat cigars, collecting old masters and young mistresses. Apart from the obvious chicanery in the link between politicians in power and these railway manipulators, the industry corrupted the electoral process itself. Railways and politics in nineteenthcentury Canada became interchangeable black arts, only marginally more ethical than piracy on the high seas.
DONALD SMIt.i.tS DEBUT in Canadian politics followed ]its successful arbitration of the Red River Rebellion in 1870. He contested and won the Winnipeg and St John seat in Manitoba's first provincial election and was simultaneously appointed to the executive council of the Northwest Territories. Unhappy with its munic.i.p.al status as a ”police village,”
Winnipeg in 1872 requested the right to incorporate itself as a city, but the new provincial legislature adjourned without dealing with the issue.
Feelings ran so high that when enactment of the ineasure was delayed by Dr Curtis James Bird, a local physician who had been elected the legislature's Speaker, he was lured out of his home on a phony nocturnal house call and waylaid by const.i.tuents who dragged him from his sleigh and poured a bucket of tar over him. Popular outrage had been roused by a belief that Bird was helping Smith oppose incorporation so that the HBC could avoid paying city taxes. Insinuations of corporate favouritism were fanned by the factthat the province's first lieutenant-governor, A.G. Archibald, lived on Company property and his successor, Alexander Morris, toured his domain STEAL OF EMPIRE 137.
aboard IIBC steamers. Before Manitoba's first bank was incorporated in 1873, the Company acted as the provincial treasury and repository for funds collected by customs officers. This official status, added to the retroactive bitterness over the 1113C's long monopoly, had jelled into ,in enduring resentment of the Companyand all Dr John C hristian Schultz, the charismatic leader of Manitoba's pro-Canadian moVement, sunirned up popular sentiment when he labelled the Hudson's Bay Company ”a curse to the country.”
f'he act of incorporation was finally pa.s.sed in the closing days of 187 1. Winnipeg's original street surveys followed the M6tis river lots and boundaries of the HB(A Land Reserve, its five -hundred - ac re holding around Fort Garry.* The settlement's muddy alleys (”a mixture of putty and bird-lime”) had been graded and planked, but there was nothing taine about Winnipeg's roughneck inhabitants, who turned the settlement into Canadas closest approximation to the Nmerican Wild West. The gin mills and mug-houses were there, as were the prost.i.tutes brazenly auctioning off their s.e.xual wares. ”Winnipeg and Barrie are the two most evil places in Canada,” went a typical report of the time.
Smith sponsored few initiatives in the Manitoba Legislat-ure mainly because he was hardly ever there. Quickly growing dissatisfied with the constraints of provincial and munic.i.p.al venues, be won the Selkirk federal seat in 1871 and held it in the next three campaigns.t He showed no
*Winnipeg'sorigina I coat of arms featured a buffalo, a ~tearro locomotive and three sheaves of wheat. This A as slightly fanciful, since the buffalo had long vanished from the city's environs, the first train would not arrive until 1878. and there would be no substantial grain exports for another five years.
tThe const.i.tuency Donald A. Smith represented was known as Lisgar in his time. In 1891 the name was changed to Selkirk. Sornesources listSmith as Member for Lisgar, others forSelk-irk.
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fax ouritism, being elected twice as a Conservative and twice as a Liberal.
The contests were hard fought, with boozing and brawling part of each run-up to election day and axe handles across the head frequently used to persuade dithering voters. Smith's margins of victory, ranging from a high of 196 ballots in 1872 to only 9 in 1878, reflected the bitterness of these contests.
The first Manitoba representative to arrive in Ottawa, Smith didn't take his parliamentary career too seriously and spent little time in legislative pursuits; debating the fine points of new laws was not a profit-producing enterprise. But from the moment he walked into the House of Commons, Smith knew that within the s.h.i.+fting alli~inces of that resplendent chamber there was significant personal authority to be gained, and he intended to grab it. 'I he great issue of 1871 was British Colurribia's entry into Confederation. The twelve thousand white residents of the former IJBC territory and British colony had decided to enter Confederation as Canada's sixth province on condition they be linked to the rest of the country by a railway within ten years. The only regular pa.s.sage across the Rockies north of the forty-ninth parallel was by IIBC-owned pack mules. The aninials, fitted with aphareos (Mexican-style pack saddles), gathered at the Punch Bowl, near what 'is now jasper, to transfer loads and pa.s.sengers.*
The entrepreneur who first undertook to build a railway across the Canadian West A as Sir Hugh Allan, yet another Scottish inunigrant, who had expanded his Montreal s.h.i.+pping line into the North Atlantic's largest merchant and pa.s.senger fleet. Allan had most
*I I BC packtrains, numbering three hundred or inore 211inials, ~kere led 1w ~i guide folloved by a bagpipcr and an IIBC Chief Factor, who usually carried a Bible anda bottle of gin in his sad- dlebags, consulting boi halong the %v~iy.
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leading C onservative politicians, including Sir John A. ,N,Iacdonal(l, Sir John Rose and Sir George-Etienne Cartier, in his pocket and regularly obtained lucrative subsidies and mail contracts for his maritime operations. Named to the Bank of Montreal board, Allan also expanded his coal and steel interests, and built himself Ravenscrag, a magnificent house on a fourteenacre estate on Mount Royal that had originally been owned by the greatest of the Nor'Westers, Simon McTavis~. Modelled on a fifteenth-century Tuscan villa, the house had thirty-four roorns including an imposing ballroom complete with a minstrels' gallery to accommodate a large orchestra. From the estate's seventy-five-foot tower Allan could scan the horizon for glimpses of his steamers returning from their weekly run to Glasgow or setting off to supply the sloping riverbank settlements along the St Lawrence. (These luxurious surroundings contrasted harshly with conditions at Allan's east-end Montreal cotton inill, which employed ten-year-old street waifs who didn't earn enough to buy shoes in winter.) When the Macdonald government decided to honour its railway commlitrient to British Columbia, Sir Hugh Allan was the logical choice to head the construction syndicate. His laxN yer, John J.C. Abbott (later Canada's fourth prime minister), incorporated the Canada Pacific Railway Company to take advantage of Ottawa's offer to grant the builder $30 million in cash and fifty million acres of land, plus an undertaking to extinguish Indian t.i.tle along the wav. Donald Smith was originally recruited as a member of Allan's syndicate to ensure the Hudson's Bay Company's co-operation in gaining use of its existing infrastructure through western Canada, but his name was not included in the final offering memo- randum. To guarantee that he would be granted the Pacific railway charter under Ottawa's generous terms, 140 LABRADOR SMITH.
Allan pledged secret subscriptions of $100,000 to Macdonald's 1872 campaign fund and even arranged for his Merchants' Bank to cancel $80,000 of Macdonald's personal debts.
The great Pacific Scandal that followed, one of the most thoroughly doc.u.mented instances of bribery in the country's political history, involved more than $500,000. Its least subtle manifestation was the telegram Macdonald sent tojobn Abbott, the Allan lawyer, at the climax of the 1872 campaign: ”I MUST HAVE ANOTHER TEN THOUSAND. WILL BE THE LAST TIM[,'. OF CALLING. DO NOT FAIL ME. ANSWER TODAY-J.A. MACDONALD.” Abbott consulted with Allan and hastily replied: ”DRAIV ON ME FOR TEN THOIJSA-ND DOLLARS.” When the Montreal Herald published these and other incrinunat- ing doc.u.ments, a royal commission was established to investigate the bribery allegations. It found the Tories g-uilty as charged. Macdonald had won the 1872 election with a dismal inargin of only two seats, and his governiTieDt seemed dooined--unlcss he could somehow remin Parliament's confidencc. Macdonald quickly realized the fate of his administration hung on one vote, that of Donald Smith. ”Upon you and the influence you can bring to bear,” he wrote to the 11BC executive, ”may depend the fate of this administration.”
Smith was in Fort Carlton, half~va ' v from Fort Garry to Edmonton, on an inspection trip at the time, but immediately rushed back to Ottawa. He set a record of only five days returning to Fort Garry, six hundred miles to the east. Angus McKay, then a fifteen-year-old FIBC apprentice, witnessed that mad dash across the Prairies.
”We first noticed a cloud of dust on the big salt plain near Hurnbolt [sic],” he wrote in his journal. ”Then we saw a buckboard, a Red River cart an(] a bunch of loose horses, driven by two men on horseback. When they met our STEAL OF EMPIRE 141.
freight train [of Red River carts], they stopped for a few minutes to ask questions while the men changed a tired horse for a fresh one, driving on again and leaving the tired one on the prairie. [Smith] was strapped crossways on his breast with wide strappings and onto the seat of the buckboard to prevent his falling out when asleep. It was the fastest Journey ever made between Carlton and Winnipeg with horses.”
Smith was in his seat when the Commons met on October 2 3, 187 3. He hoped that Macdonald might take this occasion to grant Louis Riel the amnesty that had originally been promised and to pay back the $3,000 Smith had spent bribing the M6tis leader and his followers during the 1870 Rebellion.
The debt was long overdue, and Smith rightly maintained that he had been carrying out Ottawa's instructions, but had to pay the money out of his own pocket because there were no banking facilities in Red River at the time.
The Prime Minister never disowned the debt, but he didn't honour it either.
He was all too aware of how precarious the Conservatives' political situation was and that if word of any amnesty or payments to Riel leaked out, he would lose his remaining ~upport in Orange Ontario.
The Prime Ministers cronies buzzed around Smith, trying to ensure hl~ support, and eventually arranged a private meeting between the two men.
Macdonald had been drinking for most of three days and took exaggerated offence when Smith calmly requested repayment of his loan and then a,lvised the Prime Minister to confess his political sins and ask the country for forgiveness. Instead of trying to appease hii western MP, Macdonald (fared him to make the Riel bribe public, boasting with the false courage of the bottle that he could win Ontario in another election, no matter ~A hat Smith said about him. That barely coherent bombast was followed by a stream of woozy obscenities. as the Prime Minister 142 LABRADOR SMITH.
worked himself up imo red-faced ferinent and finally pa.s.sed out.