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Title: A History of the Canadian Pacific Railway
Author: Innis, Harold Adams (1894-1952)
Date of first publication: 1923
Edition used as base for this ebook:
   London: P. S. King & Son;
   Toronto: McClelland and Stewart, 1923
Date first posted: 7 June 2011
Date last updated: 7 June 2011
Project Gutenberg Canada ebook #800

This ebook was produced by:
Iona Vaughan, Ross Cooling, Mark Akrigg
& the Online Distributed Proofreading Canada Team
at http://www.pgdpcanada.net

This ebook was produced from images generously made
available by the Internet Archive/University of Toronto
- Robarts Library






  A HISTORY

  OF THE

  CANADIAN PACIFIC

  RAILWAY




  A HISTORY OF THE
  CANADIAN PACIFIC
  RAILWAY

  BY

  HAROLD A. INNIS, Ph.D.

  Lecturer in the Department of Political
  Economy in the University of Toronto.

  LONDON: P. S. KING & SON, LTD.
  ORCHARD HOUSE, WESTMINSTER.
  TORONTO: McCLELLAND AND STEWART, LTD.
  1923




  To

  MY PARENTS



  _Printed in Great Britain by_ Butler & Tanner, _Frome and London_




  PREFACE


In this study an attempt has been made to trace the history of the
Canadian Pacific Railway from an evolutionary and scientific point of
view. Obviously, no conclusions can be reached in the matter of
recommendations since no attempt is made to state a definite objective.
Objectives are being formulated, and the interest has been in the
process of their formulation. No claim is made as to the merits or
demerits of this method of approach. Protest may be anticipated,
especially in view of the character of existing treatises on the subject
and on related topics. Much has been written in description and in
appraisal of the personalities concerned, and the subject lends itself
in a very striking way to this method of treatment. These studies have
been useful for the preparation of this history in their material rather
than in their conclusions.

At this point, grateful thanks are expressed to Prof. C. W. Wright, of
the University of Chicago, to members of the Department of Political
Science of the University of Toronto, to my sister, Mrs. M. Malcolm, and
to numerous others for assistance in many directions. Above all,
acknowledgment is made of the aid and encouragement of my wife in all
the stages of preparation.




  TABLE OF CONTENTS


                                                                      PAGE

     I Introduction                                                      1
          A. The Pacific Coast                                           3
          B. The Hudson Bay Drainage Basin                              21
          C. On the St. Lawrence                                        52

    II From National to Economic Union (1870-1880)                      75

   III Fulfilment of the Contract                                       97

    IV Expansion of the Road and the Development of Freight Traffic    129
          A. Freight Traffic and equipment prior to the completion
                  of the main line                                     130
          B. Expansion of the Road from the completion of
                  the main line to 1900                                134
          C. Freight Traffic and equipment 1885-1900                   143
          D. Expansion of the road 1900-                               151
          E. Freight traffic and equipment 1900-                       158
          F. Conclusion                                                170

     V The Freight Rate Situation                                      172

    VI Passenger Traffic                                               197
          A. Passengers carried                                        197
          B. Train Mileage                                             199
          C. Passenger equipment and services                          201
          D. Passenger rate policy                                     205

   VII Earnings from Operations                                        210
          A. Freight Earnings                                          210
          B. Passenger Earnings                                        216
          C. Miscellaneous Earnings                                    222
          D. Mail Earnings                                             224

  VIII Expenses                                                        226
          A. Indices of Efficiency                                     226
          B. Total expenses                                            231

    IX Total Receipts                                                  244
          A. Net Earnings                                              244
          B. Other Income                                              248
          C. Proceeds from Land Sales                                  250
          D. Total receipts                                            266

     X Capital                                                         270

    XI Conclusion                                                      287

       Appendix                                                        295

       Bibliography                                                    325

       Index                                                           339




  A HISTORY OF
  THE CANADIAN PACIFIC RAILWAY


  I

  Introduction


Though almost two centuries and a half elapsed between the date of the
earliest attempt to discover the North-West Passage and the completion
of the Canadian Pacific Railway in 1885, both occasions were landmarks
in the spread of Western civilization over the northern half of North
America. This spread of civilization was dependent on the geographic
characteristics of the area and on the character and institutions of the
people involved. The rapidity and direction of the growth of
civilization were largely dominated by the physical characteristics, the
geological formations, the climate, the topographical features, and the
consequent flora and fauna which these conditions produced.
Topographical features which determined to a large extent the character
of the drainage basins,[1] and consequently of the rivers, were of
primary importance. The largest[2] basin is drained by rivers flowing
into Hudson Bay--the Nelson River, the Churchill River and the
Saskatchewan rivers extending westward from 1,000 to 1,500 miles and
draining practically the whole of the central plains of Canada. The next
largest basin is drained by rivers flowing into the Arctic Ocean--the
MacKenzie River extending over 2,000 miles. The St. Lawrence River and
the Great Lakes drain the southern portion of Canada as far west as the
head of Lake Superior. Territory west of the Rocky Mountains is drained
by several short rivers flowing into the Pacific Ocean. Access to the
interior by exploration and later by settlements was gained, therefore,
from three directions--from the south by the St. Lawrence, from the
north by Hudson Bay, and from the west by rivers of the Pacific drainage
basin. The heights of land as boundaries to drainage basins were to some
extent boundaries to exploration and to a large extent boundaries to
settlement. Early civilization was confined by these limits to three
distinct areas. The Canadian Pacific Railroad was tangible evidence of
the growth of civilization beyond these boundaries.

Within each area geographic characteristics important with respect to
the spread of civilization differed widely. In the St. Lawrence drainage
basin, with the exception of territory along the north shore of the
river and of Lake Ontario and Lake Erie, the geological[3] formation is
chiefly Laurentian, consisting of granite and granite gneiss. Proceeding
south-west along the St. Lawrence, the normal annual temperature[4] as
shown during the years 1888-1907, gradually rises, and going north to
Lake Superior rapidly declines. In the same direction the number of
hours of sunshine increases. The rainfall generally decreases, though
with variation, south-west along the St. Lawrence, the snowfall
persistently declines and total precipitation generally declines. North
of Lake Superior snowfall, rainfall and consequently total precipitation
decline rapidly. The northern drainage basin with the exception of
territory in the more immediate vicinity of Hudson Bay which is largely
dominated by Laurentian formation, consists of a vast tract of fertile
territory gradually rising as it approaches the Rocky Mountains. The
normal annual temperature[5] is slightly lower than that of Lake
Superior, but remains fairly consistent throughout the plain, rising
toward the mountains. The number of hours of sunshine declines slightly
toward the centre of the plain. Rainfall, snowfall and total
precipitation decline rapidly in the central plain and rise in the west.
On the Pacific coast, the cordillera ranges are dominant. The normal
annual temperature[6] is higher than in any other part of Canada, and
the rainfall and total precipitation are greater. Snowfall is
consequently less and the hours of sunshine fewer than in the central
plain. It was with these regions that early explorers searching for a
new route to the Orient came in contact. Settlements came in the wake of
exploration and, taking root, grew up and flourished to no small extent
under the influence of the particular characteristics of the areas
involved.

[Footnote 1: _Atlas of Canada_, 1915, p. 22.]

[Footnote 2:
      Basin              Area.

    Atlantic      554,000 sq. miles
    Hudson Bay  1,486,000    "
    Pacific       387,300    "
    Arctic      1,290,000    "

      Total     3,717,300    "

Compiled from _Canada Year-book_, 1919, pp. 85-6.]

[Footnote 3: _Atlas of Canada_, 1915, pp. 10, 12.]

[Footnote 4:
                            1888-1907
             Normal      Annual                     Total
             Degrees of  Hours of                   Precipitation
             Temp. F.    Sunshine Rainfall Snowfall

  Quebec         387    1,712    2717    1329    4046
  Montreal       423    1,805    2937    1227    4164
  Kingston       437    1,989    2401     748    3149
  Toronto        455    2,048    2528     610    3138
  Port Arthur    357      --     1901     445    2346

Compiled from the _Canada Year-book_, 1919, pp. 166-7.]

[Footnote 5:
                1888-1907
            Normal      Annual                      Total
            Degrees of  Hours of                    Precipitation
            Temp. F.    Sunshine  Rainfall  Snowfall

  Winnipeg      349    2,178     1562     519    2081
  Battleford    344    2,101     1105     274    1379
  Edmonton      367     --       1418     402    1820

  _Ibid._]

[Footnote 6:
  Vancouver     491    1,815     5788     232    6020

  _Ibid._]


  A. The Pacific Coast

Encouraged by the offer of a government reward[7] to the finder of a
north-west passage from the west, Captain James Cook[8] discovered
Vancouver Island in 1778. The account of the voyages, published in 1784,
was of significance in the emphasis placed on the fur trade[9] as well
as on the geographic discoveries.[10] Following the publication of the
account came a scramble of interests to share in the profits.[11]
Englishmen[12] from China and India, and later from England, were
followed by representatives[13] of other nations. The resulting
competition led inevitably to disputes between individuals of the same
nationality[14] but, also, of more importance, between individuals of
different nationalities. Out of this situation came appeals to the home
Governments and such difficulties as those illustrated in the Nootka
Sound Controversy[15] between Spain and England.

The direction of the attention of various nations towards new territory
was not the only result of such competition. Of more immediate
importance was the beginning of settlement which accompanied the
establishment of posts by the traders[16] and which became essential in
connexion with the long ocean voyages. The history of the early
settlement was closely bound up with the fur trade. Nootka Sound,
because it offered "greater facilities for obtaining water and
provisions as well as for repairs than any other harbour in that part of
the ocean,"[17] was the earliest centre of importance. But the
dependence of Nootka on the fur trade was a source of weakness as well
as a source of strength. Under the pressure of competition new areas
more strategic for the conduct of the fur trade were found and Nootka
disappeared.

Following the achievement of Alexander MacKenzie in crossing the Rockies
and reaching the Pacific[18] in 1793, increased competition came from
the east. The appreciation of the United States authorities of the value
of this area was evinced in the Lewis and Clark expedition[19] of 1804.
Determination of the North-West Company[20] to secure a larger share of
the fur trade of the district occasioned the dispatch of Simon Fraser in
1806. The territory acquired by this invasion of interests coming
overland from the east was consolidated by the establishment of posts
and the beginnings of settlement at the heads of lakes and the forks of
streams[21] where furs could be collected most advantageously and where
supplies of such food as fish[22] and agricultural produce[23] could be
obtained most easily. Such vigorous prosecution of the fur trade
necessitated an outlet on the Pacific coast. This explained the race[24]
between the North-West Company and the Pacific Fur Company,[25]
representing the Astor interest, for the occupation of the mouth of
Columbia River. It also explained the difficulties incidental to the war
of 1812, in which the former company wrested Astoria[26] from the
Americans.

Nor did the effects on settlement of the competition of the fur trade
cease after the victory of the North-West Company in 1813, or after the
amalgamation of that company with the Hudson Bay Company in 1821.
Imperialism became aggressive. Upon the insistence of the United States,
Astoria (renamed Fort George by the English) was restored[27] in 1818,
and an indefinite compromise[28] was reached regarding the occupancy of
territory on the Pacific coast. In the race for territory, Russia made
declarations[29] favourable to the Russian American Fur Company which
led to complications[30] with Great Britain and the United States, and
the conventions of 1824 and 1825. Restoration of Astoria to the United
States and the growing demand of the fur trade for supplies in the
nature of agricultural products[31] made it necessary for the Hudson Bay
Company to select a new site for its post. Accordingly it built Fort
Vancouver[32] in 1825, and in the same year laid down a definite
agricultural policy.[33] In 1828, French-Canadian servants of the
company were encouraged to settle in Oregon,[34] and in 1836,
products[35] of the soil were of considerable importance. Additional
stimulus was given to these efforts in the agreement of 1839, concluding
a dispute[36] with the Russian American Fur Company, in which the Hudson
Bay Company[37] was obliged to furnish 2,000 ferragoes (120 lb. each) of
wheat annually for ten years at 10s. 9d. per ferrago, as well as
quantities of other products.

The development of agriculture prepared the way for immigration and in
turn was encouraged by immigration.[38] The truce of joint occupancy
involved in the indefinite compromise reached between Great Britain and
the United States was an incentive to American immigration. An increase
in American population strengthened the position of the United States in
the final division of the area and at the same time hastened the date of
division. Growth of the fur trade meant increased attention to
agriculture for supply purposes, and routes of the fur traders were
blazed trails for the earliest settlers. With the opening of routes by
fur companies immigration was inevitable. Following the prosecution of
trade by the early American companies,[39] missionaries first came with
the expedition of Nathaniel Wyeth,[40] in 1834. Dissatisfied[41] with
their progress, Jason Lee, a prominent missionary, took advantage of the
increasing attention of Congress[42] to this area, by a campaign
throughout the eastern states in 1838, urging the necessity of settling
Oregon.[43] The activity of the United States Government[44] and the
wave of emigration[45] which began in 1842 bore tribute to his success.
With settlement, issues[46] arose as to land and law, a provisional
government[47] was set up, the truce of joint occupancy disappeared, and
in the dispute of 1846 American supremacy was assured.[48]

The treaty of 1846, which gave to United States territory south of the
49th parallel, was only a landmark in the inevitable progress of
settlement, and decline of the fur trade. The forces responsible for
growth of settlement in Oregon continued, indeed became more powerful in
the growth of settlement in British Columbia. Expansion of the fur trade
and establishment of posts west of the Rocky Mountains, which made
necessary an outlet on the Pacific at the mouth of the Columbia River,
and which made inevitable the growth of settlement in that region, were
also responsible for the efforts made to discover the shortest routes to
the interior from that outlet. The impossibility of navigating the Lower
Fraser and the difficulty of transporting supplies overland from the
east led to the establishment[49] of Fort Alexander in 1821 as a supply
depot for posts tributary to Fraser River, and to the growth of
Kamloops[50] at the junction of the North and South Thompson Rivers, as
a stopping-place for supplies coming overland from Okanagan on the
Columbia River. And with the new route came establishment[51] of new
posts.

New posts, whether devoted to fur trading[52] and yet engaged in
production of supplies, or devoted wholly to production of supplies to
meet the demands of expanding trade, were, as ever, promoters of
settlement. The increased attention to agriculture, and the growth of
shipping resulting from the expansion of the fur trade along the
northern coast led to a search[53] for a new centre farther north from
Fort Vancouver. The site chosen[54] was Camosun Harbour on Vancouver
Island, and in 1843 Fort Victoria was established.[55]

Growth of settlement in British Columbia as in Oregon involved the
attention of the home authorities. The attention of Great Britain, which
had been occupied with the long series of disputes and treaties with
other nations, characteristic of the period preceding the Oregon treaty,
was attracted to the territory by the unfortunate results of bitter
competition between the North-West Company and the Hudson Bay Company
leading to the amalgamation of 1821. The limitation to twenty-one years
and other restrictions,[56] made in the grant of 1821, which gave to the
amalgamated company the right to exclusive trade with the Indians in
parts other than those already taken, were evidences of awakened
interest, and precedents for further regulation. As a result of the
growth of settlement in Oregon, and of increased attention to the region
occasioned by numerous disputes, the appeal of the company for a renewal
of the grant in 1837[57] found the Government more alert to the
situation.[58] Renewal[59] was made with the condition of a nominal
rental, of the right to annex any part of the territory, and of the
right to revoke the charter before the limit of twenty-one years had
been reached. Finally, the Oregon controversy which became particularly
prominent after 1842[60] was responsible for even greater vigilance,[61]
and its settlement in 1846 thoroughly aroused the British Government to
the necessity of more energetic interference. The growth of settlement,
with the consequent disappearance of the fur trade, was the force
underlying the growing interest of the British authorities.

The Oregon treaty served to consolidate the victory of settlement over
the fur trade, and in narrowing the arena of the struggle prepared the
way for further conquest. The Hudson Bay Company was obliged to limit
activities to British territory, and Fort Victoria, the new
head-quarters, received additional stimulus.[62] Columbia River, no
longer a highway through British territory over which supplies and furs
were carried from interior posts, was gradually abandoned, and surveys
and new roads[63] were made to the interior by way of the lower Fraser
River. These changes also made necessary increased shipping facilities
which gave greater incentive to the search for coal and stimulated the
mining industry.[64]

Growth of settlement caused by expansion of the fur trade, and
stimulated by the Oregon treaty, was further increased[65] as a result
of gold discoveries in California in 1849, and as a result of the
awakened interest of the home authorities. Anxiety of the British
Government to promote settlement had increased, and was manifest in the
regulations[66] carefully included in the grant of Vancouver Island to
the company made on January 13, 1849, and in the provisions[67] for the
administration of justice on the island made in the same year. But the
growth of settlement increased the opposition of the fur trade.
Immediately[68] the Oregon treaty had been signed, the company entered
into diplomatic[69] negotiations leading to the grant of Vancouver
Island. It became apparent,[70] after the grant had been made, that the
terms were much better adapted to further the company's policy of
hostility to settlement than to meet the demands of the British
Government for colonization.

Expansion and consolidation of the fur trade in the interior, which
stimulated the growth of Fort Vancouver, and the desirability of gaining
access to territory along the northern coast, not tributary to the
Columbia River, had still other results. There came the demand for ships
to carry supplies and furs from Fort Vancouver to England, and from new
posts to be established along the coast to Fort Vancouver. With it came
the growth of the Hudson's Bay Company's fleet,[71] and the expansion of
the fur trade[72] along the coast.

The penetration and development of the fur trade in the territory north
of the Columbia River had been delayed by the geographic features of the
country, but such delay made no less inevitable the growth of settlement
accompanying the fur trade, which so largely characterized the history
of the settlement of Oregon. The resistance of the company was doomed to
failure. Though settlement was delayed,[73] the delay made the protests
of settlers more effective and the further investigation and activity of
the home authorities more imperative. James Douglas, the successor of
Blanshard as Governor of Vancouver Island, was instructed[74] in a
dispatch of February 28, 1856, from the Secretary of State "to call
together an Assembly," and on February 5 of the following year a select
committee[75] was appointed "to consider the state of those British
possessions in North America which are under the administration of the
Hudson's Bay Company, or over which they possess a licence to trade."
Progress of the fur trade in the development of transportation routes to
the interior was a stimulus to further settlement. With the opening of
routes into the interior came news of gold discoveries in the Upper
Columbia region in 1856,[76] the rush of immigrants in the following
years,[77] the necessity of government, and the adoption of the select
committee's report,[78] as shown in the Act[79] to provide for the
government of British Columbia in 1858. As in Oregon, so it was in
Vancouver Island and in British Columbia--the fur trade had paved the
way for settlement, and for its own disappearance.

The direction and progress of settlement were greatly influenced by the
gold rush to the tableland between the Upper Columbia and the Thompson
and Fraser Rivers, known as the Coteau region.[80] The Fraser River
route from the coast to this territory being shorter[81] than the
Columbia River route was generally followed, and demand[82] for
improvements on the route was consequently great. Failing to enlist the
support of the home Government,[83] the colony, to avoid difficulties of
the upper Fraser, first, determined upon and completed[84] a route by
way of Harrison Lake, Lake Lillooet, Lake Anderson and Lake Seton to a
point on the Upper Fraser near the Great Falls, and later constructed a
road along the river.[85] The mining industry stimulated, and was
stimulated by, construction and improvement of roads. The accessibility
of the upper Fraser and the disappearance of claims in the older regions
led to a northerly search, and to the discoveries along the Quesnel
River in 1859,[86] and in the Cariboo territory[87] in 1860 and 1861.
There followed the construction of a main road from Lillooet to Clinton
in 1861, to Alexandria in 1863, and from Yale to Clinton in the same
year,[88] as well as the opening of trails to neighbouring
districts.[89] So, too, the road east from Hope to Similkameen
constructed in 1860,[90] the improvement of routes to the Upper Columbia
region,[91] and the disappearance of claims, led to the search along the
Kootenay River and the discovery on Wild Horse Creek in 1863[92] and
further north at Big Bend[93] in 1865. These discoveries were followed
by extension of the Dewdney trail[94] from Princeton along the
Similkameen River and near the boundary line to Wild Horse Creek, and by
the construction of a route[95] overland from Cache Creek on the Cariboo
trail, by boat to Seymour at the head of Shuswap Lake, and again
overland to the Columbia River.

Development of transportation facilities incidental to expansion of the
fur trade hastened, and was rapidly hastened by, the gold rush. The
interaction was evident in every phase of economic development. The gold
discoveries and the continued output[96] magically increased settlement.
Immigrants, made enthusiastic by glowing accounts,[97] came in
thousands.[98] Agriculture was stimulated.[99] Foreign trade rapidly
increased.[100] Shipping[101] consequently flourished. Coal-mining[102]
received a decided impetus. The direction and strength of economic
activity was shown in the growth of Victoria[103] opposite the mouth of
the Fraser River, and in the development of towns[104] along
transportation routes to the interior.

With the gold discoveries, and the rapid development of the country
which they occasioned, renewed interest was given to the search for a
shorter route[105] between British Columbia and the older countries than
by Cape Horn, by the Isthmus of Panama, or overland by San Francisco.
The construction of roads in the interior became links[106] in an
ultimate overland route through British territory, and the home
authorities, aware[107] of the advantages of such a route, gave
encouragement.[108] The trails of the fur traders lent feasibility to
the project. In 1862 Viscount Milton and Dr. Cheadle successfully
completed a journey across the continent by way of St. Paul, Fort Gary,
Yellowhead Pass, and the Thompson and Fraser Rivers to Victoria, and
contributed[109] to the discussion of the subject carried out by
imperialistic writers.[110] The difficulties of such a scheme were
underestimated. The British Columbia Overland Transit Company
proposed[111] in 1862 as a result of the enthusiasm disappeared[112]
after the issue of its prospectus. Alfred Waddington's petitions[113] to
the House of Commons in the interests of British Columbia in 1868 were
also unsuccessful. Formal encouragement was limited to moral support.

Canada, the eastern terminus of the proposed route, was more vitally
concerned. The interest[114] in British Columbia, aroused by the gold
discoveries, became more pronounced with the later developments. The
Overland expedition[115] organized in Canada crossed the continent by
way of St. Paul, Fort Gary, Fort Edmonton and Tte Jaune Cache in 1862.
Additional zeal on the part of Canada for an overland route was
occasioned by the possibilities of American aggression. The Western
Union Telegraph Company constructed[116] several miles of line in
British Columbia in 1865 in an attempt to link Europe with America by an
overland cable through Alaska and Russia. Of more importance, a
bill[117] was introduced in the House of Representatives in 1866, to
provide for admission of "the states of Nova Scotia, New Brunswick,
Canada East and Canada West, and for the organization of the territories
of Selkirk, Saskatchewan and Columbia." The purchase of Alaska in 1867,
and the Northern Pacific project[118] gave further cause for anxiety.
Canada was generally interested.[119]

The rapid development of British Columbia, the resulting encouragement
of the British authorities, and Canadian interest in the proposed route,
made possible a definite project. The depression[120] which followed the
exhaustion of the more important mines, its peculiar effects on the
character of immigrants attracted by the gold rush, and the
dissatisfaction[121] of the people of Vancouver Island, with the
increasing prominence of the mainland, and with the union of the two
colonies in 1866 all were additional factors explaining the importance
attached to a road to Canada. On March 18, 1867, a resolution[122] was
unanimously adopted by the Legislative Council asking Governor Seymour
"to take measures without delay to secure the admission of British
Columbia into the Canadian Confederacy." The forwarding of the
resolution was delayed by the hostility of office-holders, and in
protest the citizens of Victoria at a meeting on January 27, 1868,[123]
"amidst the wildest enthusiasm," supported[124] the Legislative Council
resolution and asked "that an essential condition to such admission
should be the construction by the Dominion Government, within two years,
of a transcontinental wagon road, connecting Lake Superior and the head
of navigation on the Lower Fraser." The movement gained in strength with
the death of Governor Seymour,[125] and with the diplomatic[126]
appointment of Governor Musgrave, who was favourable to the union. With
further encouragement of the home authorities,[127] a delegation was
dispatched[128] to Ottawa to arrange the terms of union. Canadian
enthusiasm aroused by the agitation of Waddington[129] for the
construction of a transcontinental road generally sanctioned the terms
proposed, and Canada was pledged to the commencement of the construction
of a railway within two years and to its completion within ten
years.[130]

The character of civilization which developed in British Columbia was
therefore an important factor in determining the character of the terms
of union. Geographic features were of particular significance. The
navigability of the Columbia River determined the direction of the
routes of the early fur traders. The early trading posts and the
inevitable beginnings of settlement were located at the junctions of
rivers and the heads of lakes. Growth of settlement at the mouth of the
Columbia River, due to the expansion of the fur trade in the interior,
aroused national jealousies, and led to the controversy which was
settled by the cession of Oregon to the United States. Moreover, it
drove back the fur trade. With the new boundary line it became necessary
to find new routes to the interior and to explore the lower Fraser. With
new routes, Victoria and settlements along the Fraser came into
prominence. Of more importance, came the discovery of gold, the rush of
immigration, the changes in government, the hectic economic development,
the construction of roads and the discovery of other routes along the
lakes and rivers, the renewed interest of Canada and Great Britain, and
the entry of British Columbia into the union. The direction, the extent,
and the character of the development of civilization in British
Columbia, were determining factors in the attitude of British Columbia
toward the terms of union, just as they were determining factors in her
attitude toward the fulfilment of those terms.

[Footnote 7: An act of 18 Geo. II, offering a reward of 20,000 to the
person or persons being subjects of His Majesty who should discover a
north-west passage through Hudson Strait to the western and northern
ocean of America was amended in 16 Geo. III, chap. 6, offering the
reward for the discovery of "any northern passage" for vessels by sea
between the Atlantic and Pacific Ocean.]

[Footnote 8: Cook, James, _A Voyage to the Pacific Ocean_ (1788
edition), vol. II, p. 229 ff.]

[Footnote 9: "One of our sailors disposed of his stock alone for eight
hundred dollars...and a few of the best skins...produced a hundred and
twenty dollars each....The total amount of the value...obtained for the
furs of both of our vessels...was not less than two thousand pounds
sterling. The benefits that might accrue from a voyage to that part of
the American coast where we obtained them, undertaken with commercial
views, will certainly appear of sufficient importance to claim the
public attention." Detailed instructions for such proposed ventures
accompanied this suggestion. Cook, James, op. cit., vol. IV, p. 245 ff.]

[Footnote 10: An account of earlier voyages is important in an attempt
to appraise the contributions of Captain Cook. See Greenhow, Robert,
_Memoir, Historical and Political, on the North-West Coast of North
America_, pp. 22-75.]

[Footnote 11: Some conception of the profitableness may be obtained from
the following: Captain Hanna's voyage, 1785-6, brought over 20,000.
Dixon, G., _A Voyage Round the World, but More Particularly to the
North-West Coast of America, performed in 1785, 1786, 1787 and 1788_,
pp. 315-16. Captain Portlock and Dixon representing the King George's
Sound Company netted nearly 50,000 (_ibid._, p. 303).]

[Footnote 12: Captain Hanna sailed from China (_ibid._, p. xvii.).
Captains Lorie and Guise were fitted out in India in 1786 (_ibid._, p.
317). Captain Berkley was the first to sail from England in the same
year (_ibid._, p. 289).]

[Footnote 13: Captain Kendrick and Captain Gray representing the United
States sailed from Boston, Sept. 30, 1787, and Martinez from Spain
reached Nootka in May, 1789. Greenhow, Robert, op. cit., p. 97.]

[Footnote 14: A very elaborate account of one particular dispute is
given. Meares, John, _Voyages made in the years 1788 and 1789 from China
to the North-West Coast of America_. Footnotes, pp. xxiv.-xxxviii.]

[Footnote 15: For a complete history, see Manning, W. R., The Nootka
Sound Controversy, _Annual Report of the American Historical
Association_, 1904.]

[Footnote 16: John McKey, the surgeon of the Lorie and Guise
expedition, was as far as is known the first European to live among the
natives "to ingratiate himself...so that if any other vessels should
touch there he might prevent them from purchasing any furs." Dixon, G.,
op. cit., p. 232.]

[Footnote 17: Greenhow, R., op. cit., p. 90.]

[Footnote 18: MacKenzie, Alexander, _Voyages from Montreal through the
Continent of North America to the Frozen and Pacific Oceans_, p. 349.]

[Footnote 19: The imperialistic nature of the expedition is evident in
the wariness of Jefferson in attempting to lull all suspicion on the
part of other interests. In the confidential message to Congress asking
for the necessary funds, he states: "The appropriation of two thousand
five hundred dollars 'for the purpose of extending the external commerce
of the United States,' while understood and considered by the executive
as giving the legislative sanction, would cover the undertaking from
notice and prevent the obstructions which interested individuals might
otherwise previously prepare in the way." And in the instructions to
Lewis: "Your mission has been communicated to the ministers here from
France, Spain and Great Britain--and such assurances given them as to
its objects as we trust will satisfy them." "The object of your mission
is to explore the Missouri River and such principal streams of it as by
its course and communication with the waters of the Pacific Ocean may
offer the most direct and practicable water communication across the
continent for the purposes of commerce." Coues, Elliott, _History of the
Expedition under the Command of Lewis and Clark_, vol. I, pp. xx.-xxvi.]

[Footnote 20: M. Fraser recut l'ordre de traverser les Montagnes
Rocheuses par le Nord et d'tablir des relations avec les sauvages de
ces rgions jusqu'alors inexploites. Masson, L. R., _Les Bourgeois de
la Compagnie du Nord-Ouest_, p. 29.]

[Footnote 21: The establishment of Fort McLeod at McLeod Lake, of Fort
St. James at Stuart Lake, of Fort Fraser at Fraser Lake and of Fort
George at the junction of the Stuart River and the Fraser River by Simon
Fraser in 1806-7 (see Morice, Rev. A. G., _The History of the Northern
Interior of British Columbia_, pp. 54-71), and Kooten House on the head
waters of the Columbia River below Windermere Lake (_David Thompson's
Narrative_, edited by J. B. Tyrrell, p. 375), Kullyspell House at Lake
Pend d'Oreille (_ibid._, p. 410), and Saleesh House near the mouth of
Ashley Creek in Montana (_ibid._, p. 418) by David Thompson.]

[Footnote 22: Harmon, Daniel Williams, _A Journal of Voyages and Travels
in the Interior of North America_, pp. 205-6.]

[Footnote 23: _Ibid._, p. 202, p. 248 and p. 267.]

[Footnote 24: Irving, Washington, _Astoria_, pp. 73-136.]

[Footnote 25: _Ibid._, p. 60.]

[Footnote 26: Cox, Ross, _The Columbia River_, vol. I, p. 189 ff.]

[Footnote 27: Greenhow, Robert, op. cit., p. 167.]

[Footnote 28: After a long period of negotiation, the convention of
1818, which stated "that all territories claimed by the United States or
by Great Britain between the Rocky Mountains and the Pacific should with
their harbours, bays and rivers be free and open for ten years to the
vessels, subjects or citizens of both nations," was indefinitely
continued in 1827, either party being, however, at liberty after Oct.
20, 1828, to annul and abrogate the engagement on giving due notice of
twelve months to the other (_ibid._, p. 185).]

[Footnote 29: An imperial ukase, issued Sept., 1821, declared the whole
west coast of North America north of the 51st parallel to belong
exclusively to Russia (_ibid._, p. 176).]

[Footnote 30: The convention with the United States was terminated in
1824 and with Great Britain in 1825, both of which made the extreme
southern limit of Russian territory, latitude 54 deg. 40 min. (_ibid._,
p. 180).]

[Footnote 31: Bancroft, H. H., _History of the North-West Coast_, vol.
II., pp. 436-7.]

[Footnote 32: Holman, F. V., _Dr. John McLoughlin_, p. 28.]

[Footnote 33: _Ibid._, p. 43.]

[Footnote 34: _Ibid._, p. 42.]

[Footnote 35:

    Wheat      8,000 bushels
    Barley     5,500   "
    Oats       6,000   "
    Peas       9,000   "
    Potatoes  14,000   "

In addition there were ten acres of fruit trees (_ibid._, p. 28).]

[Footnote 36: The treaty of 1825 between Russia and Great Britain
provided full navigation of streams crossing Russian territory in their
course from British possessions to the sea. The _Dryad_, a Hudson Bay
Company boat, was refused this right by the Russian Company in 1838 and
the English company claimed damages. After an appeal to the home
Governments, the Hudson Bay Company waived its claims in return for a
lease from the Russian company of all their territory between Cape
Spencer and latitude 54 deg. 40 min., for which it paid an annual rental
of 2,000 land otter skins and supplied the Russians with provisions.
Bancroft, H. H., _History of Alaska_, p. 555 ff.]

[Footnote 37: Bryce, G., _Remarkable History of the Hudson Bay Company_,
App. E, p. 494.]

[Footnote 38: "Dr. McLoughlin furnishing these immigrants with food and
clothing, and also farm implements and seed wheat. . . . He also loaned
cattle." Holman, F. V., op. cit., p. 75.]

[Footnote 39: American fur companies by no means ceased with the Astoria
disaster. See Greenhow, R., op. cit., p. 75.]

[Footnote 40: Wyeth's Journal of the second expedition. _Sources of the
History of Oregon_, vol. I, p. 221 ff.]

[Footnote 41: Bancroft, H. H., _History of Oregon_, vol. I, p. 167.]

[Footnote 42: _Ibid._, ch. xiv.]

[Footnote 43: The memorial of the settlers signed by ten missionaries on
March 16, 1838, urged the United States Government to take formal
possession, as did also information furnished to Congress by Lee in 1839
(_ibid._, p. 169 and p. 173).]

[Footnote 44: The _Lausanne_ sailed with missionaries and settlers from
New York aided by money from the United States Secret Service funds
(_ibid._, p. 177).]

[Footnote 45: Holman, F. V., op. cit., pp. 69-83.]

[Footnote 46: Bancroft, H. H., op. cit., p. 459.]

[Footnote 47: _Ibid._, ch. xii.]

[Footnote 48: Wilson, J. R., The Oregon Question, _Quarterly of the
Oregon Historical Society_, vol. I, Sept., 1900, p. 251.]

[Footnote 49: Morice, A. G., op. cit., p. 119.]

[Footnote 50: The Okanagan River was explored first by David Stuart, a
representative of the Pacific Fur Company, in 1811. Ross, Alexander,
_Adventures of the First Settlers on the Oregon or Columbia River_, p.
145 ff. He established a post at Kamloops in 1812 (_ibid._, p. 201). The
North-West Company, however, "followed hard at his heels" (_ibid._, p.
206). See also Franchere, G., _Relation d'un Voyage  la cte du
Nord-Ouest_, p. 99. Fort Colville was also established in 1825 to handle
increasing trade down the Columbia. Bancroft, H. H., _History of the
North-West Coast_, vol. II, p. 469.]

[Footnote 51: A fort on Lake Babine, 1822. Morice, A. G., op. cit., p.
122. Fort Connolly near Bear Lake in 1826 (_ibid._, p. 131). Fort
Chilcotin somewhat later (_ibid._, p. 210).]

[Footnote 52: Salmon was obtained at Fort Babine (_ibid._, p. 122). Also
at Fort Langley. Bancroft, H. H. (_ibid._, p. 487). Sheep and cattle
grazing was carried on at Fort Nisqually (_ibid._, p. 525), and horses
were bred for transport service at Fort Kamloops. Bancroft, _History of
British Columbia_, p. 136.]

[Footnote 53: James Douglas explored the whole coast and submitted a
report on July 12, 1842. Scholefield, E.O.S., _British Columbia from the
Earliest Times to the Present_, p. 460.]

[Footnote 54: The possibility of attracting whalers to the new port
(Bancroft, _ibid._, p. 85), and the unsettled boundary dispute (Coats,
R. H., and Gosnell, R. E., _Sir James Douglas_, p. 175) were additional
considerations but of secondary importance.]

[Footnote 55: Bancroft, H. H., _ibid._, p. 292 ff.]

[Footnote 56: These restrictions pertained to the carrying out of Act 1
and 2, Geo. 4. c. 66, enacted for the purpose of regulating the fur
trade and establishing a criminal and civil jurisdiction within certain
parts of North America. _Papers Relating to the Hudson Bay Company_,
1842-70, p. 21 ff.]

[Footnote 57: The grant did not expire until 1842, but North-West
Company interests had been purchased and a new grant was made (_ibid._,
p. 11).]

[Footnote 58: Correspondence between the Government and the company
(_ibid._, p. 18 ff).]

[Footnote 59: _Ibid._, pp. 9-11.]

[Footnote 60: _Correspondence relative to the negotiations of the
question of disputed right to the Oregon territory on the North-West
Coast of America subsequent to the Treaty of Washington of Aug. 9,
1842._]

[Footnote 61: Lieuts, Warre and Vavasour were sent in 1845 to report on
steps necessary to render the posts in Oregon territory safe against
attack (Scholefield, E. O. S., op. cit., p. 452), also the _America_,
under Capt. Gordon, arrived at Victoria in 1845, and several ships of
war in 1846. See excerpt from Roderick Finlayson's manuscript (_ibid._,
pp. 454-5).]

[Footnote 62: In July, 1846, "about 160 acres are cultivated with oats,
wheat, potatoes, turnips, carrots and other vegetables, and every day
more land is converted into fields." Seemann, Berthold, _Narrative of
the Voyage of H.M.S. "Herald,"_ vol. I, pp. 102-3. April 8, 1847. "The
establishment is very large and must eventually become the great depot
for the business of the Company." Kane, Paul, _Wanderings of an Artist_,
p. 209.]

[Footnote 63: The imposition of duties on Hudson Bay Company goods made
this inevitable. Anderson made surveys from Kamloops to Fort Langley in
1846 and 1847. Fort Yale was established in 1848 on the Fraser River and
brigades came overland from the interior. In the next year, however, a
new route was laid out by way of the Coquihalla River and Fort Hope was
established at its mouth. Bancroft, H. H., op. cit., pp. 160-177.]

[Footnote 64: Fort Rupert was established in 1849 to develop coal
deposits, but it was superseded by Fort Nanaimo in 1851 (_ibid._, pp.
192-7).]

[Footnote 65: The lucrativeness of the supply business more than offset
the loss through the desertion of men (_ibid._, pp. 182-3).]

[Footnote 66: "That this present grant is made to the intent that the
. . . Company shall establish a settlement . . . of resident colonists
. . . and shall dispose of all lands . . . at a reasonable price . . . and
that all monies which shall be received by the company for the purchase of
such land . . . (after deduction of such sums by way of profit as shall
not exceed a deduction of 10 per cent.) . . . be applied towards the
colonization . . . of the island. That this present grant is made upon
this condition that if the . . . Company shall not, within the term of
five years . . . have established a settlement . . . it shall be lawful
for us to revoke this present grant." Scholefield, E. O. S., op. cit.,
App., p. 679.]

[Footnote 67: Scholefield, E. O. S., op. cit., App., pp. 680-1.]

[Footnote 68: "The Hudson's Bay Company having formed an establishment
on the southern point of Vancouver's Island...are anxious to know
whether they will be confirmed in possession of such lands, as they may
find it expedient to add to those which they already possess." Letter
from Sir J. H. Pelly to Earl Grey, Sept. 7, 1846. _Copy of
correspondence between the Chairman of the Hudson's Bay Company and the
Secretary of State for the Colonies relative to the colonization of
Vancouver's Island_, p. 3.]

[Footnote 69: The correspondence is amusingly diplomatic. The question
as to the company's capacity to hold land is answered, and "This,
however, is a matter of small importance compared with the colonization
of such parts of the territory."..."It would be a superfluous task to
enter into a detail of the reasons which render the colonization...an
object of great importance; I shall merely submit whether that
object...might not be most readily and effectually accomplished through
the instrumentality of the Hudson's Bay Company."...In response to a
request for a draft of the grant to be made, "I beg leave to say that if
Her Majesty's Ministers should be of opinion that the territory in
question would be more conveniently governed and colonized (as far as it
may be practicable) through the Hudson's Bay Company, the Company are
willing to undertake it and will be ready to receive a grant of all the
territories...situated to the north and west of Rupert's Land."...With
Earl Grey's protest to such willingness "I proposed a grant which might
appear extensive, but I did this not with the view of obtaining for the
Hudson's Bay Company any advantage"...but "because I was persuaded that
the colonization would be much more successfully conducted under the
auspices of the company."...And on the same day a more lengthy letter to
the same effect. "I am very glad to learn that your Lordship is
exceedingly anxious for the colonization of Vancouver's Island."..."I
fear, my Lord, you will think me prolix." Criticism made in the House of
Commons and outside the House such as "_An examination of the charter
and proceedings of the Hudson's Bay Company with reference to the grant
of Vancouver's Island_," by J. E. Fitzgerald, was met and anticipated by
propaganda such as "_The Hudson's Bay Territories and Vancouver's
Island, with an exposition of the chartered rights, conduct and policy
of the Honourable Hudson's Bay Corporation_," by R. M. Martin, _ibid._,
pp. 4-13.]

[Footnote 70: The attitude of the company was clearly demonstrated in
evidence given in _The Report from the Select Committee on the Hudson's
Bay Company_, 1857. Land was sold at the prohibitive price of 1 per
acre, and every purchaser was required to bring out five labourers from
England, while in Oregon land was free. Minutes of Evidence, p. 287.
Settlements were obliged to pay 300 per cent. on the cost price of goods
(_ibid._, p. 288), while the competition of private individuals was
impossible (_ibid._, p. 200). Richard Blanshard, the Governor of
Vancouver Island by the appointment of the British Government in 1849,
was obliged to resign in 1850, since he received no salary, and living
expenses totalled 1,100 per year (_ibid._, p. 288). A memorial signed
by all the settlers protesting against the company's monopoly might be
cited as further evidence (_ibid._, p. 293).]

[Footnote 71: A list of boats arriving each year from 1819 to 1840 is
given in Bancroft, H. H., _History of the North-West Coast_, vol. I, p.
341....In 1845 three vessels in the company's service plied between
London and the north-west coast. Bancroft, _History of British
Columbia_, p. 120. In 1837 the company had six armed vessels on the
north-west coast. Letter from George Simpson to J. H. Pelly. Feb. 1,
1837. _Papers relating to the Hudson's Bay Company_, 1842-1870, p. 70.
The _Beaver_ was the first steam vessel to arrive at Fort Vancouver in
1836. McCain, C. W., _History of the ss. "Beaver,"_ p. 20.]

[Footnote 72: Fort Langley was established on the lower Fraser in 1827.
Bancroft, H. H., _History of the North-West Coast_, vol. II, p. 481.
Fort Nisqually, near Nisqually River, on a direct overland line between
Fort Langley and Fort Vancouver in 1833 (_ibid._, p. 524), Fort Simpson
at the mouth of the Nass River in 1831 (_ibid._, p. 623), Fort
McLoughlin on Millbank Sound in 1833 (_ibid._, p. 625), with the lease
of the territory of the Russian-American Company, Fort Durham on the
Tako River in 1840 (_ibid._, p. 647), Fort Stikeen on the Stikeen River
in the same year (_ibid._, p. 646).]

[Footnote 73: In 1857 there were not more than 250 or 300 white men in
the island, the greater number of which were servants of the Hudson Bay
Company. There were no free settlers. _Report from the Select Committee
on the Hudson's Bay Company_, Minutes of Evidence, p. 192.]

[Footnote 74: _Copies or extracts of any dispatches that have been
reserved by Her Majesty's Secretary of State for the Colonies on the
subject of the establishment of a representative assembly at Vancouver's
Island_, p. 3.]

[Footnote 75: _Report from the Select Committee on the Hudson's Bay
Company_, p. ii.]

[Footnote 76: _Copies or extracts of correspondence relative to the
discovery of gold in the Fraser's River District in British North
America_, p. 5.]

[Footnote 77: "Crowds of people are coming in from all quarters. The
American steamer _Commodore_ arrived from San Francisco with 450
passengers, and the steamer _Panama_ with 750 passengers." Dispatch from
Governor Douglas to the Right Hon. Lord Stanley, M.P., June 19, 1858.
_Papers relative to the affairs of British Columbia_, Pt. I, p. 18.]

[Footnote 78: "Your committee are of opinion that it will be proper to
terminate the connexion of the Hudson's Bay Company with Vancouver's
Island....Means should also be provided for the ultimate extension of
the colony over any portion...to the west of the Rocky Mountains."
_Report from the Select Committee on the Hudson's Bay Company_, p. iv.]

[Footnote 79: _Papers relative to the affairs of British Columbia_, Pt.
I.]

[Footnote 80: _Copies or extracts of correspondence relative to the
discovery of gold in the Fraser River District in British North
America_, p. 8.]

[Footnote 81: From the mouth of the Fraser River to Fort Thompson
(Kamloops), 150 miles. From Dalles at mouth of the Columbia River to
Kamloops, 487 miles. Macdonald, D. G. F., _British Columbia and
Vancouver's Island_, pp. 105-9.]

[Footnote 82: Victoria was particularly favourable to the improvement of
communication along the Fraser River, thus becoming "a depot and centre
of trade for the gold districts." _Copies or extracts of correspondence
relative to the discovery of gold in the Fraser River District in
British North America_, p. 13.]

[Footnote 83: "The admonitions--that British Columbia should look to her
own exertions for success--must not pass unheeded; but a practical
exemplification of that advice must be exhibited." Dispatch from the
Duke of Newcastle to Governor Douglas, Oct. 28, 1859. _Papers relative
to the affairs of British Columbia_, Pt. III, p. 105.]

[Footnote 84: _Ibid._, Pt. II, p. 46, Improvements were continually
being made such as to make it the important thoroughfare of the country.
_Ibid._, Pt. IV, p. 23.]

[Footnote 85: Roads along the Fraser River from Yale to Lytton were
constantly being pushed forward. A pack road from Derby (near Langley)
to Lytton was completed in 1860 (_ibid._, Pt. III, p. 50). See also
_ibid._, Pt. III, p. 17, p. 29; Pt. IV, p. 53.]

[Footnote 86: _Ibid._, Pt. III, p. 50.]

[Footnote 87: _Ibid._, Pt. IV, p. 50.]

[Footnote 88: Scholefield, E. O. S., op. cit., vol. II, pp. 101-3.]

[Footnote 89: Trails were broken as far north as Lake Stuart and Lake
Babine. Morice, A. G., op. cit., pp. 315-16.]

[Footnote 90: Moberly, Walter, _The Rocks and Rivers of British
Columbia_, p. 33.]

[Footnote 91: A very good description of the various routes involved is
given in the _Handbook to the Gold Regions of the Fraser's and
Thompson's Rivers_ by Alexander C. Anderson. _Papers relative to the
affairs of British Columbia_, Pt. I, App. 2, p. 79.]

[Footnote 92: Bancroft, H. H., _ibid._, p. 523.]

[Footnote 93: Scholefield, E. O. S., op. cit., p. 234.]

[Footnote 94: The trail from Hope to Similkameen. _Ibid._, p. 233.]

[Footnote 95: _Ibid._, pp. 237-8.]

[Footnote 96: Value of yearly production:
  1858       705,000
  1859     1,615,070
  1860     2,228,543
  1861     2,666,118
  1862     2,656,903
  1863     3,913,563
  1864     3,735,850
  1865     3,491,205
  1866     2,662,106
  1867     2,480,868
  1868     3,372,972
  1869     1,774,978
  1870     1,336,956
    --_Year-book of British Columbia_, 1897, p. 196.]

[Footnote 97: _The Times_ correspondent wrote several articles the
effect of which is very well described in _British Columbia and
Vancouver Island_, by John Emmerson. See also Hazlitt, W. C., _British
Columbia and Vancouver Island_; Ballantyne, R. M., _Handbook to the New
Gold Fields_; and Cornwallis, K., _The New El Dorado_.]

[Footnote 98: "About 10,000 foreign miners in Fraser's River." Dispatch
from Governor Douglas to Rt. Hon. Lord Stanley, M.P., Aug. 19, 1858.
_Papers relative to the affairs of British Columbia_, Pt. I, p. 27. The
number was subject to considerable fluctuation, but it was estimated
there were "15 to 20,000 whites and Chinese." Harvey, Arthur A.,
_Statistical Account of British Columbia_, p. 9.]

[Footnote 99: "In 1866 enough wheat was produced near the mines to meet
the entire consumption of flour for the present season." _Ibid._, p. 16;
see also Macfie, M., _Vancouver Island and British Columbia_, ch. vi.,
xi.]

[Footnote 100:
                           Imports                  Exports
                     B. C.        Van. Id.       B. C.     Van. Id.
  1860              1,286,945         --         57,000        --
  1861              1,444,400     2,083,055      63,430        --
  1862              2,800,840     3,721,885      61,385        --
  1863              2,174,265     3,986,480      94,020     197,895
  1864              2,497,765     3,714,210      99,865     396,045
  1865              2,489,670     2,971,485     167,380     601,270

The most important customer was the United States. _Ibid._, p. 19. They
consisted of almost every variety of goods, but chiefly food-stuffs.

Pemberton, J. D., _Vancouver Island and British Columbia_, pp. 67-68.]

[Footnote 101: _British Columbia, Report of the Hon. H. L. Langevin_, p.
144 ff.]

[Footnote 102: Sales of coal by mines,
  1861     14,600 tons
  1862     18,690  "
  1863     21,394  "
  1864     28,632  "
  1865     32,819  "
  1866     25,155  "
  1867     31,239  "
  1868     44,005  "
  1869     35,802  "
  1870     29,843  "   _Ibid._, p. 13.]

[Footnote 103: Macfie, M., op. cit., pp. 65-6.]

[Footnote 104: New Westminster. Mayne, R. C., _Four Years in British
Columbia and Vancouver Island_, p. 72; Fort Hope (_ibid._, p. 95); Yale
(_ibid._, p. 96); Lytton (_ibid._, p. 109); Kamloops--Bancroft, H. H.
(op. cit., p. 458); Port Douglas, Lillooet, Port Pemberton and Port
Anderson. Mayne, R. C. (op. cit., pp. 130-7). Barkerville--Laut, A. C.,
_The Cariboo Trail_, p. 46.]

[Footnote 105: Mayne, R. C., op. cit., pp. 356-7.]

[Footnote 106: "We hope to complete the last section of a pack road from
Derby to Lytton....From Lytton a natural pack road exists leading to Red
River settlement, by the Coutannais Pass, through the Rocky Mountains,
and from thence following the valley of the Saskatchewan;...a settler
may then take his departure from Red River in spring with cattle and
stock and reach British Columbia...in course of the autumn following.
This is no mere theory, the experiment having been repeatedly made by
parties of Red River people travelling to Colville...; so much so,
indeed, that the whole distance from Lytton to Red River, with the
exception of the Coutannais Pass, may be safely travelled with carts. If
the Canadian Government would undertake to open a road from Red River to
the borders of Lake Superior, which really presents no formidable
difficulties, the connexion between British Columbia and Canada would be
complete, and the whole distance might, I think, be travelled on British
soil." Governor Douglas to the Duke of Newcastle, Oct. 18, 1859. _Papers
relative to the affairs of British Columbia_, Part III, p. 68. In
connexion with the construction of the road east of Kamloops in 1865
Moberly discovered Eagle Pass. "I blazed a small cedar tree and wrote
upon that, 'This is the Pass for the Overland Railway.'" Moberly, W., op
cit., p. 44.]

[Footnote 107: A new route was suggested by various writers: Cornwallis,
K. (op. cit., pp. 66-72); Hazlitt, W. C. (op. cit., pp. 229-40);
Ballantyne, R. M. (op. cit., pp. 51-4).]

[Footnote 108: Sir E. Bulwer Lytton in a speech on the Act providing for
the Government of British Columbia in 1858 stated, "I do believe the day
will come and that many now present will live to see it when one direct
line of railway communication will unite the Pacific and the Atlantic."
_Canada and its Provinces_, vol. XXI. p. 148.]

[Footnote 109: Milton, Viscount, and Cheadle, W. B., _The North-West
Passage by Land_.]

[Footnote 110: A partial list of such literature: Forbes, C., _Vancouver
Island: Its resources and capabilities as a colony_, p. 46 ff.
Pemberton, D. (op. cit., pp. 84-125); Mayne, R. C. (op. cit., pp.
353-69); Macfie, M. (op. cit., pp. 334-77).]

[Footnote 111: The prospectus included several features. It anticipated
legislative, colonial and governmental postal subsidies and promised a
guarantee of 6 per cent. on a capital of 500,000 in 50,000 shares of
10 each. The terms of subscription were 1 per share on application,
and 1 10s. on allotment with no further call except by consent of a
general meeting of shareholders. Application had been made to British
Columbia and to the Canadian Government for local charters. The route
was that indicated by Governor Douglas from Lytton to Red River
following the Saskatchewan valley. The necessary equipment for passenger
and freight traffic consisted of carts, horses and log shanties. Convoys
were to be used. The journey from Lake Superior to British Columbia was
to occupy twelve days, arrangements were made with the Grand Trunk to
forward passengers to Detroit, and steamers and stage coaches were
provided for the journey to Red River. The fares were to be 20 per
adult from St. Paul. Emigrants were to be sent out from England. A
revenue of 30 per cent. was anticipated. _Globe_, April 25, 1862.]

[Footnote 112: Some conception of the cool reception given the company
may be obtained from letters printed in MacDonald, D. G. F., op. cit.,
p. 401-17.]

[Footnote 113: The first petition was presented May 29, 1868, by
Waddington, and the second on July 3 by Viscount Milton, in which he
emphasized "the advantages of an overland communication." Begg, A.,
_History of British Columbia_, p. 378.]

[Footnote 114: The Canadian House solicited the aid of the Imperial
authorities in establishing government in British Columbia in 1858.
_Legislative Council_, July 23, 1858.]

[Footnote 115: McNaughton, Margaret, _Overland to Cariboo_.]

[Footnote 116: Whymper, Frederick, _Travel and Adventure in the
Territory of Alaska_, p. 68.]

[Footnote 117: 39th Congress, 1st session, H. R. 754, July 21, 1866.]

[Footnote 118: "The opening by us first of a North Pacific Railroad
seals the destiny of British possessions west of the 91st meridian.
Annexation will be but a question of time." _Report of U.S. Senate on
Pacific Railroads_, February 19, 1869, p. 1363.]

[Footnote 119:
  Ottawa, _January 28, 1870._
  My dear Brydges,--

It is quite evident to me not only from this conversation, but from
advices from Washington, that the United States Government are resolved
to do all they can short of war to get possession of the western
territory, and we must take immediate and vigorous steps to counteract
them. One of the first things to be done is to show unmistakably our
resolve to build the Pacific Railway....It must be taken up by a body of
capitalists and not constructed by the Government directly. Canada can
promise most liberal grants of land in alternate blocks and may perhaps
(but of this I cannot speak with any confidence) induce Parliament to
add a small pecuniary subsidy. No time should be lost in this and I
should think that we had made a great stride if we got you to take it up
vigorously....The thing must not be allowed to sleep, and I want you to
address yourself to it at once and work out a plan. Cartier and I will
talk it over after conference with you and push it through.

  Yours faithfully,
  John A. McDonald.

Pope, Sir Joseph, _Correspondence of Sir John MacDonald_, pp. 124-5.]

[Footnote 120: Scholefield, E. O. S., op. cit., p. 225 and p. 278.]

[Footnote 121: Scholefield, E. O. S., op. cit., p. 245.]

[Footnote 122: Copy of a report of a committee of the Honourable the
Privy Council approved by His Excellency the Governor-General in Council
on March 6, 1868. _Correspondence respecting the Northwest territory
including British Columbia_, p. 10.]

[Footnote 123: Memorial of the citizens of Victoria to His Excellency
the Governor-General and the Honourable Queen's Privy Council of Canada
(_ibid._, p. 13).]

[Footnote 124: _Ibid._, p. 9.]

[Footnote 125: Governor Seymour was largely responsible for the delay.
_Ibid._, p. 10.]

[Footnote 126: Sir John A. MacDonald was influential in securing the
appointment of a governor favourable to union. See letter quoted in
_Canada and Its Provinces_, vol. XXI, p. 172.]

[Footnote 127: Dispatch from Earl Granville to Governor Musgrave, August
14, 1869. _British Columbia Sessional Papers_, 1881, pp. 139-40.]

[Footnote 128: Scholefield, E. O. S., op. cit., p. 293.]

[Footnote 129: Attention was drawn to the possibility of a
transcontinental road by an application for a charter for "The Canada
Pacific Railway," notice of which appeared in the _Canada Gazette_ of
October 12, 1869 (p. 185). It was proposed to build a road from
Minnesota over the plains of Saskatchewan to Yellowhead Pass at a cost
of 20,000,000. Waddington claimed the scheme originated with Mr.
Burpee, a Canadian engineer, and that it was compiled from his own
notes, the purpose being to attract the attention of the public. See
Bancroft, H. H., op. cit., p. 644.]

[Footnote 130: Appendix A.]


  _B._ The Hudson Bay Drainage Basin

The growth of civilization in the great central plain east of the Rocky
Mountains to which Hudson Bay affords access, was also important as a
condition leading to union. In an effort to discover a north-west
passage from the east, benefiting by knowledge gained in the voyage of
Frobisher[131] in 1578, and in the voyages of Davis[132] in 1585 and
later years, Henry Hudson[133] entered Hudson Strait and sailed into
Hudson Bay in 1610. Immediately, attempts[134] were made to find a
passage westward out of the bay. With these attempts came beginnings of
trade in furs.[135] In 1670, partly in compensation[136] for the failure
of the attempts, and partly as evidence of the growing importance of the
fur trade[137] on the North American continent, a charter was granted to
the "Governor and Company of Adventurers of England trading into Hudson
Bay."

The beginning of settlement in the great central plain known as the
North-West was dominated, therefore, as in Oregon and British Columbia,
by demands of fur trade. Vessels sailing under the auspices of the
Hudson Bay Company followed the eastern coast of Hudson Bay to the
southern extremity, and, later, turned northward along the western coast
establishing posts[138] at the mouths of rivers giving access to the
interior. Establishment of posts at the mouths of rivers as strategic
points for prosecution of the fur trade, and consequent development of
trade with the interior,[139] occasioned the competition of the French,
who attempted to divert furs to the St. Lawrence. As a result of this
competition, forts[140] were constructed at important points, and
harried attacks[141] were made on Hudson Bay Company posts, which only
ceased with the treaty[142] of Utrecht. Persistence of the French and
penetration, largely under the direction of La Verendrye, of the great
central plain as far as the Rocky Mountains by Lake Superior and the
Winnipeg River, or the southern gateway, was accompanied by the
construction of forts[143] at the heads of lakes, the mouths of rivers,
and along waterways giving access to the interior. This effective
control of the fur trade on the part of the French made necessary the
construction of posts[144] and the undertaking of journeys[145] to the
interior on the part of the Hudson Bay Company.

After the conquest of Canada, English traders followed the routes to
central Canada discovered by the French. The disastrous effects[146]
resulting from aggressiveness of these individual traders led to
establishment[147] of the North-West Company in 1783. Competition[148]
from this company, increased in 1794 by the Jay Treaty,[149] which
restricted territory of the North-West Company by transferring several
of its posts to the United States, and necessitated the adoption of more
northerly routes, was a further stimulus[150] to the efforts of the
Hudson Bay Company from the north and occasioned an increase in the
number of posts[151] by both companies at competitive points and in
more remote regions. Rapid expansion of the fur trade occasioned by such
competition led to improvement[152] of the shortest possible routes and
to the growth of settlement at strategic[153] points for the handling of
furs and supplies. Consequently, head-quarters were removed from Grand
Portage to Kaministiquia[154] (later known as Fort William)[155] in 1801
as a result of the discovery[156] of a route from Rainy Lake to Lake
Superior, which avoided the difficulties of Grand Portage. At about the
same time, an ill-fated[157] suggestion was made by Alexander MacKenzie
proposing[158] the formation of the Fishery and Fur Company, "to open
and establish a commercial communication through the continent of North
America between the Atlantic and Pacific oceans to the incalculable
advantage and furtherance of the Pacific Fishery and American fur trade
of Great Britain."[159]

The necessity of increasing settlement to furnish supplies[160] and to
handle traffic--considerations involved in expanding trade--was a factor
favourable[161] to the grant of land by the Hudson Bay Company to Lord
Selkirk for colonization purposes, and to the establishment of
settlement at the Forks of Red River. On the other hand, severity[162]
of competition, more pronounced because the step appeared[163] to be a
direct blow at the North-West Company, made settlement almost
impossible.[164] But difficult as such attempts[165] at settlement were,
the demands of the situation were ultimately such as to favour a
permanent establishment, and the very ferocity of competition, making
amalgamation[166] necessary, unavoidably involved an increase[167] in
population.

Increase in population left settlement none the less subject to
exigencies of the fur trade. Amalgamation of the companies brought the
decline of Fort Alexander[168] (Bas de la Riviere) and Fort
William,[169] formerly important, because they were situated on the main
route of communication of the North-West Company, and the growth of Fort
Douglas[170] at the confluence of the Red and Assiniboine Rivers, the
centre of the southern fur territory. In a more active capacity the
Hudson Bay Company exercised the power of monopoly in regulating affairs
of the settlement by dictating the price of land[171] and of
commodities,[172] by subsidizing enterprises[173] calculated even in
failure to redound to its own advantage, and by countenancing tyrannical
practices.[174]

Friction between the company and the settlers was the natural result of
such regulations. Of necessity the breach widened with increase in
population and particularly with increase in the number of
half-breeds--the larger and more unsettled portion.[175] The consequent
increase in agricultural products and in the returns of the annual
buffalo chase began to exceed the company's demand,[176] and there arose
the cry of the settlers for a wider market. The margin of the company's
profits on goods sold to the settlers occasioned the growth of a petty
trading class[177] of importers independent of the company. Demand for
imports caused the growth of trade[178] with Americans along channels
previously opened by early purchases of grain by the colony. The
monopoly of the company became subject to increasing strain. In the
widening of the breach, the company displayed greater activity[179] in
defence of its monopoly. The settlement became increasingly
discontented, and, with every evidence of aggressiveness on the part of
the company, unrest became more marked, although violence was generally
forestalled by the company's concessions.[180]

Another phase of the struggle between the settlement and the monopoly of
the company came with the attempt of the settlement[181] to secure
redress from the British Government, which, though temporarily
unsuccessful, contributed to produce far-reaching results. Energetic
correspondence[182] of Mr. A. K. Isbister in behalf of the settlers
failed to[183] secure definite results from the Government, which was
apparently satisfied by diplomatic[184] assurances[185] of the company,
but it undoubtedly contributed to a growing feeling of dissatisfaction
with the company's administration. Increase[186] in settlement and its
demands for a wider market, and growth of trade with the United
States--results of the accessibility of the route by way of the Red
River to St. Paul--made this dissatisfaction[187] more pronounced.
Although the Red River Settlement had suffered from the neglect of the
British Government, it had not entirely escaped notice,[188] and with
the signs[189] of American imperialism, more serious in view of the
rapid western development of the United States, a more active interest
was assumed.


The fact that the fur trade and the company's monopoly were irrevocably
opposed to settlement, as was evident in the Isbister correspondence,
and in the difficulties of British Columbia, began to be appreciated.
Propaganda[190] which had been carried on by imperialistic writers in
the insistence on the benefits of a transcontinental road also had its
effect. The necessity of renewing to the Hudson's Bay Company, the grant
which expired in 1859, offered an opportunity to investigate the whole
situation, and finally[191] the Select Committee of 1857 was appointed,
and at the same time, Captain Palliser was dispatched[192] to explore
the territory in question.

Prospect of relief of Red River Settlement from the monopoly of the
company as a result of these activities was much more promising.
Although Captain Palliser pointed out the difficulties of establishing
communication[193] between Canada and the settlement, he strongly
favoured[194] the formation of a British colony extending from the Red
River to British Columbia, and in this other members of the expedition
substantially[195] concurred.

Canada was even more seriously concerned than Great Britain with the
possibilities of American imperialism, and with the growth of trade
between Red River Settlement and the United States. The invitation[196]
of the Colonial Secretary on December 4, 1856, to Canada to present her
case before the Select Committee[197] met "with great satisfaction," and
almost immediately it was arranged[198] that Chief Justice Draper should
be appointed as a delegate. The activity of Canada was further evident
in the instructions[199] given to the delegate, and in the generally
able manner[200] in which the case was conducted. A petition[201] from
the Board of Trade of the City of Toronto to the Legislative Council
dated April 20, 1857, was forwarded to the Select Committee, and in
response to a petition[202] from Red River settlers presented on May 22,
1857, the province appointed a select committee, which collected
evidence unfavourable[203] to the company, and likewise presented it to
the same body. Finally an expedition[204] was dispatched to the
North-West in the same year for the purpose of gathering information on
its possibilities. The report of the Select Committee favouring the
annexation[205] of the Red River and Saskatchewan districts to Canada
was a tribute to these activities.

The report proved but an incident in a struggle which, since it involved
the life of the monopoly and of the fur trade, was destined to be
prolonged. It was followed by suggestions of the British authorities as
to machinery with which the proposals could be carried out. The company
succeeded in checking progress in this direction by a resort[206] to the
charter, although some advantage was gained by the Government, since
the issue became clearly defined.[207] Canada, impressed with
information which had been gathered by Hind[208] and Dawson,[209]
continued the offensive. In 1858, the North-West Transportation,
Navigation and Railway Company was incorporated[210] with powers to
establish communication from one or more points on the shore of Lake
Superior to any point in the interior "within the limits of Canada." The
boundaries of Canada being of a controversial character, this company
undertook to make arrangements giving it power to conduct operations on
territory beyond Canadian jurisdiction. The Act of Incorporation was
therefore amended[211] in 1859 to enable it to unite with another
company to be formed in England for a similar purpose. In addition the
name was changed to the "North-West Company," and power given to
construct a telegraph line. The Act expired[212] through non-use.

The disappearance of this enterprise and the attitude[213] of the
company towards the attempts of Canada to establish a postal service
with Red River, made apparent the strength of the Hudson's Bay Company
in withstanding attempts at colonization by its insistence upon
territorial rights. But antagonism of the company, and the prominence of
the British Columbia goldfields at that time, served to arouse Canadian
authorities to even greater activity. In 1862 they tried to take
advantage[214] of an Imperial Act[215] which provided for organization
of the Saskatchewan territory. In a more direct manner[216] they
attempted to secure the co-operation of the Hudson's Bay Company. The
Imperial authorities refused[217] to interfere with territory under the
company's jurisdiction, and the Hudson's Bay company again made
abundantly clear[218] the cause of their resistance. An appeal was made
to the authorities,[219] but in Great Britain largely because of
activities[220] of the company it was unsuccessful.[221] Finally, an
Act[222] was passed in the same year incorporating the North-West
Navigation and Railway Company with power to establish communications
"within the Northern and Western limits of Canada," and to "unite with
any company formed or to be formed in England for the purposes
aforesaid."

The primary issue was the claim of the Hudson's Bay Company to the
North-West territory which was in substance a question of fur trade or
settlement. This was as evident in later as it was in earlier
developments. In 1861 Mr. E. W. Watkin was dispatched[223] by the Grand
Trunk Railway directorate to retrieve that company from the difficulties
of the period. The appointment was of significance, since he was
favourable[224] to the extension of railway communication to the
Pacific, and since British authorities were sympathetically
cognizant[225] of his viewpoint, and of its difficulties.[226] With
further encouragement,[227] he was in a position in the following year
to submit a proposal[228] for the construction of a telegraph line and a
common highway between Canada and the Pacific, to Canadian delegates who
sought Imperial support for the Intercolonial railway and who had only
hoped to impress[229] upon the authorities the urgency of the Pacific
project. But although negotiations[230] were conducted with every hope
of success, insistence of the Canadian Government upon facilities for
settlement made accomplishment of the scheme impossible.

Persistence of the Canadian authorities, encouraged by the British
Government and by the continued appeals[231] of Red River Settlement,
eventually met with success. The position of the Hudson's Bay Company
was very much weakened with the reorganization engineered by Mr. Watkin
which occasioned the disappearance of the old interests in 1863. Sir
Edmund Head, formerly Governor of Canada and Head of the newly organized
company, was favourably inclined toward a complete sale of the company's
territory to the Crown and started negotiations[232] with that end in
view. This step was characteristic of the general attitude[233] of new
interests in the company which greatly increased the growing
uneasiness[234] of the settlers and lost to it the interest and
affection of the wintering partners[235] who were more directly affected
by a loss of the fur trade.

The aggressiveness of Canada continued.[236] Further negotiations[237]
with the Imperial Government led to the visit of Hon. George Brown in
1864, and settlement of the North-West territories was a feature[238]
included in the programme of the Confederation delegates in the
following year. Evidences[239] of American Imperialism, as shown
particularly in the offer of Anglo-American capitalists[240] to
purchase the territory of the Hudson's Bay Company, proved a decided
stimulus to further activity. The British North America Act included
provisions[241] for the annexation of the North-West territory and the
first Parliament on December 12, 1867, adopted resolutions[242] strongly
advising transference of the jurisdiction and control of the region to
Canada, and presented an address embodying these resolutions to the
Imperial authorities.[243] Confident in the success of such enterprise,
the Canadian Government proceeded[244] to construct a road from Fort
William according to the suggestions of Mr. S. J. Dawson in 1859, and
actually completed the first section of six miles.[245]

Attempts at colonization evident in the efforts of Canada to establish
communication between Red River and Lake Superior were not favourably
regarded. The appearance of the Canadian authorities[246] in 1868, for
the purpose of building a road from Fort Gary to Lake of the Woods, and
at the same time of providing relief to the Red River settlers, whose
harvests had been destroyed by grasshoppers, by paying for the
construction with provisions, was the occasion of a protest[247] from
the company.

The Hudson's Bay Company had ample reason to protest against Canadian
activity. Sir Edmund Head anticipated[248] and questioned[249] the
assumption of Canada that the company's rights vested in its charter
should be submitted to the protection of "courts of competent
jurisdiction." The Imperial authorities recognized the force of this
contention implicitly[250] by the passing of an Act[251] arranging for
transfer of the "requisite powers of government and legislation." It was
evident that cancellation could only be secured by purchase. To this end
negotiations continued.[252] Canada anxiously[253] requested the
privilege of sending delegates and upon their arrival in England after a
long series of proposals[254] and counter-proposals both Canada and the
company agreed to accept the terms proposed by the Imperial authorities
as a solution to the apparent deadlock. With minor adjustments,[255]
these terms were finally incorporated in a deed[256] of surrender,
signed November 19, 1869.

The continual and protracted struggle[257] of settlement against the
fur trade had apparently ended. Actually it became more violent.
Negotiations had been conducted and closed by London officers of the
company with slight regard to wishes of the wintering partners, who were
directly dependent upon profits of the fur trade. They had been made
suspicious through reorganization of the company in 1863, and became
increasingly alert[258] to dangers of the policy of London officials.
This dissatisfaction of the wintering partners accompanied, if it did
not encourage,[259] the unrest of the half-breeds who were likewise
dependent for their livelihood on the fur trade, and who were equally
alert to possibilities of its destruction. Finally the sale of land and
the change of government, executed without reference to their interests
by the company with which they had struggled for every concession,
appeared to leave no alternative but a protest determined even to the
point of violence.

On July 10, 1869, Col. J. S. Dennis was dispatched[260] by the Minister
of Public Works for Canada, to survey the territory preparatory to
transfer. Trouble with the half-breeds was anticipated,[261] but surveys
were prosecuted until they were ordered to stop[262] by a party under
Louis Riel on October 11. As a further preparatory step, Hon. Wm.
McDougall, was appointed[263] Lieutenant-Governor of the North-west
Territories on September 29, 1869, with instructions[264] to report on
the whole situation, and to take immediate steps "for the extension of
the telegraph system from the territory to Pembina and for its connexion
at that place with the system of the American Telegraph Company." He was
forbidden to proceed to Fort Gary[265] and on November 2, 1869, was
escorted[266] beyond the boundary to the American side.

Faced with opposition Canada immediately notified[267] the Imperial
authorities, and placed upon them the responsibility[268] of securing
order. Although the Imperial authorities declined[269] to accept these
views and the argument continued, the Canadian Government took active
measures to meet the situation. Mr. D. A. Smith was dispatched as a
special commissioner[270] with sufficiently elastic instructions[271] to
handle the questions involved, as were also, though with less
authority,[272] Mr. Thibault and Colonel de Salabery. At a late
date[273] Bishop Tach was added to the list. The success of these
measures was evident in the growth of a feeling of unity[274] in the
settlement, and in the dispatch on March 22, 1870, of delegates by Red
River Settlers to Ottawa to present their demands.[275] The Canadian
Government in response passed the Manitoba Act,[276] which was accepted
by the settlement, and which brought difficulties to an end. After a
long controversy, payment[277] was made to the Hudson's Bay Company, and
with later adjustments[278] the Province of Manitoba was formally
admitted to the Dominion of Canada.

As a precaution against further trouble, troops were dispatched by the
Canadian Government[279] with Imperial sanction.[280] Construction of
the road from Fort William to Fort Gary, which Canada had persistently
continued,[281] received additional stimulus[282] with the transport of
the expedition. The arrival of the troops at Fort Gary, and the
possibilities of the road,[283] from a commercial and military
standpoint, made the appearance[284] of Lieutenant-Governor Archibald,
on September 2, 1870, a significant omen in the establishment of peace
and order at Red River Settlement, and in the disappearance of the rule
of the Hudson's Bay Company, and the rgime of the fur trade.

The entrance of the province of Manitoba into the Dominion of Canada,
marked another victory of settlement over fur trade. The settlement[285]
which grew up, dominated in character and in location by demands of the
fur trade, and which increased under the favourable conditions peculiar
to the Red River Territory, after a long struggle, broke the bonds of
monopoly of the trade which had given it birth. The establishment of
posts at points geographically and technically strategic for the
handling of furs and supplies, as shown in the growth of Fort Alexander,
of Fort William (as well as in their subsequent decline with the
amalgamation of the companies and the abandoning of the Lake Superior
route), and of Fort Gary, was a tribute to the influence of geographic
features, as was also the growth of trade[286] between the Red River
Settlement, and the United States by the Red River. The physical
characteristics which conditioned the growth of trade with America, and
which gave to the development of the United States a more threatening
character were responsible simultaneously for the development of
interest[287] on the part of Canada and of Great Britain and for the
consequent activities which led to the purchase of the North-west
territories by Canada. Politically the North-west Territories were
united to Canada but geographically there remained a discrepancy to
measure the seriousness of which requires a study of the position of
Eastern Canada.

[Footnote 131: "Being persuaded of a new and nearer passage to Cathay
than by Capo de Buona Speranca which the Portuguese yearly use...he
began...with his friends to confer and laid a plain plot to them that
that voyage was not only possible by the north-west but also...easy to
be performed." Hakluyt, R., _Voyages of Elizabethan Seamen to America_,
ed. Payne, E. J., p. 64.]

[Footnote 132: "I am assured the (passage) must bee in one of foure
places or els not at all." Hakluyt, R., _The Principall Navigations_,
etc., vol. XII, p. 247.]

[Footnote 133: See _Henry Hudson the Navigator_, ed. Asher, G. M.; also
Burpee, L. J., _The Search for the Western Sea_, p. 9 ff.]

[Footnote 134: In 1613 Button sailed along the western coast of the bay
to Port Nelson. Burpee, L. J., op. cit., p. 44 ff. He was followed by
Baffin in 1615 (Fox, Luke, _North-West_, p. 149), and later by Fox and
James (Burpee, L. J., _ibid._, p. 47 ff.).]

[Footnote 135: As early as Davis's voyage furs were of considerable
importance. Master Davis to William Sanderson (Merchant) London. "They
have brought home five hundred seales skinnes and an hundred and fortie
halfe skinnes and pieces of skinnes" (Hakluyt, R., _The Principall
Navigations_, etc. _Ibid._, p. 247).]

[Footnote 136: "Whereas our dearly beloved cousin Prince Rupert (and
others) have at their own great costs and charges undertaken an
expedition for Hudson's Bay in the north-west parts of America for the
discovery of a new passage into the South Sea and for the finding of
some trade for furs, minerals and other considerable commodities...."
His Majesty's Royal Charter to the governor and company of Hudson's Bay.
_Report from the Committee appointed to inquire into the state and
condition of the countries adjoining to Hudson's Bay and of the trade
carried on there, together with an Appendix. Reported by Lord Strange_,
April 24, 1749, p. 237.]

[Footnote 137: See particularly the negotiations of Radisson, _Voyages
of Peter Esprit Radisson_ (Prince Society), p. 11 ff.]

[Footnote 138: "The year 1667 when Zachariah Gilliam--passed through
Hudson's Streights, and thence southward--where is a river, afterwards
called Prince Rupert's River. He had a friendly correspondence with the
natives, built a fort, named it Fort Charles." Oldmixon, J., _The
British Empire in America_, vol. I, p. 544. "In the year 1682 Mr.
Bridger embarked for Port Nelson where a factory was to be established
and a fort built" (_ibid._, p. 559); "In the preceding year (1683) the
chief factory was removed from Rupert's to Moose-Sebee...which has ever
since been called Albany River; where a fort was built, a factory
settled" (_ibid._, p. 560). "There is an island in the bottom of the bay
called Hay's Island where a factory had been settled." Another
settlement mentioned is at New Severn (_ibid._, p. 561). The Prince of
Wales Fort was not strongly established at the mouth of the Churchill
River until 1733. See Robson, J., _An Account of Six Years' Residence in
Hudson's Bay, 1733-36 and 1744-47_, p. 9.]

[Footnote 139: York Fort, September 8, 1690. "This summer I sent up
Henry Kelsey...into the country of the Assinae Poets...to call encourage
and invite the remoter Indians to trade with us." _Report from the
committee appointed to inquire into the state and condition of the
countries adjoining to Hudson's Bay and of the trade carried on there._
App., p. 275.]

[Footnote 140: 1684 (Du Lhut) "Il me reste  vous mander que tous les
Sauvages de Nord ont beaucoup de confiance en moy et c'est ce qui me
fait vous promettre qu'avant deux annes il ne descendra pas un Sauvage
chez les Anglois  la Baye d'Hudson...toutes les nations...m'ont promis
d'estre le printemps prochain au fort que j'ay fait faire  la Rivire 
les Manne dans le fond du Lac Alemipigon" (Nipigon). Margry, P.,
_Dcouvertes et Etablissements des Franais dans l'Ouest et dans le sud
de l'Amrique Septentrionale_, vol. VI, p. 51.]

[Footnote 141: "The French began to be afraid all the Upland Indians
might be drawn down to the Bay...wherefore they resolved to drive the
English out of all their places in the bottom of the bay." Oldmixon, J.,
op. cit., p. 561; see _ibid._, ff.]

[Footnote 142: Art. X, XI. Treaty of Utrecht. _Ibid._, p. 567.]

[Footnote 143: La Nue established a post at the mouth of Kaministiquia
River in 1717 (_ibid._, p. 504 ff.). La Jemeraye under the direction of
La Verendrye established Fort Saint Pierre on Rainy Lake in 1731
(_ibid._, p. 586). La Verendrye built Fort Saint Charles on Lake of the
Woods in 1732 (_ibid._, p. 587). His son built Fort Maurepas at the
mouth of the Winnipeg River in 1734 (_ibid._, p. 588). Ascending the
Assiniboine, Fort La Reine was built in 1738 (_ibid._, p. 590). Fort
Dauphin was constructed on Lake Manitoba in 1741 (_ibid._, p. 594).
Forts were built on the Red River, at the fork of the Red River and the
Assiniboine, and at the mouth of the Pasquia (Saskatchewan) River but
were abandoned (_ibid._, p. 617). Fort Bourbon was situated at the mouth
of the Saskatchewan River (_ibid._); Fort la Jonquiere was established
in 1751 (Il fit partir dix hommes en deux canots, lesquels remontrent
la rivire du Paskoya jusque la montagne de Roche, o ils firent un
fort), _ibid._, p. 642. Fort a la Corne was built on the Saskatchewan in
1753. Burpee, L. J., _Search for the Western Sea_, p. 281; also Bell, C.
N., _Trans. No. 17 Manitoba Hist. and Sci. Soc._, 1885, p. 17.]

[Footnote 144: "A fort...called Henly House which is 150 or 200 miles up
the River (Albany)...the governor erected that fort to prevent the
French trade who never traded there before that season." _Report from
the Committee on the state of Hudson Bay_, 1749, p. 221.]

[Footnote 145: Journal of a Journey by Anthony Hendry to explore the
country inland and to endeavour to increase the Hudson's Bay Company
trade A.D. 1754-5. _Proceedings and Transactions of the Royal Society of
Canada_, 3rd series, vol. I, 1907, p. 321, ed. Burpee, L. J.]

[Footnote 146: MacKenzie, A., _A General History of the Fur Trade from
Canada to the North-West_, p. 12.]

[Footnote 147: _Ibid._, p. 21, also Atcheson, Nathaniel, _On the Origin
and Progress of the North-West Company_, p. 7.]

[Footnote 148: MacKenzie, A., _Voyages from Montreal through the
Continent of North America to the Frozen and Pacific Oceans_, p. 14.]

[Footnote 149: Atcheson, Nathaniel, _ibid._, p. 28.]

[Footnote 150: Hearne made successive journeys to the interior in the
years following 1769 (Hearne S., _Journey from Prince of Wales Fort in
Hudson's Bay to the Northern Ocean_, especially p. xxxv. ff.) and in
1774 established Cumberland House on the Saskatchewan (_ibid._, p. 266)
as a reply to the aggressiveness of Frobisher, who intercepted trade
going to Hudson Bay by a fort on the Saskatchewan River near the site of
Fort Poskoyac and by Fort la Traite on the Churchill River. Masson, L.
R., _op. cit.,_ I, p. 14. See also Davidson, G. C., _The North-West
Company_, pp. 35-6.]

[Footnote 151: Fort Athabasca was built by Peter Pond in 1778, "sur la
Rivire  la Biche,  quarante milles de sa dcharge." Masson, L. R.,
op. cit., p. 14. Fort aux Trembles as well as another fort on the
Assiniboine River were in existence prior to 1780 (_ibid._, p. 17). Pine
Fort was built about eighteen miles below the junction of the Souris and
Assiniboine River in 1785. Coues, E., _New Light on the Early History of
the Greater North-West_, p. 296. Fort Esperance was built on Qu'Appelle
River, a branch of the Assiniboine, in 1787. Masson, L. R., op. cit., p.
274. Fort Resolution was built on Upper Slave Lake in 1787 and Fort
Providence on the north side of the Lake in 1789 (_ibid._, p. 30). Fort
Chipawean was built near Lake Athabasca to take the place of Fort Pond
in 1788. A fort was built on Peace River in the same year. MacKenzie,
A., _Voyages in North America_, p. 129. The increased aggressions of the
Hudson Bay Company became more noticeable about this period. Descending
the Albany River Osnaburg House was built in 1786. Masson, op. cit.,
vol. II, p. 244. Mention is made of Manchester House and of Hudson's
House on the Saskatchewan River in 1787 and 1788. _David Thompson's
Narrative_, ed. by J. B. Tyrrell, p. lxv. Buckingham House on the North
Saskatchewan is mentioned in 1793, also South Branch House on the South
Saskatchewan (_ibid._, pp. lxvi.-lxvii.). Fort George was established by
the North-West Company in the same locality in 1791. Masson, L. R., op.
cit., II, p. 17. Lac d'Orignal Fort was established on Beaver River two
years earlier (_ibid._, p. 14). A fort farther up the Peace River was
built in 1792. MacKenzie, A., op. cit., p. 135. Toward Lake Athabasca
the Hudson Bay Company established a post at Ile la Crosse in 1791 near
the North-West Company's posts at that point. Coues, E., op. cit., vol.
II, p. 580. They forced the North-West Company to abandon Pine Fort by
the establishment of Souris River Fort in 1793. Masson, L. R., op. cit.,
I, p. 271. Brandon House was established in 1794. Coues, E., op. cit.,
p. 298. In retaliation the North-West Company built Assiniboine House in
the same vicinity in 1795 (_ibid._). Proceeding up the North
Saskatchewan Fort Augustus was built by the North-West Company in
1794-5. Tyrrell, J. B., op. cit., p. lxxviii. Edmonton House farther up
the river was built by the Hudson Bay Company in 1795 (_ibid._, p. 432).

Fort Carlton is given the date 1797. Coues, E., op. cit., p. 490. Rocky
Mountain House was built in 1799. Tyrrell, J. B., op. cit., p. xlvi.
Southward the North-West Company built a fort at the mouth of the
Pembina River in 1797. See Burpee, L. J., op. cit., p. 385, and Tyrrell,
J. B., op. cit., p. lxxv. Nearer the Hudson Bay district Fairford House
was built on the Churchill River in 1795 (_ibid._, p. lxx.), but
apparently abandoned in favour of Bedford House the following year
(_ibid._, pp. 133-4). Under the stress of competition from the X Y
Company from 1801 to 1804 (Masson, L. R., op. cit., I, p. 77) several
other forts were built--Chesterfield House on the South Saskatchewan in
1805. Masson, L. R., _ibid._, II, p. 30. Posts were established by the
North-West Company at Moose River and Charlton Island on Hudson Bay
(_ibid._, I, p. 80). Other posts were established at various competitive
points. See Davidson, G. C., op. cit., pp. 89-91.]

[Footnote 152: Yonge Street from Toronto to Georgian Bay was largely
used by the North-West Company at that time. The company supplied funds
for the improvement of the road--contributing as much as 8,000 in one
single payment. _History of Toronto and the County of York_, vol. I, Pt.
II, p. 16. Under the pressure of the same traffic a canal was built at
Sault Ste Marie in 1798 for the passage of bateaux and canoes. Capp, E.
H., _The Annals of Sault Ste Marie_, pp. 117-19.]

[Footnote 153: An interesting description of such points and
particularly of Grand Portage is given in MacKenzie, A., _A General
History of the Fur Trade_, P. 55 ff.]

[Footnote 154: Masson, L. R., op. cit., I., p. 47. The growth of
settlement in Fort William is well described in Franchere, G., op. cit.,
p. 269 ff.]

[Footnote 155: _Ibid._]

[Footnote 156: Masson, L. R., _ibid._, p. 46.]

[Footnote 157: The scheme necessitated the granting of legal rights by
the Hudson Bay Company (Sir Alexander MacKenzie to Lord Hobart, Jan. 7,
1802, _Canadian Archives Report_, 1892, p. 148), and in view of the
competitive situation was consequently impossible. Sir Alexander
MacKenzie to John Sullivan, Oct. 25, 1802, _ibid._, p. 150.]

[Footnote 158: It was proposed "by these waters that discharge
themselves into Hudson's Bay at Port Nelson" . . . "to carry on trade to
their source at the head of the Sascatchiwine River which rises in the
Rocky Mountains not eight degrees of longitude from the Pacific Ocean.
The Columbia River flows also from the same mountains and discharges
itself likewise in the Pacific in latitude 46 20. Both of them are
capable of receiving ships at their mouths and are navigable throughout
for boats." MacKenzie, Sir Alexander, _Voyages from Montreal_, etc., p.
410.]

[Footnote 159: Sir Alexander MacKenzie to Lord Hobart, Jan. 7, 1802
(_Canadian Archives Report_, 1892).]

[Footnote 160: At Grand Portage "for which purpose several milch cows
are constantly kept." MacKenzie, A. (_A General History of the Fur
Trade_), p. 75. Fort du Bas de la Riviere "Cet tablissement avait
plutot l'air d'une mtairie que d'un post de commerce." Franchere, G.,
op. cit., p. 262.]

[Footnote 161: "Of late years this expense (provisions exported from
England), has been so enormous that it has become very desirable to try
the practicability of raising provisions within the territory itself. . . .
With these views the company were induced in the year 1811 to
dispose of a large tract of their lands to the Earl of Selkirk."
_Statement Papers relating to the Red River Settlement_, 1819, p. 4. The
significance of this statement is appreciably lessened in view of its
date, Feb. 14, 1815, which admits the possibility of its controversial
character, especially in view of the fact that the Earl of Selkirk
possessed 40,000 out of a total of 105,000 of the Hudson Bay Company
when the grant was made. (See "Coltman's Report," _ibid._, p. 152.) The
motives of the Earl of Selkirk have been subject to controversy. Even
such a sympathetic appreciation of his patriotic efforts as is shown in
Martin, Chester, _Lord Selkirk's Work in Canada_, p. 190, admits
"without a doubt Selkirk felt justified in advocating his scheme among
his relatives as an ultimately remunerative investment. Selkirk would
have been the last to affirm or even admit that his projects for
proprietary colonization were economically unsound." In a description of
a more successful venture on Prince Edward Island, the Earl of Selkirk
states: "The settlers . . . were allowed to purchase in fee simple and
to a certain extent on credit; from 50 to 100 acres were allotted to
each family at a very moderate price, but none was given gratuitously. . . .
Every assistance they received was a loan after due scrutiny into
the necessity of the case and under strict obligations of repayment with
interest." Selkirk, Earl of, _Observations on the present state of the
Highlands of Scotland with a view of the causes and probable
consequences of emigration_, pp. 204-5. Criticism of the methods
involved may be found in Strachan, John, _A Letter to the Right
Honourable the Earl of Selkirk on his settlement at the Red River near
Hudson's Bay_.]

[Footnote 162: The loss of life in the tragedy of Seven Oaks, the
destruction of property, and the hopeless litigation were incidental to
the struggle of the period. See _Papers relating to the Red River
Settlement_, 1819. McDonnell, A., _Narrative of Transactions in the Red
River Country_. Pritchard, John, _Narratives respecting the aggressions
of the North-West Company against the Earl of Selkirk settlement. The
Report of the Proceedings connected with the Disputes between the Earl
of Selkirk and the North-West Company at the Assizes at York_, 1818.
_The Report of the Proceedings at a Court of oyer and terminer appointed
for the investigation of cases from the Indian Territories_, 1819, and
more partial statements _The communications of Mercator_, and _Claims of
the Hudson's Bay Company_, 1817. See also Davidson, G. C., _The
North-West Company_, p. 118 ff.]

[Footnote 163: The scheme was regarded in general as injurious to the
fur trade, and in particular as hostile to the North-West Company, since
it was looked upon as "a nursery of servants for the Hudson's Bay
Company," as an excuse for bringing out more emigrants to carry out a
policy of aggression, as an attempt to reduce the price of supplies and
to make the Indians independent of them, and as a denial of their rights
to the territory granted--a serious consideration, since the nature of
the grant was such as to cut off the communication of the North-West
Company between Fort William and the Athabasca territory, as well as the
Assiniboine territory. (See map, Plate I, _Papers relating to the Red
River Settlement_, 1819). "Coltman's report." _Papers relating to the
Red River Settlement_, 1819, pp. 153-4.]


[Footnote 164: The hardships of the settlers, involving at times the
complete disappearance of the settlement, are very well described by
Donald Gunn, who arrived in 1813. Gunn, Donald, and Tuttle, C. R.,
_History of Manitoba_.]

[Footnote 165: About 70 reached Red River in August, 1812 (_ibid._, p.
73), about 20 in 1813 (_ibid._, p. 76), about 90 in 1814 (_ibid._, pp.
194-5), about 100 in 1815 (_ibid._, p. 133). See also Bryce, G., op.
cit., p. 213. Several French families arrived from Canada in 1818. Ross,
A., _The Red River Settlement--Its rise, progress and present state_, p.
48. In 1821 about 170 Swiss colonists were sent out. Gunn, D., and
Tuttle, C. R., op. cit., p. 218.]

[Footnote 166: For terms of the amalgamation see Davidson, G. C., op.
cit., App. p. 305 ff.]

[Footnote 167: The De Meurons, part of a Swiss regiment which the Earl
of Selkirk had taken with him for the purpose of restoring order in the
territory, were given land in the vicinity of Fort Douglas. Gunn, D.,
and Tuttle, C. R., op. cit., p. 199. Again, "the number of servants
employed by the contending parties was triple the number required in
quiet...times, and more especially when the business came to be managed
by one firm....The influx of families from the fur trade in 1822 and the
following summer exceeded in number those who represented the original
colonists brought in from all quarters by his Lordship" (_ibid._, pp.
225-6).]

[Footnote 168: Keating, W. H., _Narrative of an Expedition to the Source
of St. Peter's River, Lake Winnipeek, Lake of the Woods, etc., performed
in the year 1823_. Vol. II, p. 81.]

[Footnote 169: _Ibid._, p. 171.]

[Footnote 170: _Ibid._, p. 61.]

[Footnote 171: The price of land in 1829 was raised from 5_s_. per acre
to 7_s_. 6_d_. (Gunn, D., and Tuttle, C. R., op. cit., p. 260), in 1833
to 10_s_. 6_d_. per acre, and in 1834 to 12_s_. 6_d_. (_ibid._, pp.
282-3).]

[Footnote 172: "First 33-1/3 per cent. was added to the prime cost; then
on that amount 58 per cent., which became the selling price" (_ibid._,
p. 223). See also tariff of reduced prices for agricultural produce
(_ibid._, p. 260).]

[Footnote 173: The Buffalo Wool Company, the experimental farm of
Hayfield, the Tallow Company and the sheep speculation were particular
instances (_ibid._, ch. VI-X). See Ross, A., op. cit., p. 219.]

[Footnote 174: The manner of carrying on trade--the settlers "pay and
are paid in handkerchiefs, etc....and if they make a fortune it must be
all in clothes....These poor people have thus been reduced to the level
with the savages without sharing their advantages or enjoying their
independence." Beltrami, J. C., _A pilgrimage in Europe and America,
leading to the discovery of the sources of the Mississippi and Bloody
River_. Vol. II, pp. 353-4. "The only good thing I see in the matter
(the sale of land) is that they give me a salary of twenty-five pounds
for keeping their accounts." Simpson, Alexander, _The Life and Travels
of Thomas Simpson, the Arctic Discoverer_, p. 94. A very good statement
of the company's attitude may be found in Gunn, D., and Tuttle, C. R.,
op. cit.]

[Footnote 175: Ross, A., op. cit., p. 166.]

[Footnote 176: The number of carts for buffalo trips steadily increased.
  1820     540
  1825     680
  1830     820
  1835     970
  1840   1,210

_Ibid._, p. 246. See also pp. 115, 116.]

[Footnote 177: A feature of the high prices was further effective. "At
the year 1834...a ready-money system was introduced (goods not supplied
on credit as formerly). The distress and confusion of this system had
lasted for several years when a few private individuals resolved on
importing for themselves....At length every man who could muster twenty
shillings became an importer" (_ibid._, pp. 155-6).]

[Footnote 178: "In 1847 there were no less than 102 English importers in
the colony, and nearly as many more from the United States...whose
united invoices amounted to 11,000 sterling, exclusive of the Company's
outfit" (_ibid._, p. 395).]

[Footnote 179: The management of Lord Selkirk's colony was more actively
assumed in 1826 (Simpson, A., op. cit., p. 94), and an even more
strategic advance was made in the direct purchase of the colony in 1834.
Martin, Chester, op. cit., App., p. 223. In the same year the Council of
Assiniboia, consisting largely of company officials, was organized
(Gunn, D., and Tuttle, C. R., op. cit., pp. 288-9). Resolutions were
adopted imposing an import duty of 7 per cent., and an export duty of
an equal amount. Provision for their imposition was made in the
establishment of a volunteer corps (see a copy of a partial list, Begg,
A., _History of the North-West_, vol. I, pp. 236-7). In 1839 the company
appointed Judge Thom, and under his direction a proclamation was issued
in 1844, providing a censorship of the business letters of the
settlement (ibid., p. 257), and a clause was included in all land titles
prohibiting the owner from dealing in furs (see copies of deeds,
_Appendix to the report from the Select Committee on the Hudson's Bay
Company_, pp. 361-2 and 371-2). In 1845 a duty of 20 per cent.
particularly on all imports over 50 by fur traders was imposed. It was
further made possible to prohibit fur traders from handling goods, and
middlemen were forbidden to handle furs (see extracts from minutes of
meeting of the Governor and Council of Rupert's Land, June 10, 1845,
_ibid._, p. 373). The company further refused to carry goods for
agitators. (Begg, A., op. cit., p. 265.) The appearance of the 6th
regiment shortly afterwards was regarded with suspicion. (They were sent
out under secret instructions. _Report of Select Committee on Hudson's
Bay Company_, p. 169).]

[Footnote 180: In 1834 the Larocque incident was settled by a money
payment. (Gunn, D., and Tuttle, C. R., op. cit., pp. 284-5.) The
institution of flogging was abandoned through the fear of a
demonstration such as had followed the punishment of Louis St. Dennis,
in 1836 (_ibid._, p. 292). The trial of Regis Laurent, whose house had
been forcibly broken open and his furs seized, and the trial of William
Sayre in 1849 for trading in furs, aroused such determined opposition
that the company was virtually obliged to concede free trade (_ibid._,
pp. 304-5). As a result of this pressure, the price of land was reduced
from 12s. 6d. to 7s. 6d. (_ibid._, p. 286), and the import duty was also
reduced from 7 per cent. to 5 per cent. and to 4 per cent. Begg, A.,
op. cit., p. 254.]

[Footnote 181: A memorial was submitted on Feb. 17, 1847, signed by Mr.
A. K. Isbister and others and accompanied by a petition signed by 977
names. See instructions for the guidance of the memorialists. Copy of
Memorial and petition from inhabitants of the Red River Settlement,
complaining of the government of the Hudson's Bay Company, and reports
and correspondence on the subject of the Memorial. _Papers relating to
the Hudson's Bay Company_, 1842-70, pp. 86-90.]

[Footnote 182: The correspondence covers several pages (ibid.). See also
Papers relating to the legality of the powers in respect to territory,
trade, taxation and government claimed or exercised by the Hudson's Bay
Company on the continent of North America, under the charter of Charles
II or in virtue of any other right or title (_ibid._).]

[Footnote 183: "Lord Grey is of opinion...that the charges you have
brought against the Hudson's Bay Company are groundless" (letter from B.
Hawes to A. K. Isbister, June 14, 1847). Copy of Memorial and Petition,
etc. (_ibid._, p. 50). "Lord Grey has arrived at the conclusion that
there are no grounds for making any application to Parliament on the
subject of the oppression alleged by you" (letter from B. Hawes to A. K.
Isbister, Jan. 23, 1849, _ibid._, p. 113). As further evidence of the
Government's lassitude--after a resolution had been passed by the House
of Commons asking for an inquiry as to the legality of the company's
rights (Papers relating to the legality of the powers, etc., _ibid._, p.
3), and it had been ascertained that the company's rights did "properly
belong to them," but that a competent tribunal should be appointed to
consider the rights more carefully (_ibid._, p. 7)--the Government made
no provision for such a tribunal, but practically obliged Mr. Isbister
to drop the matter by insisting that he should bear the responsibility
and the expense of the undertaking (_ibid._, pp. 13-4).]

[Footnote 184: "Some of the settlers have of late been carrying on a
clandestine trade in furs....The injury thus done the company's trade,
though considerable, is but one, and that the least, of the evils
resulting from this practice. The persons engaged in it are diverted
from the cultivation of the soil, etc....The perusal of the
above-mentioned documents will, I trust, satisfy your Lordship that the
allegations of the memorialists are groundless" (letter from Sir J. H.
Pelly, Bart., to Earl Grey, April 24, 1847, _ibid._, p. 21). In answer
to an intimation that a further inquiry would be conducted "...that if
your Lordship will let me know the particular points on which you
require further information, I shall be most ready to co-operate with
you" (Sir J. H. Pelly, Bart., to Earl Grey, June 21, 1847). At Sir J. H.
Pelly's suggestion the memorialists were persuaded to submit the matter
in dispute to the award of Earl Grey (_ibid._, pp. 105-6). Earl Grey,
relying upon information afforded by Col. Crofton (_ibid._, pp. 101-2)
and Major Griffiths (_ibid._, pp. 110-12), two officers of the 6th
regiment both of whom were Governors of the colony (Begg, A., op. cit.,
p. 269), and belonged to a regiment regarded with suspicion by the
settlers, decided very strongly in favour of the company (letter from B.
Hawes to A. K. Isbister, Jan. 23, 1849. Copy of Memorial and petition,
etc., _ibid._, p. 113).]

[Footnote 185: In the application for the renewal of the grant made in
1837, a year later than that of the organization of the Assiniboia
Council and five years before the existing grant expired, the
righteousness of the Company's activities was effectively paraded and
Mr. (afterwards Sir) J. H. Pelly emphasized very strongly the statements
of Mr. George Simpson as to the exceptional work of the company in
promoting the interests of Red River Settlement. "It will be seen that
Red River Settlement has advanced rapidly in population and improved
since 1821...and there is a prospect that at no very distant period a
considerable export trade in the articles of wool, flax, etc., will be
established from that settlement" (copy of the existing charter or grant
by the Crown to the Hudson's Bay Company, and correspondence on the
renewal of the charter, etc., _ibid._, p. 14, see also pp. 12-17). "It
has become necessary to establish a more regular form of government and
administration of the laws than heretofore. These measures are now in
progress, and it is estimated that the attendant expenses will exceed
5,000 per annum, which will be borne by the company, although they
might with great propriety call on Her Majesty's Government to relieve
them from that charge" (letter from the Governor of the Hudson's Bay
Company to the Lords of the Committee of Privy Council for trade. Feb.
7, 1838, pp. 25-6).]

[Footnote 186: Some conception of the character and growth of the
settlement may be gained from the following statistics of 1849:

  Families              1,052
  Total population      5,291
  Houses                  745
  Horses                1,095
  Oxen                  2,097
  Cows                  2,147
  Pigs                  1,565
  Sheep                 3,096
  Ploughs                 492

Land cultivated at 2 bushels of wheat per acre, 6,392. Compiled from
Appendix to _Report from the Select Committee of the Hudson's Bay
Company_, p. 363.]

[Footnote 187: "Nous sommes prs de la ligne territoriale; nous
pourrions nous ranger sur le territoire voisin: nous y sommes invits."
Petition of settlers to Queen Victoria. Copy of Memorial and Petition
from Inhabitants of the Red River Settlement, etc. _Papers relating to
Hudson's Bay Company_, 1842-70, p. 5. See also accompanying memorial
(_ibid._, p. 3). About 1846 a petition was sent to the American
Government desiring it to annex the Red River territory, and promising
them assistance against the Hudson's Bay Company. _Report from the
Select Committee on the Hudson's Bay Company_, p. 132.]

[Footnote 188: The Government had occasion to intervene because of the
crimes resulting from the severity of the competition in the fur trade
in an Act 43 Geo. III, c. 138 "for extending the jurisdiction of the
courts of justice in the provinces of Lower and Upper Canada to the
trial and punishment of persons guilty of crimes and offences within
certain parts of North America, adjoining to the said Provinces;" in 1st
and 2nd Geo. IV, c. 66 "for regulating the fur trade and establishing a
commercial and civil jurisdiction within certain parts of North
America"; and in the management of the Selkirk difficulties, shown in
the "_Papers relating to the Red River Settlement_, 1819," particularly
in the issue of the proclamation demanding peace (_ibid._, pp. 71 and
94). Further evidence of interest is shown in the limitation of the
grant of 1821 to 21 years, and in the insistence throughout the
correspondence leading to the grant of 1838, and in the grant that
"nothing herein contained shall extend or be construed to extend to
prevent the establishment by us...of any colony or colonies, province or
provinces...or by annexing any part of the aforesaid territories to any
existing colony or colonies by us" (copy of the existing charter or
grant by the Crown to the Hudson's Bay Company, etc., _Papers relating
to the Hudson's Bay Company_, 1842-70, see pp. 19 and 29, see also
above, p. 10).]

[Footnote 189: The growth of imperialism which led to the cession of
Oregon in 1846 served to arouse Great Britain to the dangers of further
aggression. The activities of the United States in the territory south
of the Red River assumed greater significance. Following the Louisiana
purchase in 1803, the United States dispatched Lieut. Z. M. Pike to
visit Minnesota in 1805 (see Coues, Elliot, _Expeditions of Zebulon M.
Pike_, vol. I). Lewis Cass was given permission to undertake a similar
exploring tour in 1820. (Schoolcraft, H. R., _Summary Narrative of an
Exploratory Expedition to the Sources of the Mississippi River in_ 1820,
p. 31). Major S. H. Long was sent in 1823 in charge of a party "to the
point of intersection between Red River and the forty-ninth degree of
north latitude, thence along the northern boundary of the United States
to Lake Superior. The object of the expedition is to make a general
survey of the country" (Keating, W. H., op. cit., p. 3). On March 3,
1849, a bill was passed organizing the Territory of Minnesota, and in
1858 Minnesota was admitted to the Union (Neill, E. W., _The History of
Minnesota_, pp. 492 and 628). Of significance also was the proposal of
Mr. Whitney, an American engineer, to build a road from Lake Michigan to
California. Congress was asked for a grant of thirty miles of land on
each side of the line. It was proposed to sell the first ten miles, then
to build the road, and sell the next ten miles--the road being built as
settlement advanced. The whole was to be completed in fifteen years
(_The Times_, Sept. 21, 1849). He expressed the belief further that a
Pacific road could be built only through Canada because of better
country, lower gradients and shorter distance (_Leader_, May 12, 1858).]

[Footnote 190: A road from Halifax to Fraser River was advocated in
1849. The purpose of the scheme was to link up the whole English race,
and to furnish Great Britain a soil for her population and a market for
her labour. The road was to be built by convicts and Indians, aided by
local labour, and at an estimated cost of 150,000,000. England, the
Hudson's Bay Company and the North American provinces were to furnish
the necessary capital, and the management of the road was to be vested
in fifteen directors, three representing Great Britain, and an equal
number representing the Hudson's Bay Company, Nova Scotia, New Brunswick
and Canada (Smyth, Carmichael, _Employment of People and Capital of
Great Britain in her own colonies_). Following Smyth, Wilson, F. A., and
Richards, A. B., _Britain Redeemed and Canada Preserved_, 1850,
impressive statements were made as to the imperialistic advantages, and
a very elaborate scheme was worked out. The road was to be built at a
cost of 1,500 per mile, and the capital was to be raised by the saving
of the poor rate due to the emigration and relief from the surplus
population (_ibid._, p. 4), by the increase in the value of the land
served by the railroad, and by the revenue from the road (_ibid._, pp.
318-9). The line was to be divided into seven sections of 400 miles each
(_ibid._, p. 31).

                                                          Miles.

  No. 1 Atlantic division running from Halifax to Quebec    400
  "   2 Quebec division from Quebec to Tamiscaming Lake     400
  "   3 Lake division, from Tamiscaming to Lake St. Anne    400
  "   4 Central division from Lake St. Anne to Fort Gary    400
  "   5 Prairie division from Fort Gary to Saskatchewan

          River                                             400
  "   6 Mountain division, from Saskatchewan across the
          Rocky Mountains, by the Devil's Nose to Upper
          Arrow Lake                                        400
  "   7 Pacific division from Upper Arrow Lake to New
          Georgia Gulf                                      400

  Total length                                            2,800

It was proposed to employ 20,000 convicts (_ibid._, p. 200), guarded by
a legion of 5,000 men. The convicts were later to be settled on the
island of Anticosti. In addition, about 6,000 able-bodied paupers were
to be enrolled and apportioned to the various divisions (_ibid._ p.
218). The military precision was further elaborated in detail as to the
equipment, plans of barracks, convict prisons, retreat of women for each
station, block buildings, etc. (p. 557), and in the number of farmers,
carpenters, shoemakers, and other necessary tradesmen (_ibid._, p. 248).
Even greater stress was placed on the imperialistic advantages of such a
road (Synge, M. H., _Great Britain One Empire_, 1852). Various distances
were compared with an obvious conclusion.

  From England        To Sydney       To New Zealand    To Hong Kong
                      Miles    Days   Miles             Miles

  By Central          12,491   63     11,336            13,720
  America               to     to       to                to
                      13,920   65     12,765            15,760

  By the Cape of      12,634   70     13,789            13,330
  Good Hope             to     to       to                to
                      14,655   80     15,810            14,530

  By the Indian       11,727   62     12,882
  route                 to     to       to              15,590
                      13,425   66     14,580

  By British America  11,600   44     11,058            11,490

_Ibid._, p. 57.

The route was, moreover, carefully outlined. 1. Water communication to
the head of Lake Huron (or existing land routes, or mixed). 2. Railroad
portage (for a short time) round the falls of St. Mary. 3. Water
communication to the first impediment in the navigation of the Kamenis
Toquoih. 4. Railroads thence to Rainy Lake, past the several impediments
using the chain of lakes for water communications. 5. Water
communication to the head of the Lake of the Woods. 6. Railroad to the
head of the navigation of Rat River. 7. Water communication to the
rapids of the Saskatchewan. 8. Railroads round the rapids of the
Saskatchewan. 9. Water communication to the foot of the Rocky Mountains.
10. Passage of the mountains and descent to the Pacific upon the same
plan. The road was to be built gradually and every advantage taken of
the navigation facilities of the country (_ibid._, p. 87). The road was
to be financed by grants of land (_ibid._, p. 104).]

[Footnote 191: The resolution adopted by the House of Commons in 1849
asking that means should be taken to ascertain the legality of the
powers claimed by the Hudson's Bay Company was a preliminary step,
although no definite action resulted. Papers relating to the legality of
the powers, etc. _Papers relating to the Hudson's Bay Company_, 1842-70,
p. 3.]

[Footnote 192: Palliser, Captain. _The journals, detailed reports and
observations relative to the exploration of that portion of British
North America which in latitude lies between the British boundary line
and the height of land or watershed of the northern or frozen ocean
respectively, and in longitude between the western shore of Lake
Superior and the Pacific ocean during the years_ 1857, 1858, 1859, 1860,
p. 4.]

[Footnote 193: "I cannot recommend the Imperial Government to
countenance or lend support to any scheme for constructing or forming a
thoroughfare by this line of route either by land or water, as there
would be no immediate advantage commensurate with the required sacrifice
of capital, nor can I advise such heavy expenditure as would necessarily
attend the construction of any exclusively British line of road between
Canada and the Red River Settlement" (_ibid._, p. 6). "I think there can
be no other means of access to be recommended save those via the United
States." Further papers, etc., 1860 (_ibid._, p. 5).]

[Footnote 194: "I cannot see any object in limiting a new colony...and
feel decidedly in favour of annexing not only the Saskatchewan, but also
the Swan River district...and so establish one great border line from
the new colony of British Columbia up to the Red River Settlement....
The whole would thus include a territory of 240,000 square miles.... I
have no hesitation in stating that no obstacles exist to the
construction of a railway from Red River to the eastern base of the
Rocky Mountains... I have no hesitation in expressing my conviction that
it is impossible for the Hudson's Bay Company to provide a government to
meet the exigencies of a growing colony" (_ibid._, pp. 4-5).]

[Footnote 195: Lieut. Blakiston, emphasizing the advantages to the
settlement of communication with Canada, suggested a further search for
a route from a port on the north shore of Lake Superior to the Red
River. Papers relative to the exploration, etc., 1859 (_ibid._); see
also Further Papers, etc., 1860 (_ibid._, pp. 57-8).]

[Footnote 196: _Correspondence, Papers and Documents of dates from 1856
to 1882 inclusive, relating to the Northerly and Westerly boundaries of
the Province of Ontario_, 1882, p. 2.]

[Footnote 197: _Ibid._]

[Footnote 198: _Ibid._, p. 3.]

[Footnote 199: "It is especially important that Her Majesty's Government
should guard any renewal of a licence of occupation...or any recognition
of rights by the company by such stipulation as will cause such licence
or such rights not to interfere with the fair and legitimate occupation
of tracts adapted for settlement" (_ibid._, pp. 3-5).]

[Footnote 200: See Memorandum of Chief Justice Draper, May 6, 1857
(_ibid._, pp. 37-40), and particularly the Final Report of Chief Justice
Draper, respecting his mission to England (_ibid._, pp. 51-59).]

[Footnote 201: The petition stated in part "...they humbly submit that a
renewal of such licence of exclusive trade is injurious to the interests
of the country so monopolized, and in contravention of the rights of the
inhabitants of Canada." _Appendix to report from the Select Committee on
the Hudson's Bay Company_, p. 435.]

[Footnote 202: The petition was signed by 575 inhabitants and asked
"that such measures may be devised and adopted as will extend to us the
protection of the Canadian Government, laws and institutions" (_ibid._,
p. 439).]

[Footnote 203: The committee was composed of five Honourable gentlemen,
and the report consisted of evidence given by three men, Mr. Allan
McDonnell, Mr. George Gladman and Mr. William MacD. Dawson, all of whom
were hostile to the company, and all of whom spent considerable time in
the discussion of the territorial rights and of the possibilities of
communication between Canada and the Red River (_ibid._, pp. 385-402).]

[Footnote 204: The expedition was placed in charge of Mr. George
Gladman, on July 22, 1857. "Le premier objet de l'expdition est de
faire une tude complte du pays compris entre le Lac Suprieur et la
Rivire Rouge dans le but de trouver sur le territoire Anglais la route
la plus facile et la meilleure pour communiquer du lac aux
tablissements de la Rivire." _Rapport sur l'Exploration de la Contre
situe entre le Lac Suprieur et les tablissements de la Rivire
Rouge_, 1858, p. 6. Mr. S. J. Dawson was appointed as engineer (_ibid._,
p. 10), and Professor H. Y. Hind as geologist and naturalist (_ibid._,
p. 15). In 1858 the expedition was divided into two sections, one under
Professor Hind "to procure all the information in your power respecting
the Geology, Natural History, Topography and Meteorology of the
region"..."lying to the west of Lake Winnipeg and Red River and
embraced...between the River Saskatchewan and Assiniboine as far west as
'South Branch House.'" Hind, Henry Youle, _Narrative of the Canadian Red
River exploring expedition of 1857, and of the Assiniboine and
Saskatchewan exploring expedition of_ 1858, vol. I, p. 269. The other
was headed by Mr. Dawson (_ibid._, p. 267). The results of Hind's work
are well described (_ibid._, vol. I and II), and that of Dawson is
presented in Dawson, S. J., _Report on the Exploration of the country
between Lake Superior and the Red River Settlement, and between the
latter place and the Assiniboine and Saskatchewan_.]

[Footnote 205: "Your committee consider that it is essential to meet the
just and reasonable wishes of Canada to be enabled to annex to her
territory such portion of the land in her neighbourhood as may be
available to her for the purposes of settlement, with which lands she is
willing to open and maintain communications, and for which she will
provide the means of local administration. Your committee apprehend that
the districts on the Red River and the Saskatchewan are among those
likely to be desired for early occupation. Your committee trust that
there will be no difficulty in effecting arrangements as between Her
Majesty's Government and the Hudson's Bay Company, by which these
districts may be ceded to Canada on equitable principles, and within the
districts thus annexed to her the authority of the Hudson's Bay Company
would of course entirely cease." _Report from the Select Committee on
the Hudson's Bay Company_, 1857, pp. iii.-iv.]

[Footnote 206: The history of the correspondence presents the case in
more detail. The Imperial authorities on December 4, 1856, intimated to
Canada the advisability of presenting its case before the Select
Committee (_Correspondence, Papers and Documents of dates from 1856 to
1882 inclusive relating to the Northerly and Westerly boundaries of the
Province of Ontario_, 1882, p. 2). The Canadian authorities replied on
January 17, 1857, and stated the desire "to urge the importance of
ascertaining the limits of Canada in the direction over which the
Hudson's Bay Company claim jurisdiction" (_ibid._). Accordingly, the
whole question of the company's rights was submitted to the
Solicitor-General and the Attorney-General, June 9, 1857 (Appendix to
the _Report from the Select Committee on the Hudson's Bay Company_, p.
402). It was stated after a careful argument, "We cannot but feel that
the important question of the boundaries of the territory of the
Hudson's Bay Company, might with great utility as between the company
and Canada be made the subject of a quasi-judicial inquiry. But this
cannot be done except by the consent of both parties, namely Canada and
the Hudson's Bay Company," July, 1857 (_ibid._, p. 404). The Judicial
Committee of the Privy Council was suggested by the Imperial authorities
(July 15, 1857), and the suggestion was accepted by the Hudson's Bay
Company (July 18, 1857). The whole correspondence with the company
related to boundaries, but it was feared that Canada would insist also
upon the question of the charter's validity. After the Select
Committee's report had been received, with this fear in mind, the
Imperial authorities (Jan. 20, 1858), suggested "the appointment of a
Board of Three Commissioners, one to be nominated by the province of
Canada, one by the company, and one by Her Majesty's Government...to
consider and report on...the amount of pecuniary compensation which may
become justly payable to the company in consequence of such contemplated
annexation" (_Correspondence, Papers and Documents of dates from 1856_,
etc., pp. 60-61). To this again the company agreed, Jan. 21, 1858
(_ibid._, p. 62). The Canadian Parliament according to expectations
(Aug. 3, 1858), asked that the question be submitted "without
restriction as to any question Canada may present on the validity of the
said charter" (_ibid._, p. 68). At this the company, Oct. 12, 1858,
refused to be "a consenting party" (_ibid._, p. 72), and despite the
threats of Sir E. Lytton, Nov. 3, 1858 (_ibid._, p. 73), they remained
of the same opinion (_ibid._, p. 74). To carry out the threats Canada
was urged to obtain a writ of _scire facias_ to repeal the charter, Dec.
22, 1858 (_ibid._, p. 76). To this it was answered (April 29, 1859),
that "Canada ought not to be called upon to litigate the question of the
validity of the charter claimed by the company, inasmuch as such portion
of Territory as the charter covers is not part of Canada and is, if the
charter be invalid, subject to Imperial and not provincial control"
(_ibid._, p. 87).]

[Footnote 207: "It is...right to notice that the territories mentioned
as those that may probably be first desired by the Government of Canada,
namely the Red River and Saskatchewan districts, are not only valuable
to the Hudson's Bay Company as stations for carrying on the fur trade,
but that they are also of peculiar value...as being the only source from
which the company's annual stock of provisions is drawn;...the ultimate
loss of these districts will most probably involve the...company in very
serious difficulties, and cause a great expense in conducting their
trade" (letter from J. Shepherd to Rt. Hon. H. Labouchere, Jan. 21,
1858). Copies of correspondence that has taken place between the
Colonial Office and the Hudson's Bay Company, or the Government of
Canada, in consequence of the report of the Select Committee on the
affairs of the company which sat in the last session of Parliament
(_Papers relating to Hudson's Bay Company_, 1842-70, pp. 5-6).]

[Footnote 208: "It is a physical reality of the highest importance to
the interests of British North America that this continuous belt can be
settled and cultivated from a few miles west of the Lake of the Woods to
the passes of the Rocky Mountains, and any line of communication whether
by wagon road or by railroad passing through it will eventually enjoy
the great advantage of being fed by an agricultural population from one
extremity to the other" (Hind, H. Y., op. cit., vol. II, p. 234).]

[Footnote 209: The possibilities of a route from Fort William to Fort
Gary were examined, and it was estimated that with some improvements the
land carriage would be reduced to 131 miles, leaving 367 miles of
navigable river, and that "the journey from Lake Superior to Red River
might be performed in about three days." With an additional outlay Fort
Gary might be brought within five days' journey of Toronto. He pointed
out the advantages of this route over the St. Paul and Pembina route,
and the fact that trade would be transferred to Canada, that the gold
regions of British Columbia would be brought within reach, and that the
whole territory would be colonized (Dawson, S. J., op. cit., p. 29).]

[Footnote 210: 22 Vic. c. 122, 1858. See MacDonnell, Allen, _The
North-West Transportation Navigation and Railway Company: Its Objects_.]

[Footnote 211: 22 Vic. c. 97, 1859.]

[Footnote 212: _Journals of the Legislative Assembly of Canada_, 1861,
p. 77.]

[Footnote 213: "Arrangements were made within the last four years for
postal service with Red River, but the want of territorial rights at Red
River and along the greater part of the route defeated the plans of the
Canadian Government and after a very considerable outlay the line had to
be abandoned." The Provincial Secretary to the Governor of the Hudson's
Bay Company, April 15, 1862. _Sessional Papers, Canada_, 1862, vol. 22,
No. 29, p. 1.]

[Footnote 214: _Ibid._, No. 31, p. 12.]

[Footnote 215: Imperial Act 22 and 23 Vic. c. 26.]

[Footnote 216: "I am commanded by His Excellency the Governor-General to
state that the Canadian Government have decided at once to establish
steam and stage communication to the extreme limit of the territory
under their government and are ready to unite with the Hudson's Bay
Company in a mail service and post route to British Columbia."
Provincial Secretary to Governor of Hudson's Bay Company, April 15,
1862. _Sessional Papers_, op. cit., No. 29, p. 2.]

[Footnote 217: The Act "contained an enactment in the concluding section
that it should not be applicable to territories heretofore granted to
the Hudson's Bay Company." The Colonial Secretary to the
Governor-General, April 16, 1862 (_ibid._, No. 31, p. 2).]

[Footnote 218: "The Red River and Saskatchewan valleys, though not in
themselves fur-bearing districts, are the sources from whence the main
supplies of winter food are procured for the northern posts, from the
produce of the buffalo hunts. A chain of settlements through these
valleys would not only deprive the company of the above vital resource,
but would indirectly in many other ways so interfere with their northern
trade as to render it no longer worth while prosecuting on an extended
scale." Governor of Hudson's Bay Company to Provincial Secretary, April
16, 1862 (_ibid._, No. 29, p. 3).]

[Footnote 219: _Ibid._, No 31, p. 2.]

[Footnote 220: "...Between Fort William and the heights of land, the
natural difficulties of the country will make road-making a very
expensive business, while the soil...will offer no inducement to
settlers.... Beyond Red River to the base of the Rocky Mountains, the
line will pass through a vast desert, in some places without wood and
water, exposed to the incursions of roving bands of Indians and entirely
destitute of any means of subsistence for emigrants.... With regard to a
telegraphic communication it is scarcely necessary to point at the
prairie fires, the depredation of natives and the general chapter of
accidents as presenting almost insurmountable obstacles.... I have
thought it my duty thus slightly to sketch the difficulties.... The
Governor at Red River Colony has instructions to make grants of land to
settlers on easy conditions, without any restrictions as to the
company's right of exclusive trade." The Governor of the Hudson's Bay
Company to the Colonial Secretary, May 19, 1862 (_ibid._, pp. 3-4).]

[Footnote 221: "Although it is not in the power of Her Majesty's
Government to grant assistance from imperialistic funds for carrying out
the object which the Canadian Government has in view, there would be
every desire on their part to co-operate in any well-devised scheme....
I would direct your Lordship's attention to the facilities for the
acquisition of land which the Hudson's Bay Company announce." The
Colonial Secretary to the Governor-General, June 3, 1862 (_ibid._, p.
3).]

[Footnote 222: 25 Vic. c. 67.]

[Footnote 223: Watkin, Sir E. W., Bart., M.P., _Canada and the States,
Recollections_, 1851-1886, p. 11.]

[Footnote 224: ..."To work it (the Grand Trunk Railway) so as to produce
a great success in a few years can only in my opinion be done in one
way....That way...lies through the extension of railway communication to
the Pacific" (_ibid._, p. 14).]

[Footnote 225: "He (the Duke of Newcastle) authorized me to say, in
Canada, that the Colonial office would pay part of the cost of surveys;
that these works must be carried out in the greatest interests of the
nation and that he would give his cordial help" (_ibid._, p. 65).]

[Footnote 226: The Duke of Newcastle had strenuously endeavoured to make
some arrangements with the Hudson's Bay Company but with no success (see
Begg, A., op. cit., pp. 331-2).]

[Footnote 227: _Ibid._, p. 81.]

[Footnote 228: The proposal was to the effect "that upon a Governmental
guarantee of interest at the rate of 4 per cent. a sum of five hundred
thousand pounds would be immediately raised for the purpose of
constructing at once a telegraph line and a common highway for carrying
the mails and the traffic between Canada and the Pacific." Memorandum by
Honourables Messrs. Sicotte and Howland to His Grace the Duke of
Newcastle, December 11, 1862. _Sessional Papers_, Can. 1863, No. 14.]

[Footnote 229: _Ibid._]

[Footnote 230: The delegates replied to the proposal that subject to
minor provisions they were "of opinion that the Canadian Government will
agree to give a guarantee of interest at the rate of 4 per cent. upon
one-third of the sum expended, provided the whole sum does not exceed
five hundred thousand pounds, and provided also that the same guarantee
of interest will be secured upon the other two-thirds of the expenditure
by Imperial or Columbia contributions" (Watkin, E. W., to Hon. L. V.
Sicotte and W. P. Howland. December 17, 1862, _ibid._). In anticipation
of difficulty with the Imperial Government, which might insist that
British Columbia should bear a larger portion of the responsibility,
they refused to guarantee a higher rate of interest as Mr. Watkin
suggested but proposed guarantee of interest even on one-half the
capital (Messrs. Sicotte and Howland to Mr. Watkin, December 20, 1862,
_ibid._). According to expectation the Imperial authorities decided they
could not "apply to Parliament to sanction any share in the proposed
subsidy" and "that without a submarine Transatlantic telegraph the
proposed line in America will be of comparatively small value to the
Imperial Government" and finally "the Duke of Newcastle is prepared to
recommend that British Columbia and Vancouver Island shall pay the sum
of 10,000 per annum as their share of 20,000 (being at the rate of 4
per cent. on a capital of 500,000). Letter from the Duke of Newcastle
to Mr. E. W. Watkin, March 5, 1863. (Watkin, E. W., op. cit., p. 114.)
As an alternative it was then suggested "that the Imperial Government
should agree to give a grant of land of some reasonable extent, also
that portion of the territory lying between the Hudson's Bay Territory
and British Columbia which belongs to the Crown, provided a telegraphic
and road communication passes through any portion of that territory (Mr.
E. W. Watkin to the Duke of Newcastle, March 27, 1863, _ibid._., p. 112)
and to this the Duke of Newcastle agreed (_ibid._, p. 111). Accordingly
the heads of proposals were submitted by Mr. Watkin to the Duke of
Newcastle, April 28, 1863 (_Sessional Papers_, Canada, 1863, No. 31),
and with minor objections were accepted on May 1, 1863 (_ibid._). An
important clause of the proposals stated, "...and the Hudson's Bay
Company shall...within the territories belonging to them grant to the
company such land...and all such rights as may be required." In
accordance with the attitude of the Hudson's Bay Company the Governor on
being approached expressed a violent opinion on the matter. "What!
sequester our very tap root. Take away the fertile lands where our
buffaloes feed! Let in all kinds of people to squat and settle and
frighten away the fur-bearing animals they don't kill and hunt.
Impossible!" (Watkin, E. W., op. cit., p. 120). Nothing daunted, they
bought out the Hudson Bay interests hostile to the project on July 3,
1863 (_ibid._, pp. 120-7). Mr. Watkin was immediately (July 6, 1863,)
dispatched by the new interests to report on "the possibility of
commencing operations for an electric telegraph" (_ibid._, p. 153 ).
Agreements were drawn up looking toward the establishment of telegraphic
communication between the Atlantic and Pacific through arrangements with
the Montreal Telegraph Company and the United States telegraph companies
and the construction of a line from Pembina to Fort Gary, to Jasper
House and Fort Langley (for copies, see _ibid._, pp. 174-8), and some of
the material was ordered (_ibid._, p. 178). Such ardour was not
supported by the Hudson's Bay Company (_ibid._., p. 188). Canadian
authorities were less enthusiastic (_ibid._, p. 173), and on February
18, 1864, they definitely pointed out that they would not be "likely to
receive benefits corresponding to the cost of constructing a line of
telegraph"..."unless at the same time the fertile valleys and plains of
the Great North-West are made accessible to Canadian settlers and to
European emigrants...unless 'The Atlantic and Pacific Transit and
Telegraph Company' are prepared to undertake the construction of a road,
_pari passu_, with the telegraph line, the committee cannot...recommend
acceptance of the heads of proposal." _Sessional Papers_, Can. 1864, No.
62, p. 2.]

[Footnote 231: See petition of Malcolm McLeod, April 24, 1862. Copy of
all petitions that have been addressed to Her Majesty or to Her
Majesty's Government from the inhabitants of the Red River district or
other settlements or districts within the boundaries of British
territories in North America from 1860 up to the present time (_Papers
relating to the Hudson's Bay Company_, 1842-70, pp. 3-4). Of more
significance was the _Memorial of the People of Red River Settlement
January_ 21, 1863, and the resolutions adopted January 22, 1863. The
advantages and facility of establishing communication between the Red
River and Lake Superior were especially stressed, and to ensure further
activities Mr. Sandford Fleming was asked to represent their interests
in Canada and England. Finally the _Memorial_ was accompanied by remarks
of Mr. Fleming pertaining to the whole question. He elaborated upon the
agricultural possibilities of the country, stressed the dangers of
American expansion and emphasized the advantages of the route by Lake
Superior.

                                             No. of Miles

                                     Rail    Water  Stage    Total

  Toronto to Fort Gary by
    Detroit, Chicago, St. Paul        810     688    290     1,788

  Toronto to Fort Gary by
    Detroit, Milwaukee, St. Paul      618     788    290     1,696

  Toronto to Nipigon Harbour and
    by proposed route to Fort Gary     95     723    232     1,050

  In favour of proposed route over
    shorter American route            523      65     58       646

Such an advantage was possible with the construction of only 232 miles
of common stage road, one dam and a small set of wooden locks. He
proposed the construction of a telegraph along the line of a future
railway. This was followed by a substantial road built as settlement
warranted and estimated to reach Fraser River in thirteen years. This in
turn was supplanted by a railroad when the population had increased
sufficiently. The scheme was made more complete with the suggestion as
to the construction of colonization and concession roads for the purpose
of opening up the country. Such a proposal it was argued would avoid a
heavy initial expenditure which would be necessary with the immediate
construction of a railroad. _Sessional Papers_, Can. 1863, No. 83.]

[Footnote 232: On November 11, 1863, the following proposals were
suggested: (1) An equal division of the portion of the territory fit for
settlement between the company and the Crown with inclusion of specified
tracts in the share of the former. The company to construct the road and
the telegraph. (2, 3 and 4) The Crown to purchase such of the company's
premises as should be wanted for military use and to pay to the company
a net third of all future revenue from gold and silver. To these
suggestions the Duke of Newcastle offered counter-proposals dated March
11 and April 5, 1864: (1) The company to surrender to the Crown their
territorial rights. (2) To receive one shilling for every acre sold by
the Crown but limited to 150,000 in all, and to fifty years in duration
whether or not the receipts attained that amount. (3) To receive
one-fourth of any gold revenue but limited to 100,000 of adjacent land
for every lineal mile constructed of road and telegraph to British
Columbia. The company agreed March 14 and April 13 in the main, but
asked that the amount of the payments within fifty years be either not
limited or else placed at 1,000,000 and that they should be granted
5,000 acres of wild land for every 50,000 acres sold by the Crown. On
December 7, 1864, they suggested an alternative of 1,000,000. _Journals
of Legislative Assembly_, 1865, pp. 49-52.]

[Footnote 233: The company, still favourable to a policy of promoting
settlement, continued its exertions in favour of a telegraph by
dispatching in 1864 Dr. Rae and Mr. Schwieger on a journey through the
North-West territory to ascertain the practicability of a route
(Hargrave, J. J., _Red River_, pp. 331-2).]

[Footnote 234: In 1859 _the Nor'-Wester_, the first newspaper, was
established and it assumed an important place in the campaign against
the company (_ibid._, p. 145). A climax came in 1863 with the forcible
release from prison of the Rev. Mr. Corbett, who had been sentenced
under the company's jurisdiction (_ibid._, pp. 284-8). "The position of
those in authority is so disagreeable I have had great difficulty in
persuading the magistrates to continue to act" (A. G. Dallas to E. W.
Watkin, August 17, 1863. Watkin, E. W., op. cit., p. 249).]

[Footnote 235: The wintering partners conducted the fur trade of the
company and a deed poll or agreement was made, as to the profits, with
the shareholders in England. News of the reorganization of the company
caused considerable alarm (Hargrave, J. J., op. cit., pp. 297-8. Watkin,
E. W., op. cit., p. 145, also pp. 191-2). A suggested rearrangement of
the deed poll (_ibid._, pp. 155-63) was wisely abandoned (Bryce, G., op.
cit., p. 452. See _Sessional Papers_, 1867-8, No. 19, pp. 6-11).]

[Footnote 236: "I have considered it advisable to open a correspondence
with the Imperial Government with a view to arrive at a precise
definition of the geographical boundaries of Canada....Such a definition
of boundary is a desirable preliminary to further proceedings" (Speech
from the Throne, February 19, 1864. _Journals of Legislative Assembly_,
1864, pp. 2-3).]

[Footnote 237: In reply to the statement of the Canadian authorities
declining to accept the heads of proposals suggested by Mr. E. W. Watkin
the Imperial authorities, July 1, 1864, asked that a duly authorized
person should be sent over from Canada to negotiate "with a view of
accepting the government of any portion of the territory" (_Journals of
the Legislative Assembly_, 1865, vol. 25. pp. 45-6). To this it was
stated, November 11, 1864, that although they urged the settlement of
the territory "the Committee are of the opinion that the negotiations
will be advantageously left in the hands of the Imperial Government."
Nevertheless, Mr. Brown left for England on November 16 (_ibid._, pp.
47-8). Mr. Brown regarded the company's demands for the purchase of
their rights as "utterly untenable" and particularly since the
reorganization of 1863 had meant an increase in capitalization from
1,000,000 to 1,500,000 (_ibid._, pp. 52-3).]

[Footnote 238: _Ibid._, p. 8. The Imperial Government agreed to
guarantee a loan to purchase all the territory east of the Rocky
Mountains and north of the Canadian lines from the company to be
transferred to Canada (_ibid._, p. 12).]

[Footnote 239: A Bill "for the admission of the states of Nova Scotia,
New Brunswick, Canada East and Canada West and for the organization of
the territories of Selkirk, Saskatchewan and Columbia," July 2, 1866,
39th Congress, 1st Session H. R. 754, occasioned considerable alarm. See
also letter from Governor of Hudson's Bay Company to Colonial Secretary,
July 17, 1866. _Sessional Papers_, 1867-8, No. 19, pp. 14-15.]

[Footnote 240: A request from Mr. McEwen, January 18, 1866, to the
company as to possible arrangements of purchase met with a favourable
reply, January 24, 1866. The Imperial authorities warned the company of
the existing understanding with Canada, February 20, 1866, to which the
company retorted that "the possibility of losing a favourable
opportunity may become a very grave one in a pecuniary point of view"
(March 1, 1866). Canada asked (June 22, 1866) that the company should be
restrained from selling any of the territory and intimated that action
would be taken as soon as the union was formed (_Sessional Papers,
ibid._, pp. 3-5, 11-13). It ought to be added that the Canadian
delegation, February 8, 1869, stated "that the only overtures...which
the company had received were not merely encouraged but suggested and
concocted by prominent members of the company...with a view...to
negotiation and the stock market" (_Sessional Papers_, 1869, No. 25, pp.
21-2).]

[Footnote 241: Imperial Act 30-1 Vic. c. 3, Article XI, sec. 146.]

[Footnote 242: _Journals House of Commons_, 1867-8, vol. I, pp. 66-7.]

[Footnote 243: _Ibid._, pp. 67-8. An additional report of the Privy
Council, December 28, 1867, adopting a memorandum of the Minister of
Public Works which urged the necessity of immediate action was also
forwarded by the Imperial authorities. _Sessional Papers_, 1869, No. 50,
p. 23.]

[Footnote 244: On June 14, 1867, the Commissioner of Crown Lands
recommended the expenditure of 55,900, which would open 120 miles of
the route from Lake Superior to Red River. The recommendation was
adopted on June 18, 1867. _Sessional Papers_, No. 19, pp. 20-1.]

[Footnote 245: Report of Superintendent of Colonization roads October 4
and December 22, 1867, _ibid._, pp. 23-25 and supplementary return, pp.
1-2.]

[Footnote 246: _Sessional Papers_, 1869, No. 25, p. 12.]

[Footnote 247: Governor McTavish in letters to the company dated October
10 and November 11, 1868, did not express undue enthusiasm as to the
arrival (_ibid._, p. 11). As a result the company objected in that "the
Committee cannot but look upon this proceeding as almost unusual and
improper one....This trespass will be an actual encroachment on the soil
of the company" (Deputy-Governor of Hudson's Bay Company to Colonial
Office, December 22, 1868. _Ibid._, p. 10). "Their objection is not to
the road's being made, but to its being undertaken by the Canadian
Government as a matter of right" (Governor of Hudson's Bay Company to
Colonial Office, February 2, 1869. _Ibid._, p. 13).]

[Footnote 248: A letter was written January 15, 1868, to the Colonial
Secretary prior to the receipt of the Canadian resolutions. _Journals of
House of Commons_, 1867-8, pp. 368-9.]

[Footnote 249: This was true of the letter of January 15, 1868, but more
particularly of a letter of January 25, 1868, written after the Canadian
resolutions had been received. The point at issue related to the sixth
resolution, "The Government and Parliament of Canada will be ready to
provide that the legal rights of any corporation...within the same shall
be respected and placed under the protection of courts of competent
jurisdiction." In the earlier letter it was insisted that such inquiry
should be referred to the judicial committee of the Privy Council, and
the second letter protested "that before any incorporation of Rupert's
Land or the North-West territory with Canada, the rights of private
property vested in the company and the exact limits of such rights
should be ascertained, acknowledged and efficiently protected by law"
(_ibid._, pp. 370-3).]

[Footnote 250: "They desire, however, to pay due regard to the interests
of Her Majesty's subjects already concerned in the territory" (the
Under-Secretary to the Deputy-Governor of the Hudson's Bay Company,
April 23, 1868. _Ibid._, p. 374).]

[Footnote 251: Rupert's Land Act, 1868, 31-2, Vic. c. 106.]

[Footnote 252: The Colonial Secretary to the Governor-General.
_Sessional Papers_, No. 25, 1869, p. 1.]

[Footnote 253: See copies of telegrams. _Ibid._, pp. 3-4.]

[Footnote 254: On May 13 the company proposed that they should surrender
all the territory with a reservation of 6,000 acres around each post
other than the Red River Settlement at 1s. per acre. That the Government
should pay one-quarter of the sum received for gold and silver with a
limitation of 1,000,000. That the company should have the right to
select 5,000 acres of land free out of every 50,000 acres, such land to
be free from taxation. To objections raised by the Imperial authorities
they modified their proposals October 27, 1868. Land-tax exemption
limited to twenty years. Lands purchased by the company not to be
reckoned in the free grants. Free grants surveyed at the company's
expense. Lands for churches, roads or schools exempted from shilling
payment. In fertile belt land granted around posts reduced to 3,000
acres. In response the Imperial authorities proposed December 1, 1868:
Land about posts further limited. Company received one-fourth land
receipts. Company given five lots of not less than 200 acres in each
township. Tax exemption until wild lands surveyed and marked. Upon
payment to company of 1,000,000 for gold and silver right of company to
share of land receipts ceased. On January 15, 1869, the company defended
its proposals but added, "if the Canadian Government were prepared to
complete the purchase of the territory at once...it would conduce to a
more satisfactory result." This letter was submitted to the Canadian
delegates and in a reply of February 8, 1869, after a great deal of
argument, it was stated that the Canadian Government would not pay more
than 106,431, a sum arrived at on the basis adopted in the
reorganization of the company. The company regarded this (February 26,
1869) as an impossible suggestion and advised the creation of a crown
colony and relied upon the co-operation of the Government "in protecting
the settlement from any trespass or interference on the part of Canada."
Recognizing the deadlock the Imperial authorities suggested the
following proposals on March 9, 1869. The company to surrender all
rights on the payment of 300,000 by the Government of Canada. The land
in the vicinity of posts not to exceed 50,000 acres. Free grants of land
made not in excess of one-twentieth of land set out. _Sessional Papers_,
1869, No. 25, pp. 5-33.]

[Footnote 255: Protests were embodied in a series of resolutions adopted
by the company and transmitted to the delegates on March 12, 1869. The
delegates refused to consider these protests, March 13, 1869. The
company largely reasserted its position on March 16, 1869, and evidences
of a better feeling characterized the reply of the delegates, March 18,
1869. A word from the Imperial authorities, March 9, 1869, was formally
and sympathetically acknowledged by the Canadian authorities, March 27.
In minor adjustments memoranda, dated March 22 and March 29, were
adopted by the Canadian delegates and by the company (_ibid._, pp.
33-9). Resolutions were adopted by the Senate and the House of Commons
of Canada accepting the arrangements of the delegates (_Journals House
of Commons_, 1869, pp. 150-2) and embodied in an address to the throne
(_ibid_., pp. 153-5). An Act "for the temporary government of Rupert's
Land and the North-Western Territory when united with Canada" 32 and 33
Vic. c. 3, 1869, was assented to June 22, 1869.]

[Footnote 256: "The Canadian Government shall pay to the company the sum
of 300,000 sterling when Rupert's Land is transferred to the Dominion
of Canada. The company to retain all the posts or stations now actually
possessed and occupied by them,...may at any time within fifty years
after...acceptance of the said surrender claim in any township or
district within the fertile belt in which land is set out for
settlements grants of land not exceeding one-twentieth part of the land
so set out." _Statutes of Canada_, 1872, pp. lxxvii.-lxxxiii.]

[Footnote 257: The petitions of the Red River settlement were
supplemented by appeals from settlements beyond the jurisdiction of the
Council of Assiniboia. A memorial of the inhabitants of Portage la
Prairie settlement of June 1, 1867, urged the necessity of British law
and protection and on June 10, 1867, resolutions were adopted asking
that the case should be presented to the Imperial authorities and to the
Canadian authorities. Copy of all petitions that have been addressed to
Her Majesty's Government from the Inhabitants of the Red River district
or other settlements, etc. _Papers relating to the Hudson's Bay
Company_, 1842-70, pp. 8-10. A letter was addressed to the Canadian
Government, January 17, 1868, asking for admission to the Dominion and
threatening to annex to the United States if refused (_ibid._, p. 10).
These petitions were consistent with the earlier petitions of the Red
River Settlement and with the "memorial of the undersigned merchants,
traders, etc., loyal inhabitants of that part of Rupert's Land the Red
River Settlement" January 17, 1867, asking to be included in the
Canadian confederation and stating the advantages of a route from Lake
Superior to British Columbia (_ibid._, pp. 5-6).]

[Footnote 258: "This change (1863) has been made without our consent on
the supposition that our interests would be unaffected. Such a
supposition is...untenable. The wintering partners represent the fur
trade..." (Letter from Chief Factor, James Anderson, to Mr. D. A. Smith,
Willson, Beckles, _The Life of Lord Strathcona and Mount Royal_, p.
134). "We must be prepared not to receive very much sympathy from the
new shareholders or the new Board" (Mr. D. A. Smith to Mr. Barnston.
_Ibid._).]

[Footnote 259: The influence of the company has been subject to
controversy. The Canadian authorities accused the company of negligence
if not complicity. Report of a Committee of the Privy Council Canada,
December 16, 1869. _Sessional Papers_, 1870, No. 12, p. 142. Beckles
Willson, a partisan of the company, admits and excuses their negligent
attitude, Willson, Beckles, op. cit., p. viii. and p. 167.]

[Footnote 260: _Sessional Papers, ibid._, No. 12, N p. 1.]

[Footnote 261: "In the meantime the French half-breeds...(say 3,000
souls) are likely to prove a turbulent element" (J. S. Dennis to
Minister of Public Works, August 21, 1869, _ibid._, pp. 5-6). "I have
again to remark the uneasy feeling which exists in the half-breeds and
Indian element" (August 21, 1869. _Ibid._, p. 7).]

[Footnote 262: Memorandum of facts and circumstances connected with the
active opposition by the French half-breeds in this settlement to the
prosecution of the government surveys (J. S. Dennis, October 11, 1869.
_Ibid._, No. 12a, p. 7).]

[Footnote 263: _Ibid._, pp. 4-5.]

[Footnote 264: _Ibid._, pp. 2-3.]

[Footnote 265: "Le Comit National des Mtis de la Rivire Rouge intime
 Monsieur Wm. McDougall l'ordre de ne pas entrer sur le territoire du
Nord Ouest sans une permission spciale de ce Comit. Par ordre du
Prsident John Bruce, Louis Riel, Secrtaire" (October 21, 1869).
_Ibid._, p. 11.]

[Footnote 266: _Ibid._, p. 15.]

[Footnote 267: _Ibid._, No. 12a, p. 138.]

[Footnote 268: "Canada cannot accept transfer unless quiet possession
will be given" (Telegram Governor-General to Colonial Secretary,
November 26, 1869. _Ibid._, p. 137).]

[Footnote 269: "It has never been hinted that the company is to be bound
to hand over its territory in a state of tranquillity" (The Colonial
Secretary to the Governor-General, November 30, 1869. _Ibid._, p. 140).
To this Canada replied, "The obvious reason why no express stipulation
to that effect was made was, that it was assumed that the company had
both the right and the power to hand over the territory" (Report of a
Committee of the Honourable the Privy Council, December 16, 1869.
_Ibid._, p. 142).]

[Footnote 270: _Ibid._, p. 49.]

[Footnote 271: Secretary of State to Mr. D. A. Smith, December 10, 1869.
_Ibid._, p. 48.]

[Footnote 272: Secretary of State to Mr. Thibault, December 4, 1869.
_Ibid._, pp. 45-6.]

[Footnote 273: Secretary of State to the Very Reverend the Bishop of St.
Boniface, February 16, 1870. _Ibid._, p. 128.]

[Footnote 274: Report of Very Rev. J. B. Thibault, March 17, 1870.
_Sessional Papers, ibid._, No. 12_xx_, pp. 1-3; also Report of Donald A.
Smith, _ibid._, No. 12_x_, pp. 1-10, and appendix, pp. 10-13.]

[Footnote 275: These demands were in part--the establishment of a
province, two representatives in the Senate and four in the House of
Commons, no liability for public debt of Canada before entry, payment of
80,000 annually by Dominion to Province, properties, rights and
privileges respected, no interference of rights due to Hudson's Bay
Company bargain, steam communication between Lake Superior and Fort Gary
guaranteed within five years, Public works undertaken at expense of
Dominion, etc. _Correspondence relative to the Recent Disturbance in the
Red River Settlement_, 1870, pp. 130-1.]

[Footnote 276: 33 Vic. 3 assented to, May 12, 1870.]

[Footnote 277: Receipt was finally acknowledged, May 11, 1870.
_Correspondence relative to recent disturbances_, etc., p. 214.]

[Footnote 278: Orders in Council Rupert's Land and the North-west
Territory, June 23, 1870. _Statutes of Canada_, 1872, pp.
lxxiii.-lxxxiii.]

[Footnote 279: _Correspondence relative to recent disturbances, etc._,
p. 162.]

[Footnote 280: The Imperial authorities sanctioned the advance of troops
on conditions--

    1. Canadian authorization to pay 300,000 to Hudson's Bay
    Company at once.

    2. Imperial authorities to pay expense of British troops only
    not exceeding 250 and Canadian Government the rest at least 500
    trained men.

    3. Canadian Government to accept the decision of Imperial
    authorities on all disputed points of the Settler's Bill of
    Rights.

    4. Military arrangements to be to the satisfaction of Imperial
    military authorities.

Telegram from Colonial Secretary to Governor-General, April 23, 1870.
_Ibid._, p. 177.]

[Footnote 281: Previous to suspending operations on the Fort Gary
section of the road because of the disturbances twenty-nine miles had
been opened for carriage travel and sixteen miles had been surveyed in
advance. _Sessional Papers_, 1870, No. 12, pp. 18-30. On the Lake
Superior section a report of Mr. S. J. Dawson, dated May 1, 1869, was
submitted recommending the construction of a road from Lake Superior to
the navigable waters of the Summit region, forty miles; the improvement
of the lake region from the terminus of the road to the north-west angle
of the Lake of the Woods, 311 miles; and the construction of another
road from the north-west angle to Fort Gary, ninety miles, at an
estimated cost of $247,700. Later the roads would be supplanted by
railroads and the lake region improved by canal locks at an estimated
cost of $5,800,000 (_ibid._, pp. 32-55). On June 9, 1869, the author of
the report was directed to start work on the forty miles of road
proposed (_ibid._, p. 31). On March 26, 1870, the length of road
practicable to horses and waggons was twenty-five miles, and to oxen and
carts, thirty-five miles (_ibid._, p. 72). The interest of private
enterprise might also be noted in the extension of the time limit to
1870 for the commencement of operations for the North-west Navigation
and Railway Company (31 Vic. c. 87).]

[Footnote 282: The work of the soldiers was of inestimable value in
constructing the road. See Dawson, S. J., Report on the Red River
Expedition of 1870. _Sessional Papers_, 1871, No. 47, pp. 1-31,
especially p. 16, also Wolseley, Field-Marshal Viscount, _The Story of a
Soldier's Life_, vol. II, p. 189.]

[Footnote 283: The route was opened for the conveyance of emigrants in
1871, although about 400 settlers had passed over it prior to that date.
_Sessional Papers_, 1875, No. 37, p. 11.]

[Footnote 284: _Sessional Papers_, 1871, No. 20, p. 9.]

[Footnote 285: Population of Manitoba, 11,960. Half-breeds, 9,840.
_Sessional Papers_, No. 20, 1871, p. 92.]

[Footnote 286: A very rough estimate from January 1 to November 1870,
values the imports into the North-west territories via Pembina from
Canada and England at over $100,000 and from the United States at over
$250,000. _Ibid._, p. 44.]

[Footnote 287: "We intend to be liberal both in money and land, as it is
of importance to settle that country at once" (Sir John A. MacDonald to
Sir John Rose, April 17, 1872, Pope, J., _Memoirs of the Right
Honourable Sir John Alexander MacDonald_, vol. II, p. 189).]


  _C._ On the St. Lawrence

Acceptance of the terms of union by Eastern Canada implied a pronounced
development of civilization in the St. Lawrence drainage basin. It
remains to examine more closely the character of that development in
order to understand the difficulties involved in fulfilment of the
terms. Discoveries of Columbus, in search of a short cut to the Orient,
had turned the attention of Europe westward. As a result[288] Cabot
sailing from England reached the north-east coast of the North American
continent in 1496. The discovery of the Newfoundland fisheries[289] on
this voyage, and the profitableness[290] of this trade led to a race of
fishermen of various nationalities[291] to the new field. Effective
prosecution of the fishing trade necessitated arrangements and
accommodation[292] on the shore for winter residents, as well as for the
conduct of operations characteristic of dry fishing.[293] Need for
suitable harbours for these purposes brought about the establishment of
posts at St. John's, and at other points along the coast of
Newfoundland. Beginnings of settlement on the shore stimulated the
growth of trade with the Indians,[294] and these settlements served as
bases for extension of fishing and discovery of new territory. The
incentive supplied by the scramble[295] for territory, and for the
North-west passage, resulted in the success of Cartier in distinguishing
the straits of Belle Isle from the maze of inlets characteristic of the
eastern Newfoundland coast, in discovering[296] the mouth of the St.
Lawrence, and in penetrating[297] the interior as far as Hochelaga
(Montreal).

Biscayan whaling expeditions[298] and fur traders followed the route
opened by this voyage, and began to found a settlement at Tadousac,[299]
a point strategically located at the mouth of the Saguenay River on the
St. Lawrence. Movement toward the interior continued slowly,[300]
partly because of climatic difficulties evident in the unsuccessful
attempt[301] at colonization of M. de Roberval. Although demands of the
fur trade led to the establishment of settlement for the handling of
supplies and furs, the navigability of the St. Lawrence, the proximity
to such bases of supply as Newfoundland and Europe, and the impossible
coast-line of the upper St. Lawrence largely militated against the
success of colonization schemes.[302] On the other hand, continued
activity in the fur trade stimulated competition[303] and intensified
nationalistic jealousy,[304] making necessary further attempts to
establish settlements and to regulate the trade. Along the exposed
coast-line of the outlying regions, competition (incidental to the
wealth of fisheries and furs) between commercial and national interests
made settlement unusually difficult.[305] It was not until the
establishment of a colony at Quebec, in 1608, by Champlain,[306] at a
point on the St. Lawrence particularly well-fortified and strategically
located for the conduct of the fur trade,[307] that settlement gained a
continuous foothold in Eastern Canada. Accessibility of the St. Lawrence
made the establishment of posts in the interior largely
unnecessary.[308] It also occasioned such ruinous competition,[309] that
monopoly was essential, and, with the strategic location of Quebec,[310]
gave this monopoly effective control. This tendency toward concentration
of settlement at Quebec was not favourable to rapid growth. Its
numerical weakness, its value from the standpoint of control of the
interior, and its location near the mouth of the St. Lawrence made the
increasing competitive pressure[311] characteristic of the outlying
coast-line particularly dangerous. The capture of Quebec in 1629 and its
possession until 1632 by the English were results.

But eventually the expansion of the fur trade and the penetration to the
interior which it involved occasioned a demand for the establishment of
posts[312] farther up the river. Contact with new tribes of Indians gave
new zeal to missionaries, who planted, at such rendezvous of the traders
as Three Rivers[313] and Montreal,[314] chapels which served to
encourage more permanent establishments for the fur trade. Further
recognizing the dangers of nationalistic and commercial competition,
France attempted to encourage settlement in the regulation of the fur
trade as shown in the stipulations[315] with regard to colonization in
the charter of the Company of New France, in 1627.

The expansion of settlement in the interior brought difficulties.
Proximity of the St. Lawrence River and its southern tributaries to the
sources of the Hudson River brought the fur trade of the French into
competition with the trade of the Dutch and later with that of the
English, conducted from Albany.[316] The fierceness of this competition
was evident in the pro-Dutch aggressiveness of the Iroquois, who raided
French settlements,[317] persecuted French missionaries,[318] and
literally exterminated the Huron nation.[319] As a result the French
were seriously hampered and restricted[320] in the conduct of the fur
trade to the territory north and north-west of the St. Lawrence. The
energies of settlement were necessarily directed toward defence.[321]
Harassed further with the liquor traffic[322] and other features[323]
pertaining to severity of competition, slow progress[324] was
inevitable. The attempt of France to increase settlement through the
Company of New France failed, and in 1662 its charter was
surrendered.[325]

More strenuous efforts were necessary if the country was to be held in
the face of the increasing competition characteristic of the
mainland,[326] and of the interior. More direct control of the
colony[327] was assumed and measures taken to increase the size of the
settlement.[328] Troops[329] were despatched, forts were constructed at
strategic localities,[330] and attacks made on Iroquois and English[331]
territory. The trade of the Iroquois was cut off by the establishment of
strategic[332] posts. North and north-west, such aggressiveness was
equally in evidence.[333] The English and the Iroquois retaliated with
raids upon French settlements, with destruction of forts[334] and a
constant warfare on the French fur trade.[335]

These activities and the accessibility of the St. Lawrence drainage
basin explained the rapidity of the French discoveries to the
south-west, as shown in the exploration of the Mississippi followed by
the establishment of posts from the mouth of the St. Lawrence to the
mouth[336] of the Mississippi. This expansion tended to direct the
energies of settlement toward the fur trade and consequently French
civilization in North America was characterized by a lack of
concentration other than at points strategic for the conduct of that
trade. On the other hand, the inaccessibility of the interior because of
the Alleghany Mountains and the lack of advantageous water-routes
explained the relative neglect of western exploration on the part of the
English colonies. The English pressing north-west around the Alleghany
Mountains were directly opposed by the French pressing south-west by the
Great Lakes and the Mississippi River and later by the Ohio River. With
increasing national and commercial competition[337] on the outlying
coast, and with increasing competition[338] arising from the expansion
of the English colonies north-west along the Hudson, a struggle[339] for
supremacy was inevitable. The struggle[340] proved the weakness of the
French position. The English broke the long line of communication
between French establishments in the capture of Fort Frontenac and
occasioned the fall of posts to the west. The strength of a concentrated
force brought about the downfall of the flanks at Louisburg and of the
centre at Quebec.

Cession of Canada[341] to England in 1760 closed a chapter in the
history of colonial expansion. Settlement in the New England colonies
previously barred by the Alleghany Mountains and the national ambitions
of France moved steadily forward with the conclusion of the
struggle.[342] English fur traders, long held back by strategic posts of
the French, pushed rapidly into new territory. The Indian wars in the
struggle with Pontiac, though in part an aftermath[343] of the concluded
struggle, were also a phase[344] of continued westward expansion.

Growth of settlement, of which the cession of Canada and the conquest of
the Indians were results and of which they were in turn[345] causes
occasioned an increasing antagonism to regulations of the English
colonial policy which eventually terminated in the American revolution.
Restrictions[346] which became increasingly heavy on the expanding trade
and commerce of the colonies and which were particularly burdensome on
such ports as Boston grew more serious as a result of regulations[347]
prohibiting the westward movement of settlement and reserving the Ohio
valley for the fur trade and the Indians. In the final struggle the
naval supremacy of Great Britain, which had been effective through the
accessibility of the St. Lawrence valley in the capture of Quebec, was
effective in holding that point.[348] On the other hand, the relative
inaccessibility of the territory under the control of the English
colonies made naval supremacy of little avail. The treaty of Versailles
of September 13, 1783, concluded the struggle of the colonies for the
removal of barriers[349] restricting westward expansion.

The westward movement gained in momentum with the removal of political
barriers. It spread north of the St. Lawrence valley, and particularly
with the United Empire Loyalists'[350] settlements[351] began to appear
in the territory north of Lake Ontario and Lake Erie. Anxious as to the
outcome of this movement in the United States, Great Britain in addition
adopted measures to encourage[352] the settlement of that area.
Meanwhile settlement[353] in the lower St. Lawrence valley necessarily
hampered by conflicts characteristic of the long struggle was at last
favoured by peace.

But peace was of short duration. With continued westward expansion in
the United States the St. Lawrence valley became increasingly[354]
coveted as an outlet to the sea. Among a number of other causes the
advantages of its possession led to the war of 1812. The growth of
settlement in Upper Canada and in Lower Canada and the effectiveness[355]
of British naval supremacy which was evident in earlier struggles, proved
sufficient to frustrate the effort of the Americans to loosen British
control.[356]

The conclusion of peace was favourable to the expansion of
settlement[357] in Upper Canada and in the Western states.[358] This
expansion, which had been largely determined by the waterways and
particularly by the St. Lawrence system, occasioned the further
development of trade and commerce[359] which necessitated the
improvement of those waterways by the construction of canals. Activity
in this direction was increased by national and commercial rivalry.[360]
Settlement also had its effect upon the development of other means of
communication[361] and these in turn promoted settlement.

Increased trade of Upper Canada occasioned further demand for
improvements on the St. Lawrence. These demands for improvements on a
common waterway on the part of Upper Canada and the trading interests
necessitated the co-operation of Lower Canada since Montreal by virtue
of strategic location controlled[362] the collection of such an
important source of revenue as the customs duties for both provinces and
since the necessary improvements[363] were partly within its
jurisdiction. Conflict in Lower Canada between new trading interests
averse to customs duties and older agrarian interests averse to land
duties[364] complicated by racial controversies[365] and by
constitutional struggles[366] which culminated in the rebellion of 1837
made such co-operation impossible. The resulting delay in improvements
not only hampered[367] the development of Upper Canada, but also
aggravated other difficulties[368] incident to the growth of settlement.
The rebellion[369] which followed led to the investigation of Lord
Durham, to his famous report, and to the Act of Union which solved the
problem by uniting the two provinces.

The removal of these difficulties made possible the prosecution of
necessary improvements on the St. Lawrence. The work was stimulated by
growing recognition of the value of the river as a highway for
increasing trade of the rapidly expanding western states and of its
possibilities[370] as a link in a chain of waterways extending even to
the Pacific and was vigorously prosecuted.[371] The result of these
exertions and of encouraging legislation[372] was a rapid increase in
the trade of the lakes.[373]

Unfortunately[374] abolition of the preference to Canadian products in
Great Britain resulting from the repeal of the Corn Laws occasioned the
diversion of trade by Oswego[375] on Lake Ontario to New York and the
Atlantic coast. This diversion of trade stimulated and was stimulated by
the agitation which culminated in the Reciprocity Treaty of 1854.

These disappointing results of this diversion, particularly to Montreal
and Quebec, led, with the continually increasing traffic[376] and
constantly growing recognition[377] of the possibilities of a route to
the Pacific, to the encouragement[378] and vigorous projection of
geographically strategic railroads.[379] Results were scarcely more
promising, and the shorter distance to the Atlantic coast by Oswego
continued to prove effective. In addition traffic was drawn by the Great
Western[380] and American roads through Niagara peninsula. The Grand
Trunk to Portland and Rivire du Loup was in difficulty.[381]

These failures to divert the increasing traffic of the western states
and of Upper Canada through Canadian territory occasioned further
activity in the renewal[382] of an agitation for access to a Canadian
port on the Atlantic open to winter navigation. Arousal of
nationalistic anxiety[383] consequent to American expansion, increasing
recognition of the possibilities of a route to the Pacific,[384] and
development of the maritime provinces[385] gave strength to the
agitation, which bore fruit in Confederation and in construction of the
Intercolonial railway.[386] Largely in retaliation to the activity
evident in these measures and in further legislative efforts[387]
tending to divert the increasing traffic of Canada and of the western
states through Canadian channels, the reciprocity treaty was abrogated
by the United States in 1866. The abrogation gave further stimulus to
intercolonial trade and to union and in turn to development of
communication with the North-West bespoken in the purchase of the Hudson
Bay Territory and in the admission of British Columbia and Manitoba to
the Dominion.

A study of the events following the admission of British Columbia to the
Dominion which involved the acceptance of terms obligating Canada to the
construction of a road to the Pacific within ten years is facilitated by
a review of the developments leading to the assumption of the obligation
and an estimate of the strength of the third and last abutment of a
Canadian transcontinental bridge.

Wealth of fisheries in the territory adjacent to the Banks of
Newfoundland occasioned the early establishment of settlement, but
national and commercial competition incidental to such wealth seriously
hampered its growth. The maze of rivers and inlets characteristic of the
region facilitated the beginnings of settlement but delayed exploration
and discovery of the St. Lawrence River and the interior. Accessibility
of the St. Lawrence to the interior to a large extent conditioned the
rapidity of exploration of the St. Lawrence basin, of the Ohio River and
of the Mississippi by the French, and together with its climatic
severity determined the importance of the fur trade and consequently the
slow growth of settlement. Relative inaccessibility of the area south of
the St. Lawrence retarded exploration and led to the growth of
settlement along the coast. The south-westerly direction of the St.
Lawrence basin and the northerly direction of the Hudson River and the
routes to the interior leading around the Alleghany Mountains provoked
the conflict between English and French, the result of which was
determined by the consolidation and superiority of the English
settlements and the accessibility of the St. Lawrence which gave
effectiveness to British naval supremacy. Steady growth of English
settlements conflicted with the restrictive policy of British control of
the St. Lawrence as it had with the French. Maintenance of British
control on the St. Lawrence because of naval supremacy, and success of
the colonies on land because of the ineffectiveness of naval supremacy
in less accessible territory were the results of this struggle. Westward
expansion, successful in the removal of barriers interposed by the
French and the British, gaining access to the rivers characteristic of
the middle of the continent, proceeded rapidly, and contributed to the
development of Upper Canada and of the western states. Trade resulting
from this expansion increased pressure upon the St. Lawrence, in which
the question of control became a contributing cause of the war of 1812,
and which necessitated the improvement of transportation facilities to
the Atlantic coast. In the competitive struggle for this trade, Canada's
handicap of distance to the coast, and the disastrous results, compelled
improved facilities. The nationalistic dangers of western expansion
contributed to the force of this factor and there followed the
Intercolonial, Confederation and the admission of British Columbia to
the Dominion.

The apparent weakness[388] of Canada as the important abutment to a
transcontinental bridge was not offset by the strength of the remaining
abutments. The hectic and relatively slight growth of British Columbia
and the relative unimportance of the Red River settlement could not
avail in a task of such immensity. In each of the three areas roughly
included in the drainage basins concerned, civilization had developed
almost alone. It had grown and expanded beyond the boundaries set by
topographical features. Politically these sections were united but
economically the barriers proved to be of a character which tested
severely and almost to the breaking-point the union which had been
consummated. Political union rested upon pillars the weakness of which
bespoke difficulties before the economic obligation essential to such
union could be fulfilled.


[Footnote 288: See a copy of Letters Patent granted to the Cabots by
Henry VII (R. O. Pat. 4 Ed. VI, p. 6) 1496. Bland, Brown and Tawney,
_English Economic History_, pp. 400-2.]

[Footnote 289: "They affirm that the sea is full of fish that can be
taken not only with nets but with fishing baskets...and this...is told
by the Messer Joanne. And...his partners say they can bring so many fish
that this kingdom will have no more business with Islanda and that from
that country there will be a very great trade in fish" (Raimondo di
Soncino to the Duke of Milan, December 18, 1497, cited in Weise, A. J.,
_The Discoveries of North America to the year_ 1525, p. 193).]

[Footnote 290: Prowse, D. W., _A History of Newfoundland from the
English Colonial and Foreign Records_, p. 19 (footnote).]

[Footnote 291: _Ibid._, pp. 3-23, 43; also Biggar, H. P., _The Early
Trading Companies of New France_, pp. 18-20.]

[Footnote 292: "From a very early period a few crews were left behind
every winter to cut timber for building cook-rooms, stages, trainvats,
wharves" (Prowse, D. W., _Ibid._, p. 159).]

[Footnote 293: Denys, N., _Description and Natural History of the Coasts
of North America_ (Champlain Society), pp. 268-77, 331-6.]

[Footnote 294: A very good discussion is given in Biggar, H. P., op.
cit., pp. 28-32. "Notices of this fur trade are found scattered through
the records of almost the whole of the sixteenth century" (_ibid._, p.
29).]

[Footnote 295: Stephen Gomez was dispatched from Spain in 1524. Prowse,
D. W., op. cit., p. 43. Robert Thorne was sent from England in 1527
(_ibid._, pp. 38-9), and Master Hore in 1536 (_ibid._, pp. 41-2).]

[Footnote 296: In the first voyage (1534) Cartier missed the mouth of
the St. Lawrence river. Michelant, H. and Rame, A., _Relation Originale
du voyage de Jacques Cartier au Canada en_ 1534. Several explorers had
been equally unfortunate previous to his visit. See Biggar, H. P., op.
cit., pp. 1-5.]

[Footnote 297: D'Avezac, _Bref rcit et succincte narration de la
navigation faite en MDXXXV et MDXXXVI par le Capitaine Jacques Cartier
aux iles de Canada Hochelaga, Saugenay et autres_, p. 22.]

[Footnote 298: Prowse, D. W., op. cit., pp. 47-9.]

[Footnote 299: Biggar, H. P., op. cit., pp. 27, 29.]

[Footnote 300: Cartier in the second voyage kidnapped several of the
Indian chiefs. D'Avezac, op. cit., pp. 40-44. His reception on his third
voyage in 1541 under Monsieur Roberval's direction was distinctly
hostile. Hakluyt, R., _Principall Navigations_, vol. III, pp. 235-6.
This enmity toward the French continued and proved to be a serious
obstacle. Biggar, H. P., p. 32.]

[Footnote 301: Lescarbot, Marc, _The History of New France_ (Champlain
Society), vol. II, p. 181.]

[Footnote 302: Marquis de la Roche under French authority given in 1578
(Rame, A., op. cit., pp. 5-10) set sail with three hundred men in 1584,
but the voyage met with disaster in shipwreck. Hakluyt, R., op. cit., p.
26. Another attempt was made by the same gentleman under authority given
in 1598 (Lescarbot, Marc, op. cit., pp. 196-201) to colonize Sable
Island which also ended disastrously (_ibid._, vol. I, pp. 44-5). In
1599 Pierre Chauvin and Franois Grave, under a trading monopoly of ten
years in which they agreed to take out fifty colonists a year, made a
voyage to Tadousac and left sixteen men. Laverdiere, C. H., _Oeuvres de
Champlain,_ Tome III, p. 43 (according to the copy in the Toronto Public
Library Tome V is bound with Tome III. This reference would be Tome V,
p. 43). The monopoly, due to the protests of the French merchants, was
revoked in 1602 (Rame, A., op. cit., p. 12 ff.) with no tangible
colonization results. Arrangements were then made with various merchants
from Rouen and St. Malo for colonization (_ibid._, pp. 15-21 ff.). Pont
Grav and Champlain in 1603 explored the St. Lawrence (Laverdiere, C.
H., op. cit., ch. VI), also the Gaspe peninsula and Acadia, to which
regions under a monopoly granted to Sieur de Monts and other traders
(Lescarbot, Marc, op. cit., pp. 211-16, 221-3) a colony was sent in
1604. _ibid_., pp. 227-40. Settlement was established on the
inhospitable St. Croix Island on the Bay of Fundy (_ibid._, pp. 240-2)
and removed across the Bay to Port Royal in 1605 (_ibid._, p. 280). The
monopoly, subject to inroads from other merchants (Biggar, H. P., op.
cit., pp. 63-4) was revoked in 1607, the support of Sieur de Monts
withdrawn and the colony returned to France. Lescarbot, M., op. cit.,
pp. 351-3.]

[Footnote 303: A monopoly granted to Captain Jaunaye and Jacques Nouel
was protested against by other merchants and revoked. Rame, A.,
_Documents indits sur le Canada_, pp. 10-11; also Biggar, H. P., op.
cit., p. 34.]

[Footnote 304: See Hakluyt, R., Discourse on Western Planting written in
the year 1584. _Documentary History of the State of Maine_, vol. II, pp.
102-3.]

[Footnote 305: M. de Poutrincourt made a further attempt to establish a
colony at Port Royal, sailing in 1610 (_ibid._, vol. III, p. 35). A
succession of Jesuit priests attempted to start a colony farther south
at the mouth of the Penobscot River but were routed by the English
(_ibid._, p. 64). This led to a further attack on Port Royal and to its
destruction by fire in 1613 (_ibid._, p. 66). The later history of this
whole region is largely a narrative of attacks and counter-attacks.]

[Footnote 306: Laverdiere, C. H., op. cit., Tome II, ch. III, IV, p. 148
ff.]

[Footnote 307: The colony was established under a monopoly granted by
the French Government with no stipulations as to colonists. _Ibid._, pp.
136-7.]

[Footnote 308: Trade was carried on at strategic rendezvous from year to
year, generally determined upon after a consultation with the tribes
concerned and usually at the mouth of a river tributary to the St.
Lawrence. In 1610 it was arranged at the mouth of the Richelieu.
Laverdiere, C. H., op. cit., Tome II, p. 210 ff. In the following years
it was generally held at the mouth of the Ottawa, the Lachine Rapids.
_Ibid._, p. 242 ff., p. 290 ff.]

[Footnote 309: As evidence of the evils of competition, see _ibid._,

Tome II, pp. 217-18, 224, 240, 242, 245, 252-3, and particularly 283-4.]

[Footnote 310: The difficulties of enforcing the monopoly granted to
Sieur. de Monts in 1604 which pertained to the whole mainland coast
(Biggar, H. P., op. cit., p. 54) are a contrast to the efficiency of the
monopoly including only the St. Lawrence valley which was given earlier
to Chauvin, _ibid._, p. 44, and later to the friends of Champlain.
_Ibid._, pp. 101-6.]

[Footnote 311: In 1621 Sir William Alexander was given a grant under the
English Crown of the peninsula between the Gulf of St. Lawrence and the
Atlantic Ocean (Slafter, E. F., _Sir William Alexander and American
Colonization_, Prince Society, pp. 127-48), and after considerable
difficulty (_ibid._, pp. 197-202) established a colony in 1626 (Slafter,
1628) at Port Royal (Biggar, H. P., op. cit., p. 142; see also Murdoch,
Beamish, _A History of Nova Scotia or Acadia_, vol. I, p. 66). The
French under Biencourt held at least Port Lomeron near Yarmouth as well
as other forts (De Saint-Pre, Rameau, _Une Colonie Fodale en Amrique
L'Acadie_ (1604-1881), pp. 67-8). Lord Ochiltrie established a post with
fifty colonists in 1629 in Cape Breton (Biggar, H. P., op. cit., p. 43).
This was destroyed and replaced by the French in the same year (_ibid._,
p. 147). The French gained control in 1632 by the Treaty of St. Germain
en Laye.]

[Footnote 312: Champlain sought "un lieu propre pour la situation d'une
habitation" at the Lachine Rapids in 1611 (Laverdiere, C. H., Tome II,
p. 242, also p. 283). In 1616 he promised the Indians to build a fort at
the same place (_ibid._, Tome III, p. 104).]

[Footnote 313: The first mass was celebrated July 26, 1615 (Le Clerq, F.
C., _First Establishment of the Faith in New France_ (Shea), vol. I, p.
91). The first mission was established in 1617 (see Sulte, B., _Histoire
de la Ville des Trois Rivires et de ses environs_, pp. 35-7). A fort
was built in 1634. (_Jesuit Relations and Allied Documents_, vol. IV, p.
261).]

[Footnote 314: Sieur de Maissoneuve arrived at Montreal with about forty
men under the auspices of the Society of "Notre Dame de Montreal" on
October 14, 1841 (De Casson, Dollier, _Histoire du Montreal, Mmoires de
la Socit Historique de Montreal_, IV, p. 33).]

[Footnote 315: The monopoly granted in 1614 was revoked in 1620 as a
result of the neglect of the colonies' interests and a new charter
granted to De Caens, (Laverdiere, C. H., Tome III, pp. 326-7) and again
because of negligence the monopoly was revoked and a new charter granted
in 1627 with ample and explicit stipulations for colonization.
(_Collection de documents relatifs  la Histoire de la Nouvelle France_,
vol. I, pp. 64-71).]

[Footnote 316: In 1624 under the auspices of the Dutch Fort Orange was
built near the site of Albany. (_Documents Relative to the Colonial
History of the State of New York_, vol. I, p. 149). The English took
possession in 1664 (_ibid._, vol. II, p. 250).]

[Footnote 317: Charlevoix, P. F. X., _History and General Description of
New France_ (Shea, vol. II, p. 96, p. 138).]

[Footnote 318: _Ibid._, p. 221 ff.]

[Footnote 319: See discussion, _Canada and its Provinces_, vol. I, pp.
68-71.]

[Footnote 320: Trade was re-established with the Hurons and Ottawas who
had been scattered to the north-west in 1656 by the Ottawa River
(_ibid._, pp. 270-2), but even then it was conducted with considerable
difficulty (_ibid._, ff.).]

[Footnote 321: Fort Richelieu was built at the mouth of the Sorel River
in 1642 (Charlevoix, P. F. X., vol. II, p. 133). The history of the
period is generally characterized by Indian raids.]

[Footnote 322: _Ibid._, vol. III, pp. 53-5. See also the history of the
period.]

[Footnote 323: In 1644 the Company of New France abandoned the fur trade
to the settlers in return for an annual quit-rent of one thousand beaver
skins (_Edits Ordonnances Royaux Dclarations et Arrts du Conseil
d'tat du Roi concernant de Canada_, vol. I, pp. 28-9).]

[Footnote 324: The available statistics for the period illustrate the
slight growth and the concentration of the whole population at strategic
points.

  1635                      Marriages      Births    Deaths
      Quebec                    3            4          3
      Three Rivers             --           --         10

  1660
      Quebec                   14           62         16
      Three Rivers             --           15          8
      Montreal                 10           36         23

                  --_Census of Canada_, 1870-1, vol. V, pp. 174-7.]

[Footnote 325: _Edits_, etc. (pp. 30-1).]

[Footnote 326: After the restoration of Acadia to the French in 1632 the
territory was divided into three districts under separate jurisdiction.
The competition between these districts was also a feature of the
geographic characteristics of the region and complicated national
competition. The French captured in 1633 a Plymouth trading house at
Machias (_Winthrop's Journal, Original narratives of early American
History_, vol. I, p. 113) and in 1635 Pentagoet on the Penobscot River
(_ibid._, p. 157). In the meantime the district under Razilly and later
Charnise had a settlement at Port de la Heve on the south coast of Nova
Scotia which was transferred to Port Royal. La Tour in charge of another
district was strategically located at Fort St. Jean at the mouth of the
St. John River. Charnise laid siege to Fort St. Jean in 1643, but with
the aid of Bostonians (_ibid._, vol. II, p. 130) La Tour defeated him
(_ibid._, p. 136). In 1645 Charnise captured the fort. On his death in
1650 Le Borgne came into possession, but the widow of Charnise returned
Fort St. Jean to La Tour. In 1654 the English captured Port Royal, Fort
St. Jean and other French forts. In 1667 it was ceded again by the
English to France. See Charlevoix, P. F. X., op. cit., vol. III, pp.
129-35, especially the footnotes; also Denys, N., op. cit., pp. 97-103.]

[Footnote 327: In 1664 the colony was granted to the West India Company
but the first posts were filled by the French Government, (_Edits,
etc_.) and the charter was revoked in 1675. _Ibid._, pp. 74-8.]

[Footnote 328:
  Province of Quebec    Marriages  Births   Deaths
           1660            24        113      47
           1665            74        178      54
           1670           122        311      85
           1675            30        404      49
           1680            65        386     100
           1685            80        419     130
           1690           104        510     181

The number of "territorial circumscriptions" increased from 5 to 19.
_Census of Canada_, 1870-1, vol. V, pp. 176-80.

See measures adopted to increase population. _Edits, etc._, pp. 67-8,
pp. 73-4.]

[Footnote 329: In 1665 companies of the Carignan Salieres regiment
arrived. _New York Colonial Documents_, vol. IV, pp. 25-6.]

[Footnote 330: Fort Sorel replaced Fort Richelieu at the mouth of Sorel
River. Fort Saint Louis (Chambly) and Fort St. Teresa were built farther
up the same river (_ibid._, pp. 82-3).]

[Footnote 331: Two expeditions were sent in 1666, the later one with
considerable effect (_ibid._, pp. 88-91). Schenectady (_N.Y. Col. Doc._,
vol. III, p. 693), Salmon Falls (_ibid._, vol. IX, p. 471) and Casco Bay
were attacked and destroyed in 1690 (_ibid._, vol. III, p. 720).]

[Footnote 332: In 1672 Fort Cataracqui was built (_ibid._, p. 76). In
1678-9 a fort was built at Niagara (Gravien, Gabriel, _Dcouvertes et
tablissements du Cavelier de la Salle de Rouen dans l'Amrique du
Nord_, pp. 93-4). In the same year La Salle reached Lake Michigan and
built Fort Miami at the mouth of Lake Joseph (_ibid._, p. 123), and in
1680 Fort Crevecoeur was established on the Illinois River (_ibid._, p.
146) and Fort St. Louis in 1683 on the same river (_ibid._, p. 212). In
1686 Denouville ordered the construction of a post between Lake Erie and
Lake Huron (Margry, P., op. cit., vol. V, p. 23). A strong post was
built at Detroit in 1701 (_ibid._, p. 187).]

[Footnote 333: Radisson and Groseilliers built a fort on the shore of
Lake Superior in 1661 (_Radisson's Voyages_ (Prince Society), pp. 194-6)
which is generally agreed to have been at Chequamegon Bay (_Parkman Club
Papers_, No. 2, p. 20). The Jesuits were instrumental as ever in
constructing permanent establishments at strategic fur trade rendezvous.
La Pointe at Chequamegon Bay was established in 1665 (_Jesuit Relations
and Allied Documents_, vol. I, p. 33) and later at St. Ignace
(Michilimackinac), at Sault Ste Marie, at Green Bay and at St. Joseph's
on Lake Michigan (_ibid._, p. 35). Dulhut built forts on the northern
shore of Lake Superior and prepared the way for the advance into western
Canada. An overland attack of the French on the English forts in Hudson
Bay in 1686 (Valois, J. M., _Histoire du Chevalier D'Iberville_, ch. II)
and a naval expedition in 1697 under D'Iberville against the same forts
were further evidences of aggressiveness (_ibid._, pp. 177-202).]

[Footnote 334: The raids and warfare were features of the whole period.
See particularly the massacre of Lachine in 1690. _New York Colonial
Documents_, vol. IX, p. 435.]

[Footnote 335: Numerous ambushes and wars upon the French-Indian allies
were constantly being made. "We knocked the Twightwies (Miamis) and the
Chutaghicks (Illinois) on the head because they had cut down the trees
of peace....They have hunted beavers on our lands, they have acted
contrary to the customs of all Indians, for they left none of the
beavers alive, they killed both male and female" (Speech of Garrangula,
an Onandoga chief, in 1684. Smith, Hon. W., _The History of the late
Province of New York from its Discovery to the Appointment of Governor
Colden in_ 1762, vol. I, p. 67).]

[Footnote 336: A fort was built at the mouth of the Mississippi in 1699
by D'Iberville (Margry, P., op. cit., vol. IV, p. 284). Another fort was
built "dix huit lieues avant dans la rivire" in 1700 (_ibid._, p. 364).
Mobile was established in 1702 (_ibid._, p. 515). New Orleans was
constructed in 1717 (_ibid._, vol. V, p. 550) and became the chief
centre in 1722 (_ibid._, p. 641). Fort Chartres north of Kaskaskia River
was built in 1720 (Ogg, F. A., _The Opening of the Mississippi_, p.
219).]

[Footnote 337: The region continued to be the scene of continuous
activity. In 1673, seven years after the agreement of 1667, the English
took Pentagoet and Fort Gemesie (St. John) (Charlevoix, P. F. X., op.
cit., vol. III, p. 188). Again there were raids in 1680 and the seizure
of posts (_ibid._, pp. 210-11), and in 1690 Port Royal and Chedabouctou
were captured (_ibid._, vol. IV, pp. 156-60). An unsuccessful attack was
also made on Quebec in the same year (_ibid._, p. 184 ff.). Port Royal
was retaken by the French in 1691 (_ibid._, p. 215). Similar activities
characterized the Newfoundland coast (_ibid._, p. 244 ff.). In 1694 in
retaliation the French and the Indians destroyed several English
villages on the main coast (Murdoch, Beamish, op. cit., vol. I, pp.
211-3). After a long series of struggles, Port Royal was captured by the
English again in 1710 (_ibid._, p. 315). In 1713, with the Treaty of
Utrecht, Acadia remained English and Cape Breton French (_ibid._, p. 332
ff.). Louisburg was consequently selected and fortified by the French
(_N.Y. Col. Doc._, vol. X, p. 225). Difficulties continued as shown in
the destruction of Norridgewock in 1724 (_ibid._, vol. IX, p. 937). An
excuse for increased activity came with the declaration of war between
France and England in 1744, and in 1745 Louisburg was captured by the
English (Lincoln, _The Correspondence of William Shirley_, vol. I, p.
239), but again returned to the French in 1748 (Murdoch, Beamish, op.
cit., vol. II, p. 123). As a movement of consolidation, Halifax was
established in 1749 (_ibid._, p. 137). On the northern coast in 1750 a
fort was built at Beaubassin. The French retaliated with the
construction of fort Beausejour on the opposite coast (_ibid._, p. 179).
Beausejour was captured in 1755 (_ibid._, p. 269). The conquest of the
English along the coast was completed with the fall of Louisburg in 1758
(_Journal of John Knox_, Champlain Society, vol. III, App., p. 191).]

[Footnote 338: Partially as evidence of such increasing tension the
continual raids may be cited as instanced in the massacre of Deerfield
in 1704 (_N.Y. Col. Doc._, vol. IV, p. 1083), and at other places by
both colonies.]

[Footnote 339: In 1722 a fort was built at Oswego at the mouth of Oswego
River on Lake Ontario by the English (Smith, Hon. W., op. cit., vol. I,
p. 216), and as a counter-move the French strengthened Fort Niagara in
1726 (_ibid._, p. 233). Fort St. Frederick at Crown Point on Lake
Champlain was constructed shortly afterwards by the French (_ibid._, pp.
245-6). In 1749 Celoron under French instructions took possession of the
Ohio valley (Margry, P., op. cit., vol. VI, p. 666 ff.). Shortly
afterwards forts were built at Presque Isle (_N.Y. Col. Doc._, vol. X,
p. 256) near the southern shore of Lake Erie, farther south Fort La
Boeuf and at the junction of French Creek and Alleghany River Fort
Machault (_ibid._, Hulbert, A. B., _Historic Highways of America_, vol.
III, pp. 74-9). The English under Major Washington protested in a visit
to Fort La Boeuf but with no satisfaction (Margry, P., op. cit., pp.
728-31). The establishment of Fort Du Quesne at the junction of the
Alleghany and Ohio Rivers precipitated the struggle (_ibid._, p. 732).]

[Footnote 340: The defeat of the English at the forks of the Ohio and
Monangahela Rivers in 1754 (_Journal of Colonel George Washington_____,
edited by Toner, J. M., p. 18) and at Fort Necessity (_ibid._, p. 156)
led to Braddock's unsuccessful attack on Fort Du Quesne in 1755 (_A
Review of the Military Operations in North America from_ 1753 _to_ 1756,
p. 33 ff.), to the partially successful attack of Johnson on Crown Point
and the failure of the expedition under Shirley to take Fort Niagara,
and to the capture of Oswego on Lake Ontario (_ibid._, p. 136) and Fort
William Henry on Lake George by the French (_Knox Journal, ibid_., vol.
I, pp. 67-8). In 1758 the attack on the flank brought about the fall of
Louisburg, of Fort Frontenac (_ibid._, vol. III, pp. 149-150), of Fort
Du Quesne (_ibid._, vol. I, p. 297) and of Fort Niagara (_ibid._, vol.
III, p. 242), but Ticonderoga at the centre remained intact. The
superiority of English naval power which proved effective at Louisburg
caused the fall of Quebec in the following year (_ibid._, vol. II, pp.
131-2).]

[Footnote 341: Articles of Capitulation, September 8, 1760 (Shortt, A.,
and Doughty, A. G., _Documents Relating to the Constitutional History of
Canada_, 1759-1791, pp. 21-9; Treaty of Paris, February 10, 1763
_ibid._, pp. 97-125).]

[Footnote 342: See Stone, William L., _The Life and Times of Sir William
Johnston, Bart._, vol. II, p. 138 ff.]

[Footnote 343: The French influence among the Indians of the more remote
interior continued to be very strong (_ibid._, pp. 134-6). There was
also the impossible attitude of the English traders well described in
Rogers, R., _Ponteach or the Savages of America, a tragedy_; also Stone,
W. L., op. cit., vol. II, pp. 136-7. See _Canada and Its Provinces_,
vol. III, p. 56 ff.; also Marquis, T. G., _The War Chief of the
Ottawas_, pp. 1-10; Burton, C. M., ed. _Journal of the Pontiac
Conspiracy_, 1763.]

[Footnote 344: The appearance of the settlers was of crucial importance
(Stone, W. L., op. cit., vol. II, pp. 138, 142 ff.). The war witnessed
the fall of all the posts except Detroit, Niagara and Fort Pitt
(_ibid._, pp. 191-2). Peace was virtually concluded in 1765 (_ibid._, p.
261).]

[Footnote 345: See Bartlett, W. H., _The History of the American
Revolution_, p. 281.]

[Footnote 346: The situation was appreciated by Montcalm as early as
1759. "I know them well...all these English colonies would long ago have
thrown off the yoke...if the fear of seeing the French at their doors
had not proved a bridle to restrain them....But once let Canada be
conquered...and on the first occasion when Old England appears to touch
their interests, do you imagine...that the Americans will obey?" (Letter
quoted, _ibid._, p. 275). The protests of the Otis speech, later the
agitation against the Stamp Act, and finally the Boston Port Bill and
the Massachusetts Bay Bill led to war. See Frothingham, R., _History of
the Siege of Boston_.]

[Footnote 347: Ostensibly to pacify the Indians the King's Proclamation
of October 7, 1763, expressly provided "that no governor...of our
colonies...do presume to grant warrants of survey or pass patents for
any lands beyond the heads...of any of the rivers which fall into the
Atlantic from the west or north-west...and we do hereby forbid all our
loving subjects from making any purchases or settlements whatever...of
any of the lands above reserved....And we do further strictly...require
all persons whatever who have...seated themselves upon any lands...above
described...forthwith to remove themselves from such settlements" (Hart,
A. B., and Channing, E., _American History Leaflets_, No. 5, p. 14). A
project of Franklin's in 1765 to establish a new colony in the Illinois
country met serious objections from the Government, and not until 1772
was a petition granted. The Lords Commissioners for Trade and
Plantations favoured the earlier principles adopted of "confining the
western extent of settlements to such a distance from the sea coast as
that those settlements should be within the reach of the trade and
commerce of this kingdom" and within "the exercise of that
authority...conceived to be necessary for the preservation of the
colonies in due subordination to and dependence upon the mother
country." Lastly the Quebec Act of 1774 extended the boundaries of
Quebec to include the Ohio valley as far as the Mississippi. (Shortt,
A., and Doughty, A. G., op. cit., p. 402). It was the occasion of
widespread and pronounced discontent. See Hinsdale, B. A., "Western Land
Policy of the British," _Ohio Archological and Historical
Publications_, vol. I, p. 207 ff.; also Sparks, Jared, _The Works of
Benjamin Franklin_, vol. IV.]

[Footnote 348: The valley of the Hudson River was geographically
strategic in the conduct of the war. The early capture of the route by
the Americans was of significance in the rapid conquest of the whole of
Canada except Quebec. The effectiveness of British naval supremacy at
this point occasioned the defeat of the Americans and the later attempts
of the British to penetrate to the Hudson River by Oswego and the Mohawk
valley and by Lake Champlain. Again the naval supremacy of the British
was effective in the capture of New York and of other coast towns. The
attempts to penetrate the Hudson by New York and by other routes as well
as to penetrate the interior by other rivers were unsuccessful, since
long lines of communication were constantly exposed to the attacks of
Americans. See Semple, E. C., _American History and its Geographic
Conditions_, pp. 49-50; also Greene, F. V., _The Revolutionary War and
the Military Policy of the United States_.]

[Footnote 349: The new boundary line ran through the centre of Lakes
Ontario, Erie, Huron and Superior (Shortt, A., and Doughty, A. G., op.
cit., pp. 491-3). Under the continued pressure of western expansion
(Roosevelt, T., _The Winning of the West_, vol. IV) the western
boundaries were more carefully set down in the Jay Grenville treaty of
1794 (MacDonald, W., _Select Documents of the History of the United
States_, pp. 116-17).]

[Footnote 350: Loyalists emigrated to the Upper St. Lawrence and the Bay
of Quinte to the number of almost 4,000 persons; to the Niagara district
about 100 persons, and to the territory farther west a smaller number.
In 1791 it was estimated that there were 10,000 persons in the country
above Montreal. See Wallace, W. S., _The United Empire Loyalists_, pp.
104-10.]

[Footnote 351: A very interesting description of the beginnings of
settlement in Upper Canada is given in _Canada and Its Provinces_, vol.
XVII, pp. 13-99.]

[Footnote 352: Under Imperial direction grants of land and various
privileges were given to the Loyalists (Shortt, A., and Doughty, A. G.,
op. cit., pp. 494-5 ff.). The Constitutional Act of 1791 was designed
largely to meet the demands of the English settlers (_ibid._, p. 694
ff.). The necessity of settlement was also urged in later instructions
(_ibid._, 1791-1818, p. 33 ff.).]

[Footnote 353:
                          Marriages  Births  Deaths

  1700                       172       907     350
  1710                       189     1,023     315
  1720                       207     1,341     426
  1730                       382     1,910   1,173
  1740                       406     2,420     941
  1750                       619     2,974   1,879
  1760                       821     3,449   2,563
  1770                       699     4,738   3,336
  1780                       931     6,180   2,895
  1790                     1,137     6,825   4,212
  1800                     1,606    10,080   4,701

The number of "circumscriptions" during the period increased from
twenty-four to forty-three (_Census of Canada_, 1871, vol. V, p. 182
ff., and compiled from registers kept by the Roman Catholic Church). The
population has been estimated:

  1676      8,415
  1688     11,249
  1700     15,000
  1706     20,000
  1714     26,904
  1759     65,000
  1784    113,000
  1825    450,000

Bouchette, J., _The British Dominions in North America_, vol. I, p. 347.]

[Footnote 354: Although difficult to establish with documentary
evidence, the possibilities of Canada were undoubtedly important as
factors leading to the declaration of war. The struggle was in large
part another phase of western expansion. The immediacy of the attacks
upon Canada with the beginning of the conflict and the boasts of such
American leaders as Clay and Jefferson were of a suggestive character
(Thompson, D., _History of the late War between Great Britain and the
United States of America_, p. 34; see also a very good discussion, Wood,
W., _The War with the United States_, pp. 4-19; and Wood, W., _Select
British Documents of the Canadian War of_ 1812 (Champlain Society), vol.
I, pp. 1-3).]

[Footnote 355: The stubbornness of the defence which characterized the
efforts of the Canadians during the early years of the campaign was
finally successful with the co-operation of the British navy in the
reinforcement of troops, the blockade and the attacks on the American
coast (Wood, W., _The War with the United States_. Semple, E. C., op.
cit., pp. 130-146).]

[Footnote 356: The Treaty of Ghent, December 24, 1814. MacDonald, W.,
op. cit., p. 192 ff.]

[Footnote 357: Population of Upper Canada:

  1811           77,000 according to Bouchette
  1824          151,097
  1825          158,027
  1826          163,702
  1827          176,059
  1828          185,526
  1832          261,060

_Board of registration and statistics, appendix to the first report_,
1849, p. 10.]

[Footnote 358: Population of Western States:

               1800     1810     1820      1830

  Illinois      --    12,282    55,211   157,445
  Indiana     5,641   24,520   147,178   343,031
  Michigan      --     4,762     8,896    31,639
  Ohio       45,365  230,760   581,434   937,903

    --_Statistical Abstract of the United States_, 1919, p. 30.]

[Footnote 359:
_Principal articles imported from Upper Canada into Lower Canada by St.
Lawrence_:

           Ashes   Wheat    Flour     Beef    Pork
            bls.    bus.     bls.      bls.    bls.

  1830     9,745  252,330   92,584   1,936   10,935
  1831    10,482  409,975   85,026   1,020   12,643

  _Principal articles imported from U.S. into Montreal by St. Lawrence_:

             Ashes   Wheat    Flour      Beef      Pork
              bls.    bus.     bls.      bls.      bls.

  1830      15,375     --    36,781        77     2,868
  1831      18,112   2,646   42,000     1,541     3,910

_Lake Erie to Lake Ontario_, 1831:

  Staves   Ashes  Timber  Wheat   Whisky   Flour   Boards(ft.)   Pork
  (no.)     bls.   ft.     bus.    bls.     bls.                 bls.

  137,318  3,250  28,500  275,101  1,795  41,116    987,888     12,739

_Lake Ontario to Lake Erie_, 1831:

  Mdse. (cwt.)        Salt (bls.)

     23,734             14,182

  Bliss, H., _The Colonial System_, p. 129-131.]

[Footnote 360: The Erie Canal was begun in 1818 and completed in 1825.
The Ohio canal between Lake Erie and the Ohio River, and the Oswego
canal joining Lake Ontario and the Erie Canal were completed in the same
decade (MacTaggart, J., _Three Years in Canada_, vol. II, pp. 237-40).
Under Canadian jurisdiction the Lachine canal begun in 1821 was
completed in 1824 (_ibid._, vol. I, p. 236). The Welland canal was begun
in 1825 and partially opened in 1829. (_Ibid._, vol. II, pp. 144-5). The
Rideau canal begun in 1826 was not completed till 1832. (_Ibid._, vol. I,
p. 104.]

[Footnote 361: The roads from 1813 had been opened with the
encouragement of the British authorities for the development of
settlement, for purposes of defence and in response to the demands of
the fur trade. Consequently a road was built along the shore of the
Detroit River and Lake St. Clair directly westward following the Thames
River and continuing to the extreme end of Lake Ontario. Connexions were
made with Lake Erie by two parallel branches to Port Talbot and the
mouth of the Lynn River. Branching at Lake Ontario on the south it
followed the southern shore of Lake Ontario to the Niagara River and on
the north the northern shore of the Lake, continuing along the north
shore of the St. Lawrence River to Montreal. For the fur trade Yonge St.
had been extended to Lake Simcoe in 1794 and an alternative route
provided from the north-west (_History of Toronto and the County of
York_, vol. I, Pt. II, p. 13; see Chewett, Wm., _Map of the located
districts in the province of Upper Canada_, 1813). In 1825 several roads
had been built south of the main road from Lake St. Clair to Lake
Ontario. The Niagara peninsula was a network of roads, as was also the
territory north of Lake Ontario served by Yonge St. All the territory
north of the road to Montreal more readily accessible to settlement was
liberally covered with roads. See Chewett, J. G., _Map of the province
of Upper Canada in 1825_; also Bouchette, J., op. cit., vol. I, pp. 75,
90, 97, 205, 308.]

[Footnote 362: "The financial relations between these two provinces are
a source of great and increasing dispute" (Durham, Earl of, _Report on
the Affairs of British North America_ (ed. Lucas), vol. II, p. 142).]

[Footnote 363: "For the whole of the works in the Upper Province when
completed would be comparatively if not utterly useless without the
execution of similar works on that part of the Saint Lawrence which lies
between the Province line and Montreal. But this co-operation the Lower
Canadian Assembly refused or neglected to give" (_ibid._, p. 90).]

[Footnote 364: _Ibid._, pp. 35-50.]

[Footnote 365: "I found a struggle not of principles but of races"
(_ibid._, p. 16).]

[Footnote 366: "It was inevitable that such social feelings must end in
a deadly political strife" (_ibid._, p. 45). "The defects of the
colonial constitution necessarily brought the executive Government into
collision with the people" (_ibid._, p. 71).]

[Footnote 367: Resolutions of Upper Canada Commons House of Assembly,
February 26, 1838. _Further copies or extracts of correspondence
relative to the affairs of Lower Canada and Upper Canada_, pp. 177-8.]

[Footnote 368: The burden of the system of land grants and of the
numerous irregularities became increasingly heavy, with the growth of
settlement (_ibid._, vol. III, App. A, pp. 1-12).]

[Footnote 369: _Ibid._, vols. II and III.]

[Footnote 370: As early as 1829 a canal route through "the great inland
seas of Canada" had been suggested to open up the country and "to
shorten the navigation between Europe and Asia" (MacTaggart, J., op.
cit., vol. II, p. 322), and it had been optimistically written "when the
steam-packet line is established between Quebec and London as it soon
will be we may come and go between China and Britain in about two
months. The names at the stages will be London,...Quebec, Montreal,
Kingston Port Dalhousie, Port Maitland, Erie, Huron, Superior, Rocky
Mountains, Athabaska, Nootka and Canton" (_ibid._, vol. I, p. 169). In
1835 Sir John Smyth in the _Christian Guardian_ suggested the
possibilities of a short and direct line from New York to Montreal,
thence to Toronto, the Mississippi, the Rocky Mountains and the Columbia
River in developing the western trade as well as trade with India and
China. Ten years later as a result of the rapid expansion of the western
states, of the growth of the Red River Settlement and of the more
promising situation in Canada after the Union, he elaborated on the
earlier proposal. A line was advocated from London to China by way of
the British colonies and Chicago. Other roads calculated to develop
traffic were advocated as feeders. With Toronto as a centre, a road was
projected from Lake Superior to Winnipeg and from Winnipeg connecting
with the road to Columbia River, and another road north of the Chicago
route by boat across Lake Michigan to Milwaukee and connecting with the
main road. As a military caution a line was proposed north of Lake Huron
and Lake Superior to unite with the Lake Superior-Winnipeg route (Smyth,
Sir John, _Railroad Communication_; see also Bonnycastle, R. H., _Canada
and the Canadians in_ 1846, vol. I, pp. 138-40).]

[Footnote 371: Welland Canal was enlarged after 1842 (_Report of the
Chief Engineer of Canals_, 1880, pp. 7, 8). St. Anne lock on the Ottawa
was built in 1843 (Kingsford, W., _The Canadian Canals_, p. 37). Galops
canal and Iroquois canal were completed by 1846. Rapide Plat canal and
Farrans Point canal were built in 1844-7 (_ibid._, p. 57). Cornwall
canal was completed in 1843 (_ibid._, p. 56). Beauharnois canal was
built in 1842-5 (_ibid._, p. 52), and the Lachine canal enlargement
begun in 1843 was completed in 1848 (_ibid._, p. 71); see also _Canada
and its Provinces_, vol. X, pp. 508-28.]

[Footnote 372: In 6 Geo IV c. 64, Canada was given preferential
treatment in the imposition of a duty on wheat of 5_s_. per quarter at
all times, and in 1827 the Act was favourably amended so that the 5_s_.
rate applied only when wheat was below 67_s_. This preference, since
American produce passing through Canada was admitted as Canadian
produce, favoured the shipment of grain from the United States by the
St. Lawrence. As the result of further Canadian agitation more extensive
preference was granted in the Canada Corn Bill of July 12, 1843. In
consideration of a duty of 3s. per quarter imposed by Canada on American
wheat, the duty imposed by Great Britain on Canadian wheat was reduced
to 1_s._ per quarter and the duty on flour made equivalent to the duty
on wheat (_Journals of the Legislative Assembly of the Province of
Canada_, 1843, pp. 16-17). Further, an Act was passed in 1846 (9 Vic. c.
1) "to encourage the transport of foreign produce through the canals of
this province," providing for the bonding of foreign wheat and maize for
exportation. To offset the abolition of the Corn Laws by Great Britain
in 1846 to 1849 which withdrew the preference, and the effects of an Act
passed by the United States in 1846 extending the bonding privilege to
Canadian produce, and consequently tending to divert Canadian produce
over American routes, Canada urged the abolition of the British
Navigation Acts and this was accomplished in 1849. See discussion
_Canada and Its Provinces_, vol. V, p. 189 ff.; also Lucas, Sir Chas.,
_Historical Geography of the British Colonies_, vol. V, p. 195 ff.]

[Footnote 373: "Hitherto (1855) the imports and exports of the lakes
have more than doubled every four years" (Hogan, Sheridan, _Canada_, p.
24).]

[Footnote 374: The removal of the preference of the Corn Laws was an
additional factor provoking the Annexationist Manifesto of 1849 (Allin,
C. D., and Jones, G. M., _Annexation, Preferential Trade, and
Reciprocity_, pp. 106-14).]

[Footnote 375: The completion of the railroad from Ogdensburg to
connexions with the coast in 1850 gave Oswego an additional advantage
(Andrews, I. D., _Report on the Trade and Commerce of the British North
American colonies and upon the trade of the great lakes and rivers_, p.
23).

                               1850                  1851

  Exported to and        Flour       Wheat      Flour      Wheat
      through           (bls.)      (bus.)     (bls.)     (bus.)

      Buffalo           19,244      66,001     10,860    101,655
      Oswego           260,872   1,094,444    259,875    670,202
      Ogdensburg        32,999        --       30,609     18,195
      Lake Champlain    90,998     192,918     11,940        626
      Montreal and
        Quebec         280,618      88,465    371,610    161,312

_Ibid._, p. 359.]

[Footnote 376: The exports and imports of Chicago are an excellent index:

            Imports     Exports

  1842      664,347     659,305
  1843      971,849     682,210
  1844    1,686,416     785,504
  1845    2,043,445   1,543,519
  1846    2,027,150   1,813,468
  1847    2,641,852   2,296,299
  1851   24,410,400   5,395,475

Shipment of Grain:

                     Bus.
      1852         5,873,141
      1853         6,412,181
      1854        12,932,320
      1855        16,633,700
      1856        21,583,221
      1860        31,256,697
      --Bross, W., _The Toronto and Georgian Bay Ship Canal_, p. 7.]

[Footnote 377: The expansion of the western states as illustrated in the
Oregon dispute of 1846 and the growth of the Red River Settlement and
British Columbia, particularly in view of the increasing knowledge of
the country, were factors emphasizing the advisability of a route
through British territory. It was proposed in 1851 after a review of the
possible advantages of a road to the Pacific that the Government should
sell land sixty miles wide from Lake Superior to the Pacific at a
reduced rate to a company in consideration of the settlement of the
country and the consequent gradual construction of the road. "When ten
miles of the road shall have been completed...a patent shall issue to
the company for the first half of the road or five miles." The scheme
was evidently borrowed from Mr. Whitney (McDonnell, A., "Observations
upon the construction of a railroad from Lake Superior to the Pacific,"
_Journals of the Legislative Assembly_, 1851, App. UU). A petition was
presented to the House asking for a charter (_Journals of the
Legislative Assembly_, p. 40) and referred to the railway committee
which stated "that the scheme ought not to be regarded as visionary or
impracticable," but that it "had no evidence...of the capacity of the
petitioners to commence or prosecute the undertaking," and consequently
reported "such application is premature." It indulged a hope that "the
Imperial Government will be led to entertain the subject as one of
national concern and to combine with it a general and well-organized
system of colonization" (_ibid._, App. UU). The geographically strategic
location of Toronto on a direct route from Lake Huron to Lake Ontario
shown in the early construction of a road to Lake Simcoe and Georgian
Bay made it particularly susceptible to the prospects of traffic
developed in the north-west. Agitation against the Hudson's Bay Company
began in the _Globe_ at almost the same time (Lewis, John, _George
Brown_, p. 213 ff.) and the advantages of a road occasioned considerable
discussion. See an article "The Great North-West, 1852," in Sandford
Fleming's _Scrap Book_. The directness of the route from Toronto in its
accessibility to the north-west was also advantageous for the grain
trade of the western states which followed the Great Lakes. Consequently
the northern railway was built to Collingwood on Georgian Bay in 1855.
The completion of the road, the evidences of American expansion, the
gold rush of British Columbia and the difficulties leading to the
appointment of the Hudson Bay Committee in 1857 led to vigorous
agitation (see an article in the _Globe_ elaborating on the competitive
advantages of the route via Collingwood to the Atlantic, August 28,
1856), to the resolutions of the Toronto Board of Trade in condemnation
of the Hudson's Bay Company, December, 1856, and to the energetic
activities of Toronto and Canada in the following years. To offset the
activities of Toronto in directing traffic along the route, via
Collingwood, to the Atlantic, Hon. A. N. Morin with seven members of
Parliament and ten laymen petitioned for a charter to build a road from
Portland to Montreal, to Ottawa, along the north shore of Lake Huron
crossing the river at Sault Ste Marie, and along the south shore of Lake
Erie to the Great Bend of the Missouri and the Pacific. The petition
included a proposal for an agreement with an American company, but there
were no tangible results (_Canadian Parliamentary Journals_, 1854-5,
vol. I, p. 447, and Morin, A. N., and others, _Petitions praying for a
charter by the name of Northern Pacific Railway Company_, Quebec, 1854.
1st Session, 5th Parliament, 18 Vic. 1854).]

[Footnote 378: See discussion of provincial assistance, _Canada and Its
Provinces_, vol. IV, p. 391 ff.]

[Footnote 379: The Great Western directly west from Suspension Bridge to
Windsor completed in 1854 was an important link connecting with American
roads. The Northern from Toronto on Lake Ontario to Collingwood on
Georgian Bay, completed in 1855, was a direct route supplementing the
roundabout water-route by Lake Huron and Lake Erie. The Grand Trunk west
from Sarnia to Montreal was completed in 1856 and extended to Portland
(Maine) and to Quebec and Rivire du Loup in 1860. (Trout, J. M. and
Edw., _The Railways of Canada for_ 1870-1, p. 35). The importance of the
extension of this line to the maritime provinces was evident in the
agitation of Quebec. (See an editorial debate between the _Quebec
Chronicle_, urging the expenditure of money for provincial defence, and
the _Intercolonial and the Toronto Globe_, emphasizing the necessity of
opening up the west, especially _Globe_, November 15, 1861, March, 12,
1862; _Leader_, June 12, 1862.)]

[Footnote 380: "It...has enjoyed a success scarcely paralleled in the
railroad history of America" (Hogan, Sheridan, op. cit., p. 101). It
must be added that the intense competition of American lines later
brought the road into difficulties.]

[Footnote 381: "In 1861 the line was embarrassed with a floating debt of
over twelve millions of dollars and was absolutely without credit"
(Trout, J. M. and E., op. cit., p. 82). For a description of the effect
of through traffic on the company's fortunes and for a general
discussion of the company's situation see _Report of the Commission
appointed to inquire into the Affairs of the Grand Trunk Railway_, 1861,
p. 36 ff. The long branch to Rivire du Loup depending upon the
construction of the Intercolonial for a connexion with the Atlantic
seaboard was a decided drawback (Trout, J. M. and Edw., op. cit., p.
79).]

[Footnote 382: In 1832 a wagon road was proposed "from Quebec to the
harbour of St. Andrews" to bring the exports of the provinces to the
Atlantic "with more speed, regularity and security" and "at all seasons
of the year" (Fairbairn, H., _The United Service Journal and Naval and
Military Magazine_, Pt. II, 1832, p. 209). In 1836 resolutions
favourable to a road were adopted by New Brunswick, Nova Scotia and
Lower Canada. The St. Andrews and Quebec Railroad Company was
incorporated, and with Imperial support, surveys were made in the same
year. To this the State of Maine objected successfully on the ground of
the unsettled boundary and proceedings were terminated (Fleming,
Sandford, _The Intercolonial_, p. 8 ff.). The settlement of the boundary
dispute in the Ashburton treaty of 1842 furnished additional evidence of
the energetic efforts of the State of Maine to prevent the construction
of the road (_ibid._, pp. 38-9). In 1846 another attempt was made in the
incorporation and survey of the Halifax and Quebec railway (_ibid._, p.
45 ff.). Considerable enthusiasm was aroused as evidenced in Howe's
famous statement on May 15, 1851: "I believe that many in this room will
live to hear the whistle of the steam-engine in the passes of the Rocky
Mountains and to make the journey from Halifax to the Pacific in five or
six days" (Longley, J. W., _Joseph Howe_, p. 135). But the rivalry of
St. John and Halifax as possible termini and the refusal of an Imperial
guarantee to the St. John or "Valley" route brought the negotiations to
a close (Fleming, Sandford, op. cit., p. 53). They were resumed in 1857
and after considerable persistence on the part of the colonies an
Imperial guarantee was given in 1867 (_ibid._, p. 59 ff.). The colonial
situation was aptly described as follows: "Increasing wealth and
intelligence with their consequent demand for a large field of
action...have led to the removal of some of the principal impediments in
the way of...intercourse: yet those very facilities only make more
vexatious the remaining obstacles to a perfect union" (Hamilton, P. S.,
_Observations upon a union of the colonies of British North America_,
1855, pp. 10-11).]

[Footnote 383: The American Civil War, particularly the "Trent affair,"
was generally recognized as an important factor in the success of the
colonies in securing aid for the Intercolonial (Watkin, E. W., op. cit.,
p. 86 ff.) and in bringing about Confederation. See Colquhoun, A. H. U.,
_The Fathers of Confederation_.]

[Footnote 384: The subject had become of general interest (see an
article McGee, T. D., "To Red River and the Pacific, via Victoria
Bridge, June 15, 1861," _Canadian News_, October 31, 1861; _Leader_,
November 4, 1861; a report of Sandford Fleming's address, Port Hope
_Weekly Guide_, December 25, 1858; an extensive pamphlet--_Pacific
Railway Claims of St. John, N.B., to be the Atlantic terminus_, 1858,
Smith, T. T. Vernon). The Duke of Newcastle in a letter May 6, 1863,
referring to a dispatch to Canada regarding the North-West Transit, "I
added words which (without dictation) will be understood as implying 'No
Intercolonial, No Transit'" (Watkin, E. W., op. cit., p. 133). The
negotiations of the period carried out by Mr. Watkin with regard to the
Hudson's Bay Company cannot be considered without reference to the Grand
Trunk (_ibid._, p. 14). Definite expression was given by Canada in the
69th resolution of the Quebec conference in 1864. "The communications
with the North-Western territory and the improvements required for the
development of the trade of the great west with the seaboard are
regarded by this conference as subjects of the highest importance to the
Federated Provinces, and shall be prosecuted at the earliest possible
period that the state of the finances will permit" (Pope, Joseph,
_Confederation documents, hitherto unpublished_, p. 52), and in Section
XI, Act. 146. British North America Act providing for the admission of
western provinces (_ibid._, p. 282).]

[Footnote 385: The retarding influence of the geographic characteristics
of the maritime provinces prior to the treaty of Paris in 1763, in which
the exposed mainland, the wealth of fisheries and the strategic location
at the mouth of the St. Lawrence made the competitive struggles about
the region inevitable, ceased with the dominance of the English. The
same characteristics conditioned a rapid increase in immigration when
peace was established, the New England states contributing to the
accessible shores of the Bay of Fundy, and Great Britain to the eastern
and northern shores of the territory (Ganong, W. F., "A Monograph of the
origins of settlements in the province of New Brunswick," _Proceedings
and Transactions of the Royal Society of Canada_, 1904, Section II, p.
49). For a similar reason New Brunswick and the shores of the Bay of
Fundy received the largest contributions of United Empire Loyalists
(_ibid._, p. 70), and the exposed character of the area made effective
the British naval supremacy in the Revolution as well as in the war of
1812. Settlement followed the numerous rivers and inlets of the region
(_ibid._, p. 71), but with the increased immigration (_ibid._, p. 75)
following the cessation of privateering which the peculiar character of
the coast-line encouraged during the wars, there followed the
construction of roads to the interior (_ibid._, p. 89). The increase in
population in Nova Scotia:

  1818    82,053
  1828   123,848
  1851   276,117
  1861   330,857

(Compiled from Haliburton, T. C., _An Historical and Statistical Account
of Nova Scotia_, vol. II, pp. 276-7, and _Census of Nova Scotia_, 1862,
p. 7.)

And in New Brunswick:

  1824      74,176
  1834     119,457
  1840     156,162
  1851-2   193,800
  1860-1   252,047

(Hatheway, C. L., _The History of New Brunswick_, p. 81; and Monro
Alexander, _New Brunswick, with a brief outline of Nova Scotia and
Prince Edward Island_.)

and consequently in trade, further led to the construction of railroads.
In Nova Scotia a railroad across the province from Halifax to Truro and
to Windsor was completed in 1858 and to Pictou in 1867, and in New
Brunswick in consequence of the Quebec agitation a road was built from
St. Andrews to Canterbury in 1858 and to Richmond in 1862 (Trout, J. M.
and E., op. cit., p. 36). A railway was also opened from St. John to
Shediac in 1860 (Fleming, S., op. cit., p. 56).]

[Footnote 386: Provision was made for the construction of the road in
the B. N. A. Act, Sec. X, Act 145 (Pope, Joseph, op. cit., p. 282).]

[Footnote 387: Of such a nature were the increasing duties imposed by
Canada on United States manufactured articles (see the yearly changes
1855-9, Haynes, F. E., _The Reciprocity Treaty with Canada of_ 1854;
_Publications of the American Economic Association_, vol. III, No. 6, p.
49) and the reduction and abolition of tolls on the Canadian canals
(_ibid._, p. 54). For a concise discussion of the situation, see
Hopkins, J. Castell, _Canada: An Encyclopdia of the Country_, p. 346
ff. Canada's expenditure on the transportation improvements to divert
traffic over her own territory was met by revenue received from
increased duties designed to the same end (_ibid._).]

[Footnote 388:
                    Population

  Ontario           1,620,851
  Quebec            1,191,516
  New Brunswick       285,594
  Nova Scotia         378,800

    Compiled from _Census of Canada_, vol. VI, 1870-1.]




  II

  From National to Economic Union (1870-1880)


The disparity between political union and the economic development
necessary for fulfilment of the essential terms was immediately
reflected in the controversial character[389] of the debates, leading to
acceptance of the terms by the Canadian Parliament, which insisted upon
safeguards against excessive taxation. The policy of the Government, as
embodied in the Act[390] providing for execution of the terms, was
carefully planned to avoid additional expense to Canada, and it proposed
to meet the expenses of construction of the road from land grants.
Additional evidence of disparity was found in the energetic[391] and
successful efforts of the Government to secure an imperially guaranteed
loan, and in the appearance of a clause permitting the possibility[392]
of private enterprise sharing in the coveted traffic of the western
states, and consequently ensuring the attractiveness and success of the
policy. The policy in the face of a task which involved the construction
of a railroad through barriers, the magnitude[393] of which was only
beginning to be known, to unite the sparsely settled districts of
British Columbia and Red River to Canada, necessitated dependence upon
American traffic and American interests.

The importance of dependence on the traffic of the western states was
evident in the disastrous termination of the two more concrete
proposals[394] encouraged by the Government's policy. In the acts of
incorporation of both companies[395] stress was placed on connexions
with the railways of the United States designed to secure a share of the
traffic of the western states. The existence of two companies, the
Interoceanic with head-quarters at Toronto and the Canada Pacific with
head-quarters at Montreal, bore witness to competition[396] between
geographically strategic localities for this traffic. Hon. D. L.
MacPherson, head of the Interoceanic Company,[397] and others connected
with the Grand Trunk were interested in promoting a steamship line from
Portland to Europe. Sir Hugh Allan, head of the Canada Pacific Company,
alarmed[398] at the prospects of diversion of traffic from his steamship
line, energetically prosecuted the construction of railways westward to
strengthen control of traffic. This activity in turn aroused the
hostility of the Grand Trunk.[399] Finally the strength of American
influence[400], inevitable because of the importance of American
traffic, and the consequent stubbornness[401] of the struggle between
the companies to secure the charter, led to the tragic breakdown[402]
of the whole policy. In the events incidental to competition between Sir
Hugh Allan and Montreal, and the Grand Trunk and Toronto, to secure the
charter, the latter appealed to national sentiment in a demand for the
exclusion of American interests. As a result of compliance with the
demand, there developed the Pacific Scandal, the failure of Sir Hugh
Allan's programme and the downfall of the Government. The dependence of
private enterprise on American traffic was significant indeed of
Canadian inability to meet the terms of the contract.

As a result of increasing knowledge and appreciation of the character
and magnitude of the task and of the inability of Canada, reflected in
the persistent refusal to bear an increase in taxation, and in the
events of the Pacific Scandal, to perform the task, a change in the
policy[403] of construction was necessary. The policy enunciated by
Alexander MacKenzie, the new premier of Canada, in 1874,[404] proposing
the utilization of the enormous stretches of water communication between
the Rocky Mountains and the eastern terminus, and embodied in the
Act[405] of the same year, providing for the gradual construction of
the road and for settlement of the country, was a result.

This change implied modification[406] of the terms of Union with British
Columbia and evoked vigorous protests[407] from the people of the
province who were unusually petulant as a result of the legacy of
impatience inherited from the period of the gold discoveries and the
consequent hectic development. Appeal[408] was made to the Imperial
authorities and the Earl of Carnarvon was agreed upon as an arbitrator.
The arbitration award[409] expressed in the Carnarvon terms was
favourable to Canada and generally a recognition of the impossibility
of fulfilling the terms of Union, and a justification of the new policy.

Operations were begun on portions of the route strategically located for
settlement of the country. An attempt was made to continue and improve
the Dawson route,[410] from Lake Superior to Red River for the use of
settlers. Surveys were prosecuted[411] particularly in British
Columbia[412] to secure early location of the line preparatory to
construction of sections of permanent railroad and of telegraph
line.[413] To improve the communication between Red River and Canada,
provision was made for extension of the Canada Central Railway to
Georgian Bay,[414] for construction of a railroad from Lake Superior to
Red River,[415] and from Red River to the United States boundary.[416]
With completion of the latter section transportation of materials to
western Canada was facilitated and sections were built west of Red
River.[417] Construction was prosecuted under difficulties serious and
to some extent recognized[418] as inherent[419] in the later policy. The
executive capacity of the then recently organized Federal Government was
sorely taxed with the immensity of the task. Since it was obliged to
rely on technical skill inadequately developed[420] for a task of that
character, mistakes[421] were inevitable.

Embarrassment to the Government which these mistakes occasioned,
aggravated by the persistent efforts[422] of an energetic opposition,
led to a search for a plan of construction possessing fewer
disconcerting features. Though achieved under various difficulties,
progress of the work on geographically strategic portions of the route,
particularly the completion of the road from the United States boundary
to Winnipeg, brought the search of the Government for such a plan nearer
success. The economic development of western Canada[423] which made
possible the construction of the branch was stimulated with its
completion. Increased trade between Manitoba and the United States was a
stimulus to[424] increasing demands, incidental to the national and
economic growth of Canada,[425] for a more rapid and satisfactory
prosecution of construction. The rapidity desired could alone be
accomplished by private enterprise and central control. Consequently,
the Government energetically[426] sought a group of capitalists to
undertake the task, and as a result of the progress which had been made
in construction of the project, and of the economic development, and
the recognized possibilities of the areas involved, success was
eventually attained. In June, 1880, it was announced by Sir John A.
MacDonald that the necessary co-operation of capitalists had been
secured. Conclusive evidence was at hand of the ability of Canada to
support a transcontinental railroad and to overcome the barriers which
had long held back its development. The economic development of the
country became adjusted to the national development, which had made
essential the contract of union with British Columbia, and had
occasioned the innumerable difficulties of the period. The growing
strength of the abutments was sufficient to permit the completion of the
bridge. The contract for the construction of the road was signed on
October 21, 1880.

[Footnote 389: The House of Commons was by no means unanimous in the
support of the terms of union. Despite the constant and well-directed
assurance of the Government that "it was not the intention of the
Government to construct the road, but it would be undertaken by
companies to be assisted mainly by land grants. (Hear, hear.) It was not
the intention of the Government to burden the exchequer much to obtain
this railway." (Hear, hear.) Speech of the Hon. Sir Geo. E. Cartier,
(_House of Commons Debates_, 1871, vol. II, p. 662), an amendment "that
the further consideration of the question be postponed for the present
session of Parliament" was lost only on a vote of 75 to 85 (_Journals of
the House of Commons, Canada_, 1871, p. 163). To make its position even
more secure in the House of Commons, the Government adopted a resolution
specifically stating, "That the railway should be constructed and worked
by private enterprise and not by the Dominion Government; and that the
public aid to be given to secure the undertaking should consist of such
liberal grants of land and such subsidy in money or other aid not
increasing the present rate of taxation, as the Parliament of Canada
shall hereafter determine" (_ibid._, p. 266). This attitude was
apparently understood to some extent by British Columbia. "Ten years was
not put into the terms of union as an absolute limit but simply as a
bona fides that the Government would commence the road and carry it on
to completion as quickly as could be without injury to the interests of
the country" (speech of Mr. Carrall, one of the delegates from British
Columbia appointed to arrange the terms of union. _Senate Debates_,
1876, p. 153). "If they had said twelve or eighteen years that time
would have been accepted with equal readiness, as all that was
understood was that the line should be built as soon as possible"
(speech of Mr. Trutch, another of the delegates. _Sessional Papers_,
1875, No. 19, p. 25).]

[Footnote 390: The preamble to the Act restated the resolution "that the
public aid to be given...should consist of such liberal grants of land
and such subsidy in money or other aid, not increasing the present rate
of taxation." "And it was the intention of the Government not only to
carry it out in spirit but to the letter. (Hear, hear.)" (Speech of the
Hon. Sir Geo. E. Cartier, _House of Commons Debates_, 1872, p. 172.) The
Act provided for the construction and operation of the road by "one
company having a subscribed capital of at least ten million dollars" and
a deposit with the Receiver-General of 10 per cent. of the capital. Of
most importance, it provided for a land grant not to exceed fifty
million acres to be granted "in blocks not exceeding twenty miles in
depth, on each side of the railway alternating with other blocks of like
depth, on each side thereof to be reserved by and for the Dominion
Government, for the purposes of this Act, and to be sold by it, and the
proceeds thereof applied towards reimbursing the sums expended by the
Dominion under this Act....Provided that, so far as may be practicable,
none of such alternate blocks of land...shall be less than six miles nor
more than twelve miles in front on the railway, and the blocks shall be
so laid out that each block granted to the company on one side of the
railway shall be opposite to another block of like width reserved for
the Government on the other side of the railway." The sums to be
expended by the Dominion referred to "aid in money to be granted...not
exceeding thirty millions of dollars" (35 Vic. c. 71).]

[Footnote 391: Efforts were made in respect to demands for compensation
for damage occasioned by the Fenian raids. Canada urged that Great
Britain should insist upon payment by the United States, since it was
claimed that more prompt action on the part of that country would have
lessened the damage sustained (_Sessional Papers_, No. 26, 1872, p. 2).
The United States refused to consider these claims, and on the ground of
expediency they were dropped by Great Britain (p. 11). As a result
Canada claimed that Great Britain was responsible for the payment of
compensation and suggested that such compensation should take the form
of a guarantee for a loan of 4,000,000 for the construction of a
Pacific railroad (_Correspondence with the Government of Canada in
connexion with the appointment of the joint High Commission and the
treaty of Washington_, p. 3). Great Britain replied by offering to
guarantee a loan of 2,500,000 (_ibid._, p. 15), and to this Canada
reluctantly consented (_Further correspondence with the Government of
Canada in connexion with the appointment of the joint High Commission
and the treaty of Washington_, p. 1). In addition Canada asked that an
existing Imperial guarantee for 1,100,000 for the construction of
fortifications should be increased to 1,500,000 and--since the
settlement of difficulties with the United States made fortifications
unnecessary--transferred to the guarantee for the construction of the
Pacific railroad, making a total of 4,000,000 imperially guaranteed for
that purpose (_Further correspondence with the Government of Canada in
connexion with the treaty of Washington_, pp. 3, 5-6). Great Britain
objected to the increase of 400,000, but agreed to the transfer
(_ibid._, pp. 6-7). To this Canada again agreed and the final
negotiations found her in possession of an imperially guaranteed loan of
3,600,000 (_ibid._, pp. 7-8).]

[Footnote 392: Section 16 of the Act provided for construction and
working of branch lines from the railway "to some point on Lake Superior
in British territory" and to some point on the line between the Province
of Manitoba and the United States of America (_ibid._).]

[Footnote 393: Surveys conducted under the auspices of the Government
were of an illuminating character. On April 10, 1872, surveys between
Mattawa and Nepigon Bay had been completed with one exception and
between Nepigon Bay and Fort Gary with two breaks. No practicable line
could be found for a distance of one hundred miles east from the River
Nepigon (Fleming, Sandford, _Progress Report on the Canadian Pacific
Railway, Exploratory Survey_, p. 9). One line through the Rocky
Mountains to the Pacific had been found practicable (_ibid._, p. 12);
but "a great deal still remains to be done" (_ibid._, p. 10). Another
report was made on January 26, 1874. Seven distinct routes had been
found available through the Rocky Mountain district, but a choice was
still unwarranted because of insufficient information (Fleming,
Sandford, _Exploratory Survey Canadian Pacific Railway_, p. 34). Three
practical routes had been found north of Lake Superior (_ibid._, p. 27
ff.). The reports were optimistic as to the possibilities of a road, but
at the same time eloquent of the difficulties to be surmounted. See also
Grant, G. M., _Ocean to Ocean_. It was estimated by Sandford Fleming
that the road would cost $100,000,000 (speech of Alexander MacKenzie,
_Globe_, May 13, 1874).]

[Footnote 394: The proposals and suggestions pertaining to the
construction of a road to the Pacific continued to be made and became
more numerous. A wooden railway was advocated from Lake Superior to Red
River. The cost of the railway and of the stations and rolling-stock was
to be paid from land sales (Foster, John, _Railway from Lake Superior to
Red River Settlement_, also _Descriptions of a Wooden Railway_). On
March 17, 1870, a petition for an act of incorporation of the Canadian
Pacific Railway and Navigation Company with power to construct a railway
from Ottawa through the Red River territory...to the Pacific Ocean at
Bute Inlet and also for assistance in a grant of wild lands was
presented to the Canadian Parliament (_Journals of the House of Commons,
Canada_, 1870, p. 82), but received little further notice (_ibid_., p.
10). A similar fate was met (_ibid._, 1871, p. 153) by a petition of
Alfred Waddington and William Kersteman praying for an act of
incorporation of the Canada Pacific Railway (_ibid._, p. 139). The
petitioners included several Americans (_Report of Royal Commissioners_,
1873, pp. 99-100), and the petition was based on a route carefully
selected by Waddington.

    Estimate of length of road:
                                         Miles

      Mattawan to Fort Gary               985
      Plain of the Saskatchewan           985
      Rocky Mountains                      52
      British Columbia                    570
      Ottawa to Fort Gary               1,180
      Montreal to Pacific               2,777

        Nature of Country                    Level  Rolling   Poor
                                             miles   miles   miles

      Valley of Ottawa                          --     70      --
      Montreal Valley                           69     --      30
      Clay level country                       250     --      --
      Lawrentides north of Lake Superior        20     30      63
      Neepigon and Black Sturgeon district      41     25      --
      Height of land to White Mouth River       --     --     335
      Great Western Plain                    1,012     --      --
      Great Western Plain (approach to
        Rocky Mountains)                        --     25      --
      Valley of Assiniboia                      --     30      --
      Rocky Mountains to Cache                  --     --      80
      Bald or Gold Range beyond                 --     --     116
      Along Horsefly Lake and River             --     20      --
      Chilwater Plain                          152     --      --
      Cascade Range                             --     --      84
                                             _____    ___     ___
                                             1,544    200     708

                                                            Miles

      Rich and cultivable territory                         1,744
      Grazing timberland, mountainous                         723

Waddington, Alfred. _Sketch of Proposed Line of Overland route_, 1871.
The proposals favoured by the Government were incorporated as the
Interoceanic Company (35 Vic. c. 72) and the Canada Pacific Company (35
Vic. c. 73).]

[Footnote 395: Clause 3 of both Acts provided for construction of branch
lines "from the main line to the River St. Mary at some point on
Neepigon Bay or Thunder Bay and from or near Winnipeg River to the Lake
of the Woods and from Fort Garry or Winnipeg to Pembina or to any other
point on the south boundary line of the Province of Manitoba, and from
any point on the main line in British Columbia to any point on the
boundary line of that province so as to connect with the railway system
of the United States of America and to construct a railway bridge across
the said River St. Mary and across Johnson's Straits." Clause 35 also
provided that the Directors of the company "generally may enter into
such agreements as will secure uniform and complete railway connexion
with the system of railways now or hereafter existing in Canada or the
United States."]

[Footnote 396: The failure of Canadian attempts to direct American
traffic over Canadian territory had more serious consequences for
Montreal than Toronto, since the north-easterly direction of the St.
Lawrence increased the distance to the seaboard by Montreal, and traffic
went by Niagara and Oswego. For Toronto, situated farther west, this
diversion of traffic was less serious. Montreal had early urged the
advisability of a railroad west to Lake Huron which would offset this
handicap (see petitions Morin, A. N., and others, and the Canada Central
Railway, Trout, J. M. and Edw., op. cit., p. 170). The Northern
Colonization Railway, incorporated in 1869, to be constructed from
Montreal to Ottawa and westward to connect with the Canada Central
Railway, was a further step on the part of Montreal to secure more
direct control of the traffic (_ibid._, p. 147). Competition between
Montreal and Toronto made necessary the choice of an eastern terminus of
the Pacific road on or near Lake Nipissing (clause 1, 35 Vic. c. 71).
"We have been obliged to place the terminus far from your city and also
from Toronto for political reasons on account of the ambition of Toronto
and Montreal" (DeCelles, A. D., _Sir George Etiennes Cartier_, p. 52).
For a similar reason the acts of incorporation were almost identical.]

[Footnote 397: The Canada Pacific Railway organized on June 21, 1872,
with Sir Hugh Allan as president (_Correspondence relative to the
Canadian Pacific Railway_, 1874, p. 32). For a full list of the fifty
directors, see _ibid._, p. 37. The Interoceanic Company elected Hon. D.
L. MacPherson as President on June 20, 1872 (_ibid._, p. 42). For a full
list of directors, see _Railroad Gazette_, vol. IV, p. 287.]

[Footnote 398: Sir Hugh Allan had about $3,000,000 invested in sea-going
steamers alone (evidence of Hon. J. J. C. Abbott, _Correspondence
relative to the Canadian Pacific Railway_, 1874, p. 229).]

[Footnote 399: Evidence of Sir J. A. MacDonald, _Report of the Royal
Commissioners_, 1873, p. 116. See also a pamphlet _Railway interests of
the city of Montreal_, 1872, printed by the Gazette Printing House, the
medium of Sir Hugh Allan, urging the subscription of $1,000,000 for the
Northern Colonization Railway by the City of Montreal.]

[Footnote 400: The Northern Pacific was particularly interested in
securing direct communications with Boston, and since the President had
an interest in the Central Vermont a Canadian road was a geographically
strategic link. These interests favoured the Montreal route as the most
direct, and an acquaintanceship with Sir Hugh Allan quickly ripened
(Smalley, E. V., _History of the Northern Pacific Railroad_, p. 134).
Jay Cooke, financier of the Northern Pacific, was also anxious to secure
control of the Canadian proposal to prevent construction in the
North-west and consequently competition with the Northern Pacific for
capital and emigration in England and Europe (Oberholtzer, E. P., _Jay
Cooke, Financier of the Civil War_, vol. II, p. 349). Americans first
approached the Government with respect to the road at the invitation of
Mr. Waddington, but the proposal, as has been stated, was regarded as
premature (evidence of Sir J. A. MacDonald, _Report of the Royal
Commissioners_, 1873, pp. 99-100). Sir Francis Hincks, a member of the
Cabinet, gave the names of these American gentlemen to Sir Hugh Allan,
though not with the Government's approval. On October 5, 1871, in
company with Mr. Smith and Mr. McMullen of Chicago and others, Sir Hugh
Allan arrived in Ottawa to arrange a definite proposition, but the
Government declined to go further than to receive propositions
(_ibid._). Relations between Sir Hugh Allan and the American interests
continued (_ibid._, pp. 190-1), and on December 23, 1871, an agreement
was drawn up in New York. They agreed to form a company under a charter
secured by Sir Hugh Allan, Charles M. Smith and Geo. W. McMullen from
the Canadian Parliament. Of the $10,000,000 stock Smith and McMullen
agreed to subscribe $4,500,000, and the other parties the remainder, the
latter to pay 10 per cent. of the whole $10,000,000 to Jay Cooke &
Company to the credit of the Canadian Pacific Railway on its
organization, to be used as the directors determined. On organization of
the company no further assessments should be made on the stock without
the consent of nine-tenths of all outstanding stock of the company at
some regular or special shareholders' meeting. The Canada Land and
Improvement Company was to be incorporated for the purpose of
constructing the railway, and for the purchase and sale of lands, and
the interests of the parties were to be in the same proportion as in the
C.P.R. All contracts for construction were to be let to this company and
it was to be allowed the use of the railway during construction without
charge. Its capital was to be $1,000,000 and profits arising from
construction were to be used to reimburse the parties subscribing
$5,500,000 for the $1,000,000 paid by them as a 10 per cent. instalment
of the Railway stock with interest thereon at the rate of 7 per cent. A
majority of the stock in both companies was to be held by a trustee
selected by the subscribers until the road was built, or until
two-thirds of the stockholders terminated the trust--the stock to be
voted by the trustee "as he shall be directed to vote by the owners of a
majority thereof." After the payment of $1,000,000 by the parties
referred to, profits were to be divided among stockholders in proportion
to shares held. If the Canadian Parliament failed to organize the Land
and Improvement Company provision was made that it should be organized
in the United States. No money over $100,000 was to be drawn from the
funds of the proposed company unless by consent of two-thirds of the
stockholders. The essential conditions of the charter were to be a
$15,000 per mile subsidy, and a land grant of 20,000 acres per mile
except for the road from Fort Gary east to a junction with the section
proposed to be built from Lake Nipissing to the Sault Ste Marie, on
which the land grant was 25,000 acres per mile, the payments to be
absolute on the completion of each section of twenty miles, and the only
forfeiture in case of failure to complete the road within the time limit
was to be the right to finish the uncompleted portions. Subscribers: J.
Cooke & Co., $1,000,000; D. McLaren, $500,000; W. B. Ogden, $637,500; J.
Gregory Smith, $500,000; G. W. Cass, $637,500; H. R. Payson, $175,000;
Thos. A. Scott, $500,000; F. E. Canda, $175,000; C. J. Canda, $150,000;
R. D. Rice, $250,000; Frederick Billings, $30,000; A. H. Barney,
$230,000; Wm. G. Fays, $230,000; T. H. Canfield and W. Windowa,
$180,000; S. Wilkinson, $750,000; W. Hinckman, $50,000; Allan, Smith and
McMullen each $1,450,000 (_Correspondence relative to the C.P.R._, p.
215).

With this agreement Sir Hugh Allan approached Mr. Brydges, Hon. D. L.
MacPherson and other influential men to secure their co-operation
(_ibid._, p. 52 ff.). The Hon. D. L. MacPherson objected to a proposal
in which seventeen-twentieths of the capital was subscribed by
Americans, even though of the eleven directors six were to be British
subjects resident in Canada. He pointed out further that all the members
of the board were directors of the Northern Pacific Railway including
the President and Vice-President, and refused to join it (evidence of
the Hon. D. L. MacPherson, _ibid._, p. 111 ff.). Mr. Brydges, one of the
three Canadian directors of the Grand Trunk, also refused to become a
member (_ibid._, p. 54). These difficulties made necessary more
strategic plans. A supplemental contract was made with the American
interests, giving Sir Hugh Allan greater freedom and permitting him to
secure more funds. Dated, March 28, 1872. They agreed to take
$35,000,000 in money and 50,000,000 acres of land, the money to be paid
pro rata per mile as constructed, each mile to be counted as 1/2,500th
part of the whole line to be built, and the land at the rate of 20,000
acres per mile. Sir Hugh Allan was given power to accept a reduction to
$33,000,000 and 50,000,000 acres of land, while a committee of five, J.
Gregory Smith, Sir Hugh Allan, G. W. McMullen, Geo. W. Cass, and Wm. B.
Ogden, were given authority to accept $30,000,000 and 50,000,000 acres
of land. This committee was also given power to make assessments for the
general purposes of the company, but not exceeding one and a half per
cent. of the amounts agreed to be subscribed by them to the stock of the
Company. These assessments were to be considered as part of the
$1,000,000 agreed to be paid in the contract of December 23, 1871. The
Committee was authorized to take action which it deemed necessary.
Signed Jay Cooke & Company, J. Gregory Smith, B. P. Cheney, R. D. Rice,
T. H. Canfield, A. H. Barney, G. W. Cass, D. McLaren, F. Billings, W.
Windowa, H. R. Payson, F. E. Canda, C. J. Canda, S. Wilkinson, W. B.
Ogden, W. Hinckman, H. Allan, C. M. Smith, G. W. McMullen (_ibid._, p.
257).

With these funds "on a calm review of the situation I satisfied myself
that the whole decision of the question must ultimately be in the hands
of...Sir George E. Cartier...who is the salaried solicitor of the Grand
Trunk Railway to which this (railroad) would be in
opposition....I...proceeded to subsidize the newspapers...I...called on
many of the inhabitants. I visited the priests....This succeeded so well
that"..."he then agreed to give the contract as required" (_Report of
the Royal Commissioners_, 1873, pp. 205-6). Sir Hugh Allan's success was
temporary. The Government proceeded to form a new company of which Sir
Hugh Allan was president. In order to lull all suspicions raised by the
Interoceanic Company in its protests against American connexions
(evidence of Hon. A. C. Campbell, _ibid._, p. 84 ff.), every effort was
made to exclude American interests. The directors were carefully chosen
(_ibid._, p. 105 ff.). The Act (corresponding in the main to the earlier
Acts), provided that no shares were transferable within six years
without the consent of the Government and the directors, nor after six
years unless with the consent of the directors. The company was required
to keep a stock register and a bond register. Each director was required
to be a British subject and a holder of at least 250 shares of stock.
The President and a majority of the directors were further required to
be residents of Canada. Provision for branches to the St. Mary's River
and to the boundary in British Columbia were significantly absent
(_Journals of the House of Commons_, 1873, p. 55 ff.). Sir Hugh Allan
had found it necessary to write, "Dear Mr. McMullen," on October 24,
1872, informing him that, "Public sentiment seems to be decided that the
road shall be built by Canadians only" (_Report of the Royal
Commissioners_, 1873, p. 209).]

[Footnote 401: Hostility between the companies and failure of the
Government to secure an amalgamation were facts particularly eloquent as
to the character of the interests at stake. The Government was obliged
to confine its attempts to securing an amalgamation, since offer of the
charter to either company would alienate the other company's support
(evidence of Sir John A. MacDonald, _ibid._, p. 102). Its intimation to
both companies expressing the desire that they should amalgamate met
different receptions. (_Correspondence relative to the C.P.R._, p. 32
and p. 43). The Canada Pacific Company expressed its willingness to
comply with the Government's wishes (_ibid._, p. 33), and the
Interoceanic Company replied that amalgamation was impossible. The
Canada Pacific Company was under suspicion as to its relationships with
Northern Pacific interests and it was stated that a company not
pre-eminently national could not hope to secure money in the British
market. American control was interested in the retardation of
North-Western Canada (_ibid._, p. 43). The Canada Pacific Company
protested against the charges implied and denied any connexion with
foreign interests. In the draft charter it had proposed a Board of
Directors exclusively British, while the Interoceanic Company had
proposed only a majority of British directors. The plan of amalgamation
proposed that a majority of the new directors should be agreed upon
between the two companies and the Government, and this it was urged
would effectively prevent American dominance (_ibid._, p. 34 ff.). The
Interoceanic Company objected that there was little protection in the
plan of amalgamation proposed. It refused to accept the denial of
connexion with American interests and pointed to the lack of public
support afforded the Canada Pacific (_ibid._, p. 46). The Government
intervened with an expression of confidence in Sir Hugh Allan (_ibid._,
p. 38), but the Interoceanic Company remained obstinate, and insisted
that amalgamation would weaken public support (_ibid._., p. 51).
Impending elections made necessary renewed efforts (evidence of Sir John
A. MacDonald, _ibid._, p. 174). A conference was held and details
arranged, but the Hon. D. L. MacPherson persistently refused to agree to
Sir Hugh Allan becoming President of an amalgamated company (_ibid._,
pp. 114-5). The other directors of the Interoceanic Company were
eventually persuaded, but the President remained obdurate on the ground
of control of American interests (evidence of Hon. A. C. Campbell,
_ibid._, pp. 158-9).]

[Footnote 402: On April 2, 1873, a motion was made in the House of
Commons charging that Sir Hugh Allan had been in agreement with American
interests (_Report of the Royal Commissioners_, 1873, p. iii.). On April
8, Sir John A. MacDonald moved that a committee be appointed to
investigate the charges (_ibid._, p. iv.). On July 3, a series of
letters and telegrams written by Sir Hugh Allan to American interests
was published in the _Montreal Herald_ (_Correspondence relative to the
C.P.R._, 1874, p. 52 ff.). On the following day, Sir Hugh Allan
published an explanatory statement in the _Montreal Gazette_, admitting
the agreement with American interests, but denying the charge that the
Government knew of its existence. The McMullen correspondence followed
in the _Montreal Herald_ and gave additional light on the situation. The
exclusion of American interests by the Government and consequently the
suspending of negotiations by Sir Hugh Allan, had led to demands of
Americans on Sir Hugh Allan (_Correspondence relative to the C.P.R._, p.
66), and despite all precautions (_ibid._, p. 259) the correspondence
appeared in the newspapers. Consequently the corporation was hampered in
its efforts to raise capital in England (_ibid_., p. 233). A Royal
Commission was appointed on August 14, 1873, to take the place of the
Committee (_Report of the Royal Commissioners_, 1873, p. vi.). It
presented the evidence to Parliament on its opening on October 23, and
after a two weeks' debate, Sir John A. MacDonald resigned on November 5.
For a defence of Sir John A. MacDonald's position throughout the
episode, see Pope, _Memoirs of the Right Honourable Sir John Alexander
MacDonald_, vol. II, chap. 23, pp. 161-96.]

[Footnote 403: Sandford Fleming as government engineer undoubtedly
understood the situation. "I feel satisfied...after giving the matter
careful consideration that it would be best during the next two years or
so to carry on initiatory and desirable works directly by the Department
of Public Works" (Memorandum, September 29, 1874. _Sessional Papers_,
No. 48_cc_, 1882).]

[Footnote 404: Address to the electors of Lambton, January, 1874,
MacKenzie, Alexander; also his speech introducing the Act of 1874
(_Globe_, May 13, 1874).]

[Footnote 405: A branch was proposed from the Eastern terminus to some
point on Georgian Bay to take advantage of Lake Superior. Provision was
made for construction of a telegraph line as soon as the railway had
been located. It provided for contracts for construction of subsections
under the superintendence of the Department of Public Works. "The total
sum to be paid to the contractors...shall be ten thousand dollars per
mile...and no further sum...but interest at the rate of four per cent.
per annum for twenty-five years from the completion of the work on a
sum...for each mile...shall be payable to the contractors and guarantees
shall be given...and the tenders for the work shall be required to state
the lowest sum per mile on which such interest and guarantees will be
required. That a quantity of land not exceeding twenty thousand acres
for each mile--shall be appropriated to alternate sections of twenty
square miles each along the line of the said railway...each section
having a frontage of not less than three miles nor more than six
miles...and that two-thirds of the quantity of land so appropriated
shall be sold by the Government at such prices as may be...agreed upon
(with)...the contractors, and the proceeds thereof...paid...for the
contractors,...the remaining third to be conveyed to the contractors.
Each...subsection...shall be the property of the contractors...and shall
be worked by...such contractors under such regulations as may...be made
by the Governor in Council....In every contract...the Government...shall
reserve the right to purchase...the said railway...on payment of a sum
equal to the actual cost of the said railway...and ten per cent. in
addition thereto" (37 Vic. c. 14). Further provision for expenses of
construction were made in an Act appropriating $2,500,000 out of the sum
guaranteed by the Imperial authorities and providing for this sum a
sinking fund of 1 per cent. per annum and $1,500,000 out of a sum to be
raised without an Imperial guarantee (37 Vic. c. 2).]

[Footnote 406: The province had earlier shown signs of impatience at the
delay in construction, but these were more pronounced as a result of
MacKenzie's policy. As an evidence of good faith the Dominion Government
passed an order in council on June 7, 1873, that "Esquimault...should be
fixed as the terminus of the Canadian Pacific Railway and that a line of
railway be located between the harbour of Esquimault and Seymour
Narrows," and recommended that British Columbia be asked to transfer to
Canada a strip of land twenty miles in width along the eastern coast of
Vancouver Island between Esquimault and Seymour Narrows (_Correspondence
respecting Canadian Pacific Railway Act so far as regards British
Columbia_, 1875, p. 51). The province replied on July 25, objecting to
the conveyance of the land until the line of railway was defined, but
agreeing to make a reservation (_ibid._). On September 20 the Dominion
Government was asked to complete the surveys (_ibid._, p. 55). Alexander
MacKenzie, in a speech at Sarnia on November 25, 1873, tactlessly
declared his intention of securing a modification of the terms of Union.
On February 19, 1874, Mr. J. D. Edgar was sent by the Canadian
Government to British Columbia to arrive at some basis of agreement. He
was definitely instructed to insist that the construction of the road
within the time set was an impossibility, and to point out that the
terms did not require construction to Victoria or Esquimault and that
the terms were only assented to by Canada to secure election pledges
(_ibid._, p. 31). He suggested that the Dominion Government would (1)
Commence at once and finish as soon as possible a road from Esquimault
to Nanaimo, (2) Spare no expense in settling as rapidly as possible a
line to be followed by the railway on the mainland, (3) Make at once a
wagon road and line of telegraph along the whole length of the railway
in British Columbia, and continue the telegraph across the continent,
(4) The moment the surveys and road on the mainland were completed,
spend the minimum amount of $1,500,000 annually upon the construction of
the railway within the province (letter to Attorney-General from J. D.
Edgar, May 8, 1874, _ibid._, p. 36). The Provincial Premier at once
asked for Mr. Edgar's credentials (_ibid_., p. 38). Mr. Edgar was
recalled (_ibid._, p. 61), and on June 8 the announcement made that the
terms were withdrawn (_ibid._).]

[Footnote 407: A protest was made on November 22, 1873 (_ibid._, p. 57)
and again on February 9, 1874, to the Dominion Government against the
infraction of the terms of Union (_ibid._, p. 58). Little satisfaction
was obtained, since the Government replied that construction was
impossible until the line had been located (_ibid._, p. 60).]

[Footnote 408: In answer to a telegram of June 11, 1874, from British
Columbia to the Earl of Carnarvon, stating that a delegate was to be
sent to appeal against Canada's bad faith, Carnarvon ventured to act as
arbitrator (_ibid._, p. 24). To this British Columbia agreed on August 3
(_ibid._, p. 69) and Canada on July 23 (_ibid._, p. 72).]

[Footnote 409: The cases of both parties were carefully presented. As a
preliminary Mr. Walkem, the representative of British Columbia (_ibid._,
p. 63), in a memorandum of June 15, 1874, reviewed the whole situation,
emphasizing the loss to British Columbia occasioned by delay of the
project and the very evident negligence of Canada in not fulfilling the
terms as shown, particularly in the policy embodied in the Canadian
Pacific Railway Act of 1874 (_ibid._, p. 39 ff.). Mr. MacKenzie, on the
other hand, insisted that it was regarded as essential to the contract
that the rate of taxation should not be increased and that the terms
were directory and not mandatory. He reviewed the Edgar proposal and on
the basis of Mr. Edgar's report (_ibid._, p. 29 ff.) pointed out that
the intense interest of British Columbia was due to the enormous
personal benefits to be derived by a population of 8,576 from vast
construction expenditure (_ibid._, p. 27 ff.). In a dispatch on July 23

greater stress was placed on the impossibility of constructing the road
by 1881 (_ibid._, p. 72 ff.). To this Mr. Walkem replied with reference
to the whole situation and particularly to the Edgar proposals--(1)
Nothing was being done by the Dominion Government towards commencing a
railway from Esquimault to Nanaimo; (2) That the surveying parties on
the mainland were numerically weak and that no guarantee had been given
as to the speedy prosecution of the surveys; (3) That a wagon road was
not desired and it would be useless to people of British Columbia and
that even the telegraph proposed would not be made until the route of
the railway was settled; (4) That the time of completion of the surveys
was very remote and that an expenditure of $1,500,000 was insufficient.
Further by section 11 of the Canadian Pacific Railway Act, 1874, the
House of Commons could reject at any time the contract for a section of
the railroad and prevent continuous construction--obviously a direct
charge against the good faith of the Dominion Government (_ibid._, p.
74). The Dominion Government answered on September 17, 1874--(1) The
Dominion had no engagement to build a railway from Esquimault to
Nanaimo, notwithstanding the Order in Council of June 7, 1873, fixing
the terminus at Esquimault; (2) That the surveys were being pushed with
the utmost expedition; (3) A wagon road was one of the proposed terms of
the Union made by the British Columbia Legislature--it was a part of
railway construction and the declaration that British Columbia did not
desire it was made to lessen the value of the proposals to that
province; (4) Nothing had occurred to justify the suspicion that by
section 11 of the Canadian Pacific Railway Act the House of Commons
would prevent continuous construction (_ibid._, p. 80 ff.). As a basis
of agreement the Earl of Carnarvon proposed--(1) That the
Esquimault-Nanaimo section should be begun at once; (2) That the
surveying parties should be greatly increased in strength on the
mainland and that a definite considerable minimum amount should be
expended; (3) The wagon road to be abandoned and a telegraph line
postponed until the road was located; (4) That an annual minimum sum of
$2,000,000 should be expended on the railway in British Columbia and
that the road should be completed by 1890 (_ibid._, p. 74). The Dominion
Government objected to the suggestions, particularly the increase of the
annual minimum expenditure, the increase in the size of the engineering
force which involved duplication, and the fixed limit of time for
completion. It promised to agree that the territory west of Lake
Superior should be completed to afford connexion with the existing lines
of railway either by the United States or by Canadian waters and to
build the telegraph line as soon as possible (_ibid._, p. 80 ff.). On
October 31 Mr. Walkem finally presented the case of British Columbia in
a very lengthy review of the history of the controversy (_ibid._, p. 85
ff.). On November 17 the Earl of Carnarvon gave his decision--(1) That
the railway from Esquimault to Nanaimo should be commenced and completed
as soon as possible; (2) That the surveys on the mainland should be
pushed with the utmost vigour; (3) That the wagon road and telegraph
line should be immediately constructed; (4) That $2,000,000 should be
the minimum expenditure on railway works within the province from the
date at which the surveys were sufficiently complete to enable that
amount to be expended on construction; (5) That on or before December
31, 1890, the railway should be complete and open for traffic from the
Pacific seaboard to a point on the western end of Lake Superior at which
it would be connected with the existing line through a portion of the
United States and also with navigation on Canadian waters (_ibid._, p.
92).]

[Footnote 410: This road, built to facilitate the transfer of the Red
River expedition, continued open (_Sessional Papers_, No. 37, 1875).
Previous to its opening about 2,000 people had gone over the route of
whom about 400 were settlers (_ibid._). After the opening 244 emigrants
had been conveyed over the route to December 31, 1871 (_ibid._, No. 64,
1872), and 2,739 passengers, of whom 805 were emigrants, to October,
1873 (_ibid._, No. 37, 1875). The fare was decreased from $25 in 1871 to
$15 in 1872 and $10 in 1873 (_ibid._). In 1874 considerable improvement
was effected (_ibid._, No. 39, 1875, p. 1 ff.) and a contract was made
with W. H. Carpenter and Co. A bonus of $75,000 was given by the
Government to keep open a line of transportation for passengers and
freight. Passenger stages and freight wagons were to be run at least
three times per week, the passengers to be conveyed in ten to twelve
days and freight in fifteen to twenty days. The rates were carefully
scheduled to encourage traffic.

            Thunder Bay to Fort Gary

      Passengers with 200 lb. Baggage                      $10.00
      Passengers under 14 yrs. with 100 lb.                  5.00
      Children under 3 yrs.                                  free
      Freight, securely packed, per 100 lb.                  2.00
      Household furniture (owner's risk) per 100 lb.         3.00

    Machinery, horses, cattle, sheep, etc., at special rate.
    Meals 30 cts.

            Way Passengers and Freight

    _Land_--Thunder Bay to Shebandowan--45 miles.
          North-West Angle of Lake of the Woods to Fort Gary--95 miles.
      Passengers per mile                                   5c.
      Freight per 100 lb. per mile                          1c.

    _Water and Portages_--
      Passengers per mile                                   2c.
      Freight per 100 lb. per mile                          c.
    Passengers Thunder Bay to Fort Francis       $7.00 (_ibid._)

In that year 2,000 to 2,500 passengers were carried, the majority during
the first two or three weeks of the season (_House of Commons Debates_,
vol. I, 1875, p. 448). In 1875 the number decreased to 1,800 or 1,900.
The amount of freight in that year was only less than 2,000,000 lb.
(_Sessional Papers_, No. 71, 1876). The following year the road was
abandoned after an expenditure of an annual average of $220,000 during
the six years of its operation (_House of Commons Debates_, vol. II,
1876, p. 452).

In order to make available the water stretches between Lake Superior and
Red River work was commenced on Fort Francis Canal on Rainy River in
1875 (_Report of the Canadian Pacific Railway Royal Commission
Evidence_, vol. I, p. 330). It was planned to make available 200 miles
of navigable water between Kettle Falls and Rat Portage for steamboats
of moderate draught. After an expenditure of $200,000 the work was
abandoned (_House of Commons Debates_, vol. III, 1877, p. 1324 ff.).]

[Footnote 411: Reports appeared as the progress of surveys made possible
definite decisions as to location. The choice of Yellowhead Pass gave a
definite objective for a line from Lake Superior. The report of the
surveys of 1877 located a satisfactory line from the standpoint of the
various factors affecting the success of the road from Lake Superior to
Tte Jaune Cache (Fleming, S., _Report on Surveys and preliminary
operations on the Canadian Pacific Railway up to January_, 1877, p. 88).
In 1878, Burrard Inlet was recommended as a terminus (Fleming, S.,
_Report Canadian Pacific Railway_, 1879, p. 17) and adopted by an order
in council of July 13, 1878 (_Sessional Papers_, No. 19, 1880, p. 22).
Dissatisfaction in British Columbia with this terminus led to a
suggestion that another route should be surveyed (Fleming, S., op. cit.,
p. 18). A resolution was adopted on May 10, 1879, providing for further
explorations in the Peace and Pine River districts (_House of Commons
Debates_, 1879, p. 1895). Permission was also given to locate a new line
from the Red River westward (_ibid._). The British Columbia survey
failed to reveal a better route than that to Burrard Inlet and it was
chosen again on October 4, 1879 (Fleming, S., _Reports and Documents in
reference to the Canadian Pacific Railway_, 1880, p. 6). A new line by
Birdtail Creek was adopted for the route from the western boundary of
Manitoba to the Saskatchewan on January 22, 1880 (_ibid._, p. 24).
Surveys over the whole line had been conducted with considerable energy
and reported in a presentable manner, with the result that a great deal
of information about the country had been gained and disseminated. They
were conducted with a loss of thirty-eight lives. To June 30, 1880,
surveys had cost $4,166,687.77 (_Report of the C.P.R. Royal Commission,
Conclusions_, vol. III, p. 107).]

[Footnote 412: Geographically it was necessary to locate the line in
British Columbia. Upon its location depended the choice of a pass
through the mountains and upon this choice depended the location of the
line to Lake Superior. The task was particularly difficult and tedious
delays occasioned further protests from British Columbia. The attitude
of the Province was one of insistence upon rapid prosecution. The
Carnarvon terms could not settle the difficulty. The inability of Canada
was constantly reflected in protests against an increase in taxation. "A
road with less than ten people per mile"; "10,000 people asked Canada to
build a line costing $200,000,000"; "Infatuation in the extreme to build
2,700 miles of road without increasing the taxation." A resolution that
the Government should proceed vigorously with construction in British
Columbia was defeated 154 to 7 (_House of Commons Debates_, vol. II,
1876, p. 879 ff.). The Esquimault and Nanaimo Railway Bill introduced in
1875 to build a road according to the Carnarvon terms was defeated in
the Senate. "I opposed that bill...chiefly because it was part of the
Carnarvon terms which I did not believe could be fully carried out
consistently with the taxation resolution" (speech of Hon. Edward Blake,
quoted Willison, J. S., _Sir Wilfrid Laurier and the Liberal Party_, p.
380). Compensation for delays in construction to the extent of $750,000
offered by the Dominion Government was rejected (_Journals of the
Legislative Assembly of the Province of British Columbia_, p. 13; see
also _Letters of Britannicus, Pacific Railway_, 1876). A motion was
presented in the provincial Legislature providing for severance of
political connexions with Canada, but had no seconder (_Journals of the
Legislative Assembly, ibid_., p. 9). An appeal was made to the Imperial
authorities in the same year (_ibid._, p. 13). Lord Carnarvon gave
little satisfaction, except the belief that the road would be commenced
by 1878 (_ibid._, 1877, p. 13). On August 30, 1878, a motion for
secession was passed by the Legislature (_ibid._, 1878, p. 106 ff.).
Adoption of the Burrard Inlet route and commencement of construction
caused the dissatisfaction to disappear. Contract No. 60, Section A,
dated December 23, 1879, for construction of the road from Emory's Bar
to Boston Bar, twenty-nine miles, was made with Andrew Onderdonk;
Contract No. 61, Section B, dated February 10, 1880, for construction
between Boston Bar and Lytton, twenty-nine miles, with Purcell, Ryan,
Goodwin and Smith; Contract No. 62, Section C, dated December 23, 1879,
for construction between Lytton and Junction Flat, 28 miles; and
Contract No. 63, Section D, dated December 15, 1879, for construction
between Junction Flat and Savonas Ferry, 40 miles, with A. Onderdonk.
All of the contracts were eventually transferred to this contractor
(_Sessional Papers_, No. 19_m_, 1880, p. 196) and the whole was
contracted for completion on June 30, 1885. The remainder of the line
from Emory's Bar to Port Moody, 85 miles, was let to the same individual
in 1882 (_Sessional Papers_, 1882, No. 48).]

[Footnote 413: Contract No. 1, dated October 17, 1874, was made with
Sifton, Glass and Fleming for construction of a telegraph line between
Fort Gary and Fort Pelly. Contract No. 2, dated October 30, 1874, was
made with Richard Fuller for construction of a line between Fort Pelly
and Edmonton. Contract No. 3, dated November 10, 1874, with F. J.
Barnard called for construction of a line between Fort Edmonton and
Cache Creek. Contract No. 4, dated February 9, 1875, with Oliver,
Davidson and Brown, provided for construction of the remaining line from
Prince Arthur's Landing to Red River (_Canadian Pacific Railway Royal
Commission, Conclusions_, vol. III, p. 111 ff.).]

[Footnote 414: To connect the Canadian railways with the North-West an
Order in Council of November 4, 1874, advised a subsidy of $12,000 per
mile for an extension of the Canada Central Railway from "Douglas
westward to the eastern end of the branch railway proposed to be built
from Georgian Bay by the government being about one hundred and twenty
miles" (_Journals of the House of Commons_, 1875, p. 219). To this the
House of Commons assented on March 13, 1875 (_ibid._, p. 221; see also
sec. 14, 37 Vic. c. 14). To complete the connexion with Georgian Bay,
Contract No. 12, dated February 27, 1875, was made with Hon. A. B.
Foster for the construction of a road to the mouth of the French River,
85 miles. The contractor proposed the improvement of the navigability of
the French River to a distance 26 miles from its mouth, making the
terminus at that point. The contract was cancelled (_Sessional Papers_,
No. 57, 1877, p. 12 ff.). An additional survey was made and Contract No.
37, dated August 22, 1878, with Heney, Charlebois and Flood for
construction between Nipissingen Post and the head of navigation on
French River (50 miles) was agreed upon. This was cancelled on July 25,
1879 (_Sessional Papers_, No. 19_n_, 1880, p. 2 ff.); Contract No. 16,
dated June 10, 1878, with the Canada Central Railway provided for a
change in the earlier subsidy between Pembroke and Nipissing giving a
total subsidy of $1,440,000 (_Report of the C.P.R. Royal Commission_,
vol. III, p. 246 ff.).]

[Footnote 415: Contract No. 13, dated April 3, 1875, was made with
Sifton and Ward, for the construction of a railroad from Fort William to
Lake Shebandowan, 45 miles (_Minutes of Evidence taken before the Select
Committee of the Senate appointed to inquire into all matters relating
to the Canadian Pacific Railway and Telegraph west of Lake Superior_,
1879, Addenda No. 5, p. 128). Lake Shebandowan as terminus was changed
to Sunshine Creek, 32 miles, and completed in 1876 (_ibid._, p. 1 ff.).
Contract No. 14 of the same date and with the same firm, for the
construction of a road from Selkirk to Cross Lake (77 miles) was not
finally completed until 1880 (_Report of the C. P. R. Royal Commission_,
1882, vol. III, Conclusions, p. 226). Contract No. 15, dated January 9,
1877, with Joseph Whitehead, for the grading of a line from Keewatin to
Ross Lake (36 miles) and for track-laying from Keewatin to Selkirk (112
miles) was finally given up uncompleted in 1880, expenditure of
$1,875,830 (_ibid._, p. 246). Contract No. 25, dated June 7, 1876, with
Purcell and Ryan for grading between Sunshine Creek and English River
(80 miles) and for track-laying between Fort William and English River
was not completed in 1880 after an expenditure of $1,346,000 (_ibid._,
p. 317). Contract No. 42, section A, dated March 7, 1879, with Marks and
Conmee, for construction between English River and Eagle River (118
miles) and section B, dated March 20, 1879, with Fraser, Grant and
Pitblado, for construction between Eagle River and Keewatin (67 miles)
called for completion in 1883 and for the road to be in running order in
1882 (_Sessional Papers_, No. 19_m_, 1880, p. 4 ff.).]

[Footnote 416: Contract No. 5, dated August 30, 1874, with Joseph
Whitehead, for the grading of a branch from Emerson to St. Boniface (63
miles) was completed in 1877 (_ibid._, p. 153; also _Sessional Papers_,
No. 82, 1876, p. 3). Contract No. 5A, dated May, 1877, with the same
individual, for construction of an extension of this branch to Selkirk
(20 miles) was completed in 1880 (_Sessional Papers_, No. 64, 1878, p.
2). Contract No. 33, dated June 21, 1878, with Kavanagh, Murphy and
Upper, for bridging, track-laying and ballasting the branch between
Emerson and St. Boniface, was undertaken but cancelled (_Report of the
Canadian Pacific Railway Royal Commission, ibid._, pp. 334-6; also
_Sessional Papers_, No. 5, 1880-1). The Canada Pacific Railway Act
Amendment Bill, providing for the lease of the road, was rejected by the
Senate on the technical ground that the assent of the Senate was not
provided for in the Bill (_House of Commons Debates_, 1878, p. 2454),
but an agreement was finally made with Mr. George Stephen on August 3,
1878, permitting a connexion of the branch with the St. Paul and Pacific
Railway. This was cancelled on March 13, 1879, and contract No. 43,
dated March, 1879, was made with Upper, Swift and Messrs. Folger, for
the equipment and operation of the line. This was cancelled on January
26, 1880 (_Canadian Pacific Railway Royal Commission, ibid._, p. 407
ff.).]

[Footnote 417: Contract No. 48, dated August 19, 1879, with Mr. J. Ryan,
called for construction of a section 100 miles west of Red River. After
laying track 31 miles the contract was cancelled and the work taken over
by the Government (_Sessional Papers_, No. 23_k_, p. 38 ff.). Contract
No. 66, dated May 3, 1880, with Bowie and McNaughton, provided for
construction of a section 100 miles farther west. The contract was
cancelled (_ibid._, p. 58 ff.).]

[Footnote 418: The MacKenzie administration was not wholeheartedly in
favour of Government construction. "There are four great sections and it
may be quite advisable, quite possible and altogether it may be the best
thing that can be done, that each of these sections should be built by
an independent company instead of having one grand company monopolizing
the entire system of contracts. We do not expect that any company will
make a proposition to build a less portion than one of the sections"
(Speech of Alexander MacKenzie, _Globe_, May 13, 1874). "It would
undoubtedly be advantageous in many ways to construct the Pacific
Railway through the instrumentality of a large company" (Memorandum of
Sandford Fleming, September 29, 1874; _Sessional Papers_, No. 48_cc_.,
p. 30).]

[Footnote 419: "That the construction...was carried on as a Public Work
at a sacrifice of money, time and efficiency. That numbers of persons
were employed...who were not efficient...having been selected on party
grounds. That...delays occurred...for the necessity of staying
operations...until the necessary appropriations were made. That the
examination of the country over which the line was located was
inadequate, failing to give...information...necessary to enable the
Government to estimate...the probable cost. That large operations were
carried on...with much less regard to economy than...in a private
undertaking. That the practice which permits a Department to
originate...transactions...and...to award the contracts...is a
disadvantage. That the system under which the contracts were let was not
calculated to secure the works at the lowest price or the earliest date"
(_Report of the C.P.R. Royal Commission, Conclusions_, vol. III, p.
495-6).]

[Footnote 420: "There were not a sufficient number of thoroughly
efficient and practical men in the country to aid me in carrying out the
work of preliminary operations in what might be deemed the best way"
(letter of Sandford Fleming, May 1, 1882; _Sessional Papers_, No.
48_cc_, p. 5). "In our judgment this officer (Sandford Fleming) was
overtaxed" (_C.P.R. Royal Commission, Conclusions_, vol. III, p. 97).]

[Footnote 421: The Report of the Royal Commission of 1882 presents the
results of an investigation into relations of the Government with the
Canadian Pacific Railway to that date in three large volumes. No attempt
can be made to deal with all the evidence given. From this report, as
well as from results of other investigations, general principles can be
drawn. The inadequacy of engineering staffs was apparent. The cost of
Contract No. 13 was estimated at $270,976. The actual cost was $331,979,
an excess of $61,183, despite the fact that a change in location of the
line saved $60,000 (_Minutes of Evidence taken before the Select
Committee of the Senate appointed to inquire into all matters relating
to Canadian Pacific Railway and Telegraph west of Lake Superior_, pp.
2-7). On Contract No. 14, because a careful survey had not been made to
link this section with Contract No. 15, it was later found necessary to
raise the gradient, which made the original estimate inadequate.
Estimate solid rock, 10,000 yds., actual work, 34,442 yds.; loose rock,
est. 3,000 yds., actual 36,720; pile driving, est. $1,200, actual
$12,586. Total cost, est. $402,950, actual cost $723,134 (_ibid._, p. 13
ff.). Contract No. 15 in actual cost exceeded the estimated cost
$930,915 (_ibid._, p. 18) because of a change in policy in which
trestles were replaced by earth, the gradients lowered and more rock
work involved (_ibid._, p. 20 ff.). Contract No. 25 revealed similar
discrepancies: est. cost $1,037,061, actual cost $1,384,645 (_ibid._,
Addenda No. 6, p. 30). Est. solid rock, 26,000 yds., actual 76,800 yds.;
est. loose rock 10,000 yds., actual 110,000 yds.; est. earth 1,000,000
yds. actual 1,970,000 yds.; No. of ties est. 210,000, actual 241,000
(_ibid._, p. 8). Contract No. 5, through less difficult territory, was
no more accurately estimated: est. cost $120,000, actual cost to
December 31, 1875, $174,800 (_Sessional Papers_, No. 82, 1876, p. 3).
Careless surveying on the Georgian Bay branch cost the Government
$41,000 (_Sessional Papers_, No. 57, 1877, p. 16). On the same section
work on the branch costing $24,807 was abandoned because of a change in
policy (_Sessional Papers_, No. 19n, 1880, p. 10). The inadequacy of the
engineering staffs was evident in other directions. The terminus at Fort
William was expensively and inadvantageously located (_Report and
Minutes of evidence taken before the Select Committee of the Senate
appointed to inquire into and report upon the purchases of lands at Fort
William for a terminus to the Canadian Pacific Railway_, p. 4). On the
advice of the engineer-in-chief, large quantities of rails were
purchased in 1875. Later the prices fell and in addition a great deal of
waste was caused by oxidation (_House of Commons Debates_, 1877, vol.
III, p. 1688 ff.). The difficulties were enhanced by an almost undue
reliance of the Government on expert advice. A change in policy decided
upon by the engineers for permanent construction on Contract No. 15 was
carried out in spite of the Government's determination "not to do it"
(_Minutes of evidence before Committee of the Senate on Canadian Pacific
Railway west of Lake Superior, etc._, p. 59). The Premier against his
own judgment accepted the choice of the engineer-in-chief of the
terminus at Fort William (_Report and Minutes of evidence taken before
the Select Committee of the Senate to inquire into and report upon the
purchase of lands at Fort William, etc._, p. 150). This reliance of the
Government on advice of engineers, the inadequacy of this advice and the
inexperience of the Government occasioned considerable difficulty with
tenders and contracts. On Contract No. 15 the first tenders were
received in May, 1876 (_Return to address, Papers connected with
awarding of section 15 of C.P.R._, 1877, p. 4). The lowest was withdrawn
(_ibid._, p. 6), and the next was declined with a forged letter
(_ibid._, p. 12). Later information was gained about the section and the
Government advertised for new tenders. The lowest was withdrawn. The
next offered security in timber limits or real estate valued at $80,000
but worth only $30,000 (_ibid._, p. 20). The third proved sound
(_ibid._, p. 30). The security proved inadequate in a similar manner on
Contract No. 5 (_Sessional Papers_, No. 58, 1878, p. 5 ff.), on Contract
No. 48 (_Sessional Papers_, No. 23_k_, 1880, p. 38 ff.) and on Contract
No. 61 (_Sessional Papers_, No. 19_m_, 1880, p. 24). At best
construction of the road by sections necessitated an immense amount of
supervision to ensure systematic progress. With inaccurate surveys, the
necessary supervision was impossible. As a result, contractors attempted
to combine and further trouble resulted with tenders. Contracts Nos. 13
and 14 were let to the same firm. This was also true of Contracts No. 5,
No. 5_a_ and No. 15. A low tender on contract No. 15 was obliged to
withdraw because of an extension of time on Contract No. 14 (_Return to
address, Papers connected with awarding of section 15 of C.P.R._, 1877,
p. 12). Similarly, Contract No. 66 was found difficult for contractors
and eventually cancelled because Contract No. 48 had not been completed
(_Sess. Papers_, No. 23_k_, 1880, p. 66). Contracts Nos. 60 and 62 were
let to one firm and transferred to A. Onderdonk (_Sess. Papers_, No.
19_m_, 1880, p. 116). Contract No. 61, the intervening section, on the
advice of the Engineer-in-chief was also transferred to Onderdonk.
Contract No. 63 was judiciously sold to the same firm (_ibid._, p. 151).
The remaining section, because of a happy mistake of the Bank of
Montreal in stamping the cheque of the lowest tender "two days only"
was, despite all petitions, also transferred to this firm (_Sess.
Papers_, No. 48, 1882). Onderdonk proceeded to form a syndicate, headed
by D. O. Mills, and the whole section was constructed under one control
(_Sess. Papers_, No. 19_m_, 1880, p. 196). Contract No. 42, section A,
was awarded, despite protests of other tenderers (_ibid_., p. 10), to a
firm associated with the holders of Contract No. 25, the preceding
section (_ibid._, p. 6). Contract No. 12 was let to Mr. N. C. Munson, of
Boston, but transferred to Mr. A. B. Foster, representative of the
Canada Central Railway and the Quebec interest--a device which
effectively checked Mr. J. D. Edgar, representative of the Ontario and
Pacific Junction Railway and the Ontario interests (_Sess. Papers_, No.
44, 1875, p. 7). Reliance of the Government on advice of the engineers
in location of the line was the cause of considerable trouble with
settlements and of considerable embarrassment. A petition was presented
on April 17, 1873, urging the advantages of Prince Arthur's Landing as a
Canadian Pacific junction with Lake Superior (_Sess. Papers_, No. 77,
1877, p. 1 ff.). The choice of Fort William was made the occasion of
another petition on February 26, 1875 (_ibid._, p. 3). Charges were made
that the Government was in league with land speculators, and a Committee
of the Senate did reveal the fact that extravagant prices had been paid
(_Report upon the purchase of lands at Fort William, etc._, p. 149). The
Neebing Hotel, worth $3,000, was sold to the Government for $5,029. Land
purchased at $5 per acre was sold at $500 per acre (_ibid._, p. 5). A
valuator of the Government was also a member of a land speculation
company (_ibid._, p. 52-3). The Government took steps to prevent
speculation, but after the mischief had been done (_ibid._, p. 151 ff.).
A further protest of Port Arthur on March 19, 1878 (_Sess. Papers_, No.
186, 1879, p. 22 ff.) led the chief engineer to insist that the shortest
route was desirable and that a six-mile extension was unjustifiable
(_ibid._, p. 43). In location of a line through Selkirk, settlers of
Winnipeg complained that better land was available along the southern
route, that heavy work would be avoided, and that the road would be able
to meet its running expenses (_Report and Minutes of Evidence taken
before the Select Committee of the Senate to inquire into and report
upon the route of the C.P.R. from Keewatin westward_, pp. 15, 25). Mr.
Fleming contended that Selkirk was in a direct line to Northcote and
available to the trade of Lake Winnipeg and the Saskatchewan River. The
located line was twenty-four miles shorter and from the long-run
standpoint more central, less costly and had easier gradients (_ibid._,
p. 38 ff.). The Committee recommended an instrumental survey of the
southern route (_ibid._, p. 3 ff.), and this line was later adopted.

The inexperience of the Government was constantly in evidence. Contract
No. 5 for the construction of telegraph was broken because the
Government had awarded it before a line could be located and at an
expense of $18,284 (_Sess. Papers_ No. 82, 1876, p. 33). The bonus
system applied to the Dawson route made it advantageous for the
contractor to discourage people from travelling by that route (_House of
Commons Debates_, vol. II, 1876, p. 454).]

[Footnote 422: The House of Commons debates present an array of charge
and counter-charge on every possible existing and imagined discrepancy.
The Senate was unusually active in the initiation of probes. Eventually
charges were made against Sandford Fleming on the floor of the House on
March 3, 1880, and he was diplomatically removed from office on May 22,
1880. A Royal Commission was appointed, and the ample report of 1882
presented (See _Sess. Papers_, No. 48_cc_, 1882).]

[Footnote 423:
  Population--        1871       1881
      Manitoba       94,021    108,891
      Winnipeg          241      7,985

Trade of Manitoba was geographically directed through the United States.
In six months, 1872, the Northern Pacific carried 5,000,000 lb. of
freight destined for Fort Gary (Oberholtzer, E. P., _Jay Cooke,
Financier of the Civil War_, vol. II, p. 343). The improvement of
transportation facilities to the United States furnished striking
evidence of the development of Red River Settlement and of the western
states, as a phase of western expansion. In 1861 the Hudson's Bay
Company placed a small steamer, the _Pioneer_, on the Red River to ply
between Fort Abercrombie and Fort Gary. In 1862 a larger boat, the
_International_, was added. In 1866 the free traders started trade with
Mr. J. J. Hill as agent in St. Paul, and in 1871 placed a steamboat on
the river (Pyle, J. G., _The Life of James J. Hill_, vol. I, p. 75).
Competition led to an amalgamation in the following year and formation
of the Red River Transportation Line in 1872, which later became the Red
River Transportation Company. This company absorbed the Merchant's Line
with two vessels, the _Manitoba_ and the _Minnesota_, in 1875 (_ibid._,
p. 193). In the same year the company had built a line from Crookston to
Fisher's Landing on the Red River, securing direct rail communication
with St. Paul. After controversial financial manipulation it secured
control of the St. Paul and Pacific Railroad on March 13, 1878 (_ibid._,
p. 185 ff.). On December 4 of the same year connexion was made with the
Pembina branch of the Canadian Pacific Railroad (_ibid._, p. 256). The
St. Paul and Pacific Company interchanged traffic with the Red River
Transportation Company (_ibid._, p. 282). Satisfactory arrangements were
eventually gained in which the American road was given running rights to
St. Boniface. With the organization of the St. Paul, Minneapolis and
Manitoba Railroad Company, control was secured of the Red River boats
from Crookston to Fisher's Landing and from Breckenridge to Barnesville
and the whole welded into a complete system (_ibid._, p. 288).]

[Footnote 424: Jealousy which this increasing trade aroused in Canada
had been evident in many directions (see Wilson, W., _Dominion of Canada
and the Canadian Pacific Railway_, 1874, and House of Commons Debates
for later years.)]

[Footnote 425: The decade was not one of rapid growth but of
considerable change.

  Population:                1871                 1881
      Nova Scotia          387,800              440,572
      New Brunswick        285,594              321,233
      Quebec             1,191,516            1,359,027
      Ontario            1,620,851            1,926,922

  _The Canada Year-book_, 1915, p. 64.

Steam Railway Mileage:

    1871        2,695
    1872        2,899
    1873        3,832
    1874        4,331
    1875        4,804
    1876        5,218
    1877        5,782
    1878        6,226
    1879        6,858
    1880        7,194
    1881        7,331

  _Ibid._, p. 466.

The panic of 1873 and the depression which followed had a decided
influence on the trade of Canada.

General Statement of chartered banks:

                                       Notes in        Discounts to
  Calendar Year    Capital paid up    circulation       the people

      1871           $37,095,340      $20,914,637       $84,799,841
      1872            45,190,085       25,296,454       106,744,665
      1873            54,690,561       27,165,878       119,274,317
      1874            60,388,340       27,904,963       131,680,111
      1875            64,619,513       23,035,639       136,029,307
      1876            66,804,398       21,245,935       127,621,577
      1877            65,206,009       20,704,338       125,681,658
      1878            63,682,863       20,475,586       119,682,659
      1879            62,737,276       19,486,103       113,485,108
      1880            60,052,117       22,529,623       102,166,115
      1881            59,534,977       28,516,692       116,953,497

  _Ibid._, p. 577.

Exports of Canada to United Kingdom and United States:

  Fiscal Year        United Kingdom        United States

      1871              $21,733,556          $26,715,690
      1872               25,223,785           29,984,440
      1873               31,402,234           33,421,725
      1874               35,769,190           30,380,556
      1875               34,199,134           25,683,818
      1876               34,379,005           27,451,150
      1877               35,491,671           22,160,666
      1878               35,861,110           22,131,343
      1879               29,393,424           23,149,909
      1880               35,208,031           26,762,705
      1881               42,637,219           31,015,109

  _Ibid._, p. 253.

Imports of Canada from the United Kingdom and the United States:

  Fiscal Year        United Kingdom        United States

      1871              $48,498,202          $27,185,586
      1872               62,209,254           33,741,995
      1873               67,996,945           45,189,110
      1874               61,424,407           51,706,906
      1875               60,009,084           48,930,358
      1876               40,479,253           44,099,880
      1877               39,331,621           49,376,008
      1878               37,252,769           48,002,875
      1879               30,967,778           42,170,306
      1880               33,764,439           28,193,783
      1881               42,885,142           36,338,701

  _Ibid._, p. 254.

The decline in exports to the United States and the steadiness of those
to the United Kingdom, the general increase in imports from the United
States and the decline in imports from Great Britain and the resulting
unsatisfactory condition of the revenue situation led to the demand for
markets and demand for increased duties. As a result the National Policy
was adopted in 1878 with effects on the trade and revenue situation
shown in the later years. The situation expressed itself in demand for
markets and demand for prosecution of the Canadian Pacific Railway not
only as a result of the discontent throughout the period but also of the
gradual development of Canada.

  Fiscal Year

      1871       $11,807,590
      1872        13,020,684
      1873        12,997,578
      1874        14,407,318
      1875        15,354,139
      1876        12,828,614
      1877        12,544,348
      1878        12,791,532
      1879        12,935,269
      1880        14,129,953
      1881        18,492,645

  _Ibid._, p. 257.

Receipts on Consolidated Fund Account:--

  Fiscal year      Surplus in year      Deficit in year

      1871           $3,712,479                --
      1872            3,125,345                --
      1873            1,638,821                --
      1874              888,776                --
      1875              935,644                --
      1876                   --           $1,900,785
      1877                   --            1,460,028
      1878                   --            1,128,146
      1879                   --            1,938,000
      1880                   --            1,543,228
      1881             4,132,744

  _Ibid._, p. 532-3.]

[Footnote 426: Following the opinion expressed by Fleming in 1874, the
Government in 1877 asked for tenders for the construction and operation
of the whole line or of sections of the line by companies. Tenders were
solicited in England by Mr. Fleming with the assistance of Sir John
Rose. The result was unsatisfactory, "only one imperfect offer made"
(_House of Commons Debates_, 1879, p. 1899). British investors had
learned a lesson from the Grand Trunk fiasco as shown in the suspicious
attitude of the London Economist. The Grand Trunk, hostile to any
prospective competitor for its western traffic and to any competitor for
capital, carried on an energetic campaign. Mr. Potter, President of the
Grand Trunk, and _The Times_ were particularly active in 1875 in
thwarting Mr. Hugh Allan's attempts to secure money for the Montreal
Northern Colonization Railway (later the Montreal, Ottawa and Western
Railway), an important link in the proposed Canadian Pacific Railway.
"Let Sir Hugh Allan build his railway by all means, but with Canadian
money" (_The Times and Its Correspondents on Canadian Railways_, p. 9).
The MacDonald administration, in a series of resolutions adopted May 10,
1879 (_House of Commons Debates_, 1879, p. 1895), recognizing the
difficulty of enlisting private enterprise, proposed to build the line
with Imperial support. A board of Commissioners, including
representatives of the Imperial Government, was to be vested with all
the ungranted land for twenty miles along the railroad and additional
land to the extent of 100,000,000 acres. The Commissioners were given
power to sell the land at a price fixed by the Government, but not less
than $2 per acre, the proceeds to construct the road. Colonization would
proceed with construction. Sir Charles Tupper with several others went
to England in accord with the temper of the resolutions to secure
Imperial co-operation, but without results. During the Session of 1880
the resolutions were reaffirmed in general, but permission given to sell
the land at a price not less than $1 per acre. In the summer, Sir John
A. MacDonald, Hon. J. H. Pope, Sir Charles Tupper, Mr. George Stephen
and Mr. Duncan McIntyre went to England and consulted various
capitalists.]




  III

  Fulfilment of the Contract


The contract for the construction of the road was an index of the growth
of civilization in Canada. The details of the contract were evidence of
the extent and character of that civilization. Capitalists undertaking
the enterprise were significantly representative: Mr. George Stephen,
President of the Bank of Montreal; Mr. R. B. Angus, Manager of the same
bank; Hon. J. Cochran, a Quebec cattle breeder, and Mr. Duncan J.
McIntyre, Manager of the Canada Central Railway, eloquently represented
the interest of Montreal, which had long sought control of a larger
share of Western traffic. Mr. R. B. Angus, Mr. George Stephen, Mr. D. A.
Smith and Mr. J. J. Hill to a large extent owners of the St. Paul,
Minneapolis and Manitoba Railway, prominently bespoke the effect which
construction of the Canadian Pacific and the development of traffic in
Western Canada would have on the earnings of that line to Winnipeg. The
name of Mr. D. A. Smith, though omitted from the contract because of the
personal enmity of Sir John A. MacDonald, was of the greatest importance
also as representative of land holdings[427] in Western Canada, and was
particularly striking testimony to the economic development, prospective
and immediate, of that area. Mr. P. Du Pont Grenfell, senior member of
Morton, Rose and Company, and the American branch, Morton, Bliss and
Company, represented English capital, and the interest of the firm[428]
in the construction of the Government sections in British Columbia. The
possibilities of colonization and emigration were recognized[429] in the
interest of Reinach and Company, of Paris and Frankfort, and of the
Socit Gnrale.

The terms of the contract[430] were also significant. The Government
agreed to give a subsidy of $25,000,000, of 25,000,000 acres of land,
and of completed sections of road from Selkirk to Lake Superior and from
Kamloops to Port Moody, which cost with the surveys $37,785,320. The
grant of land was given in alternate sections of 640 acres, twenty-four
miles deep on each side of the railway from Winnipeg to Jasper House,
and sections unfit for settlement and deficiencies were made up by
grants of land between parallels 49 and 57 degrees latitude, or by a
similar grant of land along the company's branches. To facilitate the
company's financial arrangements provision was made for the issue of
land grant bonds to the extent of $25,000,000, in which they were
deposited with the Government, one-fifth retained as security, and the
remainder sold--the proceeds being paid to the company as the work
progressed. The aid was given according to the difficulties of
construction--the less difficult territory 900 miles west of Selkirk was
granted $10,000 and 12,500 acres per mile; 450 miles west of this line
$13,333 and 16,66666 acres per mile, and from Callander to Lake
Superior, $15,384.61 and 9,61535 acres per mile. Payment was made with
the completion of every twenty miles, but power was given to
requisition an advance of three-fourths of the value of steel rails
delivered. Land was granted for road-bed and railway purposes, and power
given to locate the main line from Callander to Lake Superior, and from
Selkirk to Kamloops by Yellowhead Pass, and to locate branch lines. The
material required for construction and operation, and the capital stock,
were exempted from taxation for ever, and the land was exempt for twenty
years after the grant from the Crown. Favourable to the owners of the
St. Paul, Minneapolis and Manitoba Railway, material for the original
construction of the road was admitted free of duty, and the construction
of any line south or south-west of the Canadian Pacific railway within
fifteen miles of latitude 49 within twenty years was prohibited. The
contract called for the completion of the road on May 1, 1891. The aid
granted by Canada for the construction of the road was ample tribute to
the insistence of demands for a rapid prosecution of construction, and
to the strength and character of Canadian civilization.

The ratification of the details of the contract by a consistent
majority[431] in the Canadian Parliament, in the face of a particularly
energetic and hostile campaign, was conclusive proof that the programme
of the Government was the programme of Canada. The activity of Ontario
and of Toronto against possible lines diverting traffic to Montreal
which had been effective in the earlier years was of little avail. A new
syndicate, composed chiefly of residents[432] of Ontario offered to
construct the road for a subsidy[433] of $22,000,000 and 22,000,000
acres of land. It offered to forgo the privileges, granting exemption
from duty on materials and exemption from taxation on lands, and the
monopoly implied in the provision prohibiting the construction of a
line south of the Canadian Pacific Railway in Manitoba. The Government
was given the option, in lieu of accepting construction on the section
from Callander to Lake Superior, of accepting the construction of a line
to Sault Ste. Marie with a bonus of $12,000 per mile. Construction in
British Columbia and the Rocky Mountain section was made the subject of
optional postponement. As a further attraction the Government was
permitted to take possession of the road at an agreed compensation.
Typically, the syndicate implied a charge of American patronage of the
original contract, in its personnel of representative Canadian
directors. The offer was rejected on January 25, 1881, by 140 to
54.[434]

Failing to thwart the contract as a whole, attempts were made to ensure
particular rights. Toronto protested[435] against section 25 which gave
the Canadian Pacific Railway Company power to purchase, lease, or
otherwise amalgamate with other roads, and especially the Canada Central
Railway, giving direct connexion with Montreal. It was claimed that this
section violated the neutral character of the terminus and diverted
trade from Ontario. It was asked that the Ontario and Pacific Junction
Railway which had running rights over the Canada Central projected
extension to Sault Ste. Marie, should be granted such powers over
sixty-five miles of the Canadian Pacific, without which the running
powers over the Canada Central would be useless. Objection was taken to
the control of the line to the Sault by the Canada Central Company, and
therefore by the Canadian Pacific, as it would be used as a feeder. A
memorial of the Toronto Board of Trade suggested as a safeguard that the
company "should not be permitted to place any higher mileage rates on
the portion of their railway over which Ontario traffic must pass than
on the portion over which eastern traffic must pass." As a result of
this protest section 24 of the Act adopting the contract provided that
the "Company shall afford all reasonable facilities to the Ontario and
Pacific Junction Railway Company when their railway shall be completed
to a point of junction with the Canadian Pacific Railway and to the
Canada Central Railway for the receiving, forwarding and delivering of
traffic upon and from the railways of the said companies," and that it
shall "receive and carry all freight and passenger traffic shipped to
and from any point on either railway passing over the Canadian Pacific
Railway at the same mileage rate and subject to the same charges for
similar services."

These changes were not serious departures from the general trend of the
act of incorporation, which was in accord with that of the contract.
Power was given to construct telegraph or telephone lines, docks,
vessels and elevators. Tolls could be reduced by Parliament only after
10 per cent. profit had been made on the capital expended in the
construction of the railway, and only after the net income of the
company had exceeded 10 per cent. on the same amount. To ensure
continuity of control a transfer of stock to non-shareholders was
subject to the veto of the directors until the completion of the
contract. The company was given power to raise capital by the issue of
bonds to the extent of $10,000 per mile, and in case no land grant bonds
were issued to the extent of $20,000 per mile and guaranteed or
preferred stock at $10,000 per mile. The capital stock was fixed at
$25,000,000. As soon as $5,000,000 was subscribed, of which 30 per cent.
was paid up, and $1,000,000 deposited with the Government, the contract
was to be transferred to the company. May 1, 1882, was the date assigned
for the payment of 20 per cent. of the $5,000,000 and December 31, 1882,
for the remainder. Little restriction was placed on the directors, as
only a majority of fifteen and the President were required to be British
subjects. This act of incorporation was carried after the failure of
twenty-five amendments, and the ratification of the contract was
completed on February 1, 1881, by a vote of 128 to 49.

The support of the Canadian Government in the fulfilment of the contract
and its energetic execution, were earnests, in addition to the
liberality of the terms of the contract and of the act of incorporation
and the whole-heartedness of their adoption, of the eagerness of Canada
to construct the railroad. The required deposit of $1,000,000 was made
with the Finance Minister on February 16, 1881, and the company was
organized on the following day.[436] Mr. George Stephen was President,
Mr. Duncan McIntyre, Vice-President, a testimony to the strength of
Montreal interests. In addition to these men, Mr. R. B. Angus and Mr. J.
J. Hill formed the executive committee--a tribute to the importance of
the St. Paul, Minneapolis and Manitoba Railroad. Mr. J. J. C. Abbott was
elected as counsel, Mr. C. Drinkwater, Secretary and Treasurer, and Mr.
G. B. Stickney, General Superintendent of the western division--evidence
that the company had immediately organized as an effective force. On the
same day arrangements were made for vigorous prosecution of the work. On
March 3, stock to the extent of $6,100,000 had been subscribed and 30
per cent. paid in. The subscribers[437] of a majority of the stock
reflected the direct influence of the directorate and of the interests
concerned.

Plans[438] were rapidly made for construction. Application was made and
agreed upon that the standard of the Canadian Pacific should equal the
standard of the Union Pacific as at the time of the Allan contract in
1873 and not as in 1881. By the end of April 20,000 rails had been
purchased in England for delivery during the summer. To secure a through
line at the earliest possible date, the company proposed to build a road
connecting Sault Ste. Marie with the Canada Central, and to place
steamers on Lake Huron to Thunder Bay. The Government had contracted for
the completion of the section between Thunder Bay and Selkirk in 1882,
giving the company a through rail and water route from Selkirk to
Montreal. At the same time, plans were made for construction north of
Lake Superior and on other sections, as well as on a branch line to the
Souris coalfields in Manitoba. To check possible competition from the
Northern Pacific, and to meet the demands of settlers in the southern
area, not only was a shorter route desirable but one more southerly
than the Government's line located through the Yellowhead Pass. To
secure the best possible line through the Rocky Mountains surveying
parties[439] were sent from Winnipeg and Victoria on May 2. On the same
date[440] under an order in council of April 9, the road from Pembina to
Selkirk and from Selkirk to Cross Lake, 162 miles, was transferred to
the company by the Government. The Government-located line from Winnipeg
by Stonewall to Portage la Prairie was re-located and shortened
seventeen miles. Location continued, and was completed as far as
Moosejaw Creek in December. Construction followed rapidly, and in
November the road was under operation from Winnipeg west to Brandon, 145
miles.

The plans for, and prosecution of, rapid construction made necessary
immediate attention to financial arrangements. Funds secured from
calls[441] for payment of the subscribed stock were supplemented by
arrangements for the issue of land grant bonds. Encouraged by a sale of
300,000 acres of land at $2.59 per acre in England during the early
spring, the directors announced in July the issue of $25,000,000 of land
grant bonds to be negotiated through the Bank of Montreal, Morton, Rose
and Company, and Reinach and Company. Accordingly, under the terms of
the contract which permitted the company to locate its branches and to
secure a grant of land along those branches, the company proceeded to
strengthen the basis of the land grant bonds by locating branches
through prospectively good territory. In August[442] it was planned to
continue the location survey of the Winnipeg and Pembina Mountain
branch, and to provide for its immediate construction, and for the
immediate location and construction of the Assiniboine branch from a
point twenty miles east of Brandon north-east to Lake Saskatchewan, Fort
Ellice and the Touchwood Hills, and of the Saskatchewan branch from a
point near the Forks of Qu'Appelle in a north-westerly direction. On
August 16 the company[443] requested that the Government should reserve
lands along the probable routes. A mortgage for the land grant bonds
followed on August 30,[444] in favour of Sir A. Campbell, the Hon. Alex.
MacKenzie, and Mr. S. Thorne of New York as trustees the bonds being
payable October 1, 1931, with interest at 5 per cent. payable
semi-annually April 1 and October 1. The company agreed to accept
payment for lands in these bonds at 110. Provision was made for
redemption of the bonds out of the sale of lands at the market price, or
by drawing in bonds and paying 10 per cent. premium. In accordance with
the terms of the charter, the proceeds of the sale of the land grant
bonds were to be deposited with the Government, and the company was
entitled to receive as the work progressed the same number of dollars as
the number of acres of the land subsidy which had been earned by it,
less one-fifth if the bonds were sold at par, or if sold below par less
an amount corresponding to the discount. Arrangements were made with a
New York and a Montreal syndicate to take $10,000,000 at 92, the
Montreal syndicate taking $2,500,000 and the New York syndicate,
represented by J. S. Kennedy and Company, the remainder. The bonds were
sold in instalments: $1,000,000 in November; $1,000,000 in January,
1882; $1,000,000 in March; $1,000,000 in May, and $1,000,000 at the
first of each month up to November. To facilitate these arrangements a
concession of 5,000,000 acres of land and a half interest in each
town-site west of Brandon on the main line of the road to the eastern
boundary of British Columbia was made by the Canadian Pacific Railway
Company to Messrs. E. B. Osler, W. B. Scarth, J. Kennedy Tod and S. H.
Northcote. These individuals, to pay for this concession, secured the
right to purchase a sufficient quantity of land grant bonds from the New
York syndicate. Provision was made for the disposal of the remainder of
the bonds through the formation of the Canadian North-West Land
Company,[445] with head-quarters in London and a capital of $15,000,000.
It had twelve directors. The Canadian directors were Mr. E. B. Osler,
Mr. W. B. Scarth, Mr. D. A. Smith and Mr. Alex. Ramsey. Among the other
directors, of whom four were Scotch and four English, were Lord
Elphinstone, Sir George Warrender, William John Menzies and the Duke of
Manchester. Scotch and Canadian allotments were limited to $10,000,000.
Active administration of this company's affairs was placed in the hands
of the Canadian directors.

The success of these arrangements depended ultimately on their
effectiveness in disposing of the land to settlers. To this end, the
company applied, on January 13, 1882, (1) for the location and
conveyance of lands already earned in railway belts along the main line,
and along the two located branches extending west from Winnipeg, and
embracing all odd-numbered lots fairly fit for settlement to a
sufficient distance along the two railway belts to complete the quantity
earned; (2) for the preservation by the Government of odd-numbered lots
for sale, remaining along branch lines east of the 104th parallel, and
for permission to dispose of those lots in anticipation of the
Government's action; and (3) for a grant as part of the deficiency on
the main line of a tract of land lying in the north-west territory south
of the Pembina Mountain branch and of the Souris branch, and extending
from these branches to the boundary line and west to the 104th parallel.
On March 14 the Government agreed to grant land in the belt along the
main line and along the two located lines named as far west as the 104th
parallel, though refusing to permit the disposition of sections before
they were earned.

On the basis of these financial arrangements, plans were made for a
continuance of rapid location and construction of the line in 1882. On
December 20, 1881, a request was made that legislation should be passed
during the next session permitting the road to go by a southern
route.[446] The required legislation stated that "the Canadian Pacific
Railway Company may, subject to the approval of the Governor in Council,
lay out and locate their main line of railway from Selkirk to the
junction with the western section at Kamloops by way of some pass other
than the Yellowhead Pass, provided that the pass be not less than 100
miles from the boundary."[447] In March, 1882, the company was able to
announce[448] the location of 1,650 miles of track, including the
Winnipeg and Pembina Mountain branch from Winnipeg to Smuggler's Point,
and thence westerly about fifteen miles from and parallel to the
International boundary to a point a short distance west of Moose River,
220 miles. In April the Government agreed[449] that a portion of the
Sault Ste. Marie branch should become a part of the main line, and the
whole was authorized from Callander to Algoma Mills, 191 miles. Location
continued throughout the year. Callander was definitely located as the
western terminus of the Canada Central, 120 miles from Pembroke.[450]
The line from Red Fox Creek to Moosejaw Creek was re-located and
extended to Swift Current Creek, 113 miles, and from thence to South
Saskatchewan Creek, 148 miles, in November. Location was carried out 195
miles on the Brandon branch,[451] which ran from Brandon south-west near
Oak Lake, striking a point about fifteen miles from the International
boundary and running parallel to the 49th degree.

Construction rapidly followed location. On February 16, traffic was
opened for thirty-one miles west of Brandon, and on October 3 it was
opened to Regina, 211 miles farther west. The frequency of application
for the subsidy payable on the completion of twenty miles of track is
eloquent of the rapidity of construction.[452] On June 8, 1882, a
subsidy had been paid on 201 miles, and on January 23, 1883, on 581
miles.[453] The Turtle Mountain branch was advanced eighty-nine miles.
In a summary report of the secretary of the company in February,
1883,[454] it was stated that track had been laid for forty miles west
of Callander, for twenty-five miles east of Algoma, and for several
miles east of Prince Arthur's Landing. Despite the late start in 1882
due to heavy snows and April floods 6889 miles had been laid from March
to June and 41791 miles to the end of the year plus 2830 miles of side
track. Of the total, 3079 miles had been laid in December. The report
pointed out that the company had chosen the shortest possible route
between Port Arthur and Callander, and along the whole line, in spite of
an increased immediate outlay, the determining factors being the
competitive value of the shortest route and the capitalized value of the
saving in costs of operation. On the eastern section the grades were not
in excess of 528 feet per mile and in the central section the maximum
was 40 feet per mile. The embankments were solidly built (14 feet at the
formation level). In the prairie section the road was built well above
the surface of the country to avoid the snow. The ties were of tamarack
at 2,640 per mile, and the rails were of steel at 56 lb. per yard.

This progress of construction proved a severe test to the company's
financial preparations for 1882 and necessitated energetic measures for
a continuance of such rapidity in the following year. In February, 1882,
it was announced[455] that the Canadian North-West Land Company had
taken $8,500,000 in bonds, the payments to be made monthly from November
1, 1882, to May 1, 1883. On the other hand, the difficulties of
settlement and the campaign on the part of hostile interests depreciated
the value of the land and rendered it almost unmarketable. Consequently
the concession granted by the railroad company was reduced, from
5,000,000 acres to 2,200,000 acres, and the syndicate found itself
unable to dispose of its land grant bonds at a satisfactory price. The
plans proved inadequate to the unusual demands of the situation.

With the failure of the land grant bonds to realize expectations, the
company was obliged to rely on the sale of its stock, but failure to
secure funds from one form of security had its effect on all. Although
the first issue of $6,100,000 had been subscribed at par, the sale of
the authorized total of $25,000,000 realized only 40c. on the
dollar.[456] An evidence of financial difficulty was the company's
resort to all possible expediencies. The Government was asked[457] not
to deduct the advance on rails to the extent of 75 per cent. of their
value from the payment of the subsidy until the financial situation
became easier. An advance was asked on rails laid down at Hochelaga on
the Quebec, Montreal, Ottawa and Occidental Railway--a road purchased by
the Canadian Pacific Railway but according to the terms of the charter
not entitled to inclusion.[458] In November permission was requested and
given to substitute 339,800 of permanent debenture stock of the Credit
Valley Railroad for $1,000,000 cash deposited with the Government as
security with an option on the part of the company of resubstituting
cash.[459] Constant vigilance characterized the policy of the company in
regard to the land grant as an asset offering relief from financial
difficulties. Upon the company's insistence an order in council of
October 24[460] reserved for sale 38,000,000 acres--the odd-numbered
sections between 52 and 54 degrees latitude and 104 and 116 longitude.
In response to further claims an order in council[461] of November 3
gave the odd-numbered sections between the belt of land along the main
line and a six-mile belt on the Manitoba and Colonization Railway south
of the main line, and between the Province of Manitoba and the Coteau or
Dirt Hills, about 2,500,000 acres. Not content with this grant the
company asked that it should include all the odd-numbered sections
between the railway belt and the international boundary and west from
Red River to the Manitoba boundary. Again the Government concurred on
January 25, 1883.[462] On November 22, 1882, a grant of 6,204,807 acres
earned on 501 miles was asked for on the ground that the 4,963,845
acres already granted had been given after a deduction of one-fifth,
which was not according to the terms of the charter. The company
insisted[463] that the charter provided that should they not issue land
grant bonds secured by mortgage, one-fifth of the lands should be
retained by the Government as security for maintenance and working of
the road. Land grant bonds had been issued and the Government was
therefore not entitled to the deduction. Again the Government finally
agreed.

Finally, to meet the situation, in December, 1882, authorized capital
stock was increased from $25,000,000 to $100,000,000, and to market this
stock under favourable circumstances, a dividend of 3 per cent, was
consistently paid.[464] On December 16 a contract was made with the
North American Railway Contracting Company,[465] a New Jersey
corporation with a capital stock of $3,000,000. Of the 30,000 shares,
21,267 were held in trust for the Canadian Pacific Railway Company[466]
in proportion to the holdings of each shareholder. The original holders
transferred a proportionate number of shares at cost price to such
parties as the company was desirous of obtaining as participators in the
enterprises. As a result W. Rockefeller, Winslow, Lanier and Co., Koehn,
Loeb and Co., Drexel, Morgan and Co. and other prominent New York
interests were represented. The contract stipulated that the road should
be constructed from a point forty miles west of Callander to the east
end of the Lake Superior section for the sum of $14,099,979 in cash and
$20,000,000 in stock, and completed by December 31, 1886, and from a
point forty-five miles east of the Saskatchewan river to Kamloops for
the sum of $17,880,000 in cash and $25,000,000 in stock and completed by
December 31, 1885. The minor provisions of the contract conspicuously
protected the railway company. It kept general control with powers to
increase the staff if progress was not satisfactory, and to cancel the
contract if its orders were not carried out. In payments, 10 per cent.
of the stock and cash was retained as security. The contractors were
given power to sell more stock than was stipulated in the contract but
at a price and in amounts agreed upon with the railroad company.
Provision was made for the sale of the remainder of the stock in an
agreement[467] on December 29 with a syndicate composed of W. L. Scott,
J. S. Kennedy, R. V. Martinsen, J. A. Stewart, Ed. King and H. F.
Spaulding, the issue, comprising 300,000 shares, being taken as follows:
100,000 shares at 50 on February 1, 1883; 100,000 shares at 5250 on
June 25, 1883; and the remainder at 55 on October 25, 1883. The stock
was disposed of by the syndicate committee without great difficulty at
$60, ensuring the company a supply of funds from this source.

These attempts to meet the difficult financial situation and to provide
for continuance of the rapid prosecution of location and construction,
in 1883, were temporarily successful. In September, 1882, approval was
asked for a line by Kicking Horse Creek and across Selkirk Range by
Beaver Creek.[468] The early discovery of Moberly led to the successful
location of a line with a maximum grade of 1056 feet per mile
concentrated within twenty miles on each side of the summit. The
line[469] proceeded from the summit of the Rocky Mountains west down the
valley of the Kicking Horse River forty-four miles, to the valley of the
Columbia River, north-west thirty miles into the valley of the Beaver
River, following it south and west to the summit of the Selkirks.
Descending the Selkirks the route followed the east fork of the
Illecillewaet River twenty miles, to a junction with the main stream,
and from thence continued south-west twenty-three miles to the west
crossing of the Columbia River. The highest points were the Rocky
Mountain summit, 5,300 feet above sea-level, and the Selkirk summit,
4,316 feet. The maximum grade was 116 feet per mile descending west from
the summit of the Rockies and for sixteen miles ascending the Selkirk
summit and twenty miles descending the same summit. At the summit of the
Selkirks was a level section three-quarters of a mile long available for
marshalling trains. The line involved a maximum curvature of 10 per
cent. Contrasted with the location of the Government line located by
Yellowhead Pass, including 140 miles with a grade of 528 feet per mile,
the company's line included sixty-three miles with two heavy grades of
twenty miles each. The use of additional engines and wear of track were
balanced against the additional operation of seventy-seven miles of line
and an increase of two hours for passengers and four hours for freight.
Through traffic represented only 10 to 12 per cent. of the whole, and
the preponderance of this traffic being westbound the two heavy grades
rising eastward were not serious. The operation costs on concentrated
maximum grades was less than on several light grades. As a result of the
approval of the Kicking Horse Pass line, location proceeded rapidly, and
on December 6, 1883, it had been carried out to the summit of the Rocky
Mountains.[470] On the eastern section location was prosecuted from both
ends of the line between Prince Arthur's Landing and Callander.[471] In
1883 it was located sixty-eight miles east from Prince Arthur's Landing
and 130 miles west of Callander. This line had a maximum grade of 53
feet per mile and curves of a minimum radius of 1,433 feet.

Location was rapidly followed by construction, and was accompanied by
extension of the company's railway system by acquisition. On June 30,
1883, rails were laid for 960 miles west of Winnipeg,[472] and in
September trains were running 881 miles.[473] The section from Selkirk
to Port Arthur was under Government contract to be in running order by
July 1, 1882, and to be completed by July 1, 1883. In the spring of 1883
the contractors expressed a desire to place the unfurnished portion of
the road in the hands of the Canadian Pacific Railway Company. This
arrangement[474] placed construction and operation of the section under
one control and the contractors were released from the obligation of
purchasing heavy equipment necessary to complete the contract. On May
10, the contract was placed in the hands of the company to be completed
at contract prices minus a deduction of 15 per cent. for preliminary
work done by the contractors,[475] and the opening of navigation in 1883
found the company in control of the whole section. Lake steamers were
ready in the same year to carry the traffic from Port Arthur to Algoma
Mills. The line from Pembroke to Callander was sufficiently improved to
warrant the Government's permission to run trains at thirty miles per
hour over the whole route on November 1, 1883.[476] In eastern Canada,
with the early control of the Canada Central,[477] over which access was
gained to Brockville on the St. Lawrence and to connexions with American
railways to New York and Boston, the company proceeded to strengthen its
position. The purchase[478] in 1882 of the western division of the
Quebec, Montreal, Ottawa and Occidental Railway from Montreal to Ottawa
brought an important addition. This included the main fine from Montreal
to Aylmer, the railway branch and bridge to Ottawa, the branch line to
St. Jerome, and a branch from the main line near Mile End station,
Montreal, to the Grand Trunk Railway between Dorval station and
Montreal. According to the terms of the purchase, through freight and
passenger traffic was carried over the Canadian Pacific Railway and the
eastern section of the Quebec, Montreal, Ottawa and Occidental Railway
to Quebec at rates charged by the Canadian Pacific for all traffic
carried past the city of Ottawa in either direction. All rates were
apportioned between the Government and the company at a mileage rate
calculated _pro rata_ according to the distance traversed by traffic on
each of the railways. Concessions were made by the Government in regard
to the dispatch of emigrant trains from Quebec and to all foreign mails
and to the carriage of coal. The Government agreed to use every effort
to secure the completion of the Intercolonial Railway to Point Levis,
and the installation of a ferry from Point Levis to Quebec, making
provision for the ultimate extension of the road to Halifax. In addition
to this extension of the main line, branch lines were constructed. The
branch from Winnipeg to West Selkirk,[479] twenty-two miles, and the
branch from Pembina Mountain Junction to Gretna, fourteen miles, built
in 1882, were supplemented by the completion[480] of the branch from
Pembina Mountain Junction to Emerson, fifteen miles, which had been
encouraged by a Government bonus of $50,000 for a bridge at the latter
point. In 1883 the Pembina Mountain branch was in operation for 102
miles.

Again the rapidity of the construction and expansion of the road
exhausted the company's resources and again it was obliged to resort to
all possible expedients. The policy of rapid extension necessitated
changes in the management and in the directorate as well as in the
financial plans. Offices had been opened in 1881 in Winnipeg with Mr. A.
B. Stickney as general superintendent and General Rosser as chief
engineer. In December, 1881, Mr. W. C. Van Horne, general superintendent
of the Chicago, Milwaukee and St. Paul, was appointed general manager
and Mr. T. G. Shaughnessy of the same company became purchasing
agent.[481] In 1882 the directors were Mr. George Stephen, Pres., Mr. D.
McIntyre, Vice-Pres., Mr. D. A. Smith, Montreal; Mr. J. S. Kennedy, New
York; Mr. R. B. Angus, Mr. J. J. Hill, St. Paul; Mr. H. S. Northcote,
Mr. P. du P. Grenfell, Mr. C. D. Rose, London; and Baron J. de Reinach,
Paris. The executive committee included Messrs. Stephen, Angus, McIntyre
and Hill. On May 3, 1883, Mr. J. J. Hill resigned[482] from the
executive committee and the board of directors because of a policy which
involved early construction of the link north of Lake Superior and the
diversion of north-west traffic from the St. Paul, Minneapolis and
Manitoba over the Canadian route. At the same time the executive
committee ceased to exist and another Vice-President, Mr. R. B. Angus,
was added. Mr. C. D. Rose and Mr. D. A. Smith made way in the interests
of new financial arrangements for Mr. R. V. Martinsen, Amsterdam, and
Hon. W. L. Scott, Erie, Pa. The following year, as evidence of the
increasing prominence of expert railroad officials in the management,
Mr. W. C. Van Horne became Vice-President in the place of Mr. D.
McIntyre and Mr. T. G. Shaughnessy became acting general manager. Mr. J.
S. Kennedy was replaced by Mr. Turnbull and Messrs. Rose and Smith again
appeared on the directorate. In 1885 Mr. Turnbull and Baron de Reinach
retired and Mr. E. B. Osler, of the Ontario and Quebec Railway, Mr.
Sandford Fleming and Mr. G. R. Harris, of Boston, were added.

In addition to changes in management some evidence of the financial
exigencies of the company--though the weight of the evidence may be
seriously lessened if judged according to norms of business
astuteness--may be found in the unusually careful surveys made of all
the railroad accounts. For instance, complaint was made of overcharging
on the part of the Government to the extent of $46,607.65--(1) a
contract of wire fencing cancelled by the Government at the time the
company took over the road, $18,500; (2) fencing on the Pembina branch
not executed, $8,000; (3) temporary bridge over the Red River not
erected directly in connexion with traffic but for traffic purposes,
$6,950; (4) customs duties which should not have been included in the
valuation of engines, $7,599.50; (5) freight in store at the time the
road was transferred and not worth the charges, $2,158.01; (6)
overcharge on freight in transit, $3,400.14. To the payment of this the
Government agreed[483] on March 27, 1883. On July 11, the company
offered to purchase the Government's rolling-stock from Fort William to
Rat Portage at certain stipulated prices. It was pointed out
depreciatingly that the lack of standard in equipment, the age of the
stock, and its rough service were factors seriously affecting its value.
The matter was submitted to arbitration and the locomotives alone
proved to be worth $9,000 more than the company's total estimate.[484]
The provision of the charter admitting materials for the construction of
the main line free of duty made necessary the payment of drawbacks to
Canadian manufacturers supplying these materials. Such drawbacks were a
continual source of difficulty especially during periods of financial
stress. The company was called upon to return $1,604.00 expended on
materials used for the Algoma branch despite a suggestion[485] that an
equal amount of materials should be used for the main line. Great care
was necessary on the part of the Government to secure affidavits from
the company and from contractors. A question was raised as to payment of
drawbacks on bridges--steel being admitted free of duty. A ruling[486]
favourable to the company held that they should be called iron bridges
and entitled to drawbacks.

Late in 1883 the company submitted a definite proposition[487] to
continue construction in the following year. Stock to the extent of
$55,000,000 had already been issued and the conditions of the market
made it impossible to issue more. To meet this situation it was
suggested that certain funds should be deposited with the Government to
guarantee the payment of dividends for a period of years. A fund of
$24,527,145 to pay semi-annual dividends of 1 per cent. on the entire
stock for ten years was to be deposited with the Government, first,
$15,000,145 in cash immediately, second, $5,000,000 with interest at 4
per cent. on or before February 1, 1884, and third, $4,527,000 to be
paid within seven years. Security for the later payments (2) and (3) was
to be furnished (_a_) by creating a charge on all sums earned by the
company as postal subsidy and for transport service--$3,000,000; (_b_)
by depositing with the Government $1,781,500 land grant bonds to cover
the balance of $4,527,000 with the option of the company to pay such
balance at any time in cash--the revenue derivable from these bonds was
adjusted at 4 per cent. on $4,527,000 by the payment half-yearly of any
deficiency or by the return to the company of any surplus, and (_c_) by
creating a charge on the $5,000,000 of land grant bonds held by the
Government as security for the operation of the road. The Government was
to be allowed interest half-yearly on the balance of the fund created,
and was to pay from such balance and interest $1,500,000 semi-annually
for ten years to the trustees as dividends, the first dividend payable
February 17, 1884. Three days later the Government approved[488] the
scheme, modifying it to the extent that the company should furnish funds
to meet the dividends falling due on February 17, 1884.

On November 5,[489] a happier arrangement was suggested. Since the
company did not need to dispose of the whole of its stock at that time,
and since it preferred placing the stock on the market as the proceeds
were needed for the prosecution of the work, and the extent of the
deposit would involve expense and loss of interest, it asked the
Government to agree to a reduction of the deposit to an amount
sufficient to pay 3 per cent. on $65,000,000 of the stock, the company
depositing the remaining $35,000,000 of stock with the Government to be
returned as the amount of money required to cover a similar dividend was
deposited. Under this arrangement the company would deposit
$15,942,645--an amount sufficient to pay dividends at 3 per cent. on
$65,000,000 for ten years. Of this the company was to pay first,
$8,561,733 immediately and $2,853,912 on February 1, 1884, with interest
to be paid semi-annually at 4 per cent., the payment to be secured by
land grant bonds deposited--$3,420,000; second, within five years the
remainder $4,527,000 with interest payable semi-annually at 4 per cent.
secured (_a_) by a charge on all sums earned as postal subsidy and for
transport service, $3,000,000; (_b_) by depositing further $1,830,000 of
land grant bonds to cover the balance of $1,527,000 with the company's
option to pay this balance in cash, the revenue derived from these
securities to be adjusted as in the first proposal at 4 per cent. on
$4,527,000; (_c_) by a charge on $5,000,000 of the land grant bonds held
by the Government. As in the first proposal the Government was to allow
interest at 4 per cent. semi-annually on the balance in hand of the
fund created and to pay from the fund and the interest $975,000
half-yearly for ten years as dividends to the trustees, the first
dividend to be paid on February 17, 1884, and any balance required to be
paid by the company. On the $35,000,000 of stock to be deposited, the
company had the right to draw to August 17, 1883, as it deposited a sum
of money which with interest added would pay a half-yearly dividend to
August 17, 1893, on the stock withdrawn, and the Government was to pay
to the trustees in addition to $975,000 a further sum equal to 1 per
cent. on the amount of stock withdrawn. Two days later the Government
agreed and the Bank of Montreal was appointed trustee.

The attempt to sell stock under favourable circumstances by the payment
of dividends met with little success. The questionableness of the
policy, the persistent propaganda[490] carried on by hostile interests
depreciating the prospects of the road, and the unsatisfactory
experiences[491] of financiers with Canadian roads seriously affected
the price of Canadian Pacific stock. In December, 1883, it was quoted at
57. In addition to this difficulty as a result of the agreement which
gave the Government control of the unissued stock, the contract with the
North American Railway Contracting Company[492] was cancelled on
November 21, and the company was obliged to carry on construction by
other means.

At every turn the company exercised and was obliged to exercise the
utmost care in the conservation of its financial resources. An
application was made for the release from land grant bonds, to the
extent of $10,000,000 in the Bank of Montreal to the order of the
Government, of an amount sufficient to pay the company the sum earned in
the construction of the line. In the agreement of November 7 a number of
these bonds were deposited by the company to secure payments to be made
under the agreement, and the Government claimed that these bonds were a
first charge on the $10,000,000 of bonds held by the Bank of Montreal,
and that none of them could be released until the amount required to be
deposited under the agreement had been fully earned. It held that bonds
pledged under the agreement had been released practically before they
were earned. The company replied[493] on January 1, 1884. Construction
was complete on 1,121 miles and on this basis according to the charter
land was to be granted to the extent of 13,755,763 acres. Since the
proceeds of the land grant bonds to be received by the company from the
Government were the same number of dollars as acres of land minus
one-fifth, $11,004,610 was due to the company. The company asked that
this amount minus $10,000,000, or $1,004,610, of the bonds should be
released. On January 7 the Government, after carefully reviewing[494]
the situation, gave its approval.

On January 15,[495] in a further effort to meet the situation, the
company suggested other measures. Its position was as follows:

  Subsidy earned             $12,289,211
  Subsidy to be earned       $12,710,789

  Land grant earned         13,755,705 acres
  Land grant sold            3,753,400   "
                            __________
  Unsold balance earned     10,002,305   "
  Land grant unearned       11,244,295   "
                            __________
  Total available           21,246,600   "

  The lands sold had realized an average of $2.36 per acre.

  _Land Grant Bonds_.

  Bonds sold                                          $10,000,000

  Bonds redeemed and destroyed                         $6,667,000
  Bonds held by land companies against payments
    for lands sold and not yet due                        846,000
  Balances payable by individuals or lands sold
    not yet due                                         1,363,500
                                                       __________
    Total                                              $8,876,500

  Balance of bonds to be provided for out of unsold
    lands                                               1,123,500
  Balance of bonds in Government hands                 15,000,000
                                                      ___________
    Bonds existing                                    $16,123,500

  Lands earned and unsold, 10,002,305 acres at $2.36   23,605,440
  Surplus from earned lands after paying bonds         $7,481,940

  The liability of the company on bonds--in hands
    of public                                          $1,123,500
  Bonds charged with lien for payment of balance
    required to secure guarantee dividend               5,258,000
                                                       __________
    Total liability                                    $6,381,500

  Total lands available (earned and unsold) plus
    unearned, 21,246,600 acres at $2.36               $43,361,420

  Stock:
    In hands of Government subject to $8,575,000
      for payment of dividends                        $35,000,000
    On hand, from which it had obtained an
      advance of $5,000,000                           $10,000,000

  Expenditure to December 31, 1883:
    1,121 miles main line                             $23,563,564
    269 miles branch line                               3,827,092
    Improving railway received from Government            353,601
    Equipped lines and branches                         8,638,306
    Equipped extensions, Brockville and Montreal
      from Callander                                    3,203,050
    Materials on hand                                   4,028,604
    Paid in advance of dividend                         8,710,240
    Paid interest on capital stock                      2,128,000
    Interest on land grant and expenses                   372,880
    Advances toward acquiring line to seaboard          3,482,251
    Acquired real estate for termini                      390,789
                                                      ___________
                                                      $58,695,377
  Received cash and land subsidy                       21,318,222
                                                      ___________
  Balance                                             $37,377,155

It was estimated that about $27,000,000 was required for the completion
of the road. Speedy construction was urged to develop the country and to
secure a return on the capital already expended. The company asked, in
the first place, for the release of $1,000,000 which had been deposited
in 1881 and substituted by Credit Valley securities in 1882 as a
guarantee for the completion of the road. It had expended $37,377,155
and during the last nine months had earned a net revenue of $978,660.
The retention of the securities not only impaired the company's
resources, but was an imputation on the value of the railway and the
good faith of the company, and was no longer necessary. In the second
place it asked that the subsidy should be paid on progress estimates as
the payment on the mileage basis was inequitable, some miles being more
difficult than others. Its third request was that the date of payment by
the company of $2,853,912 in February, 1884, should be extended until it
was needed for the payment of secured dividends on November 7, 1888,
when the balance of the fund was payable. Lastly it requested a loan of
$22,500,000 with the unpledged land grants as per statement--the
proceeds of the lands to be appropriated (_a_) in payment of interest on
the loan, (_b_) to establish a sinking fund to extinguish the principal.
Further security was offered in a first charge on the company's main
line and property including the Pembina branch and lines east of
Callander. The advance was to be paid as the work proceeded. Four days
later the Government engineer, Mr. Schreiber, recommended[496] that the
suggestions should be adopted. The proposals[497] were approved by the
Government on January 31.

The Act[498] embodying the terms of this agreement, after the usual
bitter protests of the opposition, was sanctioned by Parliament. The
security definitely provided was (1) a first lien on all the company's
plant from Callander to Port Moody; (2) a first lien on the section of
main line between Callander, Brockville and Montreal, subject to a
mortgage of $5,333,333; (3) a first lien and charge on all the land of
the company earned and to be earned subject to the bonds outstanding.
The land grant was placed in the hands of trustees to pay the proceeds
of bonds held by the public, to pay the amount due in November, 1888, to
the Government and to pay the advance. No bonds could be issued on the
Government's security. No portion of the $35,000,000 stock could be
issued without the Government's consent, and the proceeds of any issue
were to be used to pay the Government advances. Six months' default in
payment of the interest on principal created a statutory foreclosure.
Provision was made for extinguishment of a current debt of $7,500,000,
and the company agreed to complete the central and eastern sections of
the road in May, 1886.

Following these financial arrangements and preparations, location and
construction were again rapidly pushed forward in 1884. On the Rocky
Mountain section the company was obliged to apply[499] for authority to
construct a temporary line for about thirteen miles, dropping into the
Kicking Horse Valley with a grade of about 232 feet per mile for four
miles, and joining the original line at a point west of the most
troublesome portion. It was estimated that the rapid construction of the
permanent line to complete it in the time required by the contract would
increase the cost of construction to an extent sufficient to build a
temporary line. To this the Government agreed[500] on May 30. Location
was carried forward ninety-two miles during the year and completed in
March, 1885.[501] On the eastern section also location was rapidly
carried to completion.[502]

Construction on the mountain section proceeded slowly but steadily and
the company was able to predict completion in the fall of 1885. In the
eastern section in October, 1884, 185 miles of track had been laid west
of Callander, and sixty-seven miles east of Port Arthur.[503] In
December there remained 254 miles.[504] The branch from Algoma Mills to
Sudbury Junction, ninety-five miles, the link which gave the company a
through rail and water route from Winnipeg to Montreal, was
completed.[505]

Extension of the system through acquisition continued in 1884 as in the
previous year. On January 4 an important step in the control of traffic
in eastern Canada was made in the lease of the Ontario and Quebec
Railway.[506] This included the Toronto, Grey and Bruce Railway leased
on July 26, 1883, for 999 years; the London Junction Railway leased on
November 19, 1883; the Credit Valley Railway system acquired by
amalgamation on November 30, and the Atlantic and North-West Railway
acquired by purchase on December 3. The lease gave the company better
terminal facilities and secured access to important ports and
connexions. The line to Owen Sound gave the company a larger share of
the traffic shipped from the west to western Ontario and strengthened
its hold on western trade. The St. Lawrence bridge gave additional
facilities in Montreal. Connexions were made at St. Thomas with the
Canada Southern branch of the Michigan Central, permitting the Canadian
Pacific to share in the trunk-line seaboard traffic.

These acquisitions constituted a serious invasion on the territory of
the Grand Trunk. The severity of the competition which followed led to a
tentative agreement in which the Grand Trunk recognized the right of the
Canadian Pacific to traffic going north-west and the latter road agreed
to leave the Grand Trunk in possession of its district, but effective
control by the Canadian Pacific of the Ontario and Quebec Railway made
the agreement impossible[507] and competition was renewed. The Grand
Trunk attempted to prevent the Canadian Pacific from gaining access to
the seaboard. Running rights of the Canadian Pacific over the North
Shore Railway to Quebec were rendered valueless by the transfer of
control over the North Shore Railway to the Grand Trunk. With the
acquisition of this control, it proceeded to construct the Jacques
Cartier Union Railway from Sault au Recollet, a point on the Canadian
Pacific Railway, to a point on its own road, 6 miles,[508] for the
purpose of connecting the North Shore Railway with the Grand Trunk
system. In the face of an ominous silence on the part of the Canadian
Pacific the road was approved by the Government on October 10, 1883, and
completed on December 8.[509] The North Shore Railway in the sale of its
western division to the Canadian Pacific was given equal rights with the
Canadian Pacific over the portion of the line between St. Martin's
Junction and Montreal. The Grand Trunk attempted within these rights to
put up and take in traffic with its own engines and staff at the
junction with the Jacques Cartier Railway, using in this way 4 miles of
Canadian Pacific track. The Canadian Pacific objected and insisted on
certain rates for all cars going over its lines.[510] The Grand Trunk
retaliated with a refusal to grant running rights of the Canadian
Pacific over the North Shore line to Quebec and constructed an extension
of the Jacques Cartier Union Railway to St. Vincent de Paul, making a
direct connexion with the North Shore Railway.[511] The Dominion
Government at this juncture offered to secure an outlet to Quebec for
the Canadian Pacific by a subsidy to a line parallel to the North Shore
Railway, which prospect of competition brought the Grand Trunk to terms.

An Act[512] was passed by the Canadian Parliament authorizing the
setting aside of $15,000,000 to be used for the purpose of securing
access to Quebec for the Canadian Pacific Company. Following this step
on September 19, 1885, an agreement[513] was made with the Grand Trunk
in which that company transferred all the shares, all the railroad
property,[514] and $180,000 of unissued bonds of the North Shore Railway
to the Government, and agreed to secure the resignation of the
directors of the North Shore Railway, to pay all the accounts of that
railway between March 4, 1882, and September 20, 1885, and all other
obligations incurred between April 20, 1883, and September 20, 1885, and
to cancel all agreements with the Jacques Cartier Union Railway and the
North Shore Railway. The Government agreed to pay $525,000 and in
addition the cost of extra fuel laid in store for the winter and to
assume obligations on property in Quebec and Hochelaga valued at
$82,500. On the same date another agreement[515] was made with the
Canadian Pacific Railway, transferring the shares of the North Shore
Railway to Mr. George Stephen and the Hon. D. A. Smith, and the
obligations assumed by the Government to this company. Interest secured
at the rate of 4 per cent. on the $970,000 remaining after $525,000 had
been paid out of the $15,000,000 set aside in the Act, was used to make
up any deficiency of the operating receipts for the payment of bond
charges. The remaining $5,000 was paid to the Grand Trunk in
compensation for the cancellation of contracts made by the North Shore
Railway with the Canadian Express Company, the Shedden Cartage Company
and the Richelieu and Ottawa Navigation Company. With these measures the
North Shore road became the property of the Canadian Pacific.

Again the rapid expansion of the system through construction during 1884
depleted the company's financial resources despite every effort to
conserve them. On April 21 the company claimed[516] that certain
accounts had been wrongly included in the floating debt and deducted
from the loan of $7,500,000: (1) advances on Duluth rails $280,736.09
should have been spread over the estimates and not deducted in a lump
sum; (2) deductions for rolling-stock on the Thunder Bay Section
$185,890 should have been included in the Canadian Pacific Railway
contract to complete that section, as also for rails between Port Arthur
and Rat Portage $100,223.07 and timber and ties $9,538.45. The
Government approved[517] the payment of $249,043.87, and agreed that the
materials used on the Thunder Bay Section should be spread over the
estimates as the work was completed. On July 5, the Government
returned[518] $1,004,000 of land grant bonds which the company had given
in the belief that the Loan Act of 1884 called for a deposit of
$10,000,000 with the Government which possessed at that time $8,996,000.
On November 22 a question was raised[519] as to whether the $8,996,000
of land grant bonds held by the Government were to be treated as issued
by the company in advance of their being earned, and whether the
trustees of the land grant mortgage should pay interest on them as it
came due, or whether they were to be treated as issued only after they
had been earned. A Government ruling on January 7, 1885,[520]
safeguarded the position of the company. It stated that the money
received in payment of the $8,996,000 was to pay, first, the interest on
the loan and on $7,380,912, the amount provided to secure the dividends;
second, on the capital of the $7,380,912; third, on the capital of the
loan. Since the holders of land grant bonds were not desirous of having
a charge on the proceeds of the land increased beyond what was clearly
authorized, and since the security of the issued bonds would be lessened
by charging the lands earned with the total issue, therefore the bonds
earned by the company should be treated as issued and interest collected
on them while unearned bonds should not be treated as issued.

In April, 1885,[521] the company had $7,000,000 of notes outstanding and
due in two months. The blanket mortgage on the road given under the Act
of 1884 and the deposit of $35,000,000 of stock with the Government made
it impossible to secure funds either from the sale of stock or bonds.
The company proposed[522] accordingly that its total debt to the
Government, $29,880,912, consisting of the loan of $22,500,000 plus
$7,380,913, the amount due according to the agreement of November 10,
should be met by the delivery to the Government of $35,000,000 of first
mortgage bonds with interest at 5 per cent. secured by a mortgage on the
entire property, except the Algoma branch and other portions of the
road already mortgaged. The $35,000,000 of unissued stock in the hands
of the Government was to be cancelled. The total debt was to be repaid
with interest at 4 per cent. on May 1, 1891. As security the company
offered for $20,000,000 of the debt the same amount of first mortgage
bonds. The remainder of the debt--$9,880,912--was to be secured by a
lien on the unsold and unpledged lands of the company. The remaining
first mortgage bonds--$15,000,000--were divided into two portions,
first, $8,000,000 as security for a temporary loan of $5,000,000, and
the remaining $7,000,000 to be paid by the Government to the company as
it was demanded. To this the Government finally consented.[523]

To a slight extent the Act of 1885 weakened the security provided in the
loan Act of 1884. In the first Act a lien was given on the postal
subsidy and in the second Act a lien was given on all the property as
well as the subsidy. A ruling[524] was made that the Government was no
longer entitled to money from the postal subsidy and transport service
except in the case of amounts collected for these services on the Algoma
branch and the company's leased lines. Such amounts were to be retained
by the Government except in the case of leased lines in which the
revenues were pledged. Difficulties[525] were also occasioned in the
payment of the company's floating debt. On July 25, 1885, the company
reported a floating debt on May 31 of $9,782,804.67 and asked for
$4,782,804.67 to be paid out of the proceeds of the $7,000,000 portion
of the bonds provided for in the Act, in addition to the temporary loan
of $5,000,000. The company failed to show, however, that the debt had
not been reduced at the later date and on July 31 the Government
recommended the payment of only $1,104,538 plus $1,895,462, making a
total of $3,000,000 which had been shown to be still due on the floating
debt after the payment of $5,000,000.

Meanwhile, steps were taken for the issue of bonds. In conformity[526]
with the Act the Government appointed the Rt. Hon. G. G. Glyn, Baron
Wolverton; the Rt. Hon. A. C. Baring, Baron Revelstoke; and Hon. Sir
Charles Tupper, as trustees of the mortgage. The bonds were dated July
1, 1885, and ran for thirty years at 5 per cent. There were 2,600 of
1,000 bonds, 5,800 of 500 and 6,900 of 100. Interest on $20,000,000
to be paid to the Government was 4 per cent. and the whole sum was to be
repaid before May 1, 1891. Elaborate provision was made for the default
of payment of interest or principal. On July 29 the mortgage[527] was
changed in the interests of negotiability, and the provision, that there
should be a certificate upon it signed by the trustees and the place for
keeping the London register should be at Messrs. Baring & Co., where the
bonds and interest were payable, was omitted. The company secured
permission[528] from the Government to accept the proceeds in lieu of
the bonds to be held as security and steps were taken for the final
sale. Sir John Rose offered to purchase at 75, but $15,000,000 were
sold[529] to Baring Bros. at 90 and an option given for the remainder at
91. They were offered to the public at 95. The favourable reception of
the bonds was the result partly of missionary work[530] carried out by
Sir Charles Tupper, High Commissioner for Canada, partly of the recovery
following the depression of 1883 and 1884, partly of the consistent
support of the Canadian Government to the railway and of the
construction activities and railway operations of the company. The
favourable sale enabled the company to repay[531] the loan on August 27,
1885, and to secure the release of the $8,000,000 of bonds held by the
Government as security. On October 19, the $3,000,000 loan from the
Government was repaid[532] and $4,800,000 of bonds released.

The strenuous efforts to secure financial support from the Government
were stimulated by prospects of completing the main line in 1885. The
British Columbia section under Government contract was completed on July
29, 1885.[533] On the eastern section the road was of sufficient
importance to aid in the conveyance of troops to suppress the
North-West Rebellion in 1885.[534] The section was finally opened for
traffic from Callander to Port Arthur, 651 miles, on November 2.[535] On
the mountain section the Government engineer reported that on October
10, 1885, 36 miles of track remained to be laid.[536] On November 7 Mr.
Donald A. Smith drove the last spike at Craigellachie.[537] The Canadian
Pacific Railway, with the completion of these links, extended from
Montreal to Vancouver.

The fulfilment of the contract in the completion of the main line of the
road was a significant landmark in the spread of civilization throughout
Canada. It was significant of the strength and character of the growth
of civilization within the boundaries of three distinct areas which
served as buttresses for this transcontinental bridge. With this
addition to technological equipment, the civilization of these areas
changed in its character, and its extent, and became more closely a part
of a civilization narrowly described as Canadian, and typically,
western. These changes are recorded to some extent in the history of the
Canadian Pacific Railroad and the history of Canada.

[Footnote 427: Smith, early interested in the fur trade, was sent to
England in 1870 by the wintering partners of the Hudson Bay Company to
present their claims to a share of the proceeds of the sale of the
Company's territory to Canada in 1869 (Willson, Beckles, _The Great
Company_, p. 299). On his arrival in England he proceeded to take
advantage of the rumours that the sale of land to Canada had greatly
weakened the Company's position, and bought a majority of the company's
stock at a very low price (Preston, W. T. R., _Strathcona and the Making
of Canada_, p. 38 ff.). The shareholders were obliged to grant a total
of 107,055 to the wintering partners, but nothing was said as to the
share of the wintering partners of the land remaining in the hands of
the company. The control of the stock by Smith and consequently of the
land explained his reticence, "I ought to have pressed it (the question
of land) on them. But really it seemed such uphill work and I had so
much to do" (Willson, Beckles, _Life of Lord Strathcona and Mount
Royal_, p. 430). In 1874 he became the land commissioner of the Hudson
Bay Company (_ibid._, p. 543). He was particularly active in the
establishment of communication from Red River to the United States
Railroads, and in the formation of the St. Paul, Minneapolis and
Manitoba Railroad.]

[Footnote 428: M. P. Morton, of Morton, Bliss and Company, was a member
of the syndicate formed to construct the sections given out by
Government contract in British Columbia (_Sessional Papers_, No. 19_m_,
1880, p. 196).]

[Footnote 429: _Commercial and Financial Chronicle_, vol. XXXI, p. 344.]

[Footnote 430: App. _B_.]

[Footnote 431: _House of Commons Debates_, 1880-1, vol. I; also
_Journals House of Commons_, 1880-1.]

[Footnote 432: The leading directors were Sir W. P. Howland, H. H. Cook,
A. R. MacMaster of Toronto, Wm. Hendrie, John P. Proctor, John Stuart
and A. T. Wood of Hamilton, Allan Gilmour, James McLaren of Ottawa, John
Walker, D. MacFie of London, P. S. Stephenson of Montreal, J. Carruthers
of Kingston, G. A. Cox of Peterboro', A. W. Ross of Winnipeg, P. Larkin
of St. Catherines, K. Chisholm of Brampton, Alexander Gibson of
Fredericton, N.B., W. B. Lovitt of Yarmouth, N.S., and Barnet and McKay
of Renfrew, Ontario. Of the twenty-one directors, seventeen were from
Ontario, of whom eleven were from Western Ontario (_Sessional Papers_,
No. 23_m_, 1882).]

[Footnote 433: _House of Commons Debates_, 1880-1, vol. I, pp. 5, 7-8.]

[Footnote 434: _House of Commons Debates_, 1880-1, vol. I, p. 812.]

[Footnote 435: _Sessional Papers_, No. 48_d_, 1882, p. 28.]

[Footnote 436: _Railway Age_, vol. XIII, p. 116.]

[Footnote 437: Mr. George Stephen, Mr. J. J. Hill and Mr. D. A. Smith
each subscribed 5,000 shares. Among other members, Morton, Bliss and Co.
subscribed 7,410 shares; J. S. Kennedy and Co., 4,500 shares; D.
McIntyre and Co., 4,750 shares; H. S. Northcote, 1,860 shares. The
remainder was largely held by foreign parties in smaller sums.
_Sessional Papers_, No. 48, 1882, pp. 14-15.]

[Footnote 438: _Railway Age_, vol. XIII, p. 24.]

[Footnote 439: _Ibid._, p. 254.]

[Footnote 440: _Sessional Papers_, No. 8, 1882, p. 23.]

[Footnote 441: The first call came February 17, 1881, 30 per cent.;
second, April 30, 20 per cent.; third, June 10, 15 per cent.; fourth,
September 5, 15 per cent.; fifth, February 17, 1882, 20 per cent.
_Sessional Papers_, No. 31, 1884, p. 67.]

[Footnote 442: _Railway Age_, vol. XIII, p. 432.]

[Footnote 443: _Railway Age_, vol. XIII, p. 432.]

[Footnote 444: _Sessional Papers_, No. 48, 1882, p. 70.]

[Footnote 445: _Commercial and Financial Chronicle_, vol. XXXIV, p.
662.]

[Footnote 446: _Sessional Papers_, No. 48, 1882, p. 67.]

[Footnote 447: 45 Vic. c. 53.]

[Footnote 448: _Railway Age_, vol. XIII, p. 432.]

[Footnote 449: _Sessional Papers_, No. 48, 1882, p. 63.]

[Footnote 450: _Ibid._, p. 21.]

[Footnote 451: December 31, 1881. _Sessional Papers_, No. 8, 1882, p.
11.]

[Footnote 452: June 26, 20 miles; July 26, 20 miles; July 31, 20 miles;
August 10, 40 miles; August 22, 20 miles; August 26, 20 miles; September
12, 20 miles; September 19, 20 miles; September 27, 20 miles; October 9,
20 miles; October 17, 40 miles; October 31, 20 miles; November 11, 20
miles ; December 2, 20 miles; December 6, 20 miles (_Sessional Papers_,
No. 27, 1883, p. 52 ff.). For a general description of the rapidity of
construction, see Vaughan, W., _Life and Work of Sir William Van Horne_,
p. 76 ff.; Skelton, O. D., _The Railway Builders_, p. 159 ff. See also
general descriptions of the difficulties involved in construction. As
much as $700,000 was spent on one mile, and $500,000 per mile was a
common estimate for construction in the Rocky sections. It was found
cheaper to build a dynamite factory than to purchase enormous quantities
from plants. Muskegs were an additional source of trouble. Litigation
with contractors was a characteristic feature--Conmee _v._ C.P.R. was a
suit against contractors for an overpayment of $600,000 due to alleged
false measurements.]

[Footnote 453: _Sessional Papers_, No. 27, 1883, p. 125.]

[Footnote 454: _Ibid._, p. 171.]

[Footnote 455: _Ibid._, p. 153.]

[Footnote 456: _Sessional Papers_, No. 31, 1884, p. 106.]

[Footnote 457: _Ibid._, No. 27, 1883, p. 69.]

[Footnote 458: _Ibid._, No. 27, 1883, p. 97.]

[Footnote 459: _Ibid._, No. 27_a_, 1883, p. 135 ff.]

[Footnote 460: _Ibid._, No. 27, 1883, p. 187.]

[Footnote 461: _Ibid._, p. 188.]

[Footnote 462: _Ibid._, p. 194.]

[Footnote 463: _Sessional Papers_, No. 27, 1883, p. 183.]

[Footnote 464: _Ibid._, No. 31, 1884, p. 68. On August 17, February 17
and August 17, 1882; and February 17, 1883.]

[Footnote 465: _Ibid._, p. 52 ff.]

[Footnote 466: _Ibid._, p. 74.]

[Footnote 467: _Sessional Papers_, No. 31, 1884, p. 99 ff.]

[Footnote 468: _Ibid._, No. 27, 1883, p. 25.]

[Footnote 469: _Ibid._, No. 271, p. 7.]

[Footnote 470: On June 26, the line was located from the Saskatchewan
River crossing to Medicine Hat, 123 miles; on July 24, from Crowfoot
Creek to Calgary, 69 miles; August 25, to Padmore, 55 miles; September
21, to Forty Mile Creek, 28 miles; November 9, 35 miles; December 6, to
the Rocky Mt. summit, 5 miles.]

[Footnote 471: _Sessional Papers_, No. 25, 1885, p. 22 ff.]

[Footnote 472: _Ibid._, No. 10, 1884, p. 13.]

[Footnote 473: _Ibid._, p. 9.]

[Footnote 474: _Ibid._, No. 31, 1884, p. 118.]

[Footnote 475: _Sessional Papers_, No. 31, 1884, p. 124.]

[Footnote 476: _Ibid._, No. 27_n_, p. 15.]

[Footnote 477: The mileage of the Canada Central extended from Ottawa to
Carleton Place, 29 miles; from there to Pembroke, 76 miles; from there
to Callander station, 120 miles; and from Carleton Place to Brockville,
45 miles; total, 281 miles.]

[Footnote 478: Including Hull to Aylmer branch, 7 miles; St. Therese to
St. Jerome branch, 13 miles; St. Lin to St. Eustace branch, 8 miles.]

[Footnote 479: _Sessional Papers_, No. 10, 1884, p. 14.]

[Footnote 480: _Ibid._, p. 15.]

[Footnote 481: Vaughan, W., _Life and Work of Sir William Van Horne_,
pp. 75-6.]

[Footnote 482: "As regards the Nipissing and Thunder Bay line I have no
actual knowledge...it is most unfavourable for the operation of a
railroad as a financial success. During the summer months it would have
to compete with the Lakes via Thunder Bay and the American lines over
our own road and in the winter I cannot see how it could get enough
business to justify the running of trains." Letter to R. B. Angus. July,
1880, Pyle, J. G., op. cit., p. 314.]

[Footnote 483: _Sessional Papers_, No. 31, 1884, p. 23.]

[Footnote 484: _Ibid._, p. 80 ff.]

[Footnote 485: _Ibid._, p. 137.]

[Footnote 486: _Ibid._, p. 140.]

[Footnote 487: George Stephen to the Hon. Minister of Railways and
Canals, October 24, 1883 (_ibid._, p. 1).]

[Footnote 488: _Ibid._, p. 4.]

[Footnote 489: _Ibid._, p. 5.]

[Footnote 490: A typical defence against these hostile interests.
Mohawk, _The Canadian Pacific Railway and its Assailants_.]

[Footnote 491: _Economic Journal_, vol. XII, p. 409; _Economist_, vol.
XXXVIII, p. 476; vol. XLI, p. 800; vol. XLIII, p. 625.]

[Footnote 492: _Sessional Papers_, No. 31, 1884, p. 52 ff.]

[Footnote 493: _Sessional Papers_, No. 25, 1885, p. 181.]

[Footnote 494: The Government's argument was as follows:

    Lands earned               13,755,705
      "   sold                  3,752,000
                               __________
    Unsold lands               10,003,705

3,752,000 acres sold had redeemed $6,108,500 of land grant bonds. Bonds
held by land companies against payments to become due on the lands sold
$1,383,000. Balance of purchase money remaining applicable to bonds
issued $1,363,500. From 3,752,000 acres sold, $8,854,000 bonds held out
of $10,000,000 had been provided for. The balance of bonds in the hands
of the public, $1,146,000, had a security of 10,003,705 acres of land
unsold. Adding the amount applied for--$1,004,000--made a total of
$2,150,000, which was represented by land valued at $1 per
acre--$10,003,705. Land was left unpledged--$7,853,000 estimating the
value at $1 per acre, an unusually low estimate (_ibid._, p. 179).]

[Footnote 495: _Sessional Papers_ No. 31_c_, 1884, p. 4.]

[Footnote 496: _Sessional Papers_, No. 31_c_, 1884, p. 11.]

[Footnote 497: _Ibid._, p. 16.]

[Footnote 498: 47 Vic. c. 1.]

[Footnote 499: W. C. Van Horne to the Hon. Minister of Railways and
Canals, May 19, 1884, _Sessional Papers_, No. 25, 1885, pp. 10-11.]

[Footnote 500: _Ibid._, p. 13.]

[Footnote 501: On June 21, 1884, 35 miles west of the Rocky Mt. summit;
July 25, 10 miles; September 13, 15 miles; September 21, 18 miles;
November 2, 14 miles; January, 1885, 74 miles; March, 82 miles. _Ibid._,
No. 25, 1885, p. 10 ff.]

[Footnote 502: In May, 1884, 261 miles east of Nepigon River; July, 39
miles to Lake Nipissing; in August, 40 miles. From Callander west in
May, 60 miles; August, 27 miles; September, 35 miles. _Ibid._, p. 22
ff.]

[Footnote 503: _Ibid._, p. 34.]

[Footnote 504: _Ibid._, p. 39.]

[Footnote 505: _Sessional Papers_, No. 11, 1885, p. 12.]

[Footnote 506: Branches included: Fraxa Junction to Teeswater, 67 miles;
Streetsville Junction to Melville Junction, 32 miles; Cataract Junction
to Elora, 27 miles; Western Junction to St. Lin Junction, 2 miles. The
Atlantic and North-West Railway included a line from Mile End to the
south end of the St. Lawrence bridge, the bridge itself, the section
from Windsor Street, Montreal to Western Junction and the line from
Smith Falls to Perth.]

[Footnote 507: _Railway Age_, vol. XV, p. 289.]

[Footnote 508: _Ibid._, No. 31, 1884, p. 87.]

[Footnote 509: _Ibid._, p. 90.]

[Footnote 510: _Ibid._, p. 92.]

[Footnote 511: _Ibid._, p. 96.]

[Footnote 512: 48-49 Vic. c. 59.]

[Footnote 513: _Sessional Papers_, No. 35_d_, 1886, p. 1 ff.]

[Footnote 514: Including branches from Piles Junction to Grandes Piles,
27 miles; Berthier Junction to Berthier, 2 miles; Joliette Junction to
St. Felix, 17 miles.]

[Footnote 515: _Sessional Papers_, No. 35_d_, 1886, p. 6.]

[Footnote 516: _Ibid._, No. 25, 1885, p. 186.]

[Footnote 517: _Ibid._, p. 189.]

[Footnote 518: _Ibid._, No. 25a, 1885, p. 4.]

[Footnote 519: _Ibid._, p. 6.]

[Footnote 520: _Ibid._, pp. 7-8.]

[Footnote 521: See _Canada and Its Provinces_, vol. X, p. 439.]

[Footnote 522: 48-49 Vic. c. 57.]

[Footnote 523: For a dramatic description see Skelton, O. D., _Life and
Times of Sir Wilfrid Laurier_, I, pp. 281-2; also Vaughan, W., op. cit.,
p. 124 ff.]

[Footnote 524: _Sessional Papers_, No. 35, 1886, p. 16.]

[Footnote 525: _Ibid._, p. 202 ff.]

[Footnote 526: _Ibid._, p. 207.]

[Footnote 527: _Ibid._]

[Footnote 528: _Ibid._, No. 35, 1886, pp. 3-5.]

[Footnote 529: Saunders, E. M., _Life and Letters of Sir Charles
Tupper_, vol. II, p. 59.]

[Footnote 530: _Ibid._]

[Footnote 531: _Sessional Papers, Ibid._, p. 10.]

[Footnote 532: _Ibid._, p. 12; see also Skelton, O. D., op. cit., p.
282.]

[Footnote 533: This line was handed over to the C.P.R. authorities on
June 30, 1886. _Sessional Papers_, No. 34_b_, 1887, p. 125.]

[Footnote 534: The aid of the company in the transport of troops has
generally been regarded as of considerable moment in persuading
Parliament to accede to the financial arrangements in 1885. Van Horne
even suggested that the Canadian Pacific ought to erect a monument to
Louis Riel. Skelton, O. D., op. cit., p. 278.]

[Footnote 535: _Sessional Papers_, No. 13, 1886, p. 11.]

[Footnote 536: _Ibid._, No. 35a, 1886, p. 11.]

[Footnote 537: Willson, Beckles, _Lord Strathcona: The Story of his
Life_, p. 208.]




  IV

  Expansion of the Road and the Development of Freight Traffic


An index of the effectiveness of the road as an addition to the
technological equipment of Canadian civilization was the amount of
traffic carried. The extension of this equipment in the physical
property of the road prior to the completion of the main line was
accompanied by, and to a slight extent dependent on, an immediate
development of traffic, especially of freight. Extension after the
completion of the main line became increasingly the result, and
continued as a cause, of this development of freight traffic. The
importance of freight with reference to the particular characteristics
of the road made necessary a marked increase in passenger traffic
essential to settlement of western Canada, but such increase was
subsidiary to the increase in freight. Built through a long stretch of
unproductive territory, the road required a large outlay of fixed
capital, which in turn necessitated the most rapid possible prosecution
of construction of the main line and of branch lines, and the use of
every possible device calculated to develop traffic. Immigration was
encouraged by the efforts of the Canadian Pacific[538] on its own
initiative and in co-operation with the Canadian Government.[539]
Settlement was encouraged in every possible way. An energetic
advertising campaign[540] and developmental rates were directed to that
end. To direct traffic over the main line eastbound from Winnipeg,
traffic south through the United States was discouraged, and the
monopoly clause was rigidly enforced. Upon the increase in
population[541] in western Canada largely depended the freight traffic
of the road and to the development of freight energies were largely
directed.

[Footnote 538: See Carnarvon, _Speeches on Canadian Affairs_, pp.
315-32; also description of colonies largely encouraged by C.P.R.
_Sessional Papers_, No. 15_a_, 1889. For reference to the importation of
immigrants as labour for the construction of the road see _Sessional
Papers_, No. 54_a_, 1885; No. 54, 1900; No. 36_b_, 1905; also _Report of
Royal Commission to Inquire into methods by which Oriental Labourers
have been induced to come to Canada_, 1908.]

[Footnote 539: See reports of the High Commissioner on Emigration from
United States and Europe. _Sessional Papers_, No. 5_d_, 1889; No. 6,
1890; No. 6_e_, 1891; No. 7_b_, 1892.]

[Footnote 540: See Vaughan, W., op. cit., p. 136 ff. Ham, George,
_Reminiscences of a Raconteur_, p. 273 ff. Skelton, O. D., _The Railway
Builders_, p. 178. Mavor, James, _Report to the Board of Trade on the
North-West of Canada_, p. 12 ff.]

[Footnote 541: Population-- Increase Increase 1901 per cent. 1891 per
cent. 1881

British Columbia 178,657 8198 98,173 9849 36,247 Manitoba 255,211
6716 152,506 14495 62,266 The Territories 211,649 11386 98,967 7533
56,446

_Canada Year-book_, 1903, p. 85.]


  _A._ Freight Traffic and Equipment Prior to the Completion of the Main
    Line

Under Government operation the first train left St. Boniface on February
10, 1880, and despite very difficult weather and lack of equipment,
service was continued from that date.[542] The principal items of
freight for the first five months ending June 30, 1880, were steel and
provisions.

  Freight carried to June 30, 1880[543]

    Iron and steel (largely steel rails)  15,779,719 lb.
    Hides and skins                           25,360 lb.
    Oats                                      34,660 bus.
    Wheat                                     31,841 bus.
    Potatoes                                   3,775 bus.
    Butter and cheese                          9,528 lb.
    Meat                                   1,290,263 lb.
    Groceries                             19,600,668 lb.
    Total                                     30,467 tons.[544]

The commodities were typically those of an expanding agricultural
settlement, exporting the raw products--grain (wheat and oats in about
equal proportions) and hides and skins, and importing settlers'
necessities such as groceries and railroad supplies. In the following
ten months the monthly average of freight carried increased from 6,093
to 11,699 tons,[545] and although the number of miles in operation
increased from 280 to 367, the monthly average of tons of freight
carried per mile increased from 218 to 319. The transfer of this
section of road to the Canadian Pacific Railway Company on May 2,
1881[546] materially increased the amount of the mileage under operation
and changed the amount and character of the traffic. The number of miles
increased to 609 and included roads acquired in Ontario, especially the
Canada Central. The monthly average of tons of freight carried per mile
increased from 319 to 745.[547] The individual items of traffic and
their relative importance are shown in the following table:

  Freight carried during year ending June 30, 1882

    Grain                      3,937,166 bus.
    Flour                         40,006 bls.
    Live stock                    49,137 head.
    Lumber                   136,164,645 feet.
    Firewood                      12,532 cords.
    Manufactured articles        104,236 tons.
    Other articles               313,568 tons.

Settlers' necessities and farm products still remained important items,
although the importance of the Ontario roads was reflected in
manufactured goods and lumber. In the remaining years before the
completion of the main line, the rapid expansion of the road as shown in
the increased mileage from 609 to 4,338[548] brought an increase in the
amount[549] of freight carried from 634,153 to 1,655,969 tons, and a
decrease in the amount of freight carried per mile.

The increase in traffic before the completion of the main line and the
trend of particular items[550] was significant. The amount of grain
carried declined in 1883, increased in 1884 and almost doubled in the
following year. The amount of flour carried, reflecting in part the
demands of increasing settlement, increased five times in 1883, tripled
in 1884 and made a substantial increase in the last year. Live stock
proved to be more under the influence of the grain trade and of the
depression of those years, and fluctuated accordingly, practically
doubling in 1883, declining almost to its lowest level in the next year
and tripling in 1885. Lumber, influenced by the increasing demands of
the new country, steadily increased to 1884 and declined slightly in
1885. Firewood, dominated by similar circumstances, as well as by
climatic variations, increased five times in 1883, declined in 1884 and
reached its highest level the following year. Manufactured articles,
continuing to reflect the influence of the Ontario section of the road,
steadily increased, more than tripling during the period. Flour,
manufactured articles and lumber were significant items, and grain was
of decided importance.

The expansion in mileage and the increase in traffic during the period
were directly reflected in freight train mileage.[551] The total train
mileage during the first five months of operation was 69,164, making an
average of 13,832 train miles per month. In the next ten months the
total increased to 214,607, a monthly average of 21,460. In the first
year of the company's operation this was almost quadrupled to 937,243,
a monthly average of 66,946. Of that year's total train miles, 544,929,
or more than half, were freight train miles. As a reflection of the
addition of roads in eastern Canada the number increased six times in
1883 and declined slightly in the two remaining years. Mixed train
mileage, to some extent influenced by freight traffic and by
construction activities, reached its highest point in 1884 and declined
markedly in 1885.

The amount of freight train mileage directly influenced the amount and
character of equipment. In the first five months of operation, the road
was seriously handicapped by a lack of locomotives, a difficulty
increased by the severity of the winter.[552] At the end of this period,
relief had been obtained and the road possessed seven locomotives, two
first-class passenger cars, one baggage-car, six box-cars, and forty
platform-cars. In the next ten months equipment was increased to ten
locomotives, six first-class cars, two smoking-cars, twenty-one
box-cars, and one hundred and forty-eight platform-cars.[553] At the end
of the company's first year of operation[554] the road had 118 engines,
and this number was steadily increased and almost tripled by 1885.
Cattle and freight cars were tripled in 1883, increased slightly in 1884
and almost doubled in 1885. As a result of construction activities,
platform-cars steadily increased and more than doubled throughout the
period. From the same activities, tool-cars increased from ten in 1883
to 241 in 1885.

The expansion of the road and the increase in traffic which directly
determined the increase in train mileage and consequently in equipment,
were responsible for the development of other facilities. In 1882 the
road had 181 miles of telegraph of one wire and 714 miles of two wires.
In 1885 the line was opened for commercial service between Lake
Superior and the Rocky Mountains.[555] With the acquisition of the
Canada Central Railway and a terminus at Brockville,[556] the first
elevator was acquired at that point in 1883. Completion of the section
from Winnipeg to Port Arthur[557] led to the construction a year later
of an elevator of 300,000 bushels capacity at the latter point. In 1885
elevator facilities in this locality were increased by the construction
of an elevator with 1,350,000 bushels capacity at Fort William,[558] and
an addition in the capacity of Port Arthur elevators of 350,000 bushels.
The establishment of lake service necessary for a connexion between Port
Arthur and Algoma led to the purchase of the _Athabaska_ and the
_Alberta_. The use of this lake service in connexion with the
acquisition of the Ontario and Quebec Railway, and terminal facilities
at Owen Sound, necessitated the construction of an elevator of 250,000
bushels capacity at that point in 1885. Acquisition of terminal
facilities in Montreal,[559] led to the construction of two elevators of
1,200,000 bushels capacity at that point in the same year. The rapid
increase in equipment necessitated the building of car-shops. Extensive
shops at Hochelaga near Montreal for the manufacture of locomotives and
passenger-cars were completed in the spring of 1883[560] and in the same
year general repair shops were constructed at Carleton and Winnipeg.

[Footnote 542: _Sessional Papers_, 1880-1, No. 5, p. 24.]

[Footnote 543: _Ibid._]

[Footnote 544: _Ibid._, p. 77.]

[Footnote 545: _Sessional Papers_, 1882, No. 8, p. 23.]

[Footnote 546: _Ibid._, p. 18.]

[Footnote 547: _Ibid._, 1883, No. 8, p. 23.]

[Footnote 548: _C.P.R. Report_, 1885.]

[Footnote 549: Freight carried:

  1882            634,153 tons.
  1883          1,065,272  "
  1884          1,244,476 tons.
  1885          1,653,969  "

  Compiled from _Sessional Papers_, 1883-6.

_Note._--Because of the incomplete character of statistics presented in
early company reports, it has been found necessary for purposes of
comparison in the first years of operation to use material furnished in
reports of the company to the Government.]

[Footnote 550: Traffic carried 1882 to 1885 (year ending June 30):

                              1882         1883          1884          1885

  Grain, bus.              3,937,166    3,213,085     4,727,671     7,842,343
  Flour, bls.                 40,006      213,528       713,662       915,219
  Live stock, head            49,137       79,295        51,491       162,396
  Lumber, feet           136,164,645  266,744,097   285,938,029   263,812,396
  Firewood, cord              12,532       61,736        42,577        73,577
  Manufactured articles,
    tons                     104,236      229,491       267,657       393,219
  Other articles, tons       313,568      260,916       287,454       443,290

  Compiled from _Sessional Papers_, 1882-6.]

[Footnote 551: Train mileage, 1882-5:

                    Freight Train      Mixed Train        Total
                        Miles             Miles          Mileage

  1882                 544,929               --          937,243
  1883               3,384,575             54,473      4,321,296
  1884               2,683,590          1,534,231      5,278,542
  1885               2,639,368            943,528      5,343,261

  Compiled from _Sessional Papers_, 1883-6.]

[Footnote 552: _Sessional Papers_, 1881, No. 5, p. 23.]

[Footnote 553: _Ibid._, 1882, No. 8, p. 86.]

[Footnote 554: Equipment, 1882-5:

                               Platform   Cattle and
                   Engines       Cars       Freight      Tool

  1882               118        2,063         580          --
  1883               186        3,579       1,602          10
  1884               245        4,386       1,876         153
  1885               315        4,400       3,072         241

  Compiled from _Sessional Papers_, 1882-6.]

[Footnote 555: _C.P.R. Report_, 1885.]

[Footnote 556: _Dept. of Railways Report_, 1883.]

[Footnote 557: _Ibid._, 1884.]

[Footnote 558: _C.P.R. Report_, 1885.]

[Footnote 559: _Ibid._, 1886.]

[Footnote 560: _Ibid._, 1884.]


  _B._ Expansion of the Road from the Completion of the Main Line to 1900

The increase in freight traffic which followed and stimulated the
expansion of the road prior to the completion of the main line,
continued to stimulate and follow its expansion after that time. In 1885
the company was in possession of a main line from Port Moody to Montreal
and Quebec, of a line tapping the Great Lakes traffic at Owen Sound and
Toronto and running eastward to Ottawa by Smith Falls, of a line
extending from Toronto to St. Thomas and tapping the trunk line traffic,
of a line to Brockville and American connexions, and of several branch
lines which increased the traffic on these through routes. The enormous
overhead charges occasioned by the length of the main line stimulated
the energies of the company toward the development of traffic chiefly by
extending and improving the connexions of the through routes and by
developing branch lines.

To increase the control of through traffic to the Atlantic coast plans
were made to secure access to ports which were free from the navigation
difficulties incident to Montreal and Quebec. On October 6, 1883, the
company foreclosed the bonds of the South-Eastern Railway.[561] A road
was built from the south end of the St. Lawrence bridge to Farnham,
3574 miles, to connect with this system in 1886-7.[562] In this way
access was gained to the ports of Boston and Portland through
arrangements with the Boston, Lowell Railway at Newport. To secure more
direct access a line was also projected from Montreal to St. John or
Halifax. From 1872 to 1875 the International Railway Company of Canada
had constructed a line from Lennoxville to Megantic, 65 miles, and in
1879 this was extended from Megantic to the boundary, 15 miles. On
November 2, 1886, the Atlantic and North-West Company purchased the
International Railway Company and on December 6 leased the entire system
in perpetuity to the Canadian Pacific Railway. The Waterloo and Magog
Railway from Waterloo to Sherbrooke, 35 miles, built in 1874-5, was
purchased by the Atlantic and North-West Company on June 10, 1888. The
International Railway Company of Maine, under the control of the
Atlantic and North-West Company and the Canadian Pacific Railway
Company, and organized for the purpose of constructing a railway from
the boundary to Mattawamkeag, 14484 miles, completed its work in the
same year. This line from Montreal to Mattawamkeag, constructed and
acquired in sections by the Canadian Pacific Railway, was provisionally
extended farther eastward by an agreement with the Canadian Government
on April 8, 1889.[563] This agreement was superseded by a more fortunate
arrangement in the acquisition on July 1, 1890, by a 999-year lease, of
the New Brunswick system which gave the company a direct line to St.
John. In September an agreement was made with the Intercolonial for an
exchange of traffic at St. John for Halifax. The company had finally
secured an outlet to the Atlantic seaboard over a line 279 miles shorter
between St. John and Montreal, and 101 miles shorter between Halifax and
Montreal, than the Intercolonial route.

The energies directed to the prosecution of a through line from Montreal
to the seaboard were stimulated and accompanied by an increase in
traffic with the improvement and construction of through connexions west
of Montreal. In competition with the Grand Trunk for trunk line traffic
the Canadian Pacific was obliged to carry traffic to Montreal through
Smith Falls and Ottawa. To improve its competitive position a direct
line was built from Smith Falls to connect with the lines of the
Atlantic and North-West Company at Montreal and completed[564] in 1887.
To strengthen control of this traffic and of the Toronto-Montreal
traffic, the company constructed a branch from Leaside Junction to Bay
St., Toronto, and improved facilities[565] at the latter point.
Difficulties[566] with the connexions at St. Thomas led to the extension
of the road from Woodstock to London in 1887[567] and to Windsor in
1888-9.[568] A steel ferry was constructed on the Detroit River and
final agreements with American roads placed the Canadian Pacific on an
effective competitive basis with the Grand Trunk for the seaboard
traffic of the middle western states. To secure a larger share of
traffic from the north-western states, control was secured of the
Minneapolis, St. Paul and Sault Ste. Marie Railway Company and of the
Duluth, South Shore and Atlantic Railway Company. The Canadian Pacific
line was extended from Algoma to Sault Ste. Marie and connexions were
made at that point with the Minneapolis Railway in 1888[569] and with
the Duluth Railway in 1889[570]. As a result of increased traffic from
these connexions, various improvements were necessitated on the line
between Montreal and Chalk River. The alignments were improved and
grades reduced to a maximum of 40 feet per mile going west and to a
maximum of 35 feet per mile going east.[571] For the same reason the
Montreal and Ottawa railway was leased on November 15, 1892, and a line
from Ottawa to Montreal, 87 miles, was completed in 1898. This
improvement of through connexions was continued on the western portion
of the line. With the approaching pressure of traffic from western
Canada, the section between Lake Nipissing and Winnipeg was improved by
the replacement of wooden bridges with permanent embankments in
1888[572] and following years. The indirect route of the Canadian
Pacific by Smith Falls to Toronto became increasingly disadvantageous
and an agreement was made in 1888 with the Grand Trunk permitting the
Canadian Pacific to use its direct line from North Bay to Toronto.[573]

The importance of through traffic for a line of the Canadian Pacific's
length and character led to efforts to secure control of Oriental and
Pacific coast traffic. An extension of the road was constructed from
Port Moody to the entrance of Burrard Inlet, 9 miles, in 1885-6[574] for
the purpose of acquiring better harbour and terminal facilities. In the
mountains extensive snow-sheds were built and completed in 1887.[575] In
1889 and 1890 a branch was built from Mission to American connexions
with Seattle and points on American railways along the Pacific
coast.[576] Connexions with the Orient were sought and acquired. In
response to an advertisement of the Imperial Government of October,
1885, the Canadian Pacific[577] offered to furnish fortnightly service
between Vancouver and Hong Kong for 100,000 per year for ten years.
This offer was rejected since the payment by the Imperial authorities to
the Peninsular and Oriental Steam Navigation Company for the conveyance
of China mails would not be reduced by the diversion of only a part of
the mails to another route. Emphasizing the importance of the Canadian
Pacific route for the conveyance of mail and for military and naval
purposes, a modification of the offer was made in July, 1887. In this
tender the company agreed to a monthly service proposing to bring
Shanghai within the main route of mail steamers and to include the land
carriage within the time contract. The Canadian Parliament authorized a
payment of 15,000 for a monthly service between Vancouver and Hong Kong
and 25,000 for a fortnightly service. The advantages of this line in
giving direct communication through British territory and affording an
alternative route to the east, saving several days over the Suez route,
finally led the Imperial authorities to accept this proposition. On July
15, 1889, a contract was signed in which the Imperial authorities gave
a subsidy of 45,000 and the Canadian Government 15,000 annually for
ten years. The agreement[578] called for one complete monthly service,
684 hours from April to November, and 732 hours from December to March,
between Halifax or Quebec and Hong Kong. Vessels were to call at
Yokohama and Shanghai. Provision was made for the transport of troops
and the vessels were built under Admiralty supervision. The Admiralty
was given power to purchase the boats under stipulated conditions. This
arrangement gave the Canadian Pacific a through route from Halifax to
Hong Kong. The _Empress of India_ was the first steamship completed, and
the _Empress of China_ and the _Empress of Japan_ were added in time to
permit a full working schedule by the midsummer of 1891.[579]

The efforts to acquire control of the traffic of the Orient and of the
Pacific coast increased competition with American lines and particularly
with the Great Northern.[580] To strengthen its position the company
constructed a branch from Pasqua, near Moosejaw,[581] on the main line
to the boundary to connect with a branch of the Minneapolis, St. Paul
and Sault Ste. Marie from Hankinson, North Dakota, in 1893. This branch
shortened the distance between the Pacific coast and St. Paul and
Chicago and gave the company a greater competitive advantage for this
traffic. For the same competitive reasons and to prevent the extension
of American roads into British Columbia, a line from Dunmore to
Lethbridge, 107 miles, was acquired by lease in 1893 and by
purchase[582] in 1897 from the Alberta Railway and Coal Company, and
extended by construction to Crow's Nest Pass, and from that point by the
lease of the British Columbia Southern Railway in 1898[583] to Kootenay
Landing on the lakes of British Columbia, 182 miles. Two years later
under the charter of the latter railway, a line was built extending the
route from Nelson to Proctor, 20 miles,[584] and connecting with the
Columbia and Kootenay Railway to Robson, 27 miles, leased in 1890.[585]
In the following year the road was completed to Columbia River bridge
and in 1901-2 to West Robson, connecting with the Columbia and Western
Railway from West Robson to Midway, 100 miles, acquired in 1898.

The improvement and establishment of through connexions stimulated and
were stimulated by the construction and acquisition of branch lines. The
pressure of overhead charges occasioned by the increasing length of the
main line, and the competitive and less remunerative character of
through traffic, intensified the necessity for the development of local
main line and branch line traffic. The development of this traffic in
turn necessitated through connections. The barren character of the
country from Winnipeg to eastern Canada, and the consequent heavy
overhead charges on this section of the road, continued to be decided
stimuli to the early extension of branches and the development of
traffic in western Canada. Branches constructed in this area prior to
the completion of the main line became the basis for a rapidly extended
system. With the completion of the main line the company possessed
parallel lines running on each side of the Red River south of Winnipeg
to the United States boundary, one of which extended north to West
Selkirk, and a line running from one of these branches parallel to and
fifteen miles from the United States boundary to Manitou. On May 26,
1884, the Manitoba and South-West Colonization Railway was leased in
perpetuity from June 1 of that year. This line ran westward midway
between the main line and the southern Manitou branch and was extended
to Holland in 1885[586] and to Glenboro in 1886.[587] The Manitou branch
was extended under the same charter to Deloraine[588] in 1884-5. The
ends of these parallel lines were joined to the main line by the
construction of a branch running south-west from Brandon. With the
Souris coal-fields in view, 17 miles on this line were laid in 1889[589]
to Souris, 16 miles in 1890 to Hartney, 82 miles in 1891 and 47 miles in
the next year to Estevan.[590] The southern Manitou branch was extended
to meet this Souris branch at Napinka, 18 miles. The branch midway
between this line and the main line was extended 21 miles from Glenboro
in 1890, 6 miles to Nesbitt in 1891, and 18 miles to Souris on the
Souris line in the following year.[591] Another line was added with the
construction of a branch from Elm Creek to Carman in 1889-90.[592]
Westward expansion of the system continued in the following decade.
Provision was made for the occupation of the entire western and northern
area. On October 10, 1890, a road was completed from Regina to Prince
Albert, 150 miles, which had been leased to the Canadian Pacific Railway
by the Qu'Appelle, Long Lake and Saskatchewan Railroad and Steamship
Company on August 7, 1889.[593] In 1890 and 1891 a road was built from
Calgary north to Strathcona, 190 miles, and in 1892 south to West
MacLeod, 103 miles, and leased to the Canadian Pacific by the Calgary
and Edmonton Railway.[594] Generally the company included in these lines
an area defined by the sector of a circle, with Winnipeg as centre, with
the main line to Calgary as a radius and with the arc extending from
West MacLeod to Strathcona. Within this area, a line was constructed
west of the Souris branch from Menteith to Pipestone,[595] and in 1898,
17 miles beyond. The Deloraine branch was extended to Waskada in 1892,
18 miles, and to Lyleton, 37 miles, in 1902-3.

In British Columbia similar efforts in the construction and acquisition
of branch lines for the development of traffic were made. On August 22,
1890,[596] control had been secured of the Columbia and Kootenay River
Navigation Company by 999-year lease. The construction of the road from
Nelson to Robson, 26 miles, connecting the Columbia and Kootenay Lakes,
made available for over 250 miles a line of steamboat and railway
communication to such important sources of traffic as the Kootenay
mining district. The Shuswap and Okanagan Railway was leased for
twenty-five years on August 4, 1892, and construction of a road from
Sicamous on the main line to Okanagan Landing, 51 miles, gave access to
agricultural and mining districts for over 100 miles.[597] In 1893 the
lease of the Nakusp and Slocan Railway connected the Upper Arrow Lake
at Nakusp with the Slocan mining district, 36 miles, and with Sandon, 4
miles. This connexion was greatly improved by the construction of a
branch from Arrowhead to Revelstoke, 28 miles, in 1893-6. A branch from
Slocan City to Slocan Junction, 31 miles, built in 1897, and the
addition of several short branches by construction[598] and
acquisition,[599] served the mining areas effectively.

East of Winnipeg similar measures were taken for the development of
traffic, particularly contributing to the support of the through line
seaboard connexions. In 1885 a branch was built from Buckingham Junction
to Buckingham, 4 miles, to the phosphate mines,[600] in 1887 a branch
from Glenannan to Wingham, 5 miles, to the salt district,[601] and two
branches from Sudbury to the copper mines, in 1899-1901 a branch from
Molson to Lac du Bonnet, 22 miles, to a timber district, and in 1901 a
branch from Dyment to Ottamine, 7 miles, to a mining district. On
January 1, 1891, the Guelph Junction Railway[602] was leased for 99
years from September 18, 1888, including a line running from Guelph to
Guelph Junction, 15 miles. In the same year control was acquired over
the Lake Temiskaming Colonization Railway. In 1893 a branch from Mattawa
to Temiskaming, 32 miles, was completed and in 1896 a branch from Kipawa
Junction to Kipawa, 9 miles. Under the charter of the Atlantic and
North-West Railway a branch was built from Eganville Junction to
Eganville, 20 miles, in 1898, to tap an important timber area. The lease
of the Montreal and Ottawa Railway included a branch from Rigaud to
Point Fortune, 7 miles. The Montreal and Western Railway, leased in
1892, consisted of a branch from St. Jerome to Labelle, 67 miles. The
New Brunswick Railway system, leased in 1890, included important
branches--from Watt Junction on the main line to Edmunston, 178 miles,
passing through the important town of Woodstock and including two short
lines to the Maine boundary, the Houlton branch, 3 miles, and the
Presque Isle branch from Aroostook Junction to Presque Isle, 33 miles;
from Watt Junction south to the seaboard at St. Andrews, and the Maine
boundary at St. Stephen; and from Fredericton Junction to Newburg
Junction, passing through Fredericton, 80 miles. The Tobique Valley
Railroad, leased in 1897, included a branch from Perth Junction to
Plaster Rock, 28 miles, and the St. Stephen and Milltown Railway leased
in the same year, a branch from Milltown Junction to Milltown, 5 miles.
In addition to the construction and acquisition of branches for the
development of traffic, agreements were made to the same end. With the
New York Central, the Michigan Central and the Canada Southern, a
contract[603] was made for the completion and joint control of the
Toronto, Hamilton and Buffalo Railway giving access to the Hamilton,
Brantford and Niagara districts. In 1897 this contract became more
effective with an agreement securing running rights over the Grand Trunk
line from Toronto to Hamilton.

[Footnote 561: This system included the Lake Champlain and St. Lawrence
Junction Railway from Stanbridge to St. Guillaume, 60 miles, acquired by
a 29-year lease; the Richelieu, Drummond and Arthabaska Counties Railway
from Sorel to Drummondville, 37 miles; from Drummondville to L'Avenir, 5
miles (later abandoned); and from Drummondville to Drummondville
Junction, 59 miles, acquired by amalgamation; and the Newport and
Richford Railway from Abercorn to East Richford and from North Troy to
Newport, 21 miles, acquired by 99-year lease.]

[Footnote 562: _C.P.R. Report_, 1887. Details as to the acquisition of
roads were obtained directly from the company through the courtesy of
Mr. W. H. Curle, K.C., General Solicitor.]

[Footnote 563: The Government agreed to build a road from a point of
junction with the New Brunswick Railway near Harvey to a point of
junction with the Intercolonial Railway near Salisbury and to lease this
road as well as running rights over the Intercolonial from Salisbury to
Moncton in perpetuity to the company. The agreement further provided for
the carrying of freight between points west of Maine and Intercolonial
points east of Moncton either way. The Intercolonial was entitled to the
Halifax division of rates. These divisions were based on a constructive
distance equal to the distance from Halifax to Moncton plus 15 per cent.
On this constructive distance and the actual distance carried by the
lessees the through rate was prorated. But it was not entitled to a
proportion of the through rate exceeding its local tariff rate for the
portion of the line over which the freight was carried. On freight
between points on lines operated by the Canadian Pacific east of the
west boundary of the state of Maine and Intercolonial points east of
Moncton either way, the through rate was prorated on the actual mileage,
provided that on intermediate local points on the Intercolonial, that
road was entitled to its proportion for the next junction or terminal
points eastward, and that on freight to and from local points on any
line operated by the company east of Fredericton, from and to
Intercolonial points east of Moncton either way, each party was entitled
to its local tariff rates. Further arrangements were made as to
passenger traffic and the establishment of a through route from Montreal
to Halifax. For these rights the Canadian Pacific Company agreed to pay
$1 per year for the first twenty years and thereafter $73,400 per year
payable half-yearly and to pay the taxes and charges as though it was
the owner of the road. Repairs and maintenance between Salisbury and
Moncton were paid on wheelage basis. The bridge at Fredericton was
leased in perpetuity, the rent consisting of maintenance and repairs.
_Sessional Papers_, No. 36_a_, 1889, p. 285.]

[Footnote 564: _C.P.R. Report_, 1889.]

[Footnote 565: _Ibid._, 1888.]

[Footnote 566: _Ibid._, 1886.]

[Footnote 567: _Ibid._, 1887.]

[Footnote 568: _Ibid._, 1889.]

[Footnote 569: _Ibid._, 1887.]

[Footnote 570: _Ibid._, 1889.]

[Footnote 571: _Ibid._, 1888.]

[Footnote 572: _Ibid._, 1890.]

[Footnote 573: _Ibid._, 1888.]

[Footnote 574: _Ibid._, 1885.]

[Footnote 575: _Ibid._, 1887.]

[Footnote 576: _Ibid._, 1891.]

[Footnote 577: _Copy of Treasury Minute dated July 18, 1889, and of
contract with C.P.R. dated July 15, 1889, for conveyance of Her
Majesty's mails, troops and stores between Halifax or Quebec and Hong
Kong and for hire and purchase of vessels as cruisers and transports._]

[Footnote 578: _Ibid._]

[Footnote 579: _C.P.R. Report_, 1891.]

[Footnote 580: See Vaughan, W., op. cit., p. 220 ff.]

[Footnote 581: _Railroad Gazette_, vol. XV, p. 645.]

[Footnote 582: _C.P.R. Report_, 1897.]

[Footnote 583: _Ibid._, 1898.]

[Footnote 584: _Ibid._, 1898.]

[Footnote 585: _Ibid._, 1890.]

[Footnote 586: _Ibid._, 1885.]

[Footnote 587: _Ibid._, 1886.]

[Footnote 588: _Ibid._, 1886.]

[Footnote 589: _Ibid._, 1889.]

[Footnote 590: _Ibid._, 1890-2.]

[Footnote 591: _Ibid._]

[Footnote 592: _Ibid._, 1890.]

[Footnote 593: _Ibid._, 1889.]

[Footnote 594: _Ibid._, 1891.]

[Footnote 595: _Ibid._]

[Footnote 596: _Ibid._, 1889.]

[Footnote 597: _Ibid._]

[Footnote 598: Spur to Slocan mines, 4 miles; Lardeau to Gerrard on the
Trout Lake Mining district, 33 miles, 1902.]

[Footnote 599: Columbia and Western Railway leased in perpetuity, July
12, 1898. Trail to Rossland, 12 miles; Smelter Junction to Castlegar
Junction, 19 miles; Eholt Junction to Phoenix, 9 miles; Greenwood to
Mother Lode, 7 miles; Kootenay and Arrowhead Railway, leased August 15,
1901, North Star Junction to Kimberley, 19 miles.]

[Footnote 600: _C.P.R. Report_, 1885.]

[Footnote 601: _Ibid._, 1887.]

[Footnote 602: _Ibid._, 1887.]

[Footnote 603: _Ibid._, 1895.]


  C. Freight Traffic and Equipment, 1885-1900

The expansion of the system in its completion of through connexions and
its development of branches was largely the cause, and in part the
effect, of the growth of traffic. Mileage[604] had increased during the
period from the completion of the main line to the end of the century
from 4,338 to 7,000, and during the same period the number of tons of
freight[605] carried increased from 1,655,969 to 6,620,903. This general
increase in freight was steady, with the exception of a slight falling
off in 1888, a decrease in the years of depression of 1893-4, and a
rapid increase toward the end of the period. It was especially the
result of the rapid increase in the number of bushels of grain carried,
and reflected the importance of the road's expansion in western Canada.
With considerable fluctuations, largely occasioned by climatic
conditions, the amount of grain carried[606] increased from 7,842,343
bushels in 1885 to 42,763,253 in 1899. The frost and the rebellion of
1885-6 reduced the rate of increase in 1887, and the exceptional harvest
of 1887 was recorded in the increase of 1888. Another early frost
brought a decline in 1889. Except for a bad harvest in 1893, a slight
decline in 1898, and a rapid recovery in the following year, the
increase in the later years was consistent.

The expansion of the road, particularly in western Canada, and the rapid
increase in the amount of grain carried during the period, were directly
related to the increase of other commodities carried. Wheat was of
dominant importance in grain traffic, and the increase in the amount of
flour[607] carried roughly paralleled the increase in the amount of
grain carried. The number of barrels of flour carried increased from
1,000,044 in 1886 to 4,005,226 in 1899. With the exception of a decline
in 1894 and in 1897, and a rapid increase in 1899, this increase was
remarkably steady, fluctuating less than grain. This fact strongly
points to the pressure of wheat on milling capacity. An increase in
1889, with a decline in grain carried in that year, is explained, in
part, by the rapid increase in grain in the previous years, which left
the millers with grain on hand. Similarly the steady increase in 1893 is
explained by the heavy crop of 1892. The crop failure of 1893 was
reflected in the decline of flour in 1894. During later years, with the
importance of increasing mileage in eastern Canada, and the importance
of other grain than wheat, fluctuations in flour carried became less the
result of fluctuations in grain carried. In 1897 flour declined but
grain increased, and in 1898 flour increased but grain declined.

The number of tons of manufactured articles[608] carried was influenced
directly by the expansion of the road, and was also sensitive to the
agricultural situation. It increased from 476,698 in 1886 to 1,793,663
in 1899. With the exception of a slight decline in 1887, occasioned by
the unsettled western conditions in 1885-6, and a marked decline in 1894
due to the depression of the middle 'nineties, the increase was again
steady and consistent. This was largely the result of expansion in
western Canada, though the foothold which the road had secured in
eastern Canada and in the manufacturing cities of the United States was
of considerable importance. The effect of the depression was eloquent of
the influence of eastern connexions. Climatic conditions, though
transient and becoming less serious to agriculture because of improved
farming, were much less consequential to the manufacturing industries.
The number of tons of other articles[609] carried were influenced by
conditions similar to those affecting manufactures, and increased during
the period from 498,940 to 1,461,144.

Lumber was dependent on the demands of the growth of western Canada, on
the control of the road in Eastern Canada and the United States, and on
the development of traffic in timber areas. The total number of board
feet[610] carried increased from 327,760,432 in 1886 to 957,702,349 in
1899. As in the case of manufactures, and in response to the close
relationship between building operations and depressions, the number
declined in 1887, in the years of depression of 1893-4, and slightly in
1896, although the decline during the years of depression was more
serious because of the bad harvest of 1893-4. The number of cords[611]
of firewood carried increased during the period from 75,625 to 202,461.
It was dominated largely by the demands of settlers in western Canada
for such necessities as fuel, and by the demands of the railroad. With
the exception of a decline in 1889, brought about by difficulties
incident to the bad harvest of that year, a decline in 1896 conforming
with other commodities at that time, and a slight decline in 1899, the
increase was persistent.

The movement of livestock[612] was largely significant of the influence,
on traffic of the road, of the eastern agricultural situation
characterized by mixed farming, and of the growth of ranching in western
Canada. The number of head of livestock carried increased during the
period from 244,257 to 810,559. The exceptional harvest of 1887 was
followed by a decrease in the amount of livestock carried, and the poor
harvest of the following year brought an increase in that number. In
1893 and in 1897, years of bad harvest, the number of livestock carried
decreased--a change which points to the growing importance of mixed
farming, the livestock industry depending more directly on grain, and a
bad harvest restricting the marketing of the finished product. It was
further a possible indication of the increasing prosperity of farmers, a
bad harvest not necessarily leading to the sale of livestock.

The expansion of the road and this growth of traffic occasioned a rapid
increase in train mileage. This was particularly significant with an
increase in weight of the average freight train-load. The average
freight train-load[613] increased from 1622 tons in 1889 to 2312 tons
in 1899. The number fluctuated with a slight decline in 1890 and in
1897, a marked decline in 1893 due to the depression and the bad harvest
of that year, and a very rapid increase in 1899. The marked increase in
weight of the average train-load and the increase in the total train
mileage from 5,024,148 in the fiscal year of 1886 to 18,424,701 in the
calendar year of 1899, were important indices of the growth of traffic
and of the expansion of the road. Total train mileage[614] increased
consistently with the exception of a decline in 1893 and 1894. The
increasing importance of freight was evident in the increase of freight
train mileage[615] from 2,525,572 in the fiscal year of 1886 to
10,982,873 in the calendar year of 1899, and in the persistency of the
increase, which began in 1892, and though followed by a decline to 1895,
continued to 1899.

The growth of traffic and the increase in train mileage, accompanied by
an increase in the weight of the train-load, were directly the causes
and the effects of improved gradients and alignments and improved
standards of equipment. The total number of freight and cattle cars[616]
increased from 7,838 to 19,005 during the period. This increase was
persistent though it slackened in 1889 in accordance with the grain
situation of that year, and in the middle 'nineties, and gained rapidly
during the latter part of the period, especially in the last year.
Locomotives,[617] influenced by the passenger situation, and by improved
standards evident in the increased average train-load, increased less
rapidly. From 1886 to 1899 the number rose from 372 to 690, increasing
steadily during the early part of the period, remaining stationary from
1894 to 1896, and increasing rapidly in the remainder of the period. The
number of conductors' vans[618] dependent upon the freight train
mileage, the average train-load, the size of the locomotives and the
proportion of through to local traffic increased during the period from
178 to 362, increasing steadily to 1888, remaining stationary through
1889, increasing rapidly to 1893, remaining stationary again through
1896, and increasing rapidly during the remainder of the period.
Boarding, tool and auxiliary cars[619] indicating the increase in
construction activities, rose in number from 71 in 1886 to 682 in 1899,
the increase being steady and rapid, except for the year 1887, and the
years of depression, and a decrease in 1895.

This increase in traffic which led to an increase in train mileage and
in equipment was again the cause and the effect of the improvement of
physical property of the road and of the development of other services.
In 1890 72-lb. rails[620] were laid on 171 miles of main line and on 68
miles of the Ontario division, displacing lighter rails of 56 and 60 lb.
which were used in sidings and branches. In the following year[621] 200
miles of heavy rails were laid. Alignments were improved, grades were
reduced, and permanent embankments constructed. In 1890 over 200 wooden
bridges were replaced by permanent structures of masonry, iron or solid
embankments, and an equal number[622] in 1891. For the accommodation of
grain traffic from western Canada the elevator capacity of Owen Sound
and Montreal had been increased in 1885 and 1886. At Fort William an
elevator of 1,500,000[623] bushels capacity was constructed in 1888 and
one of 1,250,000[624] in 1891. The _Aberdeen_[625] was added to the lake
steamship fleet in 1894 to accommodate the same traffic. Freight
terminals[626] in Toronto and Montreal were improved in 1888. Increasing
traffic on the Pacific coast made necessary the additions of the
_Athenian_ and the _Tartar_ to the Pacific steamship service in 1898.
Twelve[627] river steamers were acquired in British Columbia in the
same year, and seven more added in the following year. In September,
1886, telegraph connexions were opened between the important towns of
Ontario and Quebec,[628] and a connexion established with the Postal
Telegraph Company and the Baltimore and Ohio Company to all points in
the United States.[629] Under the joint construction of the Canadian
Pacific and the Postal Telegraph Co. a line was built between Vancouver
and San Francisco. The whole service was rendered more complete by
connexions with the Commercial and French Atlantic Cables.[630] In
addition the Company continued its policy of erecting equipment plants.
Plants were established at Perth, and in 1887 Vancouver was equipped
with workshops as well as yards, wharves and terminal requirements.[630]

[Footnote 604: Mileage, 1885-99:

  1885                   4,338
  1886                   4,464
  1887                   4,960
  1888                   5,074
  1889                   5,186
  1890                   5,564
  1891                   5,766
  1892                   6,015
  1893                   6,327
  1894                   6,344
  1895                   6,444
  1896                   6,476
  1897                   6,568
  1898                   6,681
  1899                   7,000

  Compiled from _C.P.R. Reports_ and _Sessional Papers_.]

[Footnote 605: Freight carried, 1886-99, tons:

  1886               2,046,195
  1887               2,144,327
  1888               2,496,557
  1889               2,638,690
  1890               3,378,564
  1891               3,846,710
  1892               4,230,670
  1893               4,226,959
  1894               3,891,884
  1895               4,274,667
  1896               4,420,550
  1897               5,174,484
  1898               5,582,038
  1899               6,620,903

  Compiled from _C.P.R. Reports_.]

[Footnote 606: Grain carried, 1886-99, bushels:

  1886              10,960,582
  1887              15,013,957
  1888              15,965,682
  1889              13,803,224
  1890              20,167,888
  1891              24,894,141
  1892              29,309,887
  1893              23,636,715
  1894              25,314,827
  1895              27,628,593
  1896              32,528,256
  1897              37,756,201
  1898              35,443,084
  1899              42,763,253

  Compiled from _C.P.R. Reports_.]

[Footnote 607: Flour carried, 1886-99, barrels:

    1886             1,000,044
    1887             1,010,157
    1888             1,667,584
    1889             2,024,007
    1890             2,216,914
    1891             2,318,999
    1892             2,480,563
    1893             2,514,163
    1894             2,439,418
    1895             2,832,304
    1896             3,291,299
    1897             2,911,072
    1898             3,292,450
    1899             4,005,226

  Compiled from _C.P.R. Reports_.]

[Footnote 608: Manufactured articles, 1886-99, tons:

    1886               476,698
    1887               470,699
    1888               600,521
    1889               762,238
    1890               927,787
    1891               985,090
    1892             1,055,533
    1893             1,114,195
    1894               968,352
    1895             1,050,014
    1896             1,070,675
    1897             1,310,827
    1898             1,529,044
    1899             1,793,663

  Compiled from _C.P.R. Reports_.]

[Footnote 609: Other articles, 1886-99, tons:

    1886               498,940
    1887               534,976
    1888               586,396
    1889               632,518
    1890               726,014
    1891               860,789
    1892               898,501
    1893               978,193
    1894               864,615
    1895               930,101
    1896               878,261
    1897               994,813
    1898             1,119,097
    1899             1,461,144

  Compiled from _C.P.R. Reports_.]

[Footnote 610: Lumber, 1886-99, feet:

    1886           327,760,432
    1887           310,180,542
    1888           351,446,992
    1889           473,462,550
    1890           574,560,194
    1891           630,690,093
    1892           700,209,056
    1893           668,176,926
    1894           545,488,960
    1895           638,806,374
    1896           636,128,418
    1897           831,895,383
    1898           840,145,338
    1899           957,702,349

  Compiled from _C.P.R. Reports_.]

[Footnote 611: Firewood, 1886-99, cords:

    1886                75,625
    1887                97,541
    1888               107,654
    1889               100,288
    1890               109,478
    1891               121,010
    1892               145,280
    1893               170,294
    1894               174,020
    1895               177,032
    1896               166,831
    1897               185,208
    1898               203,336
    1899               202,461

  Compiled from _C.P.R. Reports_.]

[Footnote 612: Livestock carried, 1886-99, head:

    1886               244,257
    1887               205,572
    1888               251,297
    1889               276,514
    1890               288,853
    1891               309,639
    1892               375,292
    1893               332,589
    1894               468,218
    1895               562,135
    1896               766,219
    1897               663,773
    1898               715,018
    1899               810,559

  Compiled from _C.P.R. Reports_.]

[Footnote 613: Average freight train-load, 1889-99.

                Number of tons of freight carried one mile
        Tons =  __________________________________________
                    Number of freight ton miles:

    1889       1622
    1890       1600
    1891       1617
    1892       1820
    1893       1733
    1894       1855
    1895       1954
    1896       1995
    1897       1990
    1898       2041
    1899       2312

  Compiled from _C.P.R. Reports_.

_Note._--No basis for compilation from 1882 to 1888 is available.
Company reports omit statistics as to train mileage, and Government
reports omit freight carried one mile.]

[Footnote 614: Total train mileage, 1886-99:

    1886       5,024,148
    1887       6,880,700
    1888      10,077,416 (First three years from _Government Reports_)
    1889      10,956,316
    1890      13,023,312
    1891      14,322,370
    1892      14,525,677
    1893      14,522,612
    1894      12,943,703
    1895      13,344,580
    1896      14,712,595
    1897      16,100,733
    1898      17,656,893
    1899      18,424,701

  Compiled from _C.P.R. Reports_ and _Government Reports_.]

[Footnote 615: Freight train mileage, 1886-99:

    1886      2,525,572
    1887      3,238,103
    1888      5,702,948 (First three years from _Government Reports_)
    1889      5,964,585
    1890      7,547,058
    1891      8,605,829
    1892      8,691,132
    1893      8,385,880
    1894      7,082,645
    1895      7,625,462
    1896      8,870,134
    1897      9,826,734
    1898     10,496,129
    1899     10,982,873

  Compiled from _C.P.R. Reports_ and _Government Reports_.]

[Footnote 616: Freight and cattle cars, 1886-99:

    1886          8,253
    1887          9,296
    1888         11,020
    1889         11,318
    1890         13,071
    1891         14,077
    1892         14,304
    1893         14,505
    1894         14,555
    1895         14,890
    1896         15,162
    1897         15,544
    1898         16,942
    1899         19,005

  Compiled from _C.P.R. Reports_.]

[Footnote 617: Locomotives, 1886-99:

    1886            372
    1887            374
    1888            408
    1889            413
    1890            484
    1891            530
    1892            569
    1893            578
    1894            584
    1895            584
    1896            584
    1897            598
    1898            644
    1899            690

  Compiled from _C.P.R. Reports_.]

[Footnote 618: Conductors' vans, 1886-99:

    1886            178
    1887            185
    1888            202
    1889            202
    1890            230
    1891            253
    1892            291
    1893            297
    1894            297
    1895            297
    1896            297
    1897            312
    1898            348
    1899            362

  Compiled from _C.P.R. Reports_.]

[Footnote 619: Boarding, tool and auxiliary cars, 1886-99:

    1886             71
    1887             86
    1888             86
    1889            136
    1890            308
    1891            398
    1892            412
    1893            522
    1894            543
    1895            533
    1896            554
    1897            575
    1898            627
    1899            682

  Compiled from _C.P.R. Reports_.]

[Footnote 620: _C.P.R. Report_, 1890.]

[Footnote 621: _Ibid._, 1891.]

[Footnote 622: _Ibid._, 1890-1.]

[Footnote 623: _Ibid._, 1888.]

[Footnote 624: _Ibid._, 1891.]

[Footnote 625: _Ibid._, 1894.]

[Footnote 626: _Ibid._, 1888.]

[Footnote 627: _Ibid_., 1898.]

[Footnote 628: _Ibid._, 1886.]

[Footnote 629: _Ibid._]

[Footnote 630: _Ibid._, 1887.]


  D. Expansion of the Road, 1900--

The expansion of the road in the completion of through connexions, the
development of branch lines, and the growth of traffic, characteristic
of the period prior to the completion of the main line, and of the later
period ending with the century, continued in the following years. The
projection of the system in western Canada, which resulted in the
increase in traffic and particularly in grain traffic, conspicuous in
the closing years of the century, was rapidly extended. Branch lines
were continually being added in other sections of Canada. The consequent
rapid increase in traffic gave a decided impetus to the further
improvement and construction of through connexions. In the picturesque
language of Sir William Van Horne, enlargement of the hopper
necessitated a widening of the spout.

In 1900 a step toward the extension of the road in western Canada to the
north of the main line was made with a lease, on April 6, of the Great
North-west Central[631] from Chater on the main line to Hamiota, 51
miles, and later to Mineota, 20 miles. Control of this area for the
development of traffic and for protection from other lines became more
effective with the construction of a connexion from Varcoe to McGregor,
55 miles, and with the lease, on May 1, of the Manitoba and
North-western Railway[632] from Portage la Prairie to Yorkton, 223
miles, and from Minnedosa to Gauthier Junction on the Great North-west
Central Railway, 18 miles. The leases included two branches from
Binscarth to Russell, 12 miles, and from Forrest to Lenore, 41 miles,
the latter constructed in 1901-2. South of the main line the Pipestone
branch was extended, and in 1903-4 completed, from Arcola to Regina, 113
miles. This extension not only tapped new territory, but gave an
additional line from Regina to Winnipeg. A branch was completed from
this line at Stoughton to the St. Paul-Moosejaw line at Weyburn, 37
miles, in 1908. The system was extended westward from Yorkton to Lanigan
from 1902 to 1909, and the area more effectively served by a line
north-west from Kirkella on the main line to Lanigan, in the latter
year. To this line was added a short connexion from Virden to McAuley,
36 miles, built in 1908. An extension westward from Lanigan to
Wetaskiwin on the Calgary and Edmonton line, 100 miles, was completed in
1910. In the following year connexions from this line to the main line
were completed from Colonsay to Regina, 132 miles, and the
Lanigan-Kirkella connexion joined to this branch by a line from Bulyea
to Valeport, 18 miles. Still another connexion with the main line was
made from Moosejaw to Macklin, 267 miles, in 1912. With this extension
of the system, the company had a direct line from Northern Alberta to
Portage la Prairie and Winnipeg, and to Moosejaw and St. Paul, and
through connexions in alternate routes with the main line, by branches
from Macklin, Colonsay and Lanigan. The road had been extended to occupy
the territory of which the limits were set in the previous period.
Numerous branches and connexions had been made to complete the system. A
line from Reston to Wolseley on the main line, 122 miles, built in 1908,
lightened the increasing burden on the main line to Winnipeg by
affording further connexion with the alternate southern route. From 1909
to 1911 connexion between Calgary and Lethbridge was improved by a road
from Kipp to Aldersyde, 85 miles. In 1914 lines from Bassano to Swift
Current, 230 miles, and from Gleichen to Shepard, 40 miles, were
completed, giving practically an alternate and more direct route from
Calgary to Swift Current than the main line. A line from Lacombe to
Kerrobert, on the Macklin-Moosejaw connexion, 221 miles, completed in
the same year, gave access to valuable territory and improved the
connexions of Northern Alberta to the main line, particularly in the
Kerrobert to Wilkie branch joining with the Wetaskiwin-Winnipeg line,
completed the preceding year. Branches more immediately concerned with
the development of traffic, though to a large extent with ultimate
through connexions, were continually added. The Stonewall branch to
Foxton, 19 miles, constructed in 1898, was extended to Teulon, 19 miles,
in 1901; to Kamarno, 8 miles, in 1905, and to Icelandic River, 29 miles,
in 1910. The West Selkirk branch was constructed from Selkirk to
Winnipeg Beach, 25 miles, in 1903; to Gimli, 10 miles, in 1905, and to
Riverton, 26 miles, in 1913-14. The Snowflake to La Riviere branch, 16
miles, completed in 1903, was extended by a line from Wood Bay to
Mowbray, 26 miles, in the same year, and to Windy Gates in 1908-9. The
Rudyard-Kaleida branch, 6 miles, was constructed in 1905. A line from
Lauder was extended to Alida, 55 miles, from 1902 to 1912. In 1910-13 a
line was built from Estevan to Neptune, 55 miles, and in 1911-12 one
from Swift Current to Vanguard, 45 miles. Construction was continued
westward from Weyburn to Stirling, and with the completion of a few
miles of road practically two direct lines will be available from
Vancouver to Winnipeg. Connexion between these lines was improved by
construction of a branch from Moosejaw to Expanse, 35 miles, in 1912,
and its extension to Assiniboia, 29 miles, in 1917. In 1910 a branch was
built from Langden to Acme, 40 miles. This branch was improved in 1912
by the construction of a line from Bassano to Irricana Junction, 72
miles. The system was improved in Southern Manitoba by a connexion from
Lauder to Boissevain, 36 miles. Various short branches were commenced on
different parts of the system. In 1907 the Asquith branch, 7 miles, was
built; in 1910 the Calgary-Strathcona branch extension to Edmonton, 2
miles; in 1911 a branch from Wilkie to Cutknife, 28 miles, and in 1912
from Reford to Kelfield; in 1914 from Coronation to Lorraine, 19 miles,
and in the same year from Suffield to Lomond, 84 miles. Under the
charter of the Alberta Central Railway a line from Red Deer to Loch
Earn, 64 miles, was acquired in 1912. In the same year the Alberta
Railway and Irrigation Company, leased on January 1, gave the company
control over a connexion with the American roads with a line from
Lethbridge to Coutts, and over branches from Stirling to Cardston, 67
miles, and from Raley to Kimball, 8 miles. The leases of the Edmonton,
Dunvegan and British Columbia from Edmonton to Grand Prairie, 407 miles,
and of the Central Canada Railway from McLennan to Peace River Crossing,
48 miles, in 1920, and to Berwyn, 25 miles, in 1921, gave the company
access to the Peace River district. With these branches and connexions
the company possessed a network of roads which ensured its position in
western Canada.

The expansion of the system and the consequent development of traffic in
western Canada influenced construction in British Columbia and in
Ontario. Partly as a result of this traffic, but particularly as a
result of the continued development of traffic in British Columbia,
lines were constructed in that area to connect with the main line. On
August 31, 1901,[633] the Vancouver and Lulu Island Railway, consisting
of a line from Steveston to English Bay, 14 miles, was leased. In 1905
the company purchased[634] the Esquimault and Nanaimo Railway on
Vancouver Island. This purchase included a line from Victoria to
Wellington, 77 miles, which was extended to McBride's Junction, 18
miles, in 1909-10 and to Alberni, 40 miles, in 1911. In the following
year, a line was built from Dunraven to Cowichan Lake, 19 miles, in 1913
to Osborne Bay, 3 miles, and in 1914 from McBride's Junction to Comox,
45 miles. In 1905-6 connexions were made with Spokane by a branch to
Kingsgate, 10 miles, and to Grand Forks, 4 miles. A line was built from
Ehaine Junction to New Westminster, 10 miles, in 1909, and short
branches from Port Moody to North Vancouver in 1910, from Three Forks to
Whitewater, and from Waldo to Caithness, 11 miles, in 1912. The
Kootenay Central[635] was acquired in 1910, and in 1914 a line had been
built from Golden to Colvalli, 166 miles, connecting the main line with
the Crow's Nest Pass line, and giving an alternative rail route through
the mountains. In 1909 the "Big Hill" Grade between Hector and Field was
reduced by the construction of spiral tunnels. Further connexion with
the main line was afforded in the lease[636] of the Kettle Valley
Railroad in 1913 from Midway to Carmi and its extension to Hope on the
main line, 277 miles, in 1915. This line was improved by the
construction of a branch from Merritt to Otter Summit, 30 miles. With
the acquisition of the Kaslo and Slocan Railway, in 1918,[637] from
Retallack to Kaslo, 18 miles, the company had effectively consolidated
the traffic area of British Columbia and provided for connexions with
the main line which gave practically a through route other than the main
line from Vancouver to Winnipeg.

The development of traffic in the west by the construction of branch
lines and of through connexions and the pressure of this traffic on the
main line and especially the portion of the main line leading to the
Atlantic seaboard was of dominant importance to construction in eastern
Canada. The gradual development of alternate routes in the extension of
branches in western Canada and British Columbia was an indication of the
effect of increased traffic. In the eastern area the effects were more
pronounced. To accommodate the traffic of western Canada a double track
was completed from Winnipeg to Fort William[638] in 1907, and westward
to Portage La Prairie, Brandon and Regina in 1910 and the following
years, and in the same year a short cut was built from Molson to
Whittier Junction. Largely under pressure of the same traffic, the
Wisconsin Central Railway was leased[639] in 1909 to the Minneapolis,
St. Paul and Sault Ste. Marie Company, giving a direct line to Chicago
and an alternate route from western Canada by Chicago and Detroit to
Montreal. To shorten the line to the seaboard by the Great Lakes, the
terminal was changed from Owen Sound to Port McNicoll, and, under the
charter[640] of the Georgian Bay and Seaboard Railway, a road was built
from this point to Bethany Junction, 88 miles, in 1910. The consequent
pressure from this branch of traffic from the north-west on the Toronto
to Montreal line led to the construction, under the charter[641] of the
Campbellford, Lake Ontario and Western Railway leased on April 16, 1913,
of a line from Glen Tay to Agincourt, 184 miles, giving, with the
construction of a double track from Glen Tay to Montreal, practically
two routes from Toronto. West of Montreal a double track had been built
to Brookport, at which point traffic was divided between the ports of
New York, Boston and Halifax. In Nova Scotia the lease[642] of the
Dominion Atlantic Railway from Truro to Windsor, and from Windsor to
Halifax, gave the company an independent connexion with the latter port,
although no such connexion between St. John and Truro had been obtained.

The improvement of lines to the seaboard was accompanied by the
construction of branch lines and a constant increase of connexions. The
project of the Grand Trunk Pacific and the resulting traffic over the
North Bay to Toronto Grand Trunk line, as well as the constant
difficulties of the Canadian Pacific incidental to the possession of
running rights over this line, led to the construction of an independent
road. A line from Bolton Junction to Romford Junction, 126 miles,
completed in 1908, gave a direct independent connexion from Sudbury to
Toronto. Branches as feeders to the main line were continually acquired,
constructed and extended. On November 1, 1902, the company acquired a
line from Hull Junction to Maniwaki, 81 miles, and from Hull to Aylmer,
from Hull to Ottawa, and from Aylmer to Waltham, 70 miles, in the lease
of the Ottawa Northern and Western Railway. In 1903 a through connexion
was secured from Renfrew on the main line to Kingston on Lake Ontario,
103 miles, with the control[643] of the Kingston and Pembroke Railway.
This included the short branch from Godfrey to Zaneville, 4 miles. In
1904, with the lease of the Tilsonburg, Lake Erie and Pacific
Railroad,[644] connexion was established with Lake Erie at Port Burwell
from Ingersoll Junction. This line was extended from Ingersoll Junction
to Embro, 6 miles, in 1908, to Ingersoll, 5 miles, in 1910, and, with
the lease[645] of the St. Marys and Western Ontario Railway, in 1909, to
St. Marys, 15 miles. Under the charter of the Guelph and Goderich
Railway, leased[646] in 1906, connexion was made with Lake Ontario by
the construction of a line from Guelph to Goderich, 81 miles, in 1907.
Under this charter a branch was built from Linwood to Listowel, 16
miles, in 1908. In the same year the lease[647] of the Berlin, Waterloo,
Wellesley and Lake Huron Railway gave the company a line from Galt to
Hespeler, 7 miles, and from Preston to Waterloo, 13 miles. In 1915 the
lease[648] of the Lake Erie and Northern Railway extended this line from
Galt to Port Dover on Lake Erie, 51 miles. Direct connexion was secured
from Guelph Junction to Hamilton, 16 miles, in 1912, under the
lease[649] of the South Ontario Pacific Company in 1911. The Lindsay,
Bobcaygeon and Pontypool Railway, leased[650] in 1903, consisted of a
road, completed in 1904, from Burketon Junction to Bobcaygeon, 39 miles.
In 1906 the lease[651] of the Walkerton and Lucknow Railway gave a line
from Saugeen Junction to Walkerton, 38 miles, completed in 1908. The
Joliette and Brandon Railway, leased[652] in 1906, was a line from St.
Felix to St. Gabriel, 12 miles. The Northern Colonization Railroad,
leased in 1904, included a line from Labelle to Nominingue, 24 miles,
and an extension to Mont Laurier, 35 miles, built in 1909. The
lease[653] of the Orford Mountain Railway in 1909 gave the company a
connexion with the Montreal-St. John line to the Newport or Boston line
at Troy Junction, and included a branch from Eastray to Windsor Mills.
The St. Maurice Valley Railway, leased in 1910, was a branch from Three
Rivers to Grandmere, 27 miles. The Cap de la Madeleine Railway, leased
in 1912, was a short branch from Piles Junction to Cap de la Madeleine
and to pulp mills on Bellevue Islands, 4 miles. In the same year the
lease[654] of the Quebec Central Railway afforded a connexion by two
lines from Levis, on the St. Lawrence, to Sherbrooke and Megantic on the
Montreal-St. John line, and included a branch from Valleyfield Junction
to St. Sabine and English Lake, constructed in 1915. The lease of the
Glengarry and Stormont Railway in the latter year gave more direct
connexion with the St. Lawrence in the line from St. Polycarpe's
Junction, on the Toronto-Montreal line, to Cornwall, 28 miles. In New
Brunswick the company improved its position in 1904 by securing running
rights over the Fredericton and St. Marys bridge, and in 1905 by
purchasing the St. John bridge and railway extension line from Fairville
to the junction with the Intercolonial Railway in St. John, 2 miles. In
1910 an important connexion with American roads was acquired in the
lease[655] from the New Brunswick Southern Railway of a line from West
St. John to St. Stephen, 82 miles. In the same year a line was
leased[656] from the New Brunswick Coal and Railway Company from Minto
to St. Martins, on the Bay of Fundy, 98 miles. The latter line was
extended to Gibson, 31 miles, in the lease[657] of the Fredericton and
Grand Lake Coal Company, and connected with the Canadian-Pacific system
in the acquisition of a line from Marysville Junction to Marysville, 3
miles. The lease of the Southampton Railway in 1914 included a line from
Southampton Junction to Otis, 13 miles. In Nova Scotia the lease of the
Dominion Atlantic Railway in 1912 included a line throughout the length
of the province from Windsor to Yarmouth, 228 miles, a connexion from
Kentville to the Bay of Fundy at Kingsport, 14 miles, and short
branches, completed in 1914, from Wilmot to Torbrook, 5 miles, and from
Centerville to Weston, 15 miles. During the war and afterwards additions
in eastern Canada have been few. In 1921 provision was made for
construction, by the Interprovincial and James Bay Railway Company, of a
line from Kipawa to Des Quinze River, and of a branch to Ville Marie,
making a total of 76 miles.

[Footnote 631: _Ibid._, 1901.]

[Footnote 632: _Ibid._]

[Footnote 633: _Ibid._]

[Footnote 634: _Ibid._, 1905.]

[Footnote 635: _Ibid._, 1910.]

[Footnote 636: _Ibid._, 1913.]

[Footnote 637: _Ibid._, 1918.]

[Footnote 638: _Ibid._, 1907.]

[Footnote 639: _Ibid._, 1909.]

[Footnote 640: _Ibid._, 1912.]

[Footnote 641: _Ibid._]

[Footnote 642: _Ibid._]

[Footnote 643: _Ibid._, 1903.]

[Footnote 644: _Ibid._, 1904.]

[Footnote 645: _Ibid._, 1912.]

[Footnote 646: _Ibid._, 1906.]

[Footnote 647: _Ibid._]

[Footnote 648: _Ibid._, 1914.]

[Footnote 649: _Ibid._, 1911.]

[Footnote 650: _Ibid._, 1903.]

[Footnote 651: _Ibid._, 1906.]

[Footnote 652: _Ibid._]

[Footnote 653: _Ibid._, 1909.]

[Footnote 654: _Ibid._, 1912.]

[Footnote 655: _Ibid._, 1910.]

[Footnote 656: _Ibid._, 1912.]

[Footnote 657: _Ibid._, 1914.]


  _E._ Freight Traffic and Equipment, 1900--

The continued rapid expansion of the road, especially in western Canada,
brought a phenomenal increase in traffic, particularly, as was to be
expected, in grain. The upward trend of traffic in the closing years of
the century proved significant. The number of tons of freight
carried[658] increased from 7,155,813 in 1901 to the highest point,
31,198,685, in 1917. Except for a slight decline in 1908, occasioned
largely by the depression of that year, the increase to 1913 was steady
and persistent. Largely due to the war, a slight decline followed in
1914, and a marked decline in 1915, but owing to the exceptional grain
harvest, a rapid and temporary recovery was made in 1916 and in 1917. A
decline set in to 1919, and despite another recovery in the following
year, continued in 1921. The importance of grain in the general freight
movement was apparent. The number of bushels of grain carried[659]
increased from 32,927,468 in 1901 to the highest point, 276,788,209, in
1916--an increase which, largely influenced by climate conditions and
the development of the Canadian west, was not consistent. A bad harvest
in 1904 led to a decline in that year. This was followed by a rapid and
steady increase to 1907 and a decline in 1908, a further increase to
1910, a slight decline in 1911, much the most rapid increase to 1914, a
rapid decline in the following year and a remarkable increase in 1916.
These fluctuations were followed by a marked decline to 1919. The
remaining years to 1921 gave evidence of recovery. Although grain was
dominant, the importance of other commodities was evident. The bad
harvest of 1904 had little effect on the total amount of freight
carried, and although the decrease in the amount of grain carried in
1908 brought a decrease in the total amount of freight carried, this
decrease was accentuated by the depression of 1907. In 1910 the amount
of grain carried remained stationary and the total traffic increased
rapidly. The total amount of freight carried before the war reached a
climax in 1913, a year earlier than the climax for the amount of grain
carried. On the other hand, in the war period, the total traffic
decreased slightly in 1914 and grain increased, but the decrease was
much greater in 1915 because of a marked decrease of grain in that year.
The bumper crop of 1916 brought a marked increase in total traffic, and,
during the remainder of the period, with the exception of 1921,
fluctuations in grain carried paralleled fluctuations in total freight
carried.

The grain situation exercised a significant influence on the movement of
other commodities. The number of barrels of flour increased[660] from
3,735,873 in 1901 to the highest point, 13,727,970, in 1917. Although
wheat was the dominant grain carried, other grains continued to
increase in importance as a result of the expansion of the road in
eastern Canada and of the tendency toward mixed farming. The rapid
increase in grain to 1903 was followed more gradually by flour, the
latter commodity reaching its climax in 1904, the year in which grain
decreased. This decrease in grain was followed by a decrease in flour in
1905. From 1905 to 1907 the increase in grain again surpassed the
increase in flour. From the steady increase in flour and consequently of
milling capacity during these years, a slight decrease in grain in 1908
brought a decrease in flour in the same year. Both commodities increased
to 1910 in a more uniform manner. Grain declined slightly in 1911 and
flour increased. In 1912 a marked increase in grain was accompanied by a
slight decline in flour. In the following year flour continued to
decline, but recovered in 1914. Grain continued to increase after 1911.
The increasing importance of other grains was evident. The steady
increase in the total amount of grain to 1914 brought the recovery of
flour in that year. The decrease in grain in 1915 led to a decrease in
flour, and during the remainder of the period, with the exception of
1920, the two commodities moved concurrently. The effect of rapid
fluctuations in grain on the milling capacity occasioned varied
reactions. Flour mills, unable to adapt themselves to a rapid increase
in grain, in the effort to keep pace with expansion, found themselves
without grain in some years, and in other years unable to handle the
supply until the year following.

The importance of other grains was partly indicated in the livestock
industry, both of which were to some extent indices of the progress of
mixed farming. The number of head of livestock carried[661] increased
from 945,386 in 1901 to the maximum of 2,833,726 in 1915. The number
was marked by a steady increase to 1907, a decrease in 1908, coinciding
with the decrease in grain in that year, a gradual recovery to 1910, a
rapid increase to 1915, a marked decline in 1916, a gradual recovery to
1919, and a decline to 1921. To 1914 the number of head of livestock
fluctuated closely with the amount of grain carried. In 1915 the
decrease in grain and the abnormal war situation led to an increase in
livestock. The rapid increase in 1916 brought a rapid decrease in the
following year. Generally, the decided increase in livestock paralleled
the increase in grain, and particularly of grain other than wheat. The
whole situation was directly an evidence of the increase in mixed
farming. The war period brought an increase in the number of livestock
marketed--a fact explanatory of the decline in later years. The general
influence of livestock on the freight situation was slight. In 1915 the
total freight carried had its most marked decrease.

The agricultural situation had a direct influence on manufacturing. The
number of tons of manufactured articles carried increased from 1,954,386
in 1901[662] to a maximum of 10,148,568 in 1917. This increase
paralleled closely that of the total amount of freight carried,
increasing gradually to 1907, declining in 1908, increasing rapidly to
1913, declining rapidly to 1915, increasing rapidly to 1917, declining
to 1919, increasing in 1920, and declining again in 1921. The concurrent
fluctuations were directly illustrative of the growing importance of
manufactures and of the dominant importance of agriculture. The steady
increase to 1904 slackened in 1905 largely because of the depression
and the bad harvest of 1904. The decline in grain in 1908 and the
depression of that year were accompanied by a decline in manufactures.
With these minor exceptions, including the slight decline of grain in
1911, the rapid increase of grain to 1913 was followed by a rapid
increase of manufactures. In the year ending June 30, 1914, grain
increased, but manufactures rapidly decreased. In part this increase in
grain resulted in low prices[663] in 1913-14. At the same time the
price[664] of steel and other metals increased. Partly as a result, the
number of tons of manufactured articles carried declined. The decline in
grain carried in 1915 accentuated this decline in that year. The war
demand and the exceptional crops led to a rapid increase in 1916, and
the readjustment situation brought a decline to 1919. Recovery came in
1920, only to be followed by the decline of 1921. The trend of
manufactured articles was followed closely by that of "other articles."
The number[665] of tons increased from 2,206,079 in 1901 to the maximum
of 9,798,523 in 1918. Without definite information as to the character
of the various articles concerned, it is apparent that these commodities
were influenced by conditions similar to those dominating the
manufacturing situation. Both classifications were affected by the
agricultural situation, and bore witness to the expansion of the road to
the manufacturing centres of eastern Canada and the United States.

The number of feet of lumber carried[666] followed closely the number of
tons of manufactured articles. It increased from 899,214,646 in 1901 to
a maximum of 3,241,312,802 in 1918. The increase to 1904 was consistent
and gradual. The number of feet carried increased more rapidly to 1907,
but, influenced by depression and agricultural conditions, declined to
1909. Recovery was rapid to 1913. As in the case of manufactures, a
rapid decline followed to 1915, and a rapid increase to 1917. In 1918
the hectic prosperity of an abnormal war situation caused a further
increase, and a cessation of that prosperity a decrease in 1919. The
following year brought a slight recovery which proved temporary with the
decline to 1921. Again lumber was dominated by the agricultural
situation and reflected the expansion of the road to timber areas.

The number of cords of firewood carried[667] increased from 204,818 in
1901 to a maximum of 339,631 in 1918. It increased rapidly in 1903,
gradually in 1904, declined in 1905, recovered in 1906-7, declined
rapidly in 1908-9, increased to 1912, declined to 1915, increased
rapidly to 1918 except for a slight decline in 1917, and declined in
1919 to 1921. Generally the amount of firewood carried depended on the
availability of coal. In the depression of 1903-4 cord wood increased
and the prosperity of the following years brought a decline. Again, in
1907-8 it increased. The rapid expansion of traffic to 1912 brought an
increase in the use of firewood, but the decline started in 1913 and
continued to 1915. The scarcity of coal and the war situation brought a
rapid increase to 1918, and with the readjustment came a decline in
1919, continuing in 1921.

The expansion of the road, especially in western Canada, and the growth
of traffic, were reflected in the rapid increase in train mileage, an
increase which was significant again in view of a marked rise in the
average train-load. The latter increased from 2211 tons in 1901 to a
maximum of 5828 in 1917, an increase which was persistent and steady,
with the exception of a decline in the years of 1904, 1911, 1918, and
1919. Gradual recovery was evident in 1920, but a decline followed in
1921. The importance of the grain traffic was apparent in the close
correlation between the average train-load[668] and the number of
bushels of grain carried. The total train mileage[669] increased from
18,181,415 in 1901 to a maximum of 51,832,790 in 1913. This increase
was rapid and consistent, but was followed by a decline to 1915. The
recovery in 1917 proved temporary. There followed a decline to 1918, an
increase to 1920, and a decline in 1921. Freight train mileage[670]
adheres to these fluctuations, with the exception of a slight decline in
1908 and in 1919, the number increasing from 10,415,831 in 1901 to a
maximum of 27,611,103, in 1913. These fluctuations correlated closely
with the amount of freight carried, except in the year 1917, in which
there was an increase in freight carried, and a decline in train
mileage--a situation explained largely by the decline in grain and the
abnormal war situation in that year. Mixed train mileage[671] was of
relatively slight importance, depending largely on the construction
activities of the road and the strain on the company's resources
incidental to the war. From 1902 to 1916 it increased from 1,390,876 to
2,098,825. As portions of the system were constructed and developed,
mixed trains were superseded by regular service, and the stationary
character of mixed train mileage was an indication of the steady
expansion of the road throughout the period. During the war and other
periods of strain, there was evident an attempt to substitute a mixed
service when the situation warranted.

Increased freight, and increased freight train mileage, necessitated
increased equipment. The number[672] of freight and cattle cars
increased from 20,083 in 1901 to 88,090 in 1914. The policy involved in
the increase of this form of equipment was the resultant of difficult
conditions. The heavy overhead costs entailed by an oversupply of
equipment made necessary a policy involving few additions. At the same
time the large car shops incidental to an expanding system obliged the
company to spread the increase in equipment evenly over a number of
years. The importance of grain as an item of traffic, and its marked
fluctuations as a result of climatic variations, caused an additional
complication. The company had to meet the peak load situation within the
year, because of the importance of grain and the strong seaboard
movement of traffic. The peak load over a series of years, occasioned by
business cycles and business growth was a further difficulty. The
consequent policy was one of steady increase, though to some extent
influenced by particular conditions. As a result, during exceptionally
good harvest years, considerable complaint was made by shippers because
of a lack of cars. During the abnormal war situation the company
possessed an oversupply of equipment. The number declined to 1916, and
afterward increased slowly.

The number[673] of conductors' vans was subject to similar
considerations. Important factors were the number of freight train
miles, the size of the freight trains, the size of locomotives and the
proportion of through to local traffic. The number increased from 363 in
1901 to 1,427 in 1914, and declined to 1,324 in 1919. In 1920 a slow
recovery had begun, but in 1921 the number remained stationary.

The increase in the number[674] of locomotives was dependent to a very
large extent on the train mileage, the amount of traffic, and the
capacity of the locomotives. From 1901 to 1915 the number increased from
708 to 2,255, and remained stationary to 1921. Locomotives proved more
difficult than freight cars or conductors' vans to adjust to the demand
situation.

Boarding, tool and auxiliary cars[675] were largely dominated by the
construction activities of the company, by increased mileage, and by
increased traffic, which necessitated additional facilities. The number
increased from 886 in 1901 to 6,901 in 1916, declined to 1919, and
recovered slightly in 1920 and in 1921. The possibility of using these
cars for other purposes made them much more susceptible to the company's
control. In so far as they were capable of being changed to freight cars
the number was to some extent dependent upon the supply of this form of
equipment.

In general, equipment increased gradually and steadily during the early
years of the period and rapidly during the years from 1909 to 1913, in
which the increase in freight reached its climax. The depression which
followed proved disastrous under these circumstances, and made it
necessary for the company to resort to every possible expedient in
adjusting equipment to the changed conditions. The success with which
this was accomplished depended largely upon the character of the
equipment.

Increase in equipment was accompanied by an increase of other services
necessary to handle the rapid growth of traffic. These services were
partly the result of an increase in passenger traffic, but the dominance
of freight traffic was evident. With the development of traffic in the
interior of British Columbia in the access to the various lakes and
rivers, additional boats were acquired. A Pacific coast service was
established in 1903 with the acquisition of twelve boats, and with the
development of traffic on Vancouver Island and on other parts of the
coast, additional boats were brought into the service each year. On the
Atlantic coast two steamers were enlisted for the Bay of Fundy service
in 1912 as a necessary supplement to the company's acquisition of roads
in that area. The increase in through traffic stimulated, and was
stimulated, by the improvements of ocean services. On the Pacific the
_Monteagle_ was added in 1906 and the _Empress of Russia_ and the
_Empress of Asia_ in 1913. The pressure of traffic to the Atlantic
seaboard made necessary provisions for an Atlantic ocean service. In
1903 the Beaver Line, consisting of fourteen steamships, was purchased
from the Elder Dempster Company. The _Empress of Britain_ and the
_Empress of Ireland_ were added in 1906, the _Cruizer_ in 1907, and the
_Medora_, the _Metagama_, the _Missanabie_ in 1915. In the same year the
Canadian Pacific Ocean Steamship Services Company was organized, and the
Allan Line of steamships, including eighteen boats, was acquired. During
the war, several boats were purchased or requisitioned by the Admiralty,
and others were lost. Provision for the replacement of these losses was
made in the purchase of boats after the war. In 1921 several German
boats were purchased and other new boats constructed, the total tonnage
in that year being 438,604. Improvement of service accompanied the
addition of boats. In 1903 a bi-weekly service from Montreal to London,
and a weekly service from Montreal to Bristol and Liverpool were
established. In 1912 a four-weekly service with the _Ruthenia_ and the
_Tyrolia_ was organized between Trieste and Canada. This service
conformed to an agreement with the Austrian Government permitting the
Canadian Pacific to attach observation cars on State-owned railways
through the Alps. On the Pacific, a Canadian-Australian service was
added in 1903.

The elevator service at Fort William was improved, and with the change
of terminus to Port McNicoll, new elevators were built at that point. In
1904 in connexion with the company's land holdings, and for the
development of traffic, an important irrigation scheme was launched in
Southern Alberta. The pressure of western traffic made it advisable for
the company to control its own coal mines, and the competition in
British Columbia made the development of other mines desirable.
Important mines were early acquired in British Columbia, and in 1907 the
company entered on an elaborate coal-mining policy. Integration of
necessity accompanied the rapid increase in the traffic of the road.

[Footnote 658: Freight carried 1901-21, tons:

    1901 (Fiscal year)    7,155,813
    1902                  8,769,934
    1903                 10,180,847
    1904                 11,135,896
    1905                 11,892,204
    1906                 13,933,798
    1907                 15,733,306
    1908                 15,040,325
    1909                 16,549,616
    1910                 20,551,368
    1911                 22,536,214
    1912                 25,940,238
    1913                 29,471,814
    1914                 27,801,217
    1915                 21,490,596
    1916                 29,276,872
    1916 (six months)    16,200,453
    1917 (Calendar year) 31,198,685
    1918                 29,856,694
    1919                 25,102,821
    1920                 30,160,134
    1921                 23,710,606

  Compiled from _C.P.R. Reports_.

_Note._--Statistics to 1899 are given for the calendar year. Statistics
beginning with 1901 are for the fiscal year to 1916. In some cases
statistics are given in the _C.P.R. Reports_ for the half year, _i.e._
from Jan. 1, 1900, to June 30, 1900, in others from Jan. 1, 1900, to
June 30, 1901, and in still others omitted for the half year. Statistics
are given for the half year June 30 to Dec. 30, 1916, and in some cases
are omitted. For the year 1917, and thereafter statistics, are for the
fiscal year.]

[Footnote 659: Grain carried, 1901-21, bushels:

    1901 (Fiscal year)    32,927,468
    1902                  52,719,706
    1903                  63,822,710
    1904                  52,990,151
    1905                  59,739,180
    1906                  82,196,648
    1907                  93,207,009
    1908                  88,345,234
    1909                  97,236,150
    1910                 112,795,345
    1911                 111,169,982
    1912                 151,731,691
    1913                 171,952,738
    1914                 184,954,241
    1915                 126,909,828
    1916                 276,788,209
    1916 (six months)    146,332,583
    1917 (Calendar year) 213,340,507
    1918                 137,070,428
    1919                 121,059,921
    1920                 172,536,485
    1921                 175,506,119

  Compiled from _C.P.R. Reports_.]

[Footnote 660: Flour carried, 1901-21, barrels:

    1901 (Fiscal year)     3,735,873
    1902                   4,921,993
    1903                   5,110,757
    1904                   5,270,432
    1905                   5,010,868
    1906                   5,994,535
    1907                   6,256,702
    1908                   5,843,988
    1909                   6,683,354
    1910                   7,489,812
    1911                   8,469,744
    1912                   8,459,850
    1913                   8,093,936
    1914                   8,802,250
    1915                   8,538,600
    1916                  10,499,620
    1916 (six months)      5,710,800
    1917 (Calendar year)  13,727,970
    1918                  13,301,740
    1919                  12,787,020
    1920                   9,644,410
    1921                  11,718,510

  Compiled from _C.P.R. Reports_.]

[Footnote 661: Livestock carried, 1901-21, head:

    1901 (Fiscal year)       945,386
    1902                     963,742
    1903                   1,103,686
    1904                   1,314,814
    1905                   1,360,560
    1906                   1,428,320
    1907                   1,537,467
    1908                   1,349,771
    1909                   1,371,873
    1910                   1,381,183
    1911                   1,567,665
    1912                   1,663,315
    1913                   1,782,986
    1914                   2,481,360
    1915                   2,833,726
    1916                   2,190,389
    1916 (six months)      1,262,617
    1917 (Calendar year)   2,190,596
    1918                   2,364,870
    1919                   2,603,571
    1920                   1,947,976
    1921                   1,612,049

  Compiled from _C.P.R. Reports_.]

[Footnote 662: Manufactured articles, 1901-21, tons:

    1901 (Fiscal year)     1,954,386
    1902                   2,288,234
    1903                   2,665,260
    1904                   3,119,659
    1905                   3,250,067
    1906                   3,818,625
    1907                   4,385,854
    1908                   3,981,888
    1909                   4,425,241
    1910                   5,468,548
    1911                   5,759,344
    1912                   7,196,225
    1913                   9,519,346
    1914                   8,148,012
    1915                   6,024,590
    1916                   7,960,723
    1916 (six months)      4,643,384
    1917 (Calendar year)  10,148,568
    1918                   9,718,373
    1919                   7,854,163
    1920                   9,330,111
    1921                   6,853,857

  Compiled from _C.P.R. Reports_.]

[Footnote 663: _Wholesale Prices in Canada_, 1916, p. 37.]

[Footnote 664: _Ibid._, p. 66.]

[Footnote 665: Other articles, 1901-21, tons:

    1901 (Fiscal year)     2,206,970
    1902                   2,571,136
    1903                   2,942,736
    1904                   3,620,515
    1905                   3,894,259
    1906                   4,098,819
    1907                   4,794,295
    1908                   5,102,116
    1909                   5,916,248
    1910                   7,567,052
    1911                   8,971,037
    1912                   9,092,821
    1913                   9,625,665
    1914                   9,159,112
    1915                   7,423,163
    1916                   8,228,156
    1916 (six months)      4,659,294
    1917 (Calendar year)   8,788,423
    1918                   9,798,523
    1919                   7,589,275
    1920                   9,625,065
    1921                   7,018,876

  Compiled from _C.P.R. Reports_.]

[Footnote 666: Lumber, 1901-21, feet:

    1901 (Fiscal year)     899,214,646
    1902                 1,033,569,377
    1903                 1,190,378,217
    1904                 1,267,804,321
    1905                 1,435,758,930
    1906                 1,804,648,962
    1907                 1,989,444,728
    1908                 1,764,445,495
    1909                 1,726,944,584
    1910                 2,292,821,963
    1911                 2,441,007,107
    1912                 2,806,735,006
    1913                 3,210,306,090
    1914                 2,953,125,699
    1915                 2,180,735,600
    1916                 2,696,804,934
    1916 (six months)    1,499,916,534
    1917 (Calendar year) 3,178,554,667
    1918                 3,241,312,802
    1919                 3,143,431,200
    1920                 3,565,175,867
    1921                 2,382,570,398

  Compiled from _C.P.R. Reports_.]

[Footnote 667: Firewood, 1901-21, cords:

    1901 (Fiscal year)       204,818
    1902                     204,963
    1903                     268,401
    1904                     270,803
    1905                     261,794
    1906                     264,456
    1907                     274,629
    1908                     249,605
    1909                     249,628
    1910                     280,878
    1911                     298,345
    1912                     305,079
    1913                     293,536
    1914                     287,910
    1915                     254,428
    1916                     298,426
    1916 (six months)        124,206
    1917 (Calendar year)     295,277
    1918                     339,631
    1919                     279,925
    1920                     272,546
    1921                     204,836

  Compiled from _C.P.R. Reports_.]

[Footnote 668: Average train-load, 1901-21, tons:

    1901 (Fiscal year)     2211
    1902                   2754
    1903                   2892
    1904                   2759
    1905                   2879
    1906                   3108
    1907                   3269
    1908                   3297
    1909                   3385
    1910                   3777
    1911                   3714
    1912                   4053
    1913                   4153
    1914                   4478
    1915                   4699
    1916                   5544
    1917 (Calendar year)   5828
    1918                   5771
    1919                   5562
    1920                   5770
    1921                   5741

  Compiled from _C.P.R. Reports_.]

[Footnote 669: Total train mileage, 1901-21:

    1901 (Fiscal year)   18,181,415
    1902                 21,128,299
    1903                 23,053,079
    1904                 24,185,527
    1905                 25,765,138
    1906                 29,686,664
    1907                 32,012,771
    1908                 32,783,415
    1909                 34,920,198
    1910                 38,367,112
    1911                 40,775,846
    1912                 46,957,511
    1913                 51,832,790
    1914                 47,578,236
    1915                 36,812,879
    1916                 45,614,367
    1916 (six months)    24,347,109
    1917 (Calendar year) 45,332,831
    1918                 40,958,405
    1919                 42,349,387
    1920                 46,719,665
    1921                 39,407,334

  Compiled from _C.P.R. Reports_.]

[Footnote 670: Freight train mileage, 1901-21:

    1901 (Fiscal year)   10,415,831
    1902                 11,792,221
    1903                 13,353,188
    1904                 13,810,180
    1905                 14,429,739
    1906                 17,186,263
    1907                 18,187,263
    1908                 17,788,649
    1909                 18,816,900
    1910                 20,574,576
    1911                 21,701,893
    1912                 25,638,692
    1913                 27,611,103
    1914                 24,164,242
    1915                 16,896,368
    1916                 25,355,997
    1916 (six months)    13,315,730
    1917 (Calendar year) 25,182,863
    1918                 22,326,115
    1919                 19,994,867
    1920                 24,335,581
    1921                 18,828,421

  Compiled from _C.P.R. Reports_.]

[Footnote 671: Mixed train mileage, 1902-21:

    1902 (Fiscal year)   1,390,876
    1903                 1,553,902
    1904                 1,564,348
    1905                 1,537,781
    1906                 1,413,152
    1907                 1,411,870
    1908                 1,798,673
    1909                 1,932,776
    1910                 1,672,993
    1911                 1,680,421
    1912                 1,727,792
    1913                 1,888,015
    1914                 1,890,364
    1915                 1,939,478
    1916                 2,098,825
    1916 (six months)    1,061,048
    1917 (Calendar year) 2,056,414
    1918                 1,966,362
    1919                 1,943,410
    1920                 1,846,046
    1921                 1,647,291

  Compiled from _C.P.R. Reports_.]

[Footnote 672: Freight and cattle cars, 1901-21:

    1901 (Fiscal year)         20,083
    1902                       21,159
    1903                       26,170
    1904                       28,066
    1905                       30,101
    1906                       34,152
    1907                       40,405
    1908                       44,692
    1909                       47,748
    1910                       48,850
    1911                       52,602
    1912                       61,446
    1913                       79,085
    1914                       88,090
    1915                       87,108
    1916 (ending June 30th)    87,108
    1916 (ending Dec. 31st)    87,074
    1917 (Calendar year)       87,301
    1918                       87,513
    1919                       87,681
    1920                       88,057
    1921                       90,648

  Compiled from _C.P.R. Reports_.]

[Footnote 673: Conductors' vans, 1901-21:

    1901 (Fiscal year)      363
    1902                    448
    1903                    492
    1904                    511
    1905                    602
    1906                    658
    1907                    722
    1908                    777
    1909                    797
    1910                    867
    1911                    923
    1912                  1,065
    1913                  1,274
    1914                  1,427
    1915                  1,424
    1916                  1,420
    1917 (Calendar year)  1,359
    1918                  1,340
    1919                  1,324
    1920                  1,337
    1921                  1,337

  Compiled from _C.P.R. Reports_.]

[Footnote 674: Locomotives, 1901-21:

    1901 (Fiscal year)      708
    1902                    745
    1903                    840
    1904                    963
    1905                  1,016
    1906                  1,109
    1907                  1,296
    1908                  1,399
    1909                  1,478
    1910                  1,534
    1911                  1,637
    1912                  1,820
    1913                  2,052
    1914                  2,248
    1915                  2,255
    1916                  2,255
    1917 (Calendar year)  2,255
    1918                  2,255
    1919                  2,255
    1920                  2,255
    1921                  2,255

  Compiled from _C.P.R. Reports_.]

[Footnote 675: Boarding, tool and auxiliary cars, 1901-21:

    1901 (Fiscal year)           886
    1902                         928
    1903                         984
    1904                         993
    1905                       1,189
    1906                       1,745
    1907                       2,108
    1908                       2,726
    1909                       3,013
    1910                       3,437
    1911                       3,896
    1912                       4,254
    1913                       5,414
    1914                       5,850
    1915                       6,467
    1916 (ending June 30th)    6,867
    1916 (ending Dec. 31st)    6,901
    1917 (Calendar year)       6,735
    1918                       6,542
    1919                       6,390
    1920                       6,629
    1921                       6,762

  Compiled from _C.P.R. Reports_.]


  _F._ Conclusion

The spread of western civilization, especially in the region roughly
included in the Hudson Bay drainage basin, long delayed by the
inhospitable barrier north of Lake Superior, led to the construction of
technological equipment represented by the physical property of the
road, and with its construction, was greatly hastened. Additions to
this equipment in the matter of branch lines and other forms of
physical property were causes and effects of this rapid growth. This
marked increase in the growth of civilization in the Hudson Bay drainage
basin was accompanied by a continued growth in other areas in the
Pacific Coast drainage basin and in the St. Lawrence drainage basin.
This growth was again the cause and the effect of additions to
technological equipment in those areas. Constant additions to equipment
in the Hudson Bay drainage basin necessitated improvements and changes
in equipment in the matter of double tracks, new roads and other forms
of physical property in the drainage basins of the continent and
particularly in the St. Lawrence drainage basin. The growth and
character of the freight traffic carried during the forty years of the
company's history from 1881 to 1921 were to a large extent indices of
the effectiveness of the physical property of the road as a part of the
technological equipment of western civilization in North America.




  V

  The Freight Rate Situation


The growth of civilization attendant upon the expansion of the physical
property of the road, and the development of traffic throughout the
history of the road, largely determined, and were largely determined by,
the freight rate policy of the company. Upon freight rate policy
principally depended the earnings of the road and its possibilities of
physical growth. This interdependence was particularly important with
the large degree of freedom from regulation which the charter
guaranteed. Article 20 of the Act of Incorporation declared: "The limit
to the reduction of tolls by the Parliament of Canada provided for by
the eleventh sub-section of the seventeenth section of 'The Consolidated
Railway Act, 1879,' respecting tolls is hereby extended, so that such
reduction may be to such an extent that such tolls when reduced shall
not produce less than 10 per cent. per annum profit in the capital
actually expended in the construction of the railway, instead of not
less than 15 per cent. per annum profit, as provided by the said
sub-section; and so also that such reduction shall not be made unless
the net income of the company, ascertained as described in said
sub-section, shall have exceeded 10 per cent. per annum instead of 15
per cent. per annum as provided by the said sub-section. And the
exercise by the Governor in Council of the power of reducing the tolls
of the company as provided by the tenth sub-section of said section
seventeen is hereby limited to the same extent with relation to the
profit of the company, and to its net revenue, as that to which the
power of Parliament to reduce tolls is limited by said sub-section
eleven as hereby amended."[676] This article was strengthened by
article 15, which eliminated possible competition in an important
section of western Canada. It declared: "For twenty years from the date
hereof, no line of railway shall be authorized by the Dominion
Parliament to be constructed south of the Canadian Pacific Railway, from
any point at or near the Canadian Pacific Railway, except such line as
shall run south-west or to the westward of south-west; nor to within
fifteen miles of latitude 49. And in the establishment of any new
Province in the North-West Territories, provision shall be made for
continuing such prohibition after such establishment until the
expiration of the same period." These guarantees of freedom from
regulation were scarcely limited by article 24,[677] which ensured
non-preferential treatment to Toronto and Montreal.

These provisions gave the company effective control of its rate policy,
but such control was limited by various incidental circumstances, and
was largely confined to areas which were not subject to competition.
Rates in eastern Canada were regulated by competition from waterways and
from other railroads, and the area in which the company could exercise
its control was consequently limited to western Canada. Geographic
features made inevitable the competition in eastern territory and the
competition with American roads for transcontinental traffic. Lower
rates, and the large overhead charges incidental to the long stretch of
unproductive territory north of Lake Superior, necessitated strenuous
efforts to direct traffic over this long stretch of line, and to make
the non-competitive area of western Canada as productive as possible.
These efforts of the company to direct traffic over the line east of
Winnipeg for obvious reasons received the support of eastern Canada. An
application for a charter for the Emerson and Turtle Mountain
Railway[678] was earlier refused on the ground that it would divert
traffic through the United States. An order in council of April 18,
1879, expressed the opinion of the Government that it was "very
desirable that all railway legislation should originate here, and that
no charter for a line exclusively within the province of Manitoba should
be granted by its legislature without the Dominion Government assenting
thereto." The monopoly clause of the Canadian Pacific Railway Company
charter was a result of the same opinion.

The people of Manitoba naturally protested against the operation of this
policy. On December 22, 1880, while the act of incorporation was under
discussion, the Manitoba legislature formally objected[679] to the power
given to the company to build lines or branches other than the main
line, without obtaining permission from the Canadian Parliament, and to
other features of the act. The Canadian Government replied through the
statements of Sir John A. McDonald and Hon. Thomas White on the floor of
the House of Commons that the Dominion Parliament possessed no power
over Manitoba, and that nothing prevented that province from granting a
charter for a railway from Winnipeg to the boundary. It was explained
that the contract only prevented[680] American roads from tapping the
line in the prairie section west of the Manitoba boundary. Accordingly
the Manitoba legislature incorporated three railways: the Winnipeg
South-Eastern Railway, with power to construct a road running south-east
to the boundary and to amalgamate with other companies; the Manitoba
Tramway Company, with power to build tramways along all public highways
and across any land; the Emerson and North-Western Railway Company, with
powers to construct a line from Emerson to Mountain City and thence to
any point on the western boundary of the province, and to lease other
roads. The Canadian Pacific Company[681] protested to the Dominion
Government that these charters were in violation of its rights, and
pleaded the interests of the Dominion in sustaining traffic to support
the long unprofitable line along the north shore of Lake Superior.
Consequently the Government disallowed,[682] first, the charter of the
South-Eastern Railway, and later the charters of the other two
companies. Manitoba temporarily accepted this verdict, recognizing the
inadvisability of interfering with the company when all its energies
were directed to the construction of the main line.

The question was a source of continual trouble. The rates first charged
by the company in western Canada were those used by the Government
before the transfer of the road. This tariff was a straight distance
tariff, with four classes of rates for merchandise and seven special
classes. The local mileage rate was a direct mileage rate, with an even
spread and little discrimination. With an increase in distance the rates
increased less rapidly and the spread between the classes of rates more
rapidly. In general, the special classes[683] were designed to promote
settlement.

Still lower rates[684] were given on settlers' effects. Immigrants
movables C.L. (car load) were given one-half the special rates of the
sixth class, and L.C.L. (less than car load) were given one-half
first-class rates. In continuance of this policy of adjusting rates for
the development of traffic, immigrants were given through tickets at one
and a half cents per mile. On March 23, 1883, the company with the
Government's approval introduced[685] a new and higher tariff
constructed along the same lines. It was adjusted with low rates on
immigrant's effects, on coal, cordwood, lumber and grain, as was the
earlier tariff. It was considerably higher than the tariff in eastern
Canada, but ostensibly justified on the grounds of increased costs of
operation--in the west fuel was cited as 110 per cent. higher than in
eastern Canada, labour 45 per cent., and general supplies 60 per
cent.--and of the heavy overhead charges occasioned by the fact that the
country was very sparsely settled.[686]

To this new schedule the Winnipeg Board of Trade objected. It was held
that rates should not be made to cover the cost of operating the
railroad, and in a letter to the company of March 20, 1883,[687] it was
claimed that liberal terms had been given the company by the Government
because it was expected that the road would be run at a loss. High rates
meant high prices on commodities, and consequently were injurious to the
trade and growth of the country, and therefore reacted to the company's
own detriment. The old rates were regarded as sufficiently high, and an
additional average increase of 59 per cent.[688] was predicted to be
disastrous. Turning to the particular, Winnipeg had its own grievances.
It complained that the company had led its merchants to expect low rates
from Winnipeg to Thunder Bay during the navigation season, so that they
could lay in large stores at a moderate cost, and so that Winnipeg could
become a distributing centre. This was expected to redound to the
advantage of the company, as a large distributing point would provide
the railroad with labour and materials at a reasonable price and give it
a constantly increasing traffic. The new tariff, on the other hand, was
practically a discrimination against Winnipeg as a distributing point.
Goods bought by Winnipeg merchants were increased in price an average of
nearly 20 cents per 100 lb.[689] and this, plus 4 cents per 100 lb. for
transportation each way between the distributing house and the station,
made a total increase of 28 cents per 100 lb. above the cost of direct
shipments to such points as Brandon, Portage la Prairie and Regina. It
was shown that the new Canadian Pacific tariff was 65 per cent. higher
than the winter rate on the Grand Trunk (the lowest rate on that line)
for an equal distance, and that the Grand Trunk special tariff for
manufacturers and wholesale merchants was lower than the ordinary
fourth-class rate of the Canadian Pacific. The remedy proposed was a
special tariff for goods shipped to local points from Winnipeg.

These complaints, though producing no immediate results, were
significant protests against the exercise of the company's power to
adjust rates in a non-competitive area. The exercise of this power was
evident in other directions and with similar results. A special
east-bound grain rate, adopted January 5, 1884,[690] was designed for
the purpose of drawing traffic over the line from Winnipeg to Port
Arthur and of preventing its diversion to St. Vincent on the American
boundary and over American roads. The rate to Port Arthur on a mileage
basis was much lower than the rate to St. Vincent, and consequently had
a tendency to draw traffic by the Port Arthur route. On March 16, 1886,
the Manitoba and North-west Farmers' Alliance and People's Rights
Association, in a meeting at Brandon, accused the Canadian Pacific of a
pooling arrangement with the St. Paul, Minneapolis and Manitoba Railway,
which gave the latter 12 per cent. of the east-bound traffic receipts of
the Canadian Pacific Railway to induce[691] it to refrain from taking
produce to the market at lower rates. It was alleged that the charge was
4 cents per bushel on wheat exported. This accusation was denied by the
company in a statement which explained that the lack of competition was
due to the fact that no road could carry wheat at Canadian Pacific
rates without loss. The Canadian Pacific in comparing its traffic with
that of American roads, published a statement showing the relative
earnings for 1884, 1885 and 1886.

                               1884        1885        1886
                               cents.      cents.      cents.

    Freight per ton per mile    145        120        110

Omitting the through traffic, the earnings in 1886 were 114 cents per
ton per mile, which was much lower than those of American roads.

These difficulties were a part of a growing agitation against the
monopoly clause which was carried on with more vigour after the
completion of the main line. In 1883, in connexion with the charter of
the Emerson and North-Western Railway, it had been held that a road
could be incorporated for the people within the province, but not beyond
its boundaries,[692] a connexion with foreign fines being contrary to
the spirit of the B.N.A. Act, which protected the interests of the
Dominion,[693] and in 1886 it was held that the Federal Government had
the power to disallow roads connecting with lines outside the
province.[694] The issue was definitely stated, and the people of
Manitoba insisted that the policy of disallowance should be abandoned.
In 1884 Sir Charles Tupper had stated[695] that it would be abandoned
with the completion of the road. Several months had passed after its
completion with no result. On March 4, 1887, Hon. Thomas White
intimated[696] that it had been abandoned. Nevertheless, bills
incorporating the Manitoba Central Railway and the Winnipeg and Southern
Railway, passed April 19, 1887, were neglected[697] by the governor in
council until August 9 and then disallowed. The Red River Valley Company
was chartered, on June 1, 1887, to run from Winnipeg to West Lynne, and
a contract was made on June 29 to build the road for $782,340. The work
was started, but on July 6 the act was disallowed.[698] On June 9 a
definite protest[699] had been adopted in a resolution of the
legislature against the continuance of the policy. It stated that the
province had been prevented access to world markets, that excessive
rates had crippled its energies, and that immigration had been deterred.
The policy was characterized as an arbitrary exercise of the veto power
and a violation of the spirit of the B.N.A. Act.

On September 12 the Canadian Pacific Railway declared[700] its position.
It claimed protection from the encroachment of American lines on the
usual ground that the enormous expense involved in the construction of
the road from Lake Nipissing to Red River, nearly 1,100 miles of
unproductive territory, entitled it to an advantage. It was urged that
the interests of the older provinces should be protected in view of the
expenditure made by them. The interests of 10,000 people of Manitoba
were not to be allowed to prevail against those of 5,000,000 people of
the Dominion. A plea was made that the company, recognizing a moral
obligation, had expended over $5,700,000 on branch lines south and
south-west of Winnipeg. The action of the Government of Manitoba in
attempting to divert traffic by the construction of a road to the
boundary was therefore characterized as unfair, unjust, and a breach of
faith.[701] The company threatened, in a telegram to Premier Norquay,
moreover, to move its principal western shops to Fort William, leaving
nothing at Winnipeg but its ordinary division shops.

The Winnipeg and Brandon Boards of Trade, on October 1, replied in an
open letter[702] to the shareholders of the Canadian Pacific Railway.
They insisted that the B.N.A. Act did not impair the right of
self-government, and that the Federal authorities had no right to
disallow Manitoba railroad legislation. The president of the company had
quoted the words of the contract "that the Dominion Government should
not authorize a line running south." The actual words were "Dominion
Parliament." Parliament could not give a pledge that the power of
disallowance would be exercised, since that power was a prerogative of
the Crown over which Parliament had no control. The decision of the
European and North American Railroad case was to the effect that it was
within the power of a province to construct a railway to the boundary as
a local road. The company was reminded of the fact that Winnipeg had
given it a bonus of $200,000, a free right of way worth $20,000,
exemption of all its property within the city from taxation for ever,
and the Louise bridge, costing $250,000. Further, the expenditures on
branch lines undertaken, because of a "moral obligation," had been met
by the proceeds of land grants and by assistance from the Provincial
Government, and in any event the branches were remunerative. On October
12 the Executive Council of Manitoba[703] issued a formal protest in a
memorial covering much the same ground.

To this the Canadian Government replied on January 4, 1888.[704] Its
argument was related entirely to the interests of Canada. According to
its interpretation the B.N.A. Act gave the Dominion exclusive
jurisdiction over trade and commerce, and consequently over the powers
of the province to build a road beyond its boundaries. The monopoly
clause was essential to the construction of the road, and without the
road the western provinces would be dependent on American lines for six
months of the year. The company had built the road before the allotted
time at an increased expenditure, and a fortiori was entitled to
protection. The Government of Manitoba had moreover agreed to the rights
of the Dominion to disallowance at different periods, as in the
extension of the boundaries of the province it had acquiesced in the
policy by allowing the new territory to be subject to all provisions
enacted respecting the Canadian Pacific. It was inconceivable that the
great interest of the Canadian Pacific in the development of the country
should permit it to sanction any step which would retard prosperity. It
was charged that the Northern Pacific was behind the whole movement to
strike the Canadian Pacific in the center with a line to Winnipeg, and
to control, through competition, transcontinental traffic.

Manitoba was insistent. The company refused to yield. Finally the
Canadian Government gave way.

On April 18, 1888, an agreement[705] was made between the Government and
the Canadian Pacific providing for the cancellation of the monopoly
clause. In consideration, the Government agreed to guarantee the payment
of interest on a new issue of bond by the company up to $15,000,000, the
principal to be payable not later than 50 years and the interest payable
half-yearly at 3 per cent. per year, the bonds to be secured by the
unsold lands of the company. The proceeds from the sale of lands and the
interest on these proceeds were used to constitute a fund to satisfy the
principal of the bonds and to pay the interest on them. The land grant
bonds of the former issue held by the company, $4,000,000, were to be
destroyed, and the mortgage, created under this agreement, to become
subject to the land grant bonds in the hands of the public, $3,463,000,
although the sums due for lands already sold, $1,200,000, were to be
applied toward the payment of bonds outstanding. The proceeds from the
sale of the bonds were to be spent according to a definite schedule:
first, for capital expenditure on the main line between Quebec and
Vancouver in buildings, snow sheds, sidings, permanent bridges, filling
trestles, reducing grades and curves and other improvements, and on
vouchers and pay rolls, $5,498,000; second, for required rolling stock,
locomotives, box cars, passenger cars, flat cars, tool cars, etc.,
$5,250,000; third, for required improvements on the main line,
elevators, bridges, locomotive shops, sidings, docks, lake and coast
steamers, the remainder, $4,252,000. Provision was made for an increase
in the expenditure for the third class, and a corresponding decrease in
the other classes. The company was given authority to lease its line
from St. Boniface to the American boundary, and in the event of the
construction of a line between the same points with the sanction of the
Dominion Government, to cease operating either one of its two lines
between those points.

Cancellation of the monopoly clause did not fulfil expectations, as was
evident in renewed and later complaints. On November 15, 1894, a
Railway Rates Commission was appointed to investigate the situation. In
its report[706] of May 7, 1895, the position of the Canadian Pacific was
largely supported. It agreed "that density of population, with volume of
tonnage carried, with a fairly even balance of loaded trains hauled in
both directions, are the most important factors in determining what are
reasonable rates." Conclusions were supported on the basis of
comparisons made with American roads operating under similar conditions
with similar commodities and between points of similar characteristics.
It found that the Canadian Pacific gave lower grain rates than such
roads. This was also true of livestock. Rates on coal were lower even
than those given by roads operating in a coal area. Lumber rates were of
the same favourable character, and although lumber was carried from
British Columbia to Ontario at a lower mileage rate than to Manitoba,
the western farmer had no ground for complaint. Agricultural implements
were carried at a lower mileage rate. Merchandise carried over an
all-rail route by the Canadian Pacific was considerably higher than that
carried by American roads, but the Commission explained that about 80
per cent. of this business was carried by a lake and rail route on which
a lower rate was given. The high price of clothing was attributed to the
large profits of merchants rather than to high freight rates. Dairy
products were carried at higher rates, but a blanket rate was given west
of Winnipeg to Vancouver of $1.75 per 100 lb. The rate on cordwood was
higher than that of the Northern Pacific, but equal to that of the Grand
Trunk. Local rates, "it must be admitted," were higher than in eastern
provinces, but the commission held they were necessary to pay the cost
of transportation. On the same basis the high rates on branch lines were
regarded as inevitable. The Commission referred all matters to the cost
of transportation. Finally, it concluded with a statement made by the
company to the effect that it held 18,000,000 acres of land and upwards
of 3,000 miles of railway in the north-west, that its interests were
identical with the interests of its patrons, and for this reason it
could not subscribe to any policy unfavourable to the settlers. A
lengthy statement made by Vice-President Shaughnessy, stated that the
company's prosperity was the result of its rigid economy, that the
development of the west depended upon its financial standing, and that
expenses of operation were higher in the west and consequently justified
higher rates. In any case, the averages per passenger per mile and per
ton per mile were much lower on the Canadian Pacific west of Lake
Superior than on American roads in the same territory.

Obviously the report was of such a character as to give little
satisfaction. It was not until 1897 that an act[707] was passed designed
to meet the situation. In this act a subsidy was granted to the Canadian
Pacific Railway for the line from Lethbridge through the Crow's Nest
Pass to Nelson at $11,000 per mile to be paid on the completion of
sections of ten miles of track. This was granted under several
conditions: (1) the road was to be built through the town of Macleod;
(2) when it was opened for traffic to Kootenay Lake the local rates and
tolls on the railway and on "any other railway used in connexion
therewith and now or hereafter owned or leased by or operated on account
of the company south of the company's main line in British Columbia, as
well as the rates and tolls between any point on any such line or lines
of railway and any point on the main line of the company throughout
Canada or any other railway owned or leased by or operated on account of
the company, including its line of steamers in British Columbia, shall
be first approved by the Governor in Council or by a Railway Commission,
if, and when, such commission is established by law, and shall at all
times thereafter and from time to time be subject to revision and
control"; (3) a reduction to be made in the general rates or tolls of
the company or its freight tariff (whichever was the lowest) on classes
of merchandise west bound from and including Fort William and all points
east of Fort William on the company's railway to all points west of Fort
William on the main line or on any line throughout Canada owned, leased
or operated by the company, whether the shipment was by all rail or lake
and rail, the reductions being on all green and fresh fruits, 33-1/3
per cent., coal oil, 20 per cent., cordage and binder twine,
agricultural implements, iron, wire, window glass, paper for building
purposes, roofing felt, paints, livestock, wooden ware and household
furniture, each 10 per cent. A reduction was also stipulated for rates
on grain and flour from all points on its main line, branches and
connexions west of Fort William to Fort William and Port Arthur, and all
points east, of 3 cents per 100 lb.

These restrictions and provisions for further regulation were followed
by the appointment of a commission to investigate the whole problem. On
February 10, 1899, Prof. S. J. McLean submitted a report on Railway
Commissions, railway rate grievances and regulative legislation which
was of an illuminating and convincing character. It was stated that
communities in the north-west which had non-competitive rates found it
advantageous to transport their produce by wagon to some point where
competitive rates prevailed. "The development of the traffic of the
distant manufacturer has been given an advantage over the home
manufacturer." Rates to intermediate points in the north-west were fixed
at the same figure or even higher than rates to the coast. "There is no
doubt that the population and business of this section have not been
allowed to move and develop in accordance with natural principles." The
effect of competition could not be questioned. On May 1, 1887, the
rates[708] from Winnipeg, Portage la Prairie and Brandon to Fort William
on first-class freight were $1.33, $1.41 and $1.58 respectively. On
October 28, 1888, after the opening of the Northern Pacific from
Winnipeg to Duluth, rates between the above points were reduced to
$1.16, $1.25 and $1.42 respectively. The rate to Regina, a
non-competitive point, remained the same.

The whole situation was finally discussed in another report[709] of
January 17, 1902, by the same author. "It is impossible to bring a
car-load of oats on local rates from Portage la Prairie to Winnipeg."
The Canadian Pacific had not always been influenced as was supposed by
the best interests of the country. Distributive rates were granted when
the volume of business warranted, but withholding the rates checked
development and increased the prosperity of the distributive point.
Brandon and Winnipeg had struggled for distributive rates, and in the
struggle the interests of the country had been sacrificed to the
interests of the railroad. No regulation existed which ensured uniform
development. A wide discrepancy was found between C.L. and L.C.L. from
Winnipeg to points west and between other points--a discrepancy which
favoured the wholesale distributing points. Disproportions were found in
rates in the country west of Winnipeg, especially in the grain rates on
branch lines. On some articles the freight charges were more than twice
the cost of the article. Complaints as to minimum weights of car lots
were sustained by facts. Through rates to the north-west were found to
be ill-adjusted to the development of Canadian industry, and to
interfere with the expansion of the trade of eastern Canada. Winnipeg
complained of discrimination at Fort William, in which the Canadian
Pacific gave lower rates to favoured lake carriers. As a result, and on
the advice of the report, an act[710] was passed in 1903 establishing
the Board of Railway Commissioners.

The establishment of a regulative body, and the control of this body,
over the rates of the Canadian Pacific acquired in the Crows Nest Pass
agreement seriously curtailed the freedom of the company in the
determination of its rate policy. On the other hand, the regulation of
rates by the Board of Railway Commissioners was destined not to prove a
panacea[711] for the difficulties involved. The competitive character of
rates in eastern Canada and on transcontinental traffic and the stretch
of unproductive territory north of Lake Superior continued to
necessitate the imposition of higher rates in non-competitive territory.
As was stated in the Eastern Rates decision, "I am aware that an
absolute parity is impracticable, but as conditions become similar
reasonable parity ought to be obtained."[712] The rapidity with which
conditions in western Canada were to become similar to conditions in
eastern Canada depended on a number of circumstances.

Competition in western Canada and consequently lower rates followed the
construction of other roads, but the effectiveness of this competition
was seriously lessened by the financial conditions of these roads. The
Canadian Northern was started in Manitoba in 1896. In 1906 a system of
more than 2,400 miles had been completed in the prairie provinces, and
in 1916 this had been extended to over 5,000 miles. After the
construction of its western system, and its connexions to Vancouver,
this company made extensions eastward to secure control of eastern
traffic and to secure an outlet to the Atlantic seaboard.[713] In 1916
it had a total mileage of 9,648, extending east to Quebec, and touching
the important centres of Duluth, Toronto, Ottawa and Montreal. This
achievement had been accomplished with a comparatively small land grant,
$38,874,000 in subsidies, and the guarantee of vast sums of money by the
Dominion Government. On June 30, 1916, the Canadian Northern passed the
payment of interest on $25,000,000 of income debenture stock, and after
charging interest against capital to the amount of $5,445,389, was
$248,000 short of meeting its bonded indebtedness.[714] The Grand Trunk
Pacific was provided for in two acts of parliament dated October 24,
1903.[715] A main line was to be built from Moncton to Prince Rupert,
the section east of Winnipeg, by the Government, and leased to the Grand
Trunk with Government assistance. The road was built and operated by the
Grand Trunk Pacific from Winnipeg to Prince Rupert, 2,228 miles. The
very high cost of the eastern section built by the Government and on
which the company agreed to pay a rental, provided an excuse for its
refusal to take over the line. For the year ending December, 1916, the
Grand Trunk Pacific had a net income of $826,653 with which to meet
interest charges of $8,846,544.

The weak condition of these transcontinental roads, largely occasioned
by undeveloped western territory and by the long unproductive lines
north of Lake Superior, were of decided influence in limiting the powers
of the Board with reference to the reduction of western rates. In the
Western Rates case,[716] which was an attack on the general freight
level of western Canada, the Board stated "that rates based upon the
Canadian Pacific's power to stand reductions would inevitably bankrupt
not only the Canadian Northern and the Grand Trunk Pacific, but for the
future preserve the western provinces to that company in so far as any
new companies or new lines were concerned."[717] "A railway is entitled
to a reasonable surplus," and "rates should be considered, having regard
to the traffic necessities of western Canada and a fair return to the
carrier--apart entirely from any question of reserves of the company on
the one hand, or the liabilities on the other."[718] In the decision of
the 15 per cent. case[719] it was stated that "the Board's duty--is to
control and adjust rates, having regard to the systems of railways that
Parliament had authorized. The Board must take the railway ownership
just as it finds it." In this case, having regard to the increased
expenses, especially increased wages, the Board ruled that "subject to
the limitation worked by the Crows Nest Agreement as extended by this
judgment and to the specific conditions herein contained, the companies
are permitted to raise their general rates 15 per cent., and make the
specific advances herein allowed."

The Drayton-Acworth Report and its adoption in the amalgamation of the
Canadian Northern and the Grand Trunk Pacific in the Canadian National
Railways did not materially change the situation. Provision was made
through an order in council,[720] following a continued increase in
expenses and wages, for suspension of the Crows Nest agreement, and on
August 1, 1918, increases were granted in railway freight rates in
Canada similar to the increases granted in American territory under the
McAdoo award. Nor is it probable that the co-ordination of all
Government railways under one Board as proposed by the King
administration will seriously affect the general problem.[721] Deficits
have been met by the Dominion Parliament, but it is questionable whether
Parliament will encourage increased deficits to permit the reduction of
rates in western Canada. The gradual reduction of deficits through the
development of traffic on the national railways, through the realization
of various economies secured in the proposed co-ordination, and through
the increase in traffic taken from the Canadian Pacific, may warrant a
reduction of rates in western Canada, but prediction is dangerous. It is
even more dangerous with the existence of the Canadian[722] and the
American tariffs, which render competition from American roads in
western Canada ineffective, and consequently strengthen the monopoly of
Canadian roads in that area, and with the rise of the Progressive party,
which this situation has largely provoked.

Although the Board has been limited in questions relating to the general
rate situation in the north-west, it has exercised effective control
over rates of a local character. Various decisions in rate difficulties
of the east as of the west illustrate the extent of this control and the
general policy of the Board. In the Almonte Knitting Company case a
ruling[723] was given that higher rates were warranted on branch lines
than on the main line, because of the increased cost of operation.
Similarly in the Vancouver Eastbound _v._ Winnipeg Westbound rate
case[724] it was held that the Company was justified in charging a
higher rate on the mountain section than on the prairie section. In the
case[725] of The Attorney-General of British Columbia _v._ The Canadian
Pacific, it was requested that the province of British Columbia should
be placed on the same favourable basis in respect to tolls over the
Canadian Pacific in that province as in other portions of the Dominion
of Canada over the main line of that railway. The Board held, in reply
to the argument that the national character of the road and the
subsidies granted entitled British Columbia to this consideration, that
it did not matter as to the land and money grants to the company, as
nothing appeared in the contract requiring the company to establish and
maintain over the whole line of railway when completed the same or
similar tolls under different circumstances. The company was bound to
charge the same or similar tolls at the same time and under the same
circumstances only. The position of the Board, amplified in these
decisions, was of significance in the leeway afforded the company in its
determination of rates on branch lines and on sections of the main line.
Similar freedom was given to the company in the establishment of
developmental rates.[726] Again the Board placed the company under no
obligation to meet competition from water routes.[727] It solved with
commendable success, questions of discrimination in car-load rates,[728]
in classification,[729] and in rates,[730] and every effort[731] was
made to acquire facts essential to sound decisions.

Rulings and decisions of the Board of Railway Commissioners have to a
large extent adjusted rate difficulties permitting the uniform economic
development of western Canada, but the general rate question has been
beyond control. Primarily, the rate situation in that area has been a
monopoly situation. Competition has increased with the construction of
new roads, but the difficult financial conditions of these roads,
chiefly the result of the long stretch of unproductive territory
separating eastern from western Canada, seriously lessen its
effectiveness in the reduction of rates.

The pressure of freight rates in western Canada as a non-competitive
area has depended to some extent on freight rates on the lines of the
company in competitive territory. Competitive transcontinental traffic
became increasingly serious with the opening of the through line to
Vancouver and the continual development of new connexions. The opening
of the transcontinental line was followed by active competition with
American roads for through business in both directions, between all
Pacific coasts points and all points of the United States on or east of
the Missouri River. The Canadian Pacific definitely attempted to compel
American roads to grant differentials. Contending that the natural
disadvantages of the road should be compensated by the privilege of
offering to the public a lower rate, it engaged a steamer line from San
Francisco to take shipments of freight on through rates to various
points in eastern states. American rates, as a result, were lowered on
April 27, 1887, and again on May 25. In January, 1888, an arrangement
was finally made in which the Canadian Pacific became a member of the
Transcontinental Association, and agreed with the other lines upon
through rates considerably higher than those which previously
prevailed,[732] although that road was given certain differentials on
San Francisco traffic only--a differential of 15 cents per 100 lb. on
first-class traffic, and of 5 cents on the lowest commodity class--from
San Francisco to St. Paul, Minneapolis and common points. From San
Francisco to points further east the concessions were progressively
larger--at Chicago, Cincinnati, Pittsburgh and New York--reaching at New
York, Boston and Philadelphia, 28 cents first class and 5 cents lowest
commodity class.[733]

With the exception[734] of limitations enforced by the Interstate
Commerce Commission, this agreement persisted to 1897. The investigation
of the committee, under the chairmanship of Senator Cullom, found that
the differential given by the American roads to the Canadian Pacific on
business to and from San Francisco remained in force except for the year
from January 1, 1891, to January 2, 1892, when it was alleged that it
had been dropped in consideration of a payment of a lump sum by American
roads. With the constant improvement of through connexions on the part
of American roads, the equilibrium was destroyed, and freight
difficulties complicated with passenger difficulties led to a situation
which made necessary the abolition of the agreement. Transcontinental
traffic has remained of a competitive character, though disturbances
occasioned by rate wars have practically disappeared with the increasing
influence of regulative bodies in both the United States and Canada. The
improvement of transcontinental facilities in the United States and
Canada in the construction of railways and the opening of the Panama
Canal has made the effects of competition even more serious.

Competition of through transcontinental traffic has on the other hand
been much less serious than competition in eastern Canada and in trunk
line territory. In 1889 the number of car-loads going vi the Canadian
Pacific averaged twenty-nine per month, or one car per day, which was
roughly the amount of traffic diverted from American lines.[735] In 1891
less than 1 per cent. of the competitive traffic was carried by the
Canadian Pacific, and the gross earnings of the east-bound shipments of
this road were 136 per cent. of the gross earnings of all roads on this
traffic. Of the traffic originating in California, Oregon and
Washington, the Canadian Pacific carried 23 per cent. of the gross
revenue. Of the traffic between British Columbia and Canada it carried
8321 per cent. West-bound traffic to California, Oregon and Washington
was slight. The proportion carried by the Canadian Pacific was 81 per
cent. The proportion carried between Canada and British Columbia was
8628 per cent. The total east- and west-bound earnings of
transcontinental traffic from Vancouver in 1891 were 127 per cent. of
the total transcontinental traffic, the remainder being earnings on
domestic traffic between Eastern Canada and British Columbia. In its
share of traffic from China and Japan, the Canadian Pacific carried an
average of 42 per cent. of the tea and 16 per cent. of the silk from
1887 to 1892, but this increase in tea shipments was more largely at the
expense of the Suez Canal route than of the American routes. Since that
time transcontinental traffic has greatly increased, but it still
remains relatively unimportant.

Competition in eastern Canada and on trunk line traffic was more
serious. On April 1, 1885,[736] the schedule of the Canadian Joint
Freight Association was adopted by the Canadian Pacific and other
Canadian roads in eastern Canada. According to expectations, the rates
involved were considerably lower[737] on a strictly mileage basis than
the rates charged in western Canada. Frequent rate wars made stability
impossible, and between competitive points rates fluctuated persistently
and sank to lower levels. The American roads, in an attack on the
Canadian Pacific, as a Government-subsidized road, first asked, by a
resolution in Congress, for the abolition of the transit in bond system,
but this was defeated by commercial organizations of various important
American cities who registered their protests in no uncertain manner. An
attempt in the 50th Congress to prohibit the importation of merchandise
in bond through American seaports for Canadian markets was defeated by
the same forces.[738] Propaganda was conducted in pamphlets, in the
press, and on the floor of Congress. Mr. A. N. Towne, general manager of
the Southern Pacific Railway, was a prominent figure in this hostility.
The agitation was even reflected in the antagonistic attitude of
President Harrison,[739] and a Senate committee on interstate commerce,
under the chairmanship of Senator Cullom, was appointed to take
evidence. Careful investigation revealed important facts.[740]

It was found that on several occasions rates of the Canadian Pacific
between Minneapolis and St. Paul and New York and Boston were lower than
rates agreed upon with the other roads. In January, 1891, the rate from
New York to St. Paul was 15 cents below the agreed basis, and in April,
13 cents, and 23 cents lower than the all-rail trunk lines. Nor were
these rates raised with the closing of navigation. The Canadian Pacific
was undoubtedly the aggressor, but it was finally pointed out that the
rates were not persistently under differentials claimed by Canadian
roads, and in traffic from Boston and New York, American roads were in
all cases a part of the through route. The routes vi the Sault and vi
Chicago were competitive routes, and rates fluctuated at various
intervals. Diversion of traffic from the Chicago route was unquestioned.
Of flour shipped from Minneapolis, the percentage carried by the
Chicago, Milwaukee and St. Paul decreased from 3847 per cent, in 1884
to 1253 per cent, in 1891. The percentage carried by the Soo line
increased from the date of opening in 1888 to 17 per cent. in 1892. The
percentage of corn carried over the latter route varied from 70 to 85
per cent., of oats, rye and barley from 30 to 53 per cent., and of wool
from 76 per cent. upward, although this increase was not entirely a
diversion to the Canadian Pacific, since a large portion was hauled to
Gladstone and shipped by the lakes to Buffalo. On through rates from
Missouri River points to the seaboard the Canadian Pacific had
frequently departed from the normal basis, but the southern American
routes had been even more flagrant violators.

Competition for seaboard traffic was not confined to Canadian and
American roads. It was also serious between Canadian roads. With the
arrangements by which the C.P.R. received traffic from the Wabash at
Detroit, it carried the inconsequential portion of about 34 per cent.
of the total eastward dead-freight traffic from Chicago to the Atlantic
seaboard. In 1892 the Wabash carried 109 per cent. of the total Chicago
dressed beef, of which the greater portion found its way over the
Canadian Pacific. As a result the Grand Trunk suffered a loss of 25 per
cent. of its former share in this traffic. This investigation
effectively answered the argument of Canadian domination in trunk line
traffic and conclusively precluded the charges of American roads,
proving as it did their inevitable complicity in Canadian criminality.
Charges against the Canadian Pacific implied proof of innocence on the
part of American roads in complying with the Interstate Commerce Law by
maintaining their public through rates. The advantage of the Canadian
Pacific lay in its ability to quote through rates without consulting
other roads.

As with transcontinental traffic, competition has continued in Eastern
Canada and on trunk line traffic, though rate wars have practically
disappeared through the influence of American and Canadian regulative
bodies. The effects of canal improvements and increased Great Lakes
traffic, of the addition of railway facilities, and of the improvement
of railway systems through the centralization of railway managements
have been evident. The difficulties attending this competition were
especially prominent during the war and led to the decision[741] on
June 9, 1916, of the Board of Railway Commissioners in the Eastern Rates
Case, permitting an increase in rates in territory east of Fort William.
Rates in this territory have been inevitably of a competitive character.

The essentially competitive character of Canadian Pacific
transcontinental and trunk line traffic, which found expression in rate
wars and which was later regulated by the Board of Railway Commissioners
and by the Interstate Commerce Commission, was therefore of dominant
importance in the determination of the company's rate policy. Low
earnings or losses incidental to competition in this traffic made it
necessary that higher rates should be charged in western Canada as a
more or less non-competitive area. Conditions in eastern Canada and in
western Canada were not such as to give a parity in rates. A change of
conditions making possible this parity depends on a multitude of
uncertain factors, but a reduction of rates in the immediate future is
scarcely probable.

[Footnote 676: Appendix B.]

[Footnote 677: "The said Company shall afford all reasonable facilities
to the Ontario and Pacific Junction Railway Company, when their railway
shall be completed to a point of junction with the Canadian Pacific
Railway, and to the Canada Central Railway,...and the said Canadian
Pacific Railway Company shall receive and carry all freight and
passenger traffic shipped to and from any point on the railway of either
of the said abovenamed railway companies passing over the Canadian
Pacific Railway or any part thereof, at the same mileage rate and
subject to the same charges for similar services, without granting or
allowing any preference or advantage to the traffic coming from or going
upon one of such railways over such traffic coming from or going upon
the other of them, reserving, however, to the said Canadian Pacific
Railway Company the right of making special rates for purchasers of
land, or for immigrants or intending immigrants, which special rates
shall not govern or affect the rates of passenger traffic as between the
said company and the said two abovenamed Companies or either of them."
(Appendix B).]

[Footnote 678: _Sessional Papers_, No. 58_b_, 1888.]

[Footnote 679: _Ibid._]

[Footnote 680: _Ibid._]

[Footnote 681: _Sessional Papers_, No. 48_h_, 1882, p. 40.]

[Footnote 682: _Ibid._, p. 45.]

[Footnote 683:

  First special class:
    Grain.
    Potatoes.
    Mill stuffs.

  Second special class:
    Flour.
    Meal.
    Lime.

  Third special class:
    Salt.
    Cement lime.
    Stucco.
    Land plaster.

  Fourth special class:
    Lumber.
    Shingles.
    Laths.
    Rails.
    Timber.
    Sawlogs.
    Telegraph poles.

  Fifth special class:
    Livestock.

  Sixth special class:
    Agricultural implements.
    Furniture.
    Household goods.
    Machinery.
    Farm wagons.
    Doors.
    Sash.
    Tile.
    Nails.
    Unfinished wood pumps.
    Pork.

  Seventh special class:
    Coal.
    Coke.
    Brick.
    Sand.
    Iron ore.
    Stone.
    Pig iron.
    Shingle and stave bolts.
    Tanners backs.
    Hoops.
    Hay.
    Railroad iron.
    Sawdust.
    Ice.]

[Footnote 684: _Sessional Papers_, No. 48_g_, 1882, p. 35.]

[Footnote 685: _Ibid._, No. 27_j_, 1883, p. 3.]

[Footnote 686: _Ibid._]

[Footnote 687: _Ibid._, No. 31, 1884, p. 44.]

[Footnote 688:

                                        1st   2nd   3rd    4th
          Per 100 lb.                 Cents. Cents. Cents. Cents.

  (1) New St. Vincent to Winnipeg         43    36    29    22
      Old       "      "    "             25    21    18    13
                                          --    --    --    --
      Increase                            18    15    11     9
      Percentage of increase              72    71    61    61

  (2) New Winnipeg to Portage la Prairie  38    32    26    19
      Old    "           "       "        26    21    16    13
                                          --    --    --    --
      Increase                            12    11    10     6
      Percentage of increase              46    52    62    46

  (3) New Winnipeg to Brandon             65    54    43    32
      Old    "       "     "              41    33    27    21
                                          --    --    --    --
      Increase                            24    21    16    11
      Percentage of increase              39    64    59    52

                  --_Ibid._, p. 45.]

[Footnote 689:

                                          1st    2nd    3rd    4th
          Per 100 lb.                    Cents. Cents. Cents. Cents.

  (1) Winnipeg and Portage la Prairie.
      Through rate St. Vincent to
      Portage la Prairie                  62      52     41      31
                                          --      --     --      --
      St. Vincent to Winnipeg             43      36     29      22
      Winnipeg to Portage la Prairie      38      32     26      19
                                          --      --     --      --
                                          81      68     55      41
      Extra charge against Winnipeg       19      16     14      10

  (2) St. Vincent to Brandon              80      67     54      40
      St. Vincent to Winnipeg             43      36     29      22
      Winnipeg to Brandon                 65      54     43      32
                                          --      --     --      --
                                        108      90     72      54

      Extra charge against Winnipeg       28      23     18      14

  (3) St. Vincent to Broadview          109      91     73      55
      St. Vincent to Winnipeg             43      36     29      22
      Winnipeg to Broadview               95      79     63      48
                                          --      --     --      --
                                        138    115     92      70

      Extra charge against Winnipeg       29      24     19      15

  (4) St. Vincent to Regina             128    107     86      64
      St. Vincent to Winnipeg             43      36     27      22
      Winnipeg to Regina                115      96     76      58
                                        ----      --     --      --
                                        158    132   105      80

      Extra charge against Winnipeg       30      25     19      16

              _Ibid._, No. 31, 1884, p. 46.]

[Footnote 690:

  To Port Arthur              From               To St. Vincent
  Rates cents    Distances                  Rates cents    Distances
  per 100 lbs.     Miles                    per 100 lbs.     Miles

      28            435     Winnipeg             14            68
      34            501     Emerson               5             2
      30            491     Portage la Prairie   18           124
      33            568     Brandon              23           201
      37           699     Broadview            27           332
      40            792     Regina               32           425
      41           834     Moosejaw             33           467
      47            946     Swift Current        35          579
      54         1,095     Medicine Hat         38          728
      63          1,275     Calgary              45           908

              _Sessional Papers_, No. 31, 1884, p. 62.]

[Footnote 691: _Ibid._, No. 34_b_, 1887, p. 134.]

[Footnote 692: _Ibid._, No. 58_b_, 1888.]

[Footnote 693: _Ibid._]

[Footnote 694: _Ibid._]

[Footnote 695: _Ibid._]

[Footnote 696: _Ibid._]

[Footnote 697: _Ibid._]

[Footnote 698: _Ibid._]

[Footnote 699: _Ibid._]

[Footnote 700: _C.P.R. Co. Letter of President Stephen to the
shareholders_.]

[Footnote 701: "It would be absurd to urge that the completion of 66
miles of railway, undertaken by the Government of Manitoba, would ruin
the vast Canadian Pacific system, but its construction would be a
violation of the contract with this company, and the directors feel it
to be their duty to maintain the rights of the company in this matter"
(_Ibid._, p. 7).]

[Footnote 702: _Open letter to the shareholders of the C.P.R._]

[Footnote 703: _Sessional Papers_, No. 58_b_, 1888.]

[Footnote 704: _Ibid._]

[Footnote 705: 51 Vic. c. 32.]

[Footnote 706: _Sessional Papers_, No. 39, 1885.]

[Footnote 707: 60-61 Vic. c. 5, 1897.]

[Footnote 708: 45 C.S.C.R. 322 (1912).]

[Footnote 709: Both reports are found in _Sessional Papers_, No. 20_a_,
1902.]

[Footnote 710: 3 Edw. VII, c. 58.]

[Footnote 711: For an excellent treatment of the rate situation, _see_
MacGibbon, D. A., _Railway Rates and the Canadian Railway Commission_.]

[Footnote 712: VI, J.O.R.R. 154.]

[Footnote 713: _Report of the Royal Commission to inquire into Railways
and Transportation in Canada_, 1917, p. 21.]

[Footnote 714: _Ibid._, p. 39.]

[Footnote 715: _Ibid._, p. 20.]

[Footnote 716: _Board of Railway Commissioners of Canada_, _File No._
18755, _Judgment_.]

[Footnote 717: _Ibid._, p. 34 ff.]

[Footnote 718: _Ibid._, p. 92.]

[Footnote 719: _Report of Board of Railway Commissioners_, 1918, pp.
104-5.]

[Footnote 720: _Ibid._, 1919., p. 48.]

[Footnote 721: _Globe_, April 12, 1922.]

[Footnote 722: The words of Van Horne during the Reciprocity Campaign
are very much in point: "Shall we be permitted to recede from
reciprocity when Mr. Hill has extended his seven or eight lines of
railway into the Canadian North-West--lines which have for some years
been resting their noses on the boundary line, waiting for reciprocity
or something of the kind to warrant them in crossing--and when other
American channels of trade have been established affecting our
territory, and when the American millers have tasted our wheat and the
American manufacturers have got hold of our markets? Shall we be
permitted to recede? Not a bit of it! We are making a bed to lie in--and
die in." "I am out to do all I can do to bust the damned thing."
Vaughan, W., op. cit., p. 347.]

[Footnote 723: 3 C.R.C. 441.]

[Footnote 724: 7 C.R.C. 125.]

[Footnote 725: 5 C.R.C. 202.]

[Footnote 726: Brampton Communication Rates Case, 8 C.R.C. 42.]

[Footnote 727: Blind River Board of Trade _v._ The Grand Trunk, Canadian
Pacific Railways, Northern Navigation and Dominion Transportation
Companies. 15 C.R.C. 147.]

[Footnote 728: 17 C.R.C. 279.]

[Footnote 729: 4 C.R.C. 148.]

[Footnote 730: Regina Rates Case, 11 C.R.C. 380.]

[Footnote 731: In the Cardston Board of Trade _v._ The Alberta Railway
and Irrigation Company, the Railway Company operated a railway and
collieries and owned large areas of irrigated land and town lots. It was
claimed that tolls should not be reduced since the railway and
irrigation works were run at a loss and the land and coal areas covered
the deficit. The Board regarded the control acquired over this railway
company as a "very material factor in the case." The chief commissioner
adopted the recommendation of the chief traffic officer that the
territory in which the A.R. & I. operated was in all respects similar to
that of the Canadian Pacific in Southern Alberta, and that the A.R. & I.
freight rates should not exceed those in effect for similar distances
and on similar commodities on the line of the Canadian Pacific (5 C.R.C.
236). In Wylie Milling Company _v._ Canadian Pacific, the company owned
51 per cent. of the stock of the Kingston and Pembroke Railway. It was
claimed by the railroad that the companies were separate corporations,
and should be treated separately, each being entitled to its own rates.
The Board, with the precedent of the Interstate Commerce Commission,
stated "that the purchase by the Canadian Pacific Railway Company of a
majority interest in the stock of the Kingston and Pembroke road was not
made with a view to a directly remunerative investment, but to secure
certain advantages which it was thought would accrue from control of the
rates and operations of that road, and the company enjoying the
advantages should discharge the obligations growing out of such control.
Therefore we are logically forced to conclude that the Kingston and
Pembroke Railway should be considered a part, and treated as a part, of
the Canadian Pacific Railway" (14 C.R.C. 5).]

[Footnote 732: I.C.C.R., 1888, p. 114.]

[Footnote 733: I.C.C.R., 1889, pp. 59-60.]

[Footnote 734: In 1890 a suit was brought by the City of New York
against the Canadian Pacific and other roads. The Canadian Pacific had
been forced by steamship companies to bear a part of the reduction of
through rates, and to surrender a larger portion of the earnings as well
as greater control of the rates. Consequently rates from Yokohama to
Chicago were the same as rates from Yokohama to New York. In the
decision it was ruled that the Canadian Pacific and other roads were to
"desist from carrying traffic shipped from any foreign port through any
port of entry of the United States or any port of entry in a foreign
country adjacent to the United States upon through bills of lading
destined to any place within the United States at any other than upon
the inland tariff covering other freight from such port of entry to such
place of destination." The Canadian roads evaded the force of the
decision by selecting a few articles which were typically imports and
placing them in a commodity class with greatly reduced rates (4
I.C.C.R., p. 447).]

[Footnote 735: Raymond, A. C., _The Canadian Railway Question_, p. 38.]

[Footnote 736: _Sessional Papers_, No. 35, 1886, p. 159 ff.]

[Footnote 737:

                             Rates
              Western Division    Eastern Division
                 First Class        First Class
     Miles       Cents per lb.      Cents per lb.

       10              15                10
       15              18                12
       25              24                16
       50              35                24
      100              54                36
      300            102                60
      500            143                80
    1,000            228              150]

[Footnote 738: _See_ a history of the case: Raymond, A. C., op. cit.]

[Footnote 739: _Messages and Papers of the Presidents_, vol. IX, p.
346.]

[Footnote 740: 6 I.C.C.R., p. 280 ff.]

[Footnote 741: _Board of Railway Commissioners' Report_, 1917, pp.
7-8.]




  VI

  Passenger Traffic


The general expansion of the physical property of the road, especially
in western Canada, dominated, and was largely dominated by, the freight
situation. The importance of western Canada made inevitable an unusually
marked interrelationship between the freight situation and the passenger
situation. The movement of population to that area preceded and followed
the development of freight traffic. And in general the development of
freight traffic stimulated, and was stimulated by, the development of
passenger traffic.


  _A._ Passengers Carried

The opening of the railroad to western Canada was followed immediately
by immigration. During the first five months of Government operation of
the road from the United States boundary to Winnipeg, 17,640
passengers[742] were carried. The next ten months, which included the
summer months of 1880, brought an increase in the monthly average of
passengers[743] carried from 3,520 to 7,560, and, despite an increase in
mileage from 280 to 367, an increase in the monthly average of
passengers carried per mile from 125 to 208. The first year of company
operation which included the mileage in Eastern Canada and increased
total mileage to 609, brought an increase[744] to 456 in the monthly
average of passengers carried per mile. Rapid increase, partly the
result of the expansion of the road in eastern Canada, but largely
dominated by expansion in the west, continued to 1890. The number of
passengers carried[745] increased from 388,785 in 1882 to 2,685,730 in
1890--an increase which, with the exception of the years prior to the
completion of the main line, was, if not steady, persistent. The number
increased in 1899 to 3,818,857[746] and in 1920 to a maximum of
16,925,049. The increase was steady and rapid from 1890 to 1893 and was
followed by a decline to 1895, a gradual recovery to 1897, and a rapid
gain to 1900. Fluctuations were largely occasioned by the period of
depression, by the grain situation, and by the Klondike rush in 1898. In

1887 an exceptional harvest had little effect on the passenger situation
until two years later when there was a marked increase. Effects of the
large harvest in 1892 were lost in the depression of the following
years. The bountiful harvest of 1897 contributed to the increase of 1898
though the rate wars and the gold rush were of particular importance.
The general upward trend which dominated the fluctuations continued as
the result of the opening of the west, and expansion in more thickly
populated territory in eastern Canada and the United States. The
increase to 1909, with the exception of a slight falling off in the last
year due to the depression and the bad harvest, was steady and rapid. In
1910 it gained momentum and was unusually rapid in 1913. The beginning
of the war brought a marked decline. A partial recovery was evident in
1917 as a result of the favourable agricultural situation in that year,
but the increasing rates during the war and the transportation
restrictions led to another decline in the following year. In 1920
recovery was in evidence, but the following year brought a decline. In
general the passenger situation was dependent on the freight situation
and particularly on the agricultural situation. The rapid increase from
1900 to 1913 was, to no small extent, dominated by the expansion of
western Canada.

[Footnote 742: _Sessional Papers_, 1880-1, No. 5, p. 77.]

[Footnote 743: _Ibid._, No. 8, 1882, p. 23.]

[Footnote 744: _Ibid._, No. 8, 1883, p. 23.]

[Footnote 745: Passengers carried, 1882-1890:

    1882           388,785
    1883           800,419
    1884           919,263
    1885         1,427,367
    1886         1,791,034
    1887         1,949,215
    1888         2,135,735
    1889         2,457,306
    1890         2,685,730

  Compiled from _Sessional Papers_, 1883-91.]

[Footnote 746: Passengers carried, 1890-1921:

    1890 (Calendar year)                     2,792,805
    1891                                     3,165,507
    1892                                     3,258,289
    1893                                     3,311,247
    1894                                     3,009,015
    1895                                     2,983,793
    1896                                     3,029,887
    1897                                     3,179,589
    1898                                     3,674,502
    1899                                     3,818,857
    1901 (Fiscal year (six months omitted))  4,337,799
    1902                                     4,796,746
    1903                                     5,524,198
    1904                                     6,251,471
    1905                                     6,891,511
    1906                                     7,753,323
    1907                                     8,779,620
    1908                                     9,463,179
    1909                                     9,784,450
    1910                                    11,172,891
    1911                                    12,080,150
    1912                                    13,751,516
    1913                                    15,480,934
    1914                                    15,638,312
    1915                                    13,202,603
    1916                                    13,833,978
    1916 (six months)                        9,184,295
    1917 (Calendar year)                    15,462,276
    1918                                    14,396,753
    1919                                    15,815,982
    1920                                    16,925,049
    1921                                    15,318,358

  Compiled from _C.P.R. Reports_.]


  _B._ Train Mileage

Increase in the number of tons of freight carried was largely reflected
in the freight train mileage. Passenger train mileage was not as
dependent upon the number of passengers carried. Passenger train mileage
was related to the development of the system, to the adoption of
passenger schedules, and to the essentially large element of fixed
charges characteristic of passenger equipment, and was less elastic to
the demands of traffic than freight train mileage. As a result of the
nature of the relationship between passenger miles and the extension of
the system the number of passenger train miles[747] increased rapidly
from 317,841 in 1882 to 4,566,758 in 1890. The acquisition of lines in
the east and the construction of lines in the west occasioned persistent
fluctuations throughout the period. In 1899 the number increased[748]
to 7,441,828 and in 1921 to 18,931,622. The years from 1890 to 1893 were
characterized by a gradual but steady increase, to 1895 by a decline,
and to 1900 by a rapid recovery. Decreased traffic during the depression
was accompanied by a decline in train mileage, and increased traffic
with increased railway mileage during the end of the decade was
accompanied by an increase in the number of train miles. From 1900 to
1913 increase in passenger train mileage was rapid and steady with no
fluctuations such as characterized freight train mileage in the same
period. Increased traffic and increased mileage necessitated a constant
increase in the number of passenger schedules. On the other hand the
element of fixed charges peculiar to passenger equipment operated as a
constant check to a rapid increase. Constant pressure was exercised to
prevent an undue expansion of equipment and of train mileage. Partly as
a result of these efforts an increase in traffic in 1914 was accompanied
by a decrease in train mileage, but passenger mileage decreased less
rapidly than traffic following 1914. The rapid increase in 1916 and 1917
in traffic was accompanied by a relatively slight increase in train
mileage, though undoubtedly the situation was complicated by war-time
restrictions. Passenger train mileage was dominated by several factors,
of which traffic, mileage, inelastic schedules, and overhead charges
were most important.

[Footnote 747: Passenger train miles, 1882-90:

    1882       317,841
    1883       936,721
    1884     1,060,721
    1885     1,260,365
    1886     1,665,960
    1887     2,738,184
    1888     3,633,789
    1889     4,191,477
    1890     4,566,758

  Compiled from _Government Reports_.]

[Footnote 748: Passenger train miles, 1891-1921:

    1891 (Calendar year)                     5,716,541
    1892                                     5,834,545
    1893                                     6,136,732
    1894                                     5,861,058
    1895                                     5,719,118
    1896                                     5,842,461
    1897                                     6,273,999
    1898                                     7,160,764
    1899                                     7,441,828
    1901 (Fiscal year (six months omitted))  7,765,584
    1902                                     8,300,140
    1903                                     8,309,015
    1904                                     8,810,180
    1905                                     9,797,618
    1906                                    11,086,929
    1907                                    12,413,638
    1908                                    13,196,093
    1909                                    14,170,522
    1910                                    16,119,453
    1911                                    17,393,532
    1912                                    19,591,027
    1913                                    22,333,592
    1914                                    21,523,630
    1915                                    17,977,033
    1916                                    18,159,545
    1916 (six months)                       13,315,730
    1917 (Calendar year)                    18,093,554
    1918                                    16,665,928
    1919                                    20,411,110
    1920                                    20,538,038
    1921                                    18,931,622

  Compiled from _C.P.R. Reports_.]


  _C._ Passenger Equipment and Services

The importance of overhead charges can be more adequately appreciated in
a discussion of equipment. At the end of the first five months of
Government operation the road possessed two first-class passenger cars
and one baggage car. In the next ten months this number was increased by
an addition of four first-class cars and two smoking-cars.[749] From
1882 to 1890 under company operation[750] the first-class cars increased
from 46 to 125, the second-class cars from 18 to 146 and the baggage,
mail and express cars from 25 to 135. Second-class cars increased much
more rapidly than first-class cars, surpassing them in number in 1888.
This situation was evidently a result of the company's immigration
policy and of the policy of converting older first-class cars to
second-class cars, to reduce overhead charges. Baggage, mail and express
cars were dependent upon increase in passenger schedules. The relatively
rapid increase of this form of equipment was significant of the
development of local service. First- and second-class cars
increased[751] from 461 in 1890 to 627 in 1899 and to 2,191 in 1921.
From 1891 to 1893 increase in passenger traffic and in mileage was
accompanied by an increase in equipment. In the depression of the
following years, with a slight increase in mileage, a decline in traffic
and financial difficulties, equipment remained practically stationary.
The rapid increase in traffic in 1898 brought a rapid increase in
equipment in that year, and occasioned a very slight increase in the
following year. The decade, with the exception of fluctuations due to
the depression, was characterized by a general increase in equipment, in
traffic and in mileage. The strong upward movement evident toward the
end of the century continued to 1913. A rapid increase in mileage and in
traffic led to a rapid increase in equipment. Traffic and mileage were
determining factors. Years characterized by a slight falling off in
traffic were characterized by the addition of a smaller number of cars.
In 1904, in 1905, and in 1909 a slight falling off in traffic was
accompanied by a slight decline in the rate of increase in equipment.
The effect of the inelasticity of passenger schedules and of the
difficulties of overhead cost were shown particularly in the war period.
Following a rapid and steady increase of traffic, of mileage and of
equipment to 1913, a slight falling off in traffic in 1914 and a decline
in 1915 were accompanied in both years by an increase in equipment.
During the remainder of the period, traffic with some fluctuations
recovered, but in 1920 the number of first- and second-class passenger
cars was the same as in 1914. In 1921 the number of these cars recovered
to the high level of 1917. Inelasticity in passenger schedules made it
impossible for the company to adjust the number of cars to actual
traffic demands. It was evident that during the period ending with 1913
the company was under equipped--a situation partly the result of the
rapidity of the expansion and partly the result of the desirability of
reducing overhead charges. The wisdom of the course was justified during
the war period when slight increases could be made despite a decrease in
traffic. A decline to 1920 with an increase in traffic and an increase
in 1921 with a decline in traffic illustrate the difficulties of
adjustment.

The problem of adjusting supply of equipment to demand was even more
acute with first-class sleeping- and dining-cars and equipment more
generally necessary for the conduct of tourist traffic, although the
peculiar character of the road's territory, to some extent, rendered
these forms of equipment as essential as passenger cars. From 1889 to
1899 the number of first-class sleeping- and dining-cars increased from
56[752] to 113 and in 1921 to 539. Passenger cars were more directly
influenced by an expansion of mileage, and establishment of service on
branch lines. Sleeping- and dining-cars were confined more generally to
through traffic and consequently were not as dependent on mileage as on
through connexions. During periods of expansion which were coincident
with periods of prosperity, the number increased most rapidly as from
1889 to 1892, 1898 to 1903, and from 1906 to 1913: During periods of
depression the number remained stationary as from 1894 to 1897, in 1904
and 1905, and in 1914 and 1915. In the later years of the war the number
actually decreased. Tourist traffic, dependent on periods of prosperity,
was liable to considerable fluctuation. Consequently it was unusually
difficult to adjust the supply of equipment to the demand. On the other
hand the schedules were more elastic than the regular passenger
schedules. The decline during the war period suggests the possibility of
adjusting this equipment to other purposes. On the other hand, the
increase in 1921 with a decline in traffic suggests conclusions of a
different character.

Parlour cars, official and paymasters' cars are unfortunately classified
together, but parlour cars were undoubtedly also largely subject to the
demands of the tourist traffic. From 1889 to 1899 the total number[753]
of all cars classified under this head increased from 22 to 33 and in
1921 to 124. The number of official and paymasters' cars was directly
related to the company's policy of administration and to the expansion
of mileage. During periods of depression the number remained stationary,
as from 1893 to 1897. The unusual demands of passenger traffic in 1898
for increased cars led to a decrease. The general increase in traffic
and in mileage from 1901 to 1913 and especially in 1912 and 1913 led to
a marked increase in the number of these cars as of other equipment.
During the war period the number rapidly increased in 1917 but remained
practically stationary to 1921. The difficulty of adjusting this type of
equipment to the demand was very much lessened by the possibility of
converting it to the use of other passenger traffic.

The increase in passenger traffic and the consequent increase in
passenger train mileage and in passenger equipment made necessary an
increase in other facilities essential to the handling of this traffic.
Many of these facilities, as in the case of steamship services, were
developed largely in response to the demands of freight traffic, but
passenger traffic was of considerable importance. Facilities necessary
for passenger traffic were constantly extended. In 1888 in connexion
with tourist traffic, hotels were built at Banff and Vancouver.[754]
Later hotels were erected and improved at Victoria, Winnipeg, Caledonia
Springs and other points strategic for the handling of this traffic. The
construction and improvement of stations throughout the whole history
of the road was generally a result of the demands of passenger traffic.

[Footnote 749: _Sessional Papers_, No. 8, 1882, p. 86.]

[Footnote 750: Equipment, 1882-90:

                 1st Class  2nd Class  Baggage, Mail, and
                    Cars       Cars       Express Cars

    1882             46         18             25
    1883             90         28             44
    1884             78         33             48
    1885            100         86             61
    1886            110         99             93
    1887            120        109            100
    1888            120        134            100
    1889            116        133            124
    1890            125        146            135

       Compiled from _Government Reports_.]

[Footnote 751:  First- and second-class passenger cars, 1891-21:

    1891 (Calendar year)                     517
    1892                                     546
    1893                                     575
    1894                                     575
    1895                                     576
    1896                                     580
    1897                                     588
    1898                                     622
    1899                                     627
    1901 (Fiscal year (six months omitted))  662
    1902                                     678
    1903                                     725
    1904                                     814
    1905                                     881
    1906                                     997
    1907                                   1,191
    1908                                   1,382
    1909                                   1,461
    1910                                   1,515
    1911                                   1,689
    1912                                   1,841
    1913                                   2,063
    1914                                   2,174
    1915                                   2,182
    1916                                   2,183
    1916                                   2,189
    1917 (Calendar year)                   2,191
    1918                                   2,179
    1919                                   2,183
    1920                                   2,174
    1921                                   2,191

  Compiled from _C.P.R. Reports_.]

[Footnote 752: First-class sleeping- and dining-cars, 1889-1921:

    1889 (Calendar year)            56
    1890                            61
    1891                            73
    1892                            86
    1893                            86
    1894                            99
    1895                            99
    1896                            99
    1897                            99
    1898                           111
    1899                           113
    1901 (Fiscal year)             115
    1902                           124
    1903                           139
    1904                           141
    1905                           141
    1906                           160
    1907                           224
    1908                           245
    1909                           275
    1910                           294
    1911                           318
    1912                           369
    1913                           436
    1914                           502
    1915                           502
    1916                           498
    1916                           486
    1917 (Calendar year)           468
    1918                           480
    1919                           475
    1920                           483
    1921                           539

  Compiled from _C.P.R. Reports_.]

[Footnote 753: Parlour cars, official and paymasters' cars, 1889-1921:

    1889 (Calendar year)            22
    1890                            25
    1891                            28
    1892                            28
    1893                            30
    1894                            30
    1895                            30
    1896                            30
    1897                            30
    1898                            26
    1899                            33
    1901 (Fiscal year)              33
    1902                            40
    1903                            45
    1904                            48
    1905                            47
    1906                            50
    1907                            51
    1908                            57
    1909                            60
    1910                            61
    1911                            67
    1912                            75
    1913                            84
    1914                            96
    1915                            97
    1916                           100
    1916                           106
    1917 (Calendar year)           122
    1918                           122
    1919                           123
    1920                           124
    1921                           124

  Compiled from _C.P.R. Reports_.]

[Footnote 754: _C.P.R. Report_, 1888.]


  _D._ Passenger Rate Policy

Growth of passenger traffic, and expansion of physical property,
essential to the conduct of this traffic during the history of the road,
as with freight traffic, largely determined, and was largely determined
by, the passenger rate policy. The factors which determined the freight
rate policy were largely determinants of the passenger rate policy. The
rapid development of western Canada which occasioned a developmental
freight rate policy during the early years of the company's history
occasioned a developmental passenger rate policy. Immigration was
essential to expansion. The Government passenger rate in western Canada
adopted by the company in these first stages of the history of the road
was three cents per mile, but immigrants were given through tickets at
one and a half cents per mile.[755] In the tariff adopted by the company
on March 23, 1883,[756] consistently with a general increase, the rate
was raised, on branch lines, and on the line from Brandon to the
crossing of the Saskatchewan River, on which traffic was light, to four
cents per mile. On other portions of the western lines it remained at
three cents. Immigration rates continued to be much lower and in a
resolution[757] of June 9, 1885, the company was given permission to
grant special rates for the promotion of emigration from the United
States to the North-West, even to the point of carrying passengers free
from Emerson or Gretna, to points on the railway, in order to counteract
fully the adverse efforts of American railways. These tariffs were
testimonials to the necessity of the development of the west from the
standpoint of passenger traffic and of freight traffic, but they were
also testimonials, in the high local rates, to the fact that western
Canada was a non-competitive area. As with the freight situation,
competition on transcontinental passenger traffic and on eastern
passenger traffic was inevitable. With these competitive areas and the
consequent reduction of rates came the necessity for increased rates in
non-competitive areas.

The inelastic character of passenger traffic and its particular
difficulties with reference to overhead charges, tended to make
competition more severe than that characteristic of freight traffic. The
Canadian Pacific in its negotiations in 1887 with American
transcontinental roads successfully claimed a differential of $10 and $5
on first- and second-class tickets respectively between the Pacific
coast and Chicago and points east. It was an intermediate carrier
receiving an unduly low share of the total receipts and it was alleged,
considering the commission paid by the railroads to ticket agents, that
this road actually carried second-class passengers at a loss. The number
of transcontinental passengers carried was small, though its percentage
of California traffic, as a result of the rate situation, increased from
124 per cent. in 1889 to 306 per cent. in 1892. The Pacific steamers
started in 1891 greatly strengthened the road's control of Oriental
trade. Canadian immigration restrictions gave the company an increased
share of the Chinese passenger traffic. Moreover, a transcontinental
British route was favoured by British travellers. This gradual
change[758] in the situation made the compromise agreed upon by the
transcontinental association in the granting of differentials
impossible. In 1893 the Great Northern Railway was opened for business
between St. Paul and Seattle. In the completion of this road, the
Canadian Pacific lost its connexion vi Winnipeg with St. Paul, since
the St. Paul, Minneapolis and Manitoba Railway was a part of the Great
Northern, and with it the differential through the St. Paul and Port
Arthur gateways. The hurried extension of the Minneapolis, St. Paul and
Sault Ste. Marie from St. Paul to a point on the main line of the
Canadian Pacific near Moose Jaw served as a substitute, but competition
was unavoidable. The Great Northern reduced its fares from St. Paul to
Puget Sound points from the regular tariff rates of $60 first class and
$40 second class to $25 and $18 respectively. This cut-throat
competition was terminated by an agreement dated February 1, 1894,
stipulating that the Canadian Pacific should be given train service
into Seattle, Tacoma, and Portland, in return for waiving its claim to a
differential over the Great Northern from St. Paul, and for certain
facilities in the way of train service to Vancouver. In 1895 a
transcontinental association was formed in which this agreement between
the Canadian Pacific and the Great Northern was recognized and the
amount of the differential through the Port Arthur gateway reduced from
$10 to $750 first class, and continued at $5 second class. The decision
of the Trans-Missouri rate case led to the dissolution of the
association and with its dissolution the Northern Pacific and the Great
Northern claimed the differentials were no longer valid. Unable to
persuade other roads through the fear of rate disturbances, lower rates
were not published but tickets were sold for less than the published
rate by increasing the commission given to ticket agents in the
expectation that the commission would be divided with the purchaser of
the ticket. As a result the Canadian Pacific did not receive its share
of the traffic in the Klondike rush of 1898 and on inquiry discovered
the cause of the trouble. A rate war was the result. The Canadian
Pacific asked that the question be settled by arbitration, but the Great
Northern refused. The subject came before the Interstate Commerce
Commission as a result of a request of American roads for aid in the
continued suspension of the long and short haul clause. In the
discussion of the right of the Canadian Pacific to a differential, which
was the heart of the question, it was found that the distance from
Boston to Vancouver was fifteen hours and from Boston to Seattle
twenty-nine hours shorter by the American lines than by the Canadian
Pacific. The actual distance did not warrant this discrepancy, the
distance from Boston to Seattle being 3,240 miles by the American lines
and 3,323 miles by Canadian Pacific, and from Boston to Vancouver 3,346
miles by American lines and 2,935 miles by Canadian Pacific. The claim
of the Canadian Pacific was weakened further since the time from Boston
to Vancouver by the "Soo" line was 127 hours and by the main line 140
hours, and the time from Boston to Seattle by the "Soo" line was 131
hours and by the main line 144 hours. Finally the Canadian Pacific
agreed to accept the ruling of the commission, and abandoned its claim
to a differential.

Transcontinental competition was complicated with, and additional to,
competitive difficulties on the eastern section of the road. In the
investigation[759] of Senator Cullom's committee it was alleged that by
lower rates and by the payment of commissions to agents the Canadian
Pacific had received an undue share of the traffic from points in the
eastern states to St. Paul and Minneapolis. For five months ending July
15, 1892, the Canadian Pacific had carried over 75 per cent. of the
European immigrants destined for the western states, American roads
connecting with the Canadian Pacific having received their full local
rate and the loss being borne by that company. On east-bound traffic it
was found that the differentials offered by the "Soo" line were such as
to compel lines west of Chicago to leave that line in absolute control
of the field. This competitive situation became more serious with the
transcontinental controversy. The Grand Trunk had been particularly
active in securing working connexions with American roads and
consequently became involved. As a competitive measure, it
cancelled[760] the agreement permitting the Canadian Pacific cars to be
run over the Toronto and North Bay route, making it necessary for these
cars to follow the circuitous route over the Canadian Pacific line by
Smith Falls--refusing to carry Canadian Pacific traffic at the rate of
$14 per 12-ton car for 206 miles and demanding $21. Toronto traffic for
the Pacific coast was forced, in this way, to travel an additional 150
miles. As a counter-measure, the Canadian Pacific proceeded to deny the
right of the Grand Trunk to sell tickets on even terms between Toronto
and Winnipeg although the Canadian Pacific had the shorter route.
Further, rates were cut one-half on all competitive points between
Montreal and Toronto. Considerable loss to both roads was the result.
Eventually an agreement was signed restoring rates to their old basis
and permitting the Canadian Pacific to run cars over the Grand Trunk
line from Toronto to North Bay.[761]

In general, therefore, with the exception of greater competition
occasioned by the importance of fixed charges, the passenger rate
situation was dominated by factors similar to those which dominated the
freight rate situation. Inevitable competition on international traffic,
and on Atlantic seaboard traffic, and consequently increased pressure
toward higher rates in western Canada as a non-competitive area,
influenced the passenger rate situation as it did the freight rate
situation. The organization of the Board of Railway Commissioners due to
these circumstances and the effects of consequent regulation discussed
in relation to freight rates pertained generally to passenger rates.

[Footnote 755: _Sessional Papers_, No. 48_g_, 1882, p. 36.]

[Footnote 756: _Ibid._, No. 27_j_, 1883, p. 3.]

[Footnote 757: _Ibid._, No. 35, 1886, p. 201.]

[Footnote 758: 7 I.C.C.R. 71.]

[Footnote 759: 6 I.C.C.R., p. 288 ff.]

[Footnote 760: _The Economist_, 1898, vol. 20, p. 1520.]

[Footnote 761: _Ibid._, p. 1693.]




  VII

  Earnings from Operations


  _A._ Freight Earnings

The amount of freight carried and the freight rate policy of the company
were factors directly reflected in freight earnings. This item was of
dominant and increasing importance as a constituent of gross earnings.
The percentage of freight to gross earnings increased from 575 per
cent. in 1882, to 606 per cent. in 1890, to 641 per cent. in 1899 and
to 667 per cent. in 1921. Gross earnings during the first five months
of Government operation totalled $104,976,[762] an average of $20,995
per month, and in the next ten months, increased to $291,498,[763] a
monthly average of $29,149. Under Canadian Pacific management on June
30, 1882, it had increased to $1,546,214, or a monthly average of
$110,443. In 1890 this had increased tenfold to $15,572,986,[764] in
1899 to $29,230,038 and in 1920 to the maximum of $216,641,349. Gross
earnings per mile increased with considerable fluctuation from $2,529 in
1882 to $3,062 in 1890, the fluctuations varying with fluctuations in
mileage and in earnings. The expansion in mileage more than offset the
increase in earnings to 1884. A more rapid increase in earnings brought
an increase in gross earnings per mile to 1888, and a more rapid
increase in mileage, a decrease to 1890. Gross earnings per mile[765]
increased from $2,989 in 1889, to $4,176 in 1899 and to $14,357 in 1921.
With the rapid increase in mileage this increase was an excellent index
to the growth of traffic and to the intensive development of the road.
Fluctuations were occasioned generally by earnings rather than mileage.
To 1896 the depression acted as a decided check, but following that year
the increase was steady and rapid. In the following period the expansion
of earnings and of mileage was singularly rapid, but of earnings more
than mileage. The highest point was reached in 1913 and was followed by
a decrease in 1914 accentuated by increased mileage. The serious
decrease in 1915 was the result of a decline in earnings, and the
recovery in the remainder of the period was largely due to stationary
mileage.[766] In conclusion, fluctuations in gross earnings followed
closely fluctuations in freight traffic. The steady increase to 1891,
the stationary period to 1893, the decline in 1894-5, and the strong
recovery toward the end of that period were movements characteristic of
the amount of freight carried and of gross earnings. In the later period
the rapid increase to 1907, the decline in 1908, the strong rapid
movement culminating in 1913, the rapid decline in 1915 and the recovery
to 1917 were similarly movements characteristic of both items. The
increase in rates during the war brought an increase in gross earnings
but a decline in freight carried in 1918 and 1919. To 1921 fluctuations
in freight carried were concurrent with fluctuations in gross earnings.

Without exception fluctuations in gross earnings were closely paralleled
by fluctuations in freight earnings. During the first five months of
Government operation earnings from freight totalled $64,272,[767] a
monthly average of $12,854, and in the next ten months $164,252,[768] a
monthly average of $16,425. At the end of the first year under company
operation, the monthly average was $63,598. In 1890[769] freight
earnings had increased more than tenfold--an increase which was steady,
except for the troublesome years from 1883 to 1885 and the slight
falling off in 1888-89. These earnings increased from $8,852,702 in
1889, to $18,738,885 in 1899, and to $128,849,446 in 1921.

Fluctuations in freight earnings paralleled closely the number of tons
of freight carried and the number of tons of freight carried one mile.
The number of tons of freight carried one mile[770] increased from
406,822,166 in 1885, to 1,208,014,731 in 1890, to 2,539,171,900 in 1899,
and to 10,087,106,000 in 1921. The relation of the increase in the
amount of freight carried to the increase in the amount of freight
carried one mile is significant as evidence of the development of
through traffic. To 1890 freight carried one mile increased rapidly with
a relatively slight increase of the number of tons carried, affording
direct evidence of the development of through traffic following the
completion of connexions with the west and with through lines. With the
establishment of these connexions and as a result of the depression of
the nineties, the last decade of the century was characterized by a less
rapid increase in the number of tons carried one mile. Local traffic
became of more importance. The importance of this traffic increased
after the beginning of the century. The number of tons carried one mile
decreased more rapidly than the number of tons carried in 1904-5, and in
1909 the total number of tons carried one mile increased much less
rapidly than the total number of tons carried. On the other hand the
importance of through traffic continued and increased. In 1907 the total
amount of traffic carried decreased more rapidly than the number of tons
carried one mile. The importance of grain was reflected in the amount of
freight carried one mile and through traffic was largely influenced by
the grain situation in western Canada, as was especially evident in the
later period. In 1911 the falling off in the increase of freight carried
one mile was due directly to the falling off in grain carried. In 1916
the rapid increase in the amount of grain carried was reflected in a
more rapid increase of freight carried one mile than of the total
freight carried. The importance of grain therefore introduced an elastic
element in the number of tons carried one mile as compared to the number
of tons carried. The general relatively greater increase in traffic
carried than in traffic carried one mile was a striking tribute to the
development of local traffic, resulting from the intensive development
of the west and the expansion of the road in the east.

The growing importance of local traffic was more striking in the
movement of traffic density[771]--a variable of mileage and of traffic
carried one mile. Freight density increased from 93,781 tons in 1885 to
217,112 in 1890, to 362,738 in 1899, and to 750,305 in 1921, a
particularly bad year. To 1890 the rapid increase in traffic density,
despite a rapid increase in mileage, was evidence that important areas
of traffic were being tapped with new lines, and being developed with
the old lines. For this the expansion of the road in eastern Canada and
the connexions in the United States were responsible. The increase
continued to 1892 with an increase in mileage. Adverse conditions of the
period brought a decline to 1894, but more stationary mileage in the
following year produced a favourable change. Local development of
traffic to the end of the decade was evident in a marked increase of
traffic density with an increase in mileage. The movement gained headway
with the turning of the century and increased to 1903, but a decrease in
traffic and an increase in mileage in the following year brought a
decline. The succeeding years to 1913 with the exception of slight
fluctuations were characterized by a strong upward movement of traffic
density which was significant of intensive development. From 1913 to
1915 a decrease in traffic and an increase in mileage brought a rapid
decrease in traffic density. The rapid increase in traffic in 1916
brought recovery. During the remainder of the period, the mileage being
comparatively stationary, fluctuations were occasioned almost entirely
by traffic. The later history of the road was characterized generally by
a steady and marked increase in traffic density and by marked intensive
development.

Lower rates were an additional partial index of the development of
through traffic which accompanied this increase in local traffic.
Earnings per freight ton mile[772] decreased from 9 cents in 1889 to 8
in the following year and to 7 in 1896. This was partly the result of
the increase in through traffic which accompanied the expansion of the
road in the west. Grain, the most significant item of traffic, steadily
increased. From 1896 to 1910 the rate remained stationary, partial
evidence of the growing importance of other commodities than grain, of
the intensive development of the road and of the relative minor
importance of through traffic. In 1910 grain and manufactures remained
practically stationary and with the consequent decrease of through
traffic, earnings per freight ton mile increased to 8 cents. In 1916
the large harvest increased the amount of through traffic and the
freight rate per ton mile decreased to 6 cents. In 1918 grain and
manufactures decreased, and the average freight charge per ton mile
increased, the increase in this year and in the following years being
complicated with changes in the rate situation incidental to the
difficulties of the period. The general stationary character of freight
earnings per ton mile throughout the whole period was the result of a
close relationship between freight earnings and the amount of freight
carried one mile. Fluctuations were due largely to the nature of the
traffic, the development of the road, and the proportion of through to
local traffic.

Freight earnings and gross earnings were largely influenced in the
general increase and in the fluctuations by the agricultural situation
in western Canada. The intensive development of the road was principally
the result of the growth of the west, and the importance of through
traffic depended largely on grain. The relation of freight earnings to
grain and the western agricultural situation has been particularly
important because of a rate policy which necessitated higher rates in
western Canada. The growing importance of the west has stimulated, and
been accompanied by, a marked development of the east, and an expansion
of the road in that area which in turn has had its influence on
earnings, and contributed to the intensive development of the road,
characteristic of later years.

[Footnote 762: _Sessional Papers_, No. 5, 1881, p. 77.]

[Footnote 763: _Ibid._, No. 8, 1882, p. 79.]

[Footnote 764: See footnote 1 on opposite page.]

[Footnote 765:

    1882-1921:                Gross
               Gross         Earnings
             Earnings        per Mile

    1882 (1882-90 from _Government Reports_)     $1,546,21393    2,539
    1883                                          4,490,35178    2,522
    1884                                          5,177,01612    1,688
    1885                                          6,928,86929    2,069
    1886                                          8,874,95022    2,354
    1887                                         10,650,25408    2,491
    1888                                         12,711,01001    2,726
    1889                                         13,016,61181    2,616
    1890                                         15,572,98562    2,306
    1891 (1891-1921 from _C.P.R. Reports_)       20,241,09598    3,510
    1892                                         21,409,35177    3,559
    1893                                         20,962,31744    3,313
    1894                                         18,752,16771    2,956
    1895                                         18,941,03687    2,939
    1896                                         20,681,59684    3,194
    1897                                         24,049,78507    3,662
    1898                                         26,138,97713    3,912
    1899                                         29,230,03826    4,176
    1900 (Change to fiscal year)                 14,167,79789  6 months
                                                    ending June 30, 1900.
    1901                                         30,855,20655    4,080
    1902                                         37,503,05378    4,945
    1903                                         43,957,37304    5,673
    1904                                         46,469,13224    5,577
    1905                                         50,481,88225    5,812
    1906                                         61,669,75816    7,018
    1907                                         72,217,52764    7,889
    1908                                         71,384,17322    7,573
    1909                                         76,313,32096    7,725
    1910                                         94,989,49033    9,425
    1911                                        104,167,80821   10,072
    1912                                        123,319,54123   11,453
    1913                                        139,395,69998   12,264
    1914                                        129,814,82383   10,978
    1915                                         99,865,20978    7,994
    1916                                        129,481,88574   10,024
    1916                                         76,717,96536  6 months ending
                                                                 Dec. 31, 1916.
    1917 (Calendar year)                        152,389,33500   11,731
    1918                                        157,532,69800   12,125
    1919                                        176,929,06000   13,214
    1920                                        216,641,34930   16,165
    1921                                        193,021,85440   14,357]

[Footnote 766: Mileage, 1901-21:

    1901 (Fiscal year)       7,563
    1902                     7,587
    1903                     7,748
    1904                     8,332
    1905                     8,568
    1906                     8,777
    1907                     9,154
    1908                     9,420
    1909                     9,878
    1910                    10,078
    1911                    10,342
    1912                    10,767
    1913                    11,366
    1914                    11,825
    1915                    12,368
    1916                    12,917
    1916                    12,955
    1917 (Calendar year)    12,990
    1918                    12,993
    1919                    13,389
    1920                    13,402
    1921                    13,444

  Compiled from _C.P.R. Reports_.]

[Footnote 767: _Sessional Papers_, No. 5, 1881, p. 77.]

[Footnote 768: _Ibid._, No. 8, 1882, p. 79.]

[Footnote 769: Freight earnings, 1883-1921:

    1883 (Calendar year)                     $3,755,91500
    1884                                      3,410,36539
    1885                                      4,881,86558
    1886                                      6,112,37989
    1887                                      6,924,13047
    1888                                      8,017,31366
    1889                                      8,852,70239
    1890                                     10,106,64402
    1891                                     12,665,54026
    1892                                     13,330,54019
    1893                                     12,673,07538
    1894                                     11,445,37778
    1895                                     11,877,85195
    1896                                     13,187,56031
    1897                                     15,257,89694
    1898                                     16,231,44493
    1899                                     18,738,88496
    1901 (Fiscal year (six months omitted))  18,983,18551
    1902                                     24,199,42814
    1903                                     28,502,08176
    1904                                     29,235,82104
    1905                                     31,725,29010
    1906                                     39,512,97318
    1907                                     45,885,96816
    1908                                     44,037,59797
    1909                                     48,182,52011
    1910                                     60,158,88703
    1911                                     65,645,22759
    1912                                     79,833,73403
    1913                                     89,655,22333
    1914                                     81,135,29512
    1915                                     60,737,73725
    1916                                     89,654,40519
    1916 (six months)                        51,945,29160
    1917 (Calendar year)                    103,635,79500
    1918                                    110,187,72810
    1919                                    111,064,44168
    1920                                    145,303,39970
    1921                                    128,849,44563

  Compiled from _C.P.R. Reports_.]

[Footnote 770: Freight carried one mile, tons, 1885-1921:

    1885 (Calendar year)                               406,822,166
    1886                                               555,438,159
    1887                                               687,786,049
    1888                                               784,972,511
    1889                                               967,508,450
    1890                                             1,208,014,731
    1891                                             1,391,705,486
    1892                                             1,582,554,352
    1893                                             1,453,367,263
    1894                                             1,313,948,410
    1895                                             1,490,639,847
    1896                                             1,769,958,865
    1897                                             1,955,911,006
    1898                                             2,142,319,887
    1899                                             2,539,171,900
    1901 (Fiscal year (six months omitted))          2,383,633,945
    1902                                             3,247,922,167
    1903                                             3,862,242,993
    1904                                             3,809,801,952
    1905                                             4,155,256,309
    1906                                             5,342,248,625
    1907                                             5,946,779,961
    1908                                             5,865,089,008
    1909                                             6,372,269,174
    1910                                             7,772,012,635
    1911                                             8,062,102,013
    1912                                            10,391,650,965
    1913                                            11,470,001,871
    1914                                            10,821,748,859
    1915                                             7,940,151,342
    1916                                            14,057,685,773
    1916 (six months)                                7,872,405,297
    1917 (Calendar year)                            14,677,957,266
    1918                                            12,885,684,625
    1919                                            11,121,322,012
    1920                                            13,094,508,975
    1921                                            10,087,106,000

  Compiled from _C.P.R. Reports_.]

[Footnote 771: Traffic density, 1885-1921, tons:

    1885 (Calendar year)             93,781
    1886                            124,426
    1887                            138,666
    1888                            158,324
    1889                            192,385
    1890                            217,112
    1891                            241,364
    1892                            261,455
    1893                            229,708
    1894                            207,116
    1895                            231,322
    1896                            273,310
    1897                            297,794
    1898                            320,658
    1899                            362,738
    1901 (Fiscal year)              315,170
    1902                            428,090
    1903                            498,482
    1904                            457,249
    1905                            484,973
    1906                            608,664
    1907                            649,637
    1908                            622,224
    1909                            645,097
    1910                            771,186
    1911                            779,549
    1912                            965,139
    1913                          1,009,150
    1914                            915,158
    1915                            641,991
    1916 (Calendar year)          1,088,308
    1917                          1,129,942
    1918                            991,740
    1919                            830,631
    1920                          1,044,210
    1921                            750,305

  Compiled from _C.P.R. Reports_.]

[Footnote 772: Earnings per freight ton mile, in cents, 1889-1921:

    1889     9
    1890     8
    1891     8
    1892     8
    1893     8
    1894     8
    1895     8
    1896     7
    1897     7
    1898     7
    1899     7
    1901     7
    1902     7
    1903     7
    1904     7
    1905     7
    1906     7
    1907     7
    1908     7
    1909     7
    1910     7
    1911     8
    1912     7
    1913     7
    1914     7
    1915     7
    1916     6
    1917     7
    1918     8
    1919    10
    1920    104
    1921    119

  Compiled from _C.P.R. Reports_.]


  _B._ Passenger Earnings

The character and amount of passenger traffic carried and the passenger
rate policy were factors directly reflected in passenger earnings. The
character of the traffic as related to passenger earnings was largely
the result of the importance of local in comparison with through
traffic, as shown in the relation of the number of passengers carried
one mile to the number of passengers carried. The number of passengers
carried one mile[773] increased from 116,702,980 in 1885 to 253,905,182
in 1889, to 397,417,473 in 1899 and to 1,373,928,588 in 1921. The
importance of through traffic as a factor influencing the number of
passengers carried one mile was evident particularly in relation to
tourist traffic. Fluctuations were dominated largely by periods of
prosperity and of depression which directly affected tourist traffic. Of
more general importance was the expansion of the road, especially the
development of through connexions and the opening of the west. With the
completion of the main line, the establishment of connexions and the
competitive advantages for transcontinental traffic, the number of
passengers carried one mile to 1890 increased more rapidly than the
number of passengers carried. The depression of the following decade
brought a more rapid decline in the number of passengers carried one
mile than in the number of passengers carried, and the recovery, a more
rapid increase. The effects of the Klondike rush of 1898 in an increase
of through traffic and of the number of passengers carried one mile were
evident the following year in a rapid decline in the number of
passengers carried one mile, but in an increase in the number of
passengers carried. This elasticity characteristic of the number of
passengers carried one mile and largely the result of tourist traffic
was illustrated in the depression of 1907-8. Passengers carried
increased in 1908 but passengers carried one mile declined. Again, the
beginning of depression in 1914 brought a decline in passengers carried
one mile but an increase in passengers carried. The difficulties of 1920
produced similar results. Fluctuations, on the other hand, dependent on
periods of prosperity and depression were not of dominant importance.
The development and expansion of the road from 1901 to 1913 was
accompanied by a rapid increase in the number of passengers carried one
mile. Generally the development of through traffic was characteristic of
the expansion of the road, of the completion of through connexions, and
of the opening of the west.

The general increase of through traffic incidental to expansion and the
intensive development of the road were reflected in passenger density, a
function of mileage and passengers carried one mile. Passenger density
increased from 26,902 in 1885 to 50,488 in 1889, to 56,787 in 1899 and
to 102,196 in 1921.[774] The rapid increase in the number of passengers
carried one mile and the slight increase in mileage to 1889 were
reflected in the increase in passenger density and the rapid increase in
mileage in 1890 brought a decline. Passengers carried one mile was
responsible for the rapid increase in the next year, and increase in
mileage for the decline in the two following years. Mileage remained
stationary during the period of depression and passenger density
declined. The period of recovery and particularly the gold rush of 1898
brought a marked increase. From 1899 to 1901 density declined, in the
first year as a result of passengers carried one mile and later as a
result of mileage. During the following period of rapid expansion
terminating in 1913, passenger density, with the exception of the years
of depression 1904 and 1908-9, increased steadily and rapidly and
despite a rapid increase in mileage. During the war a decline in
passengers carried one mile and a relatively stationary mileage brought
a decline in density. The number of passengers carried one mile
explained the increase in 1919 and the decline in 1920 and in 1921.
Passenger density throughout the history of the road generally had shown
a marked increase and though subject to wide fluctuations due to the
elastic character of a portion of the number of passengers carried one
mile it was a significant index of the intensive development of the
road. It was especially significant of the extent to which the
inhospitable area north of Lake Superior had ceased to be a barrier to
communication, and of the expansion of the west.

The importance of through traffic was also evident in earnings per
passenger per mile.[775] From 1885 to 1890 earnings per passenger per
mile declined from 24 to 17 and after considerable fluctuation reached
the latter point again in 1899, but increased to the highest point, 29,
in 1921. The development of through connexions, the influence of
developmental rates, and the expansion of the road in competitive areas
brought a steady reduction from the date of the completion of the main
line to 1893. The depression and consequent decline in through traffic
brought an increase in 1894, but rate wars were disturbing factors. The
Klondike rush brought a rapid decline in 1898, and the falling off in
through traffic in the following year an increase. The decade was
characterized by rate wars, depression, and declines in through traffic.
Fluctuations were the result. The first year of the century brought an
increase, and the two following years a decrease. In 1904 the rate
increased to 18 and at this point remained until 1910, increasing in
1911 to 19 and remaining at that point until 1913. The rapid increase
in through traffic was exceeded by the increase in local traffic. During
the war years, with the exception of a decline in 1916, occasioned by
the increased passenger traffic incidental to the large harvest of that
year, rates increased steadily. The period beginning with the century
was characterized by a general steadiness, as contrasted with the
uncertainties of the previous decade, and reflected the influence of the
Board of Railway Commissioners. The increase during the war period was
partly the result of orders from this body, and partly the result of the
decline of through traffic in proportion to local traffic.

The intensive development of the road, evident in the increasing
prominence of local traffic, bespoke a marked and steady increase in
earnings, through traffic being related more closely to fluctuations.
During the first five months of Government operation of the line to
Winnipeg, passenger earnings totalled $32,530, or $6,506 per month, and
in the remaining period of Government operation, increased to $101,749
or $10,174 per month. The first year of company operation ending on June
30, 1882, and including the mileage of the road in eastern Canada,
brought an increase to $596,825 or $42,630 per month. In 1890 passenger
earnings[776] had increased to $4,526,292. This increase followed the
expansion of the road in eastern Canada, the opening of the west, and
the constant development of through connexions. In 1899 passenger
earnings[777] increased to $7,098,097 and in 1920 to the maximum of
$49,125,739. The decade ending in 1900 was characterized by fluctuations
as the result of rate wars and especially of the depression. Beginning
with recovery after this depression and ending in 1913, with the
exception of slight falling off in 1904 and 1907-8, passenger earnings
increased rapidly and steadily. Decline followed in 1914 and in the war
years to 1916. With higher rates, increase and recovery were evident to
1920. Decline in passenger traffic brought the decline in earnings in
1921. Necessarily passenger earnings were the result of passenger
traffic and passenger rates. The essentially competitive character of
passenger business, the intensive development of the road resulting from
expansion in the west and in the east, and the consequently greater
proportionate increase in local traffic than in through traffic, and the
passenger rates responsible for, and resulting from, this development,
were reflected in passenger earnings. Through traffic essentially
important as evident in the fluctuations was not dominant and declines
were partly offset by the steadying influence of the Board of Railway
Commissioners.

Through traffic was a determining factor in parlour-car and
sleeping-car earnings. These earnings[778] increased from $24,071 in
1883 to $268,097 in 1890 and to $721,006 in 1904. After 1904 statistics
as to this item were included in miscellaneous earnings. The opening of
the main line and the improvement of through connexions were responsible
for the steady increase to 1890 as they were responsible for the
development of through traffic. The importance of the situation in
western Canada, and of immigration to that area, was evident in the
slight increase in 1888 in consonance with the bad harvest of that year
and in the rapid increase of 1893, following the heavy crop of 1892. The
decline during the years of depression accompanied the decline in
through traffic. A general increase in through traffic followed with
recovery, and with the rapid increase in 1898 occasioned by the rush to
the Klondike. A slight relapse from this hectic year led to a gradual
and steady increase to 1904.

[Footnote 773: Passengers carried one mile, 1885-1921:

    1885 (Calendar year)                                116,702,980
    1886                                                150,466,149
    1887                                                174,687,802
    1888                                                212,766,866
    1889                                                253,905,182
    1890                                                274,940,328
    1891                                                320,659,837
    1892                                                328,838,647
    1893                                                334,307,590
    1894                                                260,804,129
    1895                                                260,317,256
    1896                                                263,607,453
    1897                                                317,997,951
    1898                                                430,493,139
    1899                                                397,417,743
    1901 (Fiscal year (six months omitted))             419,353,393
    1902                                                534,777,153
    1903                                                635,855,533
    1904                                                677,940,496
    1905                                                736,774,844
    1906                                                870,339,686
    1907                                              1,064,564,999
    1908                                              1,052,010,356
    1909                                              1,071,149,528
    1910                                              1,355,266,088
    1911                                              1,457,332,937
    1912                                              1,626,577,067
    1913                                              1,784,683,370
    1914                                              1,587,368,110
    1915                                              1,164,488,630
    1916                                              1,255,561,198
    1916 (six months)                                   850,190,050
    1917 (Calendar year)                              1,480,023,872
    1918                                              1,280,533,734
    1919                                              1,776,740,850
    1920                                              1,732,050,259
    1921                                              1,373,928,588

  Compiled from _C.P.R. Reports_.]

[Footnote 774: Passenger density (No.), 1885-1921:

    1885 (Calendar year)              26,902
    1886                              33,706
    1887                              35,219
    1888                              42,913
    1889                              50,488
    1890                              49,414
    1891                              55,612
    1892                              54,669
    1893                              52,838
    1894                              41,110
    1895                              40,396
    1896                              40,705
    1897                              48,416
    1898                              64,435
    1899                              56,787
    1901 (Fiscal year)                55,448
    1902                              70,485
    1903                              82,067
    1904                              81,365
    1905                              85,991
    1906                              99,161
    1907                             116,295
    1908                             111,607
    1909                             108,437
    1910                             134,470
    1911                             140,914
    1912                             151,070
    1913                             157,019
    1914                             134,238
    1915                              94,153
    1916                              97,202
    1917 (Calendar year)             113,935
    1918                              98,555
    1919                             132,701
    1920                             129,230
    1921                             102,196

  Compiled from _C.P.R. Reports_.]

[Footnote 775: Earnings per passenger per mile, in cents, 1885-1921:

    1885 (Calendar year)                24
    1886                                21
    1887                                19
    1888                                17
    1889                                17
    1890                                17
    1891                                17
    1892                                16
    1893                                16
    1894                                18
    1895                                16
    1896                                18
    1897                                18
    1898                                15
    1899                                17
    1901 (Fiscal year)                  19
    1902                                17
    1903                                17
    1904                                18
    1905                                18
    1906                                18
    1907                                18
    1908                                18
    1909                                18
    1910                                18
    1911                                19
    1912                                19
    1913                                19
    1914                                20
    1915                                20
    1916                                19
    1917 (Calendar year)                20
    1918                                24
    1919                                26
    1920                                28
    1921                                29

  Compiled from _C.P.R. Reports_.]

[Footnote 776: Passenger earnings, 1882-90:

    1882         $596,82478
    1883        1,229,90427
    1884        1,562,21398
    1885        2,479,89421
    1886        2,768,84117
    1887        3,367,80058
    1888        3,536,79615
    1889        4,127,31941
    1890        4,526,29220

  Compiled from _Government Reports_.]

[Footnote 777: Passenger earnings, 1891-1921:

    1891 (Calendar year)                       $5,459,78946
    1892                                        5,556,31640
    1893                                        5,656,20490
    1894                                        4,840,41233
    1895                                        4,683,13774
    1896                                        4,820,14330
    1897                                        5,796,11512
    1898                                        6,538,58958
    1899                                        7,098,09670
    1901 (Fiscal year (six months omitted))     8,083,36960
    1902                                        9,359,52200
    1903                                       11,001,97371
    1904                                       12,418,41933
    1905                                       13,583,05211
    1906                                       16,041,61552
    1907                                       19,528,87809
    1908                                       19,900,43201
    1909                                       20,153,00083
    1910                                       24,812,02086
    1911                                       28,165,55641
    1912                                       31,812,20782
    1913                                       35,545,06163
    1914                                       32,478,14658
    1915                                       24,044,28283
    1916                                       24,690,65219
    1916 (six months)                          15,988,42421
    1917 (Calendar year)                       30,238,98600
    1918                                       30,837,25389
    1919                                       46,182,15112
    1920                                       49,125,73888
    1921                                       41,565,88499

  Compiled from _C.P.R. Reports_.]

[Footnote 778: Parlour- and sleeping-car earnings, 1883-1904:

    1883 (Calendar year)                     $24,07100
    1884                                      43,49260
    1885                                      73,52355
    1886                                     118,65899
    1887                                     176,82639
    1888                                     187,69413
    1889                                     239,10314
    1890                                     268,09676
    1891                                     303,54509
    1892                                     331,20273
    1893                                     380,47010
    1894                                     331,71969
    1895                                     302,63763
    1896                                     303,68848
    1897                                     361,77738
    1898                                     455,34507
    1899                                     441,64754
    1901 (Fiscal year (six months omitted))  472,18191
    1902                                     530,76489
    1903                                     637,64205
    1904                                     721,00614

  Compiled from _C.P.R. Reports_.]


  _C._ Miscellaneous Earnings

Other earnings, partly influenced by the passenger situation and partly
by the freight situation, fluctuated accordingly. Express earnings[779]
were presented from 1889 to 1904, increasing during the period from
$242,807 to $1,062,340. Without exception the increase persisted
throughout the period, though it was less rapid during the years of
depression and more rapid during years of recovery. This increase was
eloquent of the inelastic character of the express business and of the
continued expansion of the road. Miscellaneous earnings, including
earnings from telegraph, grain elevators, the steamship service and
other sundry sources, are difficult to analyse because of changes in
accounting practice. From 1882 to 1890 this item[780] increased from
$19,731 to $1,090,217, and in 1904[781] to $2,350,282. In 1905, with the
inclusion of express earnings and parlour- and sleeping-car earnings, it
increased to $4,469,544 and in 1921 reached the maximum of $20,713,980.
Fluctuations were rapid and explainable largely on the basis of changes
such as those incidental to accounting. The marked increase in 1885 was
due to the addition of the boat service on the lakes and the decline in
the following year to the completion of the main line and the
transportation of traffic by rail. Changes of a similar character
doubtless explain the marked decline in 1889 and the marked increase in
1890. Government reports which reveal these wide fluctuations differ
from the company reports which point to a steady increase with the
exception of the decline in 1890. Specific causes of fluctuations are
difficult to discover. Steamship earnings[782] were dominated by
considerations similar to those which dominate freight and passenger
earnings and with the expansion of steamship lines became increasingly
important. Earnings from grain elevators were closely related to the
harvest situation. Hotel earnings were subject to general conditions
influencing through traffic and tourist traffic. With the depression,
miscellaneous earnings declined rapidly. The importance of through
passenger traffic was evident in the rapid increase in 1898 and in the
slight decline in the following year. With the beginning of the century
a rapid increase followed. The inclusion of express and parlour-and
sleeping-car earnings in miscellaneous earnings after 1904 renders the
explanation of fluctuations more difficult. To 1913 the increase was
rapid and steady, which was generally the case with freight and
passenger earnings, but in 1914 the increase continued and freight and
passenger earnings declined. During the war years, with the exception of
1918 in which miscellaneous earnings declined, fluctuations were
parallel. Though factors influencing the movements of freight and
passenger earnings generally influenced miscellaneous earnings, other
less elastic factors were in evidence.

[Footnote 779: Express earnings, 1889-1904:

  1889 (Calendar year)                    $242,80670
  1890                                     260,26843
  1891                                     288,63325
  1892                                     302,25934
  1893                                     333,97539
  1894                                     342,47229
  1895                                     387,60593
  1896                                     460,20190
  1897                                     530,74965
  1898                                     615,63143
  1899                                     663,96052
  1901 (Fiscal year (six months omitted))  691,20856
  1902                                     737,10782
  1903                                     909,09802
  1904                                   1,062,33984

  Compiled from _C.P.R. Reports_.]

[Footnote 780: Miscellaneous earnings, 1882-90:

    1882      $19,73082
    1883       53,50295
    1884       86,85170
    1885      295,78746
    1886      288,30164
    1887      540,22089
    1888    1,067,87035
    1889      243,84694
    1890    1,090,21722

  Compiled from _Government Reports_.]

[Footnote 781: Miscellaneous earnings, 1891-1921:

    1891 (Calendar year)                      $1,007,48947
    1892                                       1,405,11053
    1893                                       1,422,47518
    1894                                       1,294,05646
    1895                                       1,149,68744
    1896                                       1,302,45887
    1897                                       1,499,78507
    1898                                       1,687,99155
    1899                                       1,669,06335
    1901 (Fiscal year (six months omitted))    1,973,45262
    1902                                       2,020,83246
    1903                                       2,248,67224
    1904                                       2,350,28177
    1905                                       4,469,54356
    1906                                       5,408,16149
    1907                                       6,079,74437
    1908                                       6,706,38809
    1909                                       7,198,97767
    1910                                       9,226,83699
    1911                                       9,524,29024
    1912                                      10,814,04184
    1913                                      13,273,73206
    1914                                      15,068,66722
    1915                                      12,693,85614
    1916                                      13,752,26093
    1916 (six months)                          8,030,86120
    1917 (Calendar year)                      18,514,55400
    1918                                      16,513,15600
    1919                                      18,199,13414
    1920                                      20,713,97958
    1921                                      19,667,26522

  Compiled from _C.P.R. Reports_.]

[Footnote 782: The Canadian Pacific Ocean Steamship Company was
organized as a separate company in 1915 and net earnings were
transferred to special income account.]


  _D._ Mail Earnings

Earnings from mails were significant of the place of the Canadian
Pacific in the development of Canada. Mail and sundry earnings increased
from $8,174 during the first five months of Government operation to
$25,497 in the next ten months. Mail and express earnings during the
first year of company operation totalled $39,274 and increased[783] to
$601,996 in 1890. Mail earnings increased to $618,385 in 1899 and to
$2,939,259 in 1921.[784] To 1890 the increase was steady and consistent
with the expansion of the road. The elections brought a rapid increase
in 1891 and were followed by a decline in the next year. During the
period of depression the increase was persistent though slow, receiving
considerable stimulus in the election of 1896. The year following the
election brought a decline. From that year to 1915 mail earnings
constantly increased--slowly, at first, but with acceleration in the
later years. During the war, 1915 brought a marked increase, 1916 a
slight decline, 1917 another marked increase and 1918 a heavy decline.
The overseas situation, elections and Government regulations involving
taxation and other restrictions were largely responsible. The increase
of the last two years is significant of general recovery. The general
expansion had been occasioned largely by the expansion of the road and
by the expansion of Canada, as well as by postal regulations which have
made this expansion more directly contributory to mail earnings.

[Footnote 783: Mail and express earnings, 1882-90:

    1882           $39,27373
    1883            95,01259
    1884           137,24157
    1885           254,46226
    1886           251,49238
    1887           457,58098
    1888           486,58540
    1889           550,33090
    1890           601,99573

  Compiled from _Government Reports_.]

[Footnote 784: Mail earnings, 1891-1921:

    1891 (Calendar year)                       $516,09845
    1892                                        483,92258
    1893                                        496,13449
    1894                                        498,12916
    1895                                        540,11618
    1896                                        607,54398
    1897                                        603,21049
    1898                                        609,97457
    1899                                        618,38519
    1901 (Fiscal year (six months omitted))     651,80535
    1902                                        655,40747
    1903                                        657,90526
    1904                                        681,22412
    1905                                        703,89648
    1906                                        707,00797
    1907                                        722,93702
    1908                                        739,57559
    1909                                        778,82235
    1910                                        791,24545
    1911                                        832,73397
    1912                                        859,55754
    1913                                        921,68292
    1914                                      1,132,71491
    1915                                      1,389,33356
    1916                                      1,384,56743
    1916 (six months)                           753,38855
    1917 (Calendar year)                      1,429,40461
    1918                                      1,354,57091
    1919                                      1,483,33226
    1920                                      1,498,23114
    1921                                      2,939,25856

  Compiled from _C.P.R. Reports_.]




  VIII

  Expenses

  _A._ Indices of Efficiency


Gross earnings, including earnings from freight and passenger traffic
and from other sources of less importance, were largely the result of
the expansion of traffic and of the rate situation. These factors
depended upon in part, and determined in part, the efficiency of the
road. Efficient operation was to a large extent responsible for the
expansion of the road, and the expansion of the road made possible
efficient operation. Rates were dependent upon efficiency of operation,
and efficiency of operation was dependent upon rates. A partial index of
efficiency was given in train mile earnings. Earnings per train
mile[785] to 1890 were subject to unusual fluctuations, decreasing from
1649 in 1882 to 1391 in 1890. These earnings[786] increased to 158
cents in 1899 and to 489 in 1921. As a function of total train mileage
and of gross earnings, train mile earnings fluctuated in accordance with
fluctuations in these items. The rapid increase in total mileage from
1882 to 1884, proportionate to the increase in gross earnings, brought a
decline in train mile earnings, and the rapid increase in gross earnings
during the next two years, proportionate to the increase in train
mileage, brought an increase. From 1886 to 1888 the increase in train
mileage brought a decline, and to 1890 the increase in earnings brought
an advance. In the following decade a further increase in earnings to
1892 brought a further increase in train mile earnings. During the years
of depression to 1894 the movement of earnings and of train mileage was
parallel, train mile earnings remaining the same. A decline in earnings
in 1895 caused a movement downwards. Throughout the remainder of the
decade, with the exception of 1898, in which year a greater
proportionate increase in train mileage brought a decline, train mile
earnings recovered rapidly. The advance continued to 1921, with the
exception of declines in the depressing years of 1904, 1908 and 1915.
The increase during the war period, with the exception of 1915, was
largely the result of increased earnings the result of increased rates.
Changes in the rate situation in the period following the depression of
the nineties was to some extent, at least, the result of more efficient
operation.

The adequacy of train mile earnings as an index of efficiency may be
better understood from an analysis of freight train mile earnings and
passenger train mile earnings. Freight train[787] mile earnings, as a
function of freight train mileage and freight earnings, in the period
ending in 1890, declined with considerable fluctuation from 1633 in
1882 to 1624 in 1890. They increased[788] from 133 in 1890 (Company
reports) to 176 in 1899, and to 684 in 1921. Freight train mile
earnings declined in 1883, advanced to 1886, declined again to 1888, and
increased in the last two years. The rapid expansion of the road in 1883
in eastern Canada and in the west brought a rapid increase in train
mileage and a consequent reduction of freight train mile earnings. In
1884 the increase in mixed train mileage offset a decline in freight
train mileage, and contributed to an increase in freight train mile
earnings, which continued to 1886. Though train mileage was adjusted in
part to traffic--all evidence of efficient operation--the increase had a
less favourable aspect because of the increase in mixed train mileage.
The expansion of mileage in the following years and the bad harvest of
1888 brought a decline which culminated in the latter year. In the years
to 1894 (with the exception of 1893 when earnings declined) traffic and
earnings surpassed mileage--evidence that freight was handled more
efficiently during a period of expansion. Inability to adjust train
mileage to traffic was characteristic of the years of depression with
the decline in train mile earnings from 1894 to 1896. The recovery
during the remainder of the decade, which continued throughout the
history of the road, with the exception of 1898, in which year through
traffic increased, of 1904, of 1908 and of 1915, was followed by a rapid
increase in train mile earnings. Over the whole period freight earnings
increased more rapidly than freight train mileage, and only during years
of depression was it found difficult to adjust freight train mileage to
freight demands represented in earnings. Imperfect as freight train mile
earnings were as an index of efficient operation because of changes in
the rate situation and because of increased freight rates during the
war, the general increase warrants the conclusion that efficiency had
rapidly improved, and that the company within reasonable limits was
successful in adjusting train mileage to the traffic demands. The
difficulties of adjustment were alleviated in part by the intensive
development of the road which made it less dependent upon grain as the
chief source of revenue. Bad harvests became less serious. Through
traffic being less remunerative was less dangerous in its fluctuations.
Depressions and their more serious effects on through traffic became
less disastrous, and rendered train mileage more amenable to the
company's control. Moreover, a period of rapid expansion was of decided
advantage in this adjustment. Freight train mile earnings were to a
large extent an index of the constantly improving efficiency of the road
and of changing conditions which made greater efficiency possible.

Passenger train mile earnings, because of the more inelastic character
of the passenger business, were less amenable to control. Earnings[789]
per passenger train mile decreased from 1877 in 1882 to 992 in 1890
and to 95[790] in 1899, and increased to the maximum of 281 in 1920.
The earlier period was characterized by unusual fluctuations. The rapid
increase in train mileage in 1883, as a result of expansion in
competitive territory in eastern Canada, was not accompanied by an
equally rapid increase in earnings. Improved connexions in the
following year brought a more rapid increase in earnings, and rapid
expansion in 1885 a more rapid increase in train mileage. Bad harvest
conditions due to the early frost of 1885 and the increase in mixed
train mileage led to a decline in passenger train mileage in 1886 which,
with a slight increase in earnings, brought an increase in train mile
earnings. The rapid increase in passenger train mileage in the two
following years occasioned by the opening of the main line and the
decrease in mixed train mileage brought a decline. From 1888 to 1890
expansion of mileage was less rapid, and train mile earnings increased.
The uncertain character of the period incidental to rapid expansion
rendered adjustment of train mileage to traffic difficult. The movement
characteristic of the last two years of the period continued in 1891. In
1892 increase in passenger earnings paralleled increase in train
mileage, and train mile earnings remained stationary. During the
depression traffic declined, and the inability to adjust passenger train
schedules to the situation brought a decline in mileage earnings--much
more marked than in freight train mile earnings in the same period.
Recovery began in 1896, and with the exception of 1898 and of the years
of depression, 1905 and 1908, continued until 1912. The years of
depression and the decline in traffic, especially in through traffic,
and the inelasticity of passenger service, rendered the decline of
passenger train mile earnings more serious than in the case of freight
train mile earnings. The difficulty of adjusting passenger schedules to
the demand, enhanced by the more serious character of overhead charges,
was particularly evident in the war years. The decline beginning in 1913
continued to 1915. Higher rates were responsible for the rapid increase
in the later years. The period from 1896 to 1913 was generally
characterized by increased efficiency, though the increase in train mile
earnings was partly the result of a proportionate increase in local
traffic, the disappearance of rate wars, and the influence of the Board
of Railway Commissioners. Passenger train mile earnings gave less
evidence of efficiency than freight train mile earnings. Regulations
were more stringent, overhead charges were more serious, and competition
of more consequence. Passenger service was more dependent on densely
populated areas, in which competition was more severe. The inelasticity
of passenger schedules incidental to competition, and to public demands
for convenience and service was a handicap making adjustment of
passenger train mileage to passenger traffic unusually difficult.

[Footnote 785: Earnings per train mile, 1882-90:

               Cents
    1882       1649
    1883       1038
    1884        980
    1885       1296
    1886       1766
    1887       1548
    1888       1191
    1889       1224
    1890       1391]

[Footnote 786: Earnings per train mile, 1891-1921:

                            Cents
    1891 (Calendar year)     141
    1892                     147
    1893                     144
    1894                     144
    1895                     141
    1896                     145
    1897                     149
    1898                     148
    1899                     158
    1901 (Fiscal year)       169
    1902                     177
    1903                     190
    1904                     181
    1905                     195
    1906                     207
    1907                     225
    1908                     217
    1909                     218
    1910                     247
    1911                     255
    1912                     262
    1913                     268
    1914                     272
    1915                     268
    1916                     283
    1917 (Calendar year)     336
    1918                     384
    1919                     417
    1920                     463
    1921                     489]

[Footnote 787: Freight train mile earnings, 1882-90:

                 Cents
    1882         1633
    1883          919
    1884         1263
    1885         1401
    1886         2164
    1887         1940
    1888         1336
    1889         1408
    1890         1624

  Compiled from _Government Reports_.]

[Footnote 788: Freight train mile earnings, 1890-1921:

                           Cents
    1890 (Calendar year)   133
    1891                   141
    1892                   153
    1893                   151
    1894                   161
    1895                   158
    1896                   148
    1897                   155
    1898                   154
    1899                   176
    1901 (Fiscal year)     182
    1902                   205
    1903                   213
    1904                   211
    1905                   219
    1906                   229
    1907                   252
    1908                   247
    1909                   256
    1910                   292
    1911                   302
    1912                   311
    1913                   324
    1914                   335
    1915                   359
    1916                   357
    1917 (Calendar year)   409
    1918                   493
    1919                   500
    1920                   550
    1921                   684

  Compiled from _C.P.R. Reports_.]

[Footnote 789: Passenger train mile earnings, 1882-90:

               Cents

    1882       1877
    1883       1312
    1884       1472
    1885       1408
    1886       1722
    1887       1229
    1888        973
    1889        984
    1890        992]

[Footnote 790: Passenger train mile earnings, 1891-1921:

                              Cents

    1891 (Calendar year)       95
    1892                       95
    1893                       92
    1894                       82
    1895                       82
    1896                       82
    1897                       92
    1898                       91
    1899                       95
    1901 (Fiscal year)        104
    1902                      113
    1903                      132
    1904                      140
    1905                      138
    1906                      144
    1907                      157
    1908                      158
    1909                      142
    1910                      153
    1911                      161
    1912                      162
    1913                      159
    1914                      150
    1915                      133
    1916                      135
    1917 (Calendar year)      166
    1918                      185
    1919                      259
    1920                      281
    1921                      219]


  _B._ Total Expenses.

Increased efficiency reflected in the increase in freight train mile
earnings, and, to a less extent, in passenger train mile earnings was
immediately reflected in expenses. During the first five months of
operation on the part of the Government, working expenses[791] totalled
$78,892, a monthly average of $15,778. In the next ten months these
expenses[792] increased to $236,945, a monthly average of $23,694. The
difficulties of operation incidental to the opening of the line were
evident in the number of accidents. In the first five months[793] on 161
miles of road out of a total of eighteen accidents, fifteen were due to
bad track. Under company[794] operation expenses increased from
$1,148,299 in 1882 to $9,424,166 in 1890, to $16,999,873 in 1899,[795]
and to the maximum of $183,488,305 in 1920.

The general trend and the fluctuations of total expenses depended upon
the changes in constituent items. Though difficulties incidental to
obtaining early statistics and to reclassification of accounts are a
decided handicap to thorough analysis, general conclusions may be
suggested. In direct relation to the amount of traffic carried were
expenses incurred in conducting transportation. In the period preceding
1890,[796] according to Government reports, "engine repairs" increased
from $378,116 in 1882 to $3,314,817 in 1890. The item "motive power,"
according to company reports, increased to $8,989,111 in 1903.[797] In
the following years this item was included in "conducting
transportation." In the earlier period fluctuations were due to several
causes. The general increase was largely the result of expansion and
increased train mileage. The increase in "engine repairs" expenses in
1883 and 1884 followed the increase in total train mileage. The decline
of these expenses in 1885 was due largely to the slight increase in
train mileage, to the rapid increase in the number of locomotives, and
to the improvement of types. In 1886, on the other hand, a slight
decline in train mileage, but a continued increase in locomotives,
brought an increase in expenses, and an increase in train mileage in the
following two years was accompanied by a continued increase in expense.
A marked increase in locomotives in 1889 again brought a decline. From
1890 to 1892 increased train mileage brought an increase in "motive
power" expense. A decline in freight train mileage in 1893 failed to
offset the effects of an increase in passenger train mileage, and
expenses increased despite a decrease in total train mileage. In the
following year a marked decline of total train mileage brought a decline
in expenses. In 1895 the influence of passenger train mileage, which
declined with an increase in freight train mileage and in total train
mileage, brought a decline in expenses. With the exception of 1901, in
which again an increase in passenger train mileage and a decline in
freight train mileage and in total train mileage was accompanied by an
increase in expense, an increase in total train mileage brought an
increase in expense to 1903. Throughout the whole period to 1903 the
general increase in train mileage occasioned an increase in "engine
repairs" or in "motive power" expense. Fluctuations followed passenger
train mileage rather than freight train mileage. The inelasticity of
passenger service was apparently a determining factor in the
fluctuations of this item of expense, though the trend throughout the
period was dominated by the general traffic situation and consequently
by freight train mileage and by the general increase in the average
train load.

Expenses headed "conducting transportation" appear only under the
company's classification, and include, after 1904, expenses classified
as "motive power." From 1885 to 1890 this item[798] of expense increased
from $1,225,803 to $2,576,726. In 1899 it had increased to $4,256,097
and in 1920 to a maximum of $86,608,611. To 1892 the increase in the
amount of freight carried one mile and in the number of passengers
carried one mile was accompanied by an increase in "conducting
transportation" expenses. In 1893 a decline in the amount of freight
carried one mile and an increase in the number of passengers carried one
mile, and the decline in freight train mileage and the increase in
passenger train mileage already noted, brought an increase in
"conducting transportation" expense as in "motive power" expense. In the
following year a general decline in traffic brought a general decline in
expense, but in 1895, as with "motive power" expense, "conducting
transportation" expense again declined with a decline in passenger train
mileage and in the number of passengers carried one mile and with an
increase in freight train mileage, total train mileage and the amount of
freight carried one mile. With the exception of 1914 and 1915 the
increase beginning in 1896 continued to 1920. In 1901 with "conducting
transportation" expense as with "motive power" expense, the increase in
passenger train mileage and in the number of passengers carried one mile
offset the decrease in freight train mileage, total train mileage and
the amount of freight carried one mile, and brought an increase. With
the exception of this year, fluctuations of "conducting transportation"
expense paralleled the fluctuations of total train mileage to 1916. In
the later war years[799] as a result of rising prices a decline in the
total train mileage in 1918 was accompanied by an increase in
"conducting transportation" expenses, and the increase in train mileage
to 1920 by a more rapid increase in these expenses. A decline in train
mileage and in wages in 1921 brought a decline in expenses. Generally
"conducting transportation" expenses followed the increase of traffic
incidental to the expansion of the road. Transportation expenses
increased less rapidly, and fluctuations upward were less marked than in
train mileage, increased efficiency being largely responsible.
Expanding traffic was handled more efficiently, and with a greater
reduction of overhead charges. On the other hand, because of overhead
charges, a decline in traffic was not accompanied by a proportionate
decline of expenses, as was evident in 1914 and 1915. In 1904 and in
1908 expenses increased more rapidly than total train mileage. Freight
train mileage actually declined in the latter year. The decline in
through traffic during years of depression occasioned a greater decline
in train mileage than in expenses, though more particularly in relation
to freight train mileage than to passenger train mileage. The general
movement of "conducting transportation" expenses and "motive power"
expenses as the result of the expansion of the road was characteristic
of "traffic" expense. This classification has been made since 1908. It
increased[800] from $1,734,086 in that year to $6,289,622 in 1921, and
was not relatively important. Comprising chiefly wages and salaries of
passenger and freight agents and expenses of advertising agencies the
increase to 1913 paralleled closely the increase in mileage and in
traffic to that year. The increase in 1914, despite a decline in
traffic, and the marked decrease in the two following years despite an
increase of traffic in 1916 made it apparent that though in the long run
these expenses were largely determined by the demands of traffic during
short periods, fluctuations were the result of a variety of factors,
including the rise in prices, the rise in wages, and the control and
policy of the company. Fluctuations in later years corresponded with
fluctuations in train mileage and in traffic, but in 1921 these expenses
increased with a decline in traffic.

Parlour and sleeping-car expenses were related to the movement,
especially of through passenger traffic. These expenses increased,[801]
from $24,099 in 1885 to $64,096 in 1890, to $85,582 in 1899, and to a
maximum of $2,492,641 in 1920. In the years immediately following the
completion of the main line, the opening of the west occasioned a rapid
increase in immigration, in through traffic and in parlour and
sleeping-car expenses. The dependence of these expenses on this movement
brought a rapid increase to 1893, with the exception of a decline in
1889 due to the bad harvest of the previous year. The relation of
parlour and sleeping-car expenses to through traffic and the decline of
this traffic during a period of depression occasioned a decrease in 1894
and 1895. The recovery and the stimulus of the Klondike rush in 1898 led
to a rapid increase in that year, and was followed by a decline in 1899.
Following the expansion of the road these expenses increased to
1914--the rate of increase falling off in 1904. Consistently with the
decline of tourist and through traffic due to the war situation they
declined rapidly to 1916 and gained only slightly in 1917. The rise in
prices as with other expenses and the recovery after the war brought
about the rapid increase from 1918 to 1920. A decline in traffic and
prices led to the decline in these expenses in 1921. Generally this item
of expense was dependent on the expansion of the road and the
establishment of through connexions, and particularly it was closely
related to through traffic characteristic of periods of prosperity.

Expenses incidental to lake and river steamship traffic increased[802]
from $50,794 in 1889 to $417,045 in 1899 and to a maximum of $1,492,991
in 1920. These expenses were determined largely by the number of vessels
owned by the company, and by the increasing traffic which made possible
expansion in that direction. With the acquisition of new boats these
expenses increased very rapidly to 1891. This was followed by a slight
decline to 1894, and the general increase in steamship business brought
an increase to 1896. The acquisition of steamers in British Columbia
territory caused the rapid jump of over 100 per cent. in 1897. Increased
traffic and extension of the service brought a continuous increase to
1904. The depression occasioned a slight decline to 1906. Further
extension of service stimulated the recovery beginning in 1907, and in
1914 expenses had more than doubled in seven years. A decline in 1915,
accompanying the general decline of traffic in that year, was followed
by a continued increase from 1917 to 1920, partly the result of recovery
from the war period but largely the result of characteristic rising
prices. To some extent these expenses were influenced by the varying
navigation seasons and by periods of depression, but generally the
expansion of the company and the improvement of its through connexions
on the extension of steamship service were dominant factors.

General expenses increased,[803] according to Government reports, from
$436,360 in 1882 to $3,581,282 in 1890, and, according to company
reports,[804] from $950,754 in 1890 to $1,680,933 in 1899, and to
$9,460,681 in 1921. The rapid increase of 1887 and 1888 in other items
of expense was characteristic of this item. This increase continued to
1893, and was followed by a decline to 1895, the years of depression,
and by rapid recovery to 1899. In 1901 the decreased freight train
mileage and total train mileage were accompanied by a decline in general
expense. Passenger mileage, which dominated "motive power" expense and
"conducting transportation" expense in that year and occasioned an
increase in those items, was not dominant in general expense. On the
other hand, the decline in 1904 of general expense was accompanied by an
increase in freight carried, in freight train mileage and in total train
mileage. The decline in the amount of freight carried one mile was
significant but not dominant, and the marked decline of general expense
in that year suggests improved efficiency and reduction on the part of
the company of constituent items of general expense, as salaries of
officers and clerks, cost of general supplies, insurance and general
administration. A decline in freight train mileage, in freight carried
and in freight carried one mile in 1908 occasioned a decline in general
expense. In 1914 general expense increased with traffic expense, despite
a decrease in freight train mileage, in passenger train mileage and in
freight and passenger traffic--a result of the difficulty of adjusting
these expenses to the rapid increase in traffic culminating in the
preceding year. In the remaining years of the period general expenses
fluctuated with other items of expense, rising rapidly toward the end
with the rise in prices and with the inclusion and increase of
taxes.[805] General expenses were dependent in the long run on the
expansion of the road. Fluctuations were the result of increasing
efficiency, of minor traffic fluctuations and of the company's control.

As in other items of expense, "car repairs" was dependent generally on
the traffic situation. This expense increased, according to Government
reports[806] from $56,883 in 1882 to $521,824 in 1890, and, according
to company reports,[807] under the classification "maintenance of cars"
to $1,295,282 in 1899 and under the classification "maintenance of
equipment" after 1904 to a maximum of $46,350,793 in 1920. In the first
period, as a result of the expansion of the road, "car repairs"
increased consistently to 1888. In 1889 the rapid increase in equipment
and the slight increase in train mileage brought a decline. An increase
beginning in 1890 continued to 1892, and was followed by a rapid decline
in 1893 as a result of a decrease in traffic. With slight additions to
the number of cars and a continued decline in traffic, "maintenance of
cars" increased slightly in 1894. The general difficulties of the period
culminating in 1895 and the consequent economies practised brought a
marked decrease in that year, despite a slight increase in traffic. An
increase began in 1896, and with the general expansion of the road
continued rapidly to 1904. The increase of over 100 per cent. in that
year was the result of the change of classification to "maintenance of
equipment." This item increased to 1911, in which year consistent
additions of equipment and a slight falling off in traffic brought a
decline. During the remainder of the period, fluctuations paralleled
fluctuations in traffic, and with other items of expense increased
rapidly from 1917 to 1920 and declined in 1921. The general movement of
maintenance of equipment expense followed closely the movement of
traffic.

"Maintenance of way and structures" was more generally related to the
policy of the company and more generally subject to the company's
control. "Maintenance expense," according to Government reports,
increased from $276,941 in 1882 to $2,006,237 in 1890,[808] and
"maintenance of way and structures," according to the company's
reports,[809] to $3,488,254 in 1899, and to a maximum of $32,573,927 in
1920. In the earlier period, with the expansion of the road, maintenance
expenses increased steadily to 1889. The decline in 1890, in spite of an
increase in traffic, was partly the result of the anxiety of the company
to secure a favourable reserve against the exhaustion in 1893 of the
funds deposited with the Government as a guarantee of dividends, and the
decline in 1895 was partly the result of the difficult financial
situation of the company during the period of depression, though
warranted in part by the decline in traffic of the preceding year. With
recovery, maintenance expenses increased steadily from 1896 to 1908. The
depression in 1907 and the consequent decline in gross earnings
occasioned a slight decline in 1909. The importance of traffic was
reflected in the parallel fluctuations of maintenance expenses and other
items of expense more generally dominated by traffic. Maintenance of way
per mile--the resultant of mileage and maintenance of way and
structures--illustrated the general movement of maintenance expenses
more strikingly. Maintenance of way per mile, according to Government
reports, declined[810] from $455 in 1882 to $394 in 1890, and, according
to company reports,[811] increased to $498 in 1899 and to a maximum of
$2,430 in 1920. As a result of the rapid increase in mileage,
maintenance expenses per mile decreased rapidly in 1883 and slightly in
1885, and in the remaining years to 1889 increased. In 1890 the decline
in maintenance expenses and the increase in mileage brought a marked
decrease in maintenance expenses per mile. In 1892 increasing mileage
brought a decrease. In 1895 a decrease in maintenance expenses was
largely responsible for decline. In 1908 increasing mileage brought a
decline in maintenance expense per mile. In 1909 the same factor with a
decline in maintenance expenses occasioned a rapid decrease. Again,
increasing mileage brought a decline in maintenance expenses per mile in
1913. The rapid decline of maintenance expenses to 1915 resulted in a
more rapid decline of expenses per mile. Maintenance expenses occasioned
the increase in maintenance expenses per mile during the remainder of
the period with the exception of 1917, in which increased mileage
brought a decline. Maintenance of way and structure, in the general
increase, was the result of the expansion of the road, and in
fluctuations was to some extent dominated by the financial policy of the
company.

Commercial telegraph increased[812] from $50,619 in 1886 to $241,758 in
1890, to $489,808 in 1899, and to $2,852,416 in 1918. The rapid increase
of the telegraph system and the increase in traffic occasioned the
steady increase of the early years to 1892. A decline followed to 1895
with the exception of a slight increase in 1894. An increase began in
1896 and continued steadily to 1913 as a result of the general expansion
characteristic of the period. Decline beginning in 1914 continued in the
war years to 1916. With rising prices these expenses increased to 1918.
Though relatively unimportant these expenses were largely dominated by
the general movement of traffic.

[Footnote 791: _Sessional Papers_, No. 5, 1881, p. 77.]

[Footnote 792: _Ibid._, No. 8, 1882, p. 79.]

[Footnote 793: _Ibid._, No. 5, 1881, p. 84.]

[Footnote 794: Total expenses, 1882-90:

    1882      $1,148,29934
    1883       3,953,46861
    1884       4,747,77742
    1885       4,557,51973
    1886       5,633,25132
    1887       7,299,04516
    1888       9,034,36027
    1889       8,997,31205
    1890       9,424,16645

    Compiled from _Government Reports_.]

[Footnote 795: Total expenses, 1891-1921:

    1891 (Calendar year)  $12,231,43611
    1892                   12,989,00421
    1893                   13,220,90139
    1894                   12,328,83863
    1895                   11,460,08588
    1896                   12,574,01510
    1897                   13,745,75876
    1898                   15,663,60551
    1899                   16,999,87277
    1900 (Fiscal year)      8,889,85106 (Six months ending June 30, 1900)
    1901                   17,849,52041
    1902                   23,417,14137
    1903                   28,120,52726
    1904                   32,256,02721
    1905                   35,006,79329
    1906                   38,696,44553
    1907                   46,914,21883
    1908                   49,591,80770
    1909                   53,357,74806
    1910                   61,149,53446
    1911                   67,467,97764
    1912                   80,021,29840
    1913                   93,149,82583
    1914                   87,388,89615
    1915                   65,290,50249
    1916                   80,255,96550
    1916 (six months)      45,843,19990
    1917 (Calendar year)  105,843,31600
    1918                  123,035,31000
    1919                  143,996,52358
    1920                  183,488,30400
    1921                  158,820,11409

  Compiled from _C.P.R. Reports_.]

[Footnote 796: Engine repairs, 1882-90:

    1882         $378,11609
    1883        1,693,74520
    1884        2,111,01720
    1885        1,761,78430
    1886        2,180,70982
    1887       $2,724,19622
    1888        3,265,13983
    1889        2,997,74027
    1890        3,314,81750

  Compiled from _Government Reports_.]

[Footnote 797: Motive power, 1885-1903:

    1885 (Calendar year)                    $1,915,25049
    1886                                     2,488,78784
    1887                                     2,969,71691
    1888                                     3,224,92269
    1889                                     3,065,44111
    1890                                     3,655,24422
    1891                                     4,217,97509
    1892                                     4,298,58912
    1893                                     4,361,48902
    1894                                    $3,682,48733
    1895                                     3,614,10916
    1896                                     3,914,14808
    1897                                     4,211,58661
    1898                                     4,866,25315
    1899                                     5,286,87150
    1901 (Fiscal year (six months omitted))  5,745,73055
    1902                                     7,387,06581
    1903                                     8,989,11177

  Compiled from _C.P.R. Reports_.]

[Footnote 798: Conducting transportation expense, 1885-1921:

    1885 (Calendar year)                         $1,225,80271
    1886                                          1,543,16654
    1887                                          1,831,21121
    1888                                          2,154,68426
    1889                                          2,192,16537
    1890                                          2,576,72572
    1891                                          3,032,47580
    1892                                          3,324,57785
    1893                                          3,427,51172
    1894                                          3,016,50522
    1895                                          2,884,19118
    1896                                          3,200,51630
    1897                                          3,434,75539
    1898                                          4,014,17820
    1899                                          4,256,09731
    1901 (Fiscal year (six months omitted))       4,476,12374
    1902                                          5,361,06727
    1903                                          6,434,32157
    1904                                         14,045,45979
    1905                                         16,905,84892
    1906                                         18,785,69580
    1907                                         23,765,13808
    1908                                         24,112,71382
    1909                                         25,568,98965
    1910                                         27,425,23761
    1911                                         31,537,51882
    1912                                         38,923,05002
    1913                                         46,074,29926
    1914                                         42,250,28637
    1915                                         32,083,16965
    1916                                         38,915,38150
    1916 (six months)                            21,943,02086
    1917 (Calendar year)                         53,029,26000
    1918                                         61,047,81279
    1919                                         68,054,17476
    1920                                         86,086,61154
    1921                                         73,557,74911

  Compiled from _C.P.R. Reports_.]

[Footnote 799: For a description of the effects of increased prices due
to the war, see a letter from the Canadian Pacific to the Board of
Railway Commissioners, _Report of the Board of Railway Commissioners_,
1918, p. 81 ff.]

[Footnote 800: Traffic expense, 1908-21:

    1908 (Fiscal year)                         $1,734,08657
    1909                                        2,123,86002
    1910                                        2,436,65126
    1911                                        2,623,28098
    1912                                        2,880,80032
    1913                                        3,376,98085
    1914                                        3,626,61208
    1915                                        2,990,16397
    1916                                        2,798,69940
    1917 ( Calendar year (six months omitted))  3,084,94400
    1918                                        3,011,57867
    1919                                        3,829,68656
    1920                                        4,999,34521
    1921                                        6,289,62186

  Compiled from _C.P.R. Reports_.]

[Footnote 801: Parlour and sleeping-car expenses, 1885-1921:

    1885 (Calendar year)              $24,09899
    1886                               38,53325
    1887                               52,46857
    1888                               59,45174
    1889                               50,79418
    1890                               64,09614
    1891                               68,69838
    1892                               69,46304
    1893                               85,13810
    1894                               80,85457
    1895                               68,01568
    1896                               71,31149
    1897                               78,67390
    1898                               86,19799
    1899                               85,58218
    1901 (Fiscal year)                 99,34826
    1902                              115,77033
    1903                              144,34983
    1904                              161,02609
    1905                              172,12361
    1906                              231,68862
    1907                              318,82380
    1908                              395,62872
    1909                              461,43337
    1910                              600,79611
    1911                              731,73862
    1912                              944,59434
    1913                            1,241,70007
    1914                            1,348,97947
    1915                            1,111,25329
    1916                              990,41087
    1916 (six months)                 530,11823
    1917 (Calendar year)            1,006,03800
    1918                            1,214,38952
    1919                            1,861,42805
    1920                            2,492,64078
    1921                            2,271,39104

  Compiled from _C.P.R. Reports_.]

[Footnote 802: Lake and river expense, 1889-1921:

    1889 (Calendar year (six months omitted 1916))    $50,79418
    1890                                              108,33592
    1891                                              165,09267
    1892                                              149,48978
    1893                                              134,54963
    1894                                              114,11160
    1895                                              133,87706
    1896                                              147,33212
    1897                                              333,38168
    1898                                              413,19502
    1899                                              417,04572
    1901 (Fiscal year (six months omitted 1901))      447,24910
    1902                                              468,94388
    1903                                              470,77306
    1904                                              519,99412
    1905                                              515,39702
    1906                                              511,39047
    1907                                              564,55211
    1908                                              750,19784
    1909                                              758,98888
    1910                                              858,83434
    1911                                              989,76874
    1912                                            1,064,01153
    1913                                            1,113,80810
    1914                                            1,183,39769
    1915                                            1,051,78169
    1916                                              829,81173
    1917 (Calendar year (six months omitted 1916))  1,054,68300
    1918                                            1,181,58941
    1919                                            1,335,00319
    1920                                            1,492,99154
    1921                                            1,455,21313

  Compiled from _C.P.R. Reports_.]

[Footnote 803: General expense, 1882-90:

    1882       $436,35989
    1883      1,410,47608
    1884      1,553,87686
    1885      1,654,84657
    1886      1,894,89418
    1887      2,369,52262
    1888      3,134,57419
    1889      3,370,25913
    1890      3,581,28186

  Compiled from _Government Reports_.]

[Footnote 804: General expense, 1890-1921:

    1890 (Calendar year)                           $950,75406
    1891                                          1,194,21486
    1892                                          1,272,47475
    1893                                          1,281,60328
    1894                                          1,252,06052
    1895                                          1,086,90045
    1896                                          1,216,12225
    1897                                          1,336,02247
    1898                                          1,589,77706
    1899                                          1,680,93266
    1901 (Fiscal year (six months omitted))       1,670,90435
    1902                                          2,088,84886
    1903                                          2,323,31502
    1904                                          1,589,13479
    1905                                          1,634,69891
    1906                                          1,964,09300
    1907                                          2,188,85787
    1908                                          1,942,75625
    1909                                          2,356,40299
    1910                                          2,548,79989
    1911                                          2,771,42500
    1912                                          3,444,39551
    1913                                          3,953,76974
    1914                                          4,322,10393
    1915                                          3,963,20280
    1916                                          4,014,75369
    1916 (six months)                             2,318,68720
    1917 (Calendar year)                          5,023,60900
    1918                                          5,421,60138
    1919                                          6,105,78308
    1920 (incl. taxes)                            8,969,99575
    1921 (incl. taxes)                            9,460,68107

  Compiled from _C.P.R. Reports_.]

[Footnote 805: The burden of taxation on the earnings of the company has
been slight because of charter provisions exempting the capital stock
and property of the company. The Saskatchewan legislature in the Railway
Taxation Act of 1908 holding that only the real and personal property
were exempt, levied a tax on the gross earnings. This claim has been
disputed by the company, but the tax has been paid under an agreement
with the Saskatchewan Government. In the fiscal year of 1918 the company
paid $85,000. The exemption did not apply to the property of subsidiary
companies, and this has been subject to taxation. Dominion taxation has
been limited to a regulation adopted during the war and becoming
effective through an Order in Council on January 1, 1918. From that date
until one year after the declaration of peace the Canadian Pacific was
called upon to bear additional and special taxation on the basis of
one-half its net earnings from railway operation in excess of 7 per
cent. on its common stock up to $7,000,000, and an income-tax on all
earnings except those from railway operation not exceeding the net
earnings due to increase in rates. These taxes were not exacted after
1919. Taxes were earlier included under general expense and also from
1920. During the war a special fund was set apart for war taxes, and all
taxes were not included in that item. In any case the changes made in
the accounts concerned have been relatively unimportant, and on the
whole taxation has been unusually light. See Clark, A. B., op. cit.;
also _Report of Ontario Commission on Taxation_, 1905.]

[Footnote 806: Car repairs, 1882-90:

    1882        $56,88267
    1883        258,30958
    1884        321,04440
    1885        347,65505
    1886        455,94847
    1887        586,80514
    1888        653,72176
    1889        456,96088
    1890        521,82377

  Compiled from _Government Reports_.]

[Footnote 807: Maintenance of cars, 1891-1903:

    1891 (Calendar year)                      $704,44652
    1892                                       956,98847
    1893                                       831,19550
    1894                                       868,40298
    1895                                       710,99712
    1896                                       881,40252
    1897                                       955,01312
    1898                                       962,26383
    1899                                     1,295,28203
    1901 (Fiscal year (six months omitted))  1,661,22504
    1902                                     1,868,04517
    1903                                     2,487,97669

  Compiled from _C.P.R. Reports_.

Maintenance of equipment, 1904-21:

    1904                                       $5,873,16291
    1905                                        6,616,25717
    1906                                        7,369,56584
    1907                                        9,083,24861
    1908                                        9,358,13848
    1909                                       11,080,88650
    1910                                       12,567,49386
    1911                                       12,056,16011
    1912                                       13,608,70819
    1913                                       17,198,57338
    1914                                       16,617,24721
    1915                                       11,307,96504
    1916                                       16,695,95587
    1917 (Calendar year (six months omitted))  23,404,26350
    1918                                       28,226,99104
    1919                                       33,897,72764
    1920                                       46,350,79261
    1921                                       36,746,81645

  Compiled from _C.P.R. Reports_.]

[Footnote 808: Maintenance expense, 1882-90:

    1882         $276,94069
    1883          399,37786
    1884          755,83896
    1885          793,23381
    1886        1,101,69885
    1887        1,618,51118
    1888        1,980,92449
    1889        2,172,35077
    1890        2,006,23738

  Compiled from _Government Reports_.]

[Footnote 809: Maintenance of way and structures, 1891-1921:

    1891 (Calendar year)                        $2,519,82513
    1892                                         2,570,25481
    1893                                         2,808,67734
    1894                                         2,972,02483
    1895                                         2,659,73389
    1896                                         2,807,15163
    1897                                         3,018,74890
    1898                                         3,274,64290
    1899                                         3,488,25373
    1901 (Fiscal year (6 months omitted))        4,196,18847
    1902                                         5,634,49717
    1903                                         6,723,24117
    1904                                         7,372,40826
    1905                                         8,527,03507
    1906                                         9,105,24956
    1907                                        10,110,95749
    1908                                        10,410,75161
    1909                                        10,074,04904
    1910                                        13,653,93804
    1911                                        15,561,08629
    1912                                        17,719,79521
    1913                                        18,498,74105
    1914                                        16,426,58205
    1915                                        11,400,53889
    1916                                        14,671,29120
    1916 (six months)                            8,245,74101
    1917 (Calendar year)                        17,470,06900
    1918                                        22,646,10594
    1919                                        28,912,22030
    1920                                        32,573,92727
    1921                                        29,038,64143

  Compiled from _C.P.R. Reports_.]

[Footnote 810: Maintenance per mile, 1882-90:

    1882              $45474
    1883               22436
    1884               24652
    1885               23692
    1886               29230
    1887               37868
    1888               42490
    1889               43678
    1890               39454

  Compiled from _Government Reports_.]

[Footnote 811: Maintenance of way per mile, 1891-1921:

    1891 (Calendar year)          $43701
    1892                           42730
    1893                           44391
    1894                           46867
    1895                           41274
    1896                           43347
    1897                           45961
    1898                           49014
    1899                           49832
    1901 (Fiscal year)             55483
    1902                           74265
    1903                           86773
    1904                           88483
    1905                           99521
    1906                         1,03739
    1907                         1,10449
    1908                         1,10447
    1909                         1,01984
    1910                         1,35482
    1911                         1,50464
    1912                         1,64575
    1913                         1,62755
    1914                         1,38914
    1915                           92177
    1916                         1,13885
    1917 (Calendar year)         1,13488
    1918                         1,74296
    1919                         2,15940
    1920                         2,43052
    1921                         2,15997

  Compiled from _C.P.R. Reports_.]

[Footnote 812: Commercial telegraph, 1886-1918:

    1886 (Calendar year)                       $50,61928
    1887                                       180,79489
    1888                                       207,95276
    1889                                       241,75776
    1890                                       288,69736
    1891                                       328,70760
    1892                                       345,98639
    1893                                       335,73680
    1894                                       342,41152
    1895                                       302,26134
    1896                                       336,03071
    1897                                       377,57669
    1898                                       457,09736
    1899                                       489,80764
    1901 (Fiscal year (six months omitted))    449,05869
    1902                                       492,90288
    1903                                       547,43815
    1904                                       590,72289
    1905                                       635,43250
    1906                                       728,76224
    1907                                       882,64087
    1908                                       887,53441
    1909                                       933,13761
    1910                                     1,057,78335
    1911                                     1,196,89908
    1912                                     1,435,94428
    1913                                     1,691,95338
    1914                                     1,613,68764
    1915                                     1,382,50716
    1916                                     1,339,16102
    1916 (six months)                          853,35389
    1917 (Calendar year)                     1,770,45000
    1918                                     2,852,41630

  Compiled from _C.P.R. Reports_.

In the remaining years, this item is not included in expenses, but net
earnings from commercial telegraph are classified under other income.]




  IX

  Total Receipts

  _A._ Net Earnings


The relation of total expenses to gross earnings was reflected in
operating ratio. Operating ratio during the first period[813] fluctuated
widely, rising rapidly from 742 in 1882 to 917 in 1884, declining to
634 in 1886, rising to 710 in 1888, and declining to 605 in 1890. The
rapid rise of 1883 and 1884 was the result of the rapid increase in
expenses in these years occasioned by the rapid expansion of the road,
especially in territory not productive of traffic. The completion of the
rail and water route in 1885 and the beginning of operation over the
main line in 1886 brought a decline in those years, the situation being
reflected in the actual decline of expenses in 1885 and the relatively
slight increase in 1886, largely a result of the decline in engine
repairs, and in the increase in earnings, largely the result of increase
in freight earnings and in grain. The rapid rise in 1887 and 1888 of
operating ratio was the result of a marked increase in every item of
expense occasioned by the expansion of those years and a relatively
smaller increase in earnings shown in every item of earnings. The
decline in expenses, the result of a decrease in car repairs and engine
repairs in 1889, and the slight increase in 1890, the result of a
decrease in maintenance expenses, and the increase in earnings
especially the result of increased earnings from "other sources" in
1890, brought a slight decline of operating ratio in 1889 and a marked
decline in 1890. The operating ratio of the years of the period to 1890
was obviously the result of uncertainties incidental to early years of
the road's expansion. The importance of grain and the control exercised
by the company in the later years of the decade were significant
factors, but underlying the changes of the period were difficulties of
early growth. From 1890 to 1894 operating ratio[814] changed slightly,
rising in the latter year to 6575. To 1892 increased expenses
paralleled closely earnings, with consequent slight change in operating
ratio. A decline in earnings, largely the result of a decline in freight
earnings incidental to a decline in traffic due to grain, but more
especially to manufactured articles, and an increase in expenses in
1893, which the decline in maintenance expenses failed to offset, and a
relatively slight decrease in expenses in 1894, brought an increase in
operating ratio. In 1895 the slight recovery of earnings, occasioned by
increased traffic largely the result of the agricultural situation, and
the general decline of expenses, led to a marked decline of operating
ratio. To the end of the century earnings and expenses generally
increased, though at varying rates, with the result that the operating
ratio fluctuated accordingly, but, with the greater relative increase of
earnings as a result of increasing traffic especially of grain, and also
of manufactured articles, generally declined. In the decade from 1850 to
1900 the expansion of the road in the earlier years and the consequent
increase in fixed capital and overhead charges resulted in a rapid
increase in operating ratio during the depression. In the later years
the relatively slight growth of fixed capital during the depression and
the recovery of traffic toward the end of the century occasioned a
decline of operating ratio.

From 1901 to 1904 operating ratio increased gradually to 1903 and
rapidly in 1904. In the earlier years expenses increased more rapidly
than earnings, and operating ratio increased accordingly. In 1904 a
slight increase in earnings with a decline in grain and in other
articles, and a general increase in expenses brought a rapid rise. A
year later the operating ratio remained practically stationary, but in
1906, the result of a rapid increase in earnings due largely to the
grain situation and to a steady increase in expenses, declined rapidly.
In the years to 1909, following an increase in earnings in 1907, a
decline in 1908 and a slight increase in 1909, generally the result of
similar fluctuations in freight earnings and again of similar
fluctuations in grain and manufactured articles, partly the effects of
the depression and the continued steady increase in expenses, operating
ratio increased slightly in 1907, rapidly in 1908 and remained
stationary in 1909. In 1910 a rapid increase in earnings, again largely
the result of the grain situation, occasioned a decline. To 1913 the
relatively greater increase in expenses brought a steady increase, and
in 1914 a relatively greater decline in earnings produced the same
result. In 1915 a marked decline in earnings and a more rapid decline in
expenses brought a decline in operating ratio, and in the following year
a rapid increase in earnings, occasioned by the exceptional harvest
reduced the operating ratio to a much more marked extent. In the
remaining years of the period the rapid increase in expenses due to
rising prices brought the operating ratio to the highest point of the
period in 1920. A decline in expenses led to a slight decline in the
following year.

Generally from 1900 to 1913 operating ratio increased. The heavy
overhead charges incidental to the rapid expansion of the road brought
during a period of depression a decided increase in operating ratio.
Increasing importance of fixed capital incidental to constant expansion
of the road made inevitable during the period a steady though gradual
rise. That this persistent increase was due to the increase in the
company's fixed capital was evident in 1915, in a year in which greatly
increased traffic brought a marked decline in the ratio. This general
tendency towards increase of operating ratio was accentuated by the
rising costs of the war period. The expansion of the road in mileage,
equipment and services, the effects of the vast stretch of unprofitable
territory separating eastern and Western Canada, and of the difficult
east-bound grades,[815] the dependence of the road on grain which
necessitated a situation subject to uncertain climatic conditions, to a
decided peak load in expenses, and to a long back haul, and the
importance of passenger traffic with its inelastic characteristics, were
factors in the increase in operating ratio. Large overhead charges were
involved which made adjustment to traffic conditions unusually
difficult.

The expansion of the road and the success of the company in meeting the
situation were registered in net earnings. During the first period of
Government operation net earnings totalled $26,084,[816] or $5,216 per
month. In the next ten months[817] they increased to $54,553, or $5,455
per month, and in the first year of the company's operation to $397,914,
a monthly average of $28,422. In 1890, according to Government
reports,[818] they had increased to $6,148,819; in 1899, according to
company reports,[819] to $12,230,165 and in 1921 to $34,201,740. In the
earlier period following gross earnings and the operating ratio, and the
result of factors dominating these items, net earnings increased in
1883, declined in 1884, and increased steadily to 1892. The depression
brought a decline to 1894. With recovery net earnings increased to 1899,
and with the exception of a slight decline in 1901, in 1904 and in 1908,
this increase continued to 1913. A decline followed in 1914 and 1915,
but the highest point was reached in 1916. In the later years they
declined to 1919, rising slightly in 1920 and in 1921. Net earnings per
mile varied with mileage and net earnings.[820]

[Footnote 813: Operating ratio, 1882-90:

    1882     742
    1883     880
    1884     917
    1885     657
    1886     634
    1887     685
    1888     710
    1889     691
    1890     605]

[Footnote 814: Operating ratio, 1891-1921:

    1891 (Calendar year)   6043
    1892                   6043
    1893                   6307
    1894                   6575
    1895                   6050
    1896                   6080
    1897                   5716
    1898                   5992
    1899                   5816
    1901 (Fiscal year)     6075
    1902                   6244
    1903                   6397
    1904                   6942
    1905                   6935
    1906                   6275
    1907                   6496
    1908                   6947
    1909                   6992
    1910                   6438
    1911                   6477
    1912                   6489
    1913                   6682
    1914                   6732
    1915                   6604
    1916                   5975
    1917 (Calendar year)   6946
    1918                   7810
    1919                   8139
    1920                   8470
    1921                   8228]

[Footnote 815: Particularly the grade from Winnipeg to the height of
land between Lake Superior and Hudson Bay. See White, James, _Altitudes
in Canada_, p. 1 ff.]

[Footnote 816: _Sessional Papers_, No. 5, 1882, p. 77.]

[Footnote 817: _Ibid._, No. 8, 1882, p. 79.]

[Footnote 818: Net earnings, 1882-90:

    1882        $397,91459
    1883         537,88377
    1884         429,23870
    1885       2,371,34956
    1886       3,241,69890
    1887       3,351,20892
    1888       3,676,64974
    1889       4,019,29976
    1890       6,148,81917

  Compiled from _Government Reports_.]

[Footnote 819: Net earnings, 1891-1921:

    1891 (Calendar year)      $8,009,65987
    1892                       8,420,34756
    1893                       7,741,41605
    1894                       6,423,30908
    1895                       7,480,95099
    1896                       8,107,58174
    1897                      10,303,77589
    1898                      10,475,37162
    1899                      12,230,16549
    1900 (Fiscal year)         5,277,94683 (6 months ending June 30, 1900.)
    1901                      12,109,37535
    1902                      14,085,91241
    1903                      15,836,84578
    1904                      14,213,10503
    1905                      15,475,08846
    1906                      22,973,31263
    1907                      25,303,30881
    1908                      21,792,36602
    1909                      22,955,57290
    1910                      33,839,95587
    1911                      36,699,83057
    1912                      43,298,24283
    1913                      46,245,87415
    1914                      42,425,92768
    1915                      33,574,62729
    1916                      49,225,92046
    1916 (six months)         30,874,76586
    1917 (Calendar year)      46,546,01900
    1918                      34,502,38800
    1919                      32,933,03642
    1920                      33,153,04460
    1921                      34,201,74031

  Compiled from _Company Reports_.]

[Footnote 820: Net earnings per mile, 1882-90:

    1882     $65339
    1883      30218
    1884      13999
    1885     $70828
    1886      86009
    1887      78409
    1888     $79507
    1889      80806
    1890    1,20920

Net earnings per mile, 1891-1921:

    1891 (Calendar year)  $1,38911
    1892                   1,39988
    1893                   1,22355
    1894                   1,01250
    1895                   1,16091
    1896                   1,25194
    1897                   1,56878
    1898                   1,56793
    1899                   1,74716
    1901 (Fiscal year)     1,60113
    1902                   1,85658
    1903                  $2,04399
    1904                   1,70584
    1905                   1,81614
    1906                   2,61744
    1907                   2,76418
    1908                   2,31196
    1909                   2,32390
    1910                   3,35786
    1911                   3,54862
    1912                   4,02138
    1913                   4,06879
    1914                   3,58781
    1915                   2,71463
    1916                   3,81096
    1917 (Calendar year)   3,58321
    1918                   2,65545
    1919                   2,45970
    1920                   2,47373
    1921                   2,54401]


  _B._ Other Income

Fluctuations in other income largely followed fluctuations in net
earnings from operation, and were largely the result of the same
movements. Interest on loans and deposits as an item of this
classification fluctuated to some extent with net earnings and was
predetermined by net earnings, which made possible a financial policy on
the part of the company permitting the direction of resources to liquid
investments. The expansion of the road which occasioned the growth of
net earnings was characterized by integration and the acquisition of
other roads. This expansion was principally accomplished through the
purchase of securities which in interest and dividends contributed to
"other income."[821] The dependence of "other income" on the ownership
of securities of subsidiary companies, on "loans and deposits," and on
the reclassification of accounts with reference to the inclusion in
later years of net earnings from ocean and coastal steamship lines, and
from commercial telegraph and news department, and of interest from land
sales, occasioned marked changes in the total. In the period ending with
the century the subsidiary companies the Duluth, South Shore and
Atlantic Railway, and the Minneapolis, St. Paul and Sault Ste. Marie
Railway were important contributors, income from these companies
increasing from $203,603 in 1892 to $1,150,199 in 1899, being two-thirds
of total "other income" in the latter year. Fluctuations during this
decade followed the difficulties of these roads during the period of
depression and their repayment of aid. After 1900 the acquisition of
other securities, the addition of new accounts, and the rapid expansion
of the road with the consequent increase in net earnings and in surplus
available in liquid forms, brought a steady though fluctuating rise. In
1921 "other income" totalled $10,987,189, of which $2,307,332 came from
investments and other resources (Exhibit C), $1,840,866 from deposits
and dividends on other securities, $2,785,615 net earnings from ocean
and coastal steamship lines and $4,053,386 from the commercial telegraph
and news department, hotels, rentals and miscellaneous. Par value of
acquired securities (Exhibit C) in that year was $63,966,727 and the
cost of these securities $38,356,460. Par value of acquired securities
of leased and controlled lines (Exhibit B) totalled $16,507,005 and cost
$128,109,814. The company held also Imperial and Dominion Government
Securities, $27,310,675 and Provincial and Municipal Securities,
$2,016,721. Fundamentally, the items concerned were largely influenced
by considerations dominant over net earnings.

[Footnote 821: Other Income, 1892-1921:

    1892 (Calendar year)               $203,60272
    1893                                209,86287
    1894                                333,82591
    1895                                552,91296
    1896                                511,16510
    1897                                340,70648
    1898                                423,36686
    1899                              1,150,19857
    1900 (Fiscal year)                1,011,35867 Six months.
    1901                                933,42525
    1902                                958,82664
    1903                              1,286,81241
    1904                              1,691,26851
    1905                              1,584,66347
    1906                              1,316,87047
    1907                              1,640,83170
    1908                              1,541,87403
    1909                              1,906,57840
    1910                              2,426,47729
    1911                              5,046,85640
    1912                              5,158,58540
    1913                              6,598,15133
    1914                              8,587,87053
    1915                             10,969,33169
    1916                              9,940,95494
    1916 (six months)                 6,415,35245
    1917 (Calendar year)             10,713,29932
    1918                              8,128,75151
    1919                              9,049,34170
    1920                             10,966,44781
    1921                             10,987,19912

  Compiled from _C.P.R. Reports_.]


  _C._ Proceeds from Land Sales

Net earnings and "other income" reflected directly the expansion of the
railroad, and were determined by influences largely coincident with
influences affecting receipts from land sales. The settlement of western
Canada and the importance of grain were significant factors in the
growth of earnings, and were directly related to the sale of land. The
dependence of earnings on settlement, and the control of the company
over lands in western Canada, occasioned by the terms of the charter,
and the efforts of the company during the period of the construction of
the main line, incidental to strengthening the position of its land
grant as a basis for land grant bonds, for settlement, for purposes of
strategy in railway competition, and for immediate and ultimate returns
from sales, rendered the land situation important.

After the completion of the main line, adjustments[822] were made for
the final transfer of the land grant. An agreement in 1886[823]
permitted the deduction of 6,793,014 acres, valued at $150 per acre,
from the original land grant for the purpose of cancelling the remaining
debt of $10,189,521 (increased with interest from $9,880,912). The Act
provided that the Government should retain lands of equal average value
and quality with the lands constituting the portion of the company's
land grant not "heretofore" disposed of by the company. In the passage
of the Act through the House of Commons it was stated on behalf of the
Government that out of lands to be conveyed to the company, there would
be taken a proportion of the area so conveyed, which would be equal to
the ratio which the whole area to be retained by the Government would
bear to the balance of the company's grant of 25,000,000 acres remaining
undisposed of by the company at the time of the passing of the Act.
Consequently the Government refused to accept a suggestion of the
company that the land grant should simply be reduced to 18,206,986
acres, and asked the company to furnish a statement[824] showing the
amount of land disposed of at the time of the passing of the Act, to
define the lands it proposed to accept in the railway belt, and to
define the locality in which it proposed to accept the remainder of the
grant. In the same spirit the Government refused to grant land requested
to the extent of 9,000,000 acres along six "projected" branch lines. A
month later the company proposed that the "projected" lines be regarded
as common front lines and on each side 24 miles deep the lands in
odd-numbered sections be applied to the land grant. It agreed to specify
within six weeks the lands within these belts which would be accepted as
part of the land grant--being not less than 7,000,000 acres, to be
granted on demand, and the acreage to be ascertained after all the
deductions were made. The lands were to be selected so that a minimum of
railways would open a maximum of territory. The company being in
possession of large tracts of land would construct its own lines or
encourage other lines through the territory because of the benefits to
be derived. The negotiations finally terminated with a suggestion made
on May 20, 1890.[825] At that time the company had selected 8,347,440
acres from the railway belt and the territory in southern Manitoba.
There remained about 800,000 acres to be selected. The order in council
of October 24, 1882, had reserved the area between the 52nd and 54th
parallels of latitude and the 104th and 116th degrees of longitude which
contained about 19,000,000 acres of farming land. The Government
proposed to retain the eastern half of this territory and, for ample
allowance, to add another piece of land bounded on the north by the 52nd
parallel, on the east by the 104th degree, on the west by the 110th
degree, and on the south by the South Saskatchewan River from the 110th
degree to its intersection with the northern boundary of the 48-mile
belt of the main line, and the 104th degree. From the section comprised
in the eastern half of the territory set aside in the October, 1882,
order in council, a belt of land 24 miles wide extending north-west from
the southern boundary of the reservation to the 110th degree was to be
excepted for the purpose of securing the construction of a road from
Saskatoon north-west to the North Saskatchewan. This road was to be
built by the company and finished by April 1, 1892. Since the company
proposed building a line from the point at which the branch touched the
North Saskatchewan to the 110th meridian it was assumed it would extend
this proposed line through Battleford to Edmonton. For the selection of
the remainder of the grant, therefore, a common front line was laid
down--a right line from the south-west angle of Township 35, Range 4,
west of 3rd meridian to Battleford and a right line thence to the 110th
degree--the depth of a belt of land on each side to be 12 miles. It was
estimated this area would yield 1,000,000 acres of land, giving the
company a reasonable margin from which to select. The western half of
the reservation of the October, 1882, order in council with the
exception of lands accepted by the company was to be released for
settlement after January 1, 1891. The company suggested that the land
grant should be released on January 1, 1892, instead of January 1, 1891,
and that the date of completion for the road between Saskatoon and the
North Saskatchewan River should be changed to October 1, 1892. With the
adoption of these suggestions an agreement embodying the propositions
was signed on January 7, 1891.[826]

The expiration of the reservation and the provision for the construction
of branch lines for the promotion of settlement were evidences of an
increasing demand for settlement of the country. This increasing demand
and the resulting policy of the Government directed to the opening of
the country were particularly advantageous to the company. Not only was
traffic developed with settlement, but to encourage the construction of
branches essential to settlement the Government acceded more willingly
to requests for additional grants of land. On May 16, 1889, an
application[827] was made for a land grant on a line from Brandon to or
near Township 3, Range 27, and west 100 miles, and on a line from
Township 3, Range 27, east to Deloraine, 25 miles. These lines were an
extension of the Manitoba South-West Colonization Railway, but under the
charter of that company the time for completion had elapsed. On May
18[828] the Government approved of construction by the Canadian Pacific
Railway Company and agreed to a land grant of 6,400 acres per mile or
800,000 acres. Conditional[829] to the grant the branches were to be
built before the end of 1890, and the location was to be approved by the
Government, but such conditions were not of a serious character. On June
4 another application[830] was made for a land grant of 6,400 acres per
mile on the line from Souris to Glenboro, about sixty miles, and to
this, with conditions similar to the grant of May 18,[831] the
Government agreed. To facilitate financial arrangements it was further
provided that the line should be divided into three sections of 20 miles
each and the grant transferred with the completion of each section. On
June 18 this provision was extended to the earlier branches. The date
for completion,[832] December 31, 1890, was changed to November 1,
1891, and again because of difficulties in securing rails to November 1,
1892.[833] Again under similar terms[834] a grant of 6,400 acres per
mile was approved on February 7, 1891, for an extension of the Souris
branch to the lignite coal-fields, 60 miles, to be completed December
31, 1891. The total land grant to these branches was 1,568,000 acres. To
provide[835] for this the belt of land 24 miles wide from near Saskatoon
through Battleford, north-west to the 4th meridian, set aside in the
agreement of January 7, 1891, was widened by an addition of two strips
on each side of the belt of 12 miles each, and in addition, a triangular
piece of land bounded by the combined belts, by the line between
Townships 34 and 35 from its intersection by the south-west limit of the
combined belts to the 4th meridian, and on the west by the 4th meridian,
was reserved, making a total of 1,900,000 acres.

Final adjustments of the land grant were made throughout the decade.
Difficulties continued as to delay in selection. Early in 1892 a
dispute[836] arose over the grant of land to the Great North-west
Central Company made from the belt of the Canadian Pacific. The Canadian
Pacific refused to adopt the suggestions of the Government and submit
the matter to arbitration, but insisted that the Government had no power
to grant lands within its belt, and eventually gained its point. Land
granted to the Qu'Appelle, Long Lake and Saskatchewan Railway from the
Canadian Pacific belt before the surveys had been made was returned on
their completion.[837] The northern boundary of the belt was also
adjusted to meet the grant of the Manitoba and North-West Railway.[838]
If it was to the interest of the Government to secure an early selection
of land, it was to the interest of the company to delay selection.
Several sections of the land grant within the railway belt were declared
to be arid or semi-arid and not acceptable to the company. Finally, to
settle the question, the Government agreed to grant a solid block of
land of 3,000,000 acres in southern Alberta.[839]

The land grant given directly by the Dominion Government in accordance
with the act of incorporation and in accordance with the policy of
opening new territory to settlement was supplemented by land acquired
through the lease of other roads and the acquisition of charter
privileges belonging to other railroad companies. Expansion of the road
in British Columbia carried out largely through the acquisition of other
companies brought additional grants. In 1892 the Columbia and Kootenay
Central gave 190,000 acres and later the Columbia and Western 1,347,905
acres and the British Columbia Southern 3,600,000 acres. In western
Canada the lease of the Manitoba South-West Colonization Railway brought
1,349,424 acres and in 1902 the Great North-West Central 320,004 acres.
The latest acquisition relates to a grant of 4,000 acres per mile to the
Interprovincial and James Bay Railway Company for the construction of a
road from Kipawa to Des Quinze River, and to Ville Marie, altogether 76
miles.

The land grant, acquired by the act of incorporation, and increased by
special grants for the construction of branch lines, and by the lease of
other companies, enhanced in value by the policy of the company in
delaying selection,[840] was not the only form of real estate of which
the company became owner through the terms of the charter, through
business astuteness, and through the desire of the Government to
encourage the construction of transportation facilities. On January 12,
1882, for instance, the Government,[841] unable to transfer property
necessary to facilitate operations which belonged to the Ontario
Government, went as far as possible, and gave the company all the
rights and privileges which it enjoyed. Under similar circumstances at
Port Arthur a grant of land 200 feet wide and 2 miles long was requested
for terminal facilities. Although this was a larger stretch of land than
permitted by the Consolidated Railway Act of 1879 the Dominion
Government recommended[842] to the Ontario Government that the
application should be granted as far as possible[843] and expropriated
the amount given under the Act of 1879. Again authority was given to
expropriate 200 feet[844] along the road from Current River to River
Nepigon, 64 miles, and from Moosejaw to Calgary[845] on the ground that
this was necessary to secure protection from snow. At English Bay[846]
despite the protest of the Superintendent-General of Indian Affairs 80
acres were expropriated for terminal facilities. In other localities the
company was equally favoured.[847] On the other hand an application of
January 29, 1883, for lands on the eastern section from Callander west,
in addition to those granted by the Consolidated Railway Act, was
refused.[848]

In questions relating to the right of way the company was generally
fortunate. The contention that the extension of the main line from Port
Moody to Vancouver did not entitle the company to the necessary right of
way was settled favourably to the company on the ground that such an
extension was a branch.[849] On the basis of this decision the
contention of the Government in January, 1891, that the company was not
entitled to a free right of way for a spur at Revelstoke was also
defeated.[850] In a dispute in which the Government declared its
intention of including the right of way within the total land grant of
25,000,000 acres, the company again protested successfully.[851]
Questions[852] arose in June, 1886, as to whether the right of way
through homestead lands for which the entry was not granted at the date
of the passing of the Act, was vested in the company without a patent
issuing from the Crown, and if the entry for the homestead was granted
before the passage of the Act, whether the company was entitled to the
right of way through the homestead free of charge, and whether the
Government had the right to exclude the right of way from the patent to
the homesteader; all of these were decided in the company's favour and
provision was made for the settlement by the Government of cases where
the patent had been granted without reservation of the right of
way.[853] In the construction of branches the Government generally made
reservations of sections of land for right-of-way purposes.[854] On the
other hand in the case of school sections a different verdict was
reached. On June 26, 1889, consent[855] was asked to appropriate land in
so far as it was within townships surveyed on or before October 21,
1880, and therefore vested in the Crown for school purposes. It was
claimed that the land had greatly increased in value because of the
railway and therefore should be sold to the company at a nominal price.
To this the Government[856] replied that the company was entitled to a
free grant of land required for railway purposes on the school sections
in those townships which were not surveyed until after the location of
the railway through such townships, but where the survey had preceded
the location, the company was required to pay for its right of way. If
the lands were disposed of before the location of the line the company
had no claim on them. A charge of $520 per acre was levied for the
right of way acquired under these rulings.

Station grounds and other lands for railway purposes were generally
secured under favourable arrangements. Land necessary for sidings was
usually granted upon the approval of the Government engineer. Ballast
pits were granted where occasion demanded. On the line from Winnipeg to
Calgary 2,832 acres were claimed for ballast pits[857] of which 2,077
acres were chosen from Government lands and 597 from company lands. On
the same stretch of line nearly one hundred station grounds from 300 ft.
x 2,650 ft. (nearly 20 acres) upwards[858] were claimed. The company was
also permitted to make arrangements leading to the abandonment by a
settler of his claim to any portions of an even-numbered section needed
for railway station grounds. From the western limits of the land grant
to the eastern boundary of British Columbia the company was permitted by
virtue of an agreement[859] of March 3, 1886, to select from vacant
Dominion lands a tract of land not exceeding 160 acres adjoining each
station. The land granted in this way was subtracted from the total land
grant, but since it comprised chiefly the town sites, the arrangement
was distinctly favourable to the company. At Donald,[860] British
Columbia, a grant of 88 acres was given to the company, and a section of
502 acres sold at $250 per acre. At Griffin Lake and at Glacier,[861]
lands were given for the purpose of ejecting squatters who were erecting
buildings which interfered with the tourist trade, though on a similar
plea, