Part 9 (1/2)
Stephen had lobbied the Prime Minister hard to allow his St Paul syndicate to lease the new line, but Smith's partic.i.p.ation in the project was a complicating factor. The Liberal leader knew that no undertaking with the Smith name attached to it would be approved by Sir John A. Macdonald and his Tories, who remained so angry with Smith that they left the House of Commons en ma.s.se whenever he rose to speak. When Mackenzie introduced the bill to lease the line on March 18, 1878, he not only left out Smith's name but also pointedly denied that Smith had any connection with the project.
The Opposition Tories quickly turned the routine bill into a major issue, with Macdonald insisting that the legislation was a fraudulent measure because it would only ”put money in [Smiths] own pocket.” Mackenzie used his Commons majority to ram the lease through, but it was vetoed by the Torydominated Senate. Smith informed the Prime Minister STEAL OF EMPIRE 151.
that if the roadbed could not be legally leased, his syndicate would be happy merely to rent running rights. When Mackenzie approved that compromise, Macdonald could no longer hold himself back. In a stunning attack on Smith, the Tory leader commended the Senate's action, ”which would put a stop to their [the government's] bargain with the honorable member for Selkirk to make him a rich man and to pay him for his servile support.”
Smith rose in the Commons the following afternoon (the last day of the session) to defend his honour. The I-louse was all set to prorogue for a general election, but the Selkirk member's question of privilege halted the proceedings and turned Parliament into a rowdy daycare centre. When George Brown, founding editor of the Toronto Globe and at the time a Liberal senator, described the scene that followed as ”the most disgrace- ful in the annals of the Canadian House of Commons,” he was indulging in understatement. Members' shouts escalated from ”liars” to ”treacherous liars” and many cruder epithets that Hansard reporters chose to ignore.
just as the Commons was on the verge of bedlam, the sonorous knock of Black Rod, the parliamentary official whose entry signals termination of sessions, could be heard. The Speaker, trying to invite him in, as protocol demanded, could not make himself heard, so the poor man kept on knocking. ”Finally ... Black Rod entered,” reported WTR. Preston, then a parliamentary page. ”He bowed, as usual. His lips moved, but no sound reached the frantic House. The Speaker stood up and evidently made an announcement. He was not heardthe 'Faithful Commons' continued to shout at one another with unabated fury! Finally, with what dignity he could muster, the Speaker stepped down from the dais, the Sergeant-at-Arms shouldered the mace, and preceded by Black Rod, they slowly made their way to the 152 LABRADOR SMITH.
lobby leading to the Senate. The Cabinet followed, and then as excited a mob as ever disgraced the House of Commons. . . .” Preston himself was caught up in the swaying, belligerent crowd and at one point found himself' pushed against Smith, just as ”Tory members reached out to strike his grey top hat.”
As usual, Sir John A. Macdonald had the last word. The final insult recorded in Hansard during that stormy parliamentary sitting was attributed to Macdonal~. ”That fellow Smith,” he declared, ”is the biggest liar I ever met!”
The Liberal governments final official act was to grant Smith, Stephen and their partners the ten-vear running rights on the Pembina Branch line they had requested. It was soon connected with their St Paul, Minneapolis and Manitoba tracks, gWing them a inonopoly on western Canadian freight. In the election that followed, which easily returned Macdonald to power, the Tories singled out Smith as a special target. ”Now, Sir John, if you want that prince of old scoundrels 'Sinith' beaten, use your influence to getVVilliam Ogilvie to con- sent to run adxised John C. Schultz. ”Donald Smith has I think lost just about the last vestige of char acter he ever possessed here, since the accounts of the closing scene of the House have come to hand. . . .”
Smith's challenger turned out to be an even more for midable choice, Alexander Morris, who had been a min ister in Macdonald's first administration and served as Manitoba's first chief justice. When Morris pointed out his opponent's obvious conflict of interest between what was best for land sales in Manitoba and best for him as one of the proprietors of the St Paul, Smith reacted with a dose of righteousness improbable even for him. With a straight face he explained that ”the primary object of the railway was for the benefit of Manitoba and not for the purpose of making money.”
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Realizing that his re-election bid was in serious trouble, Smith tried to enlist the organizational a.s.sistance of J.H. Mcl~vish, a popular HBC Factor, but London head office firmly directed Winnipeg to ”keep the Company neutral ... the Fur Trade officers must take no part in the election as such.” Smith attempted to protect himself by pretending he was politically independent,* pledging that he had ”no favour to ask and nothing personal to desire from any Government” and would ”support only such measures as are conducive to the advancement of Manitoba. . . .”
just in case this high moral ground might prove too slippery, Smith transferred several gangs of Mkis who were on the Company's payroll to his riding and ordered twenty-six YIBC families to be iemporarily moved into his jurisdiction, then bribed them to vote for him. Even these out- rageous manoeuvres barely turned the trick. He won the election by a hair's-breadth margin of nine votes. On the night of his modest victory, as his cheering supporters led him through Winnipeg's main streets, the salute guns of Fort Garry boomed happily in the background. Smith was magnanimous in his triumph: he donated $7 50 to the Knox Church Building Fund.
A pet.i.tion charging Smith with bribery and corruption was immediately filed, but when it was heard before Mr justice Louis Bkournay in the Manitoba Court of Queen's Bench, Smith was confirmed in his seat. That verdict was tarnished by the fact that Smith held a fourthousand-dollar mortgage on Bkournay's house, granted at highly favourable terms. When the decision was overturned, a by-election was called for September 10, 1880. Smith ran as an independent, bolstering his political stance with bribes that totalled more than $30,000. But the voters refused to be bought. Smith was
*Which, in a way, he was-his sole allegiance was to himself 154 LABRADOR SMITH.
decisively beaten. His subsequent comment to James Cole, an HBc Factorwhohad acted as his campaign manager, easily ranks as Canadian history's longest snort. ”I am sorry to say,” Smith complained, ”that a majority of the intelligent electorate of my late Selkirk const.i.tuency have, in the exercise of their undoubted privilege and the right to choose the most fit and proper person available for the purpose of representing them in the Dominion Parliament, seen fit to reject my own humble, not hitherto unacceptable person.”
”The dainn voters,” shot back the more succinct Cole, ”took your money and votedagainst you!”
”You, ” intoned Smith, ”have properly expressed the situation.”
HIS POLITICAL CAREER temporarily abandoned, Smith could concentrate on his long-standing ambition to be a fiscal animator-and personal beneficiary-of building a railway across Canada. His involvement with that project was to be the central public accomplishment of his life, forever perpetuated in the history books by the photograph ofhIs driving In the last spike.
Because it was the CPR that finally destroyed the HBC's dominance in west- ern Canada, its construction, at least as briefly stinunarized in the pages that follow, is part of the Company's history. Smith had resigned his post as the HBCs Land Commissioner in 1879, but he continued buying up stock. By 1883 he had become the HBCs dominant shareholder and a year later was appointed, along with Sandford Fleming, to head a Canadian subcommittee that controlled the Company's overseas operation-all this before the CPR had been completed.
The building of that railway probably ranks as Canada's greatest achievement. ”A new current was in motion within the mainstream of human history,” wrote STEAL OF EMPIRE 155.
Ralph Allen in his evocative Ordeal by Fire. ”The railways opened up a new caravan trail for the restless, the driven, and the questing and led them to the heartland of Canada.”
By 1880, all the elements of Smith's career seemed to combine in pus.h.i.+ng him to join his cousin George Stephen in becoming a decisive figure in the railway's realization. A fringe benefit of the Minnesota railway venture had been to provide Stephen with an opportunity to view the West at first hand. He had travelled over the St Paul's rickety tracks in the autumn of 1877 and was then driven north to Silver Heights, where Smith and Stephen discussed the railway pro) ect's future. ”The immensity of the treeless Prairie landscape affected him deeply, indeed disoriented him, as it does most people when they see it for the first time,” WE Morton wrote of Stephen's reaction. ”He could at last imagine what Smith had all along been telling him-that people would come to this emptiness, that they would survive and prosper, and that the railway would be the instrument of this population-that it would bring the population to its lands, and those people would provide it with its future earnings.”
Because the revelation of his a.s.sociation with the project would have killed its chances, Smith was deliberately kept in the background, but it was his determination that proved essential in financing the epic venture. He had roused Stephen's interest in both railroading and the great North-West, and though the cousins both tended to h.o.a.rd their emotions too much to develop an easy friends.h.i.+p, theirs was an enduring partners.h.i.+p.
Stephen was una.s.suming in private and invisible in public. He loathed the circuitous mouthings of politicians but knew how to rent them-and occasionally buy them. He believed devoutly that man's salvation lay in hard work and besting one's enemies. His only recreation was fis.h.i.+ng, and be owned the rights on two rivers to 156 LABRADOR SMITH.
prove it, the Matap6dia (later sold to the Ristigouche Club in New Brunswick) and the Mitis, where he regularly cast a most beautiful fly. He was a tall man, thin, with a hangdog look and brooding eyes that, complemented by his droopy nioustache, endowed his face with a cast of melancholy wisdom. His position as the Bank of Montreal's president togethcr with his experience in reviving the St Paul line made him a natural choice when the newly re-elected SirJohn A. Macdonald began his search for a syndicate to build the long-delayed transcontinental railway. ”This m as the climate in which the CPR Syndicate was eventually formed,” noted Pierre Berton in his lively history. ”For all the controversy served to illuminate one fact: there was now available a remarkable group of successful men who had experience in both railway building and high finance. In the summer of 1880, the Macdonald government was looking for just such a group. It wasJohn Henry Pope, the homely and straightforward minister of agriculture, who had first drawn his Prime Minister's attention to the St Paul a.s.sociates.
”'Catch thern,' he said, 'before they invest their profits.”'
And ”catch them” Macdonald (lid, with as generous a mark-up as was ever offered any businessman not selling snake-oil. According to WT.R. Preston, it was ”the most stupendous contract ever made under responsible gov- ernnient in the history of the world.” To complete the transcontinental tracks from North Bay, Ontario, to Port Moody, at the head of Burrard Inlet in British Columbia, within ten years, the syndicate was granted an eventual $206 million in cash, subsidies and stock guarantees in addition to 25 million acres in land grants, with the shortfall in fertile acreage made up in other regions.*
Between 1893 and 1930, the CPR sold 2 3 million acres worth $178 million.
STEAL OF EMPIRE 157.
According to John Gallagher, a historical researcher, when all the tax benefits and value of the land exchanges are taken into account, the CPR received gifts from the country worth $106,300,000. The CPR's authorized history, written by its publicity manager, John Murray Gibbon, was called Steel of Empire; a more appropriate t.i.tle might have been Steal of Empire.
The new Canadian Pacific Railway syndicate, granted its charter on October 21, 1880, included George Stephen, James J. Hill, J.S. Kennedy (the New York banker who had acted as trustee of the St Paul), Duncan McIntyre, who controlled the Canada Central Railway running between Ottawa and North Bay, Sir Stafford Northcote, twenty-second Governor of the Hudson's Bay Company, and Richard Bladworth Angus, yet another Scot with a nose for money, who had been named the Bank of Montreal's general manager when he was only thirty-eight.*
Building a Pacific railway was the dominant issue in Canada's fledgling Parliament for thirty years. One CPR lobbyist boasted that whenever the Speaker's bell rang for a division, there were almost always more MPs in his apartment, swilling free liquor and puffing
*Unlike most of his confr~res, Angus rejected the offer of a knighthood-twice-though he was a founder of the prestigious Mount Royal Club and his neo-Romanesque home was ample enough to eventually house McGill University's Conservatory of Music. His great hobby was cultivating orchids. One of his daughters married B.T Rogers, founder of British Columbia Sugar, amalgamating what became two great Canadian fortunes.
Angus, along with Stephen and Smith, dominated the Bank of Montreal for most of four decades, raising its a.s.set base from $3 8 million to $350 million. Angus was its general manager from 1869 to 1879 and president from 19 10 to 1913; Stephen served as vice-president and president between 1873 and 1881; Smith occupied the same positions from 1882 to 1905.
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complimentary cigars, than anywhere else in Ottawa. The CPR directors dispensed bountiful ”bonifications,” as they preferred to call them, to smooth parliamentary obstacles. Most of these bribes were in the form of CPR share options deposited in secret bank accounts.*
From the beginning the railway was difficult to finance. Most of the government's largess was scheduled to kick in only after completion targets had been met, and most sophisticated international investors had been disillusioned too often to gamble again on North American railway bonds.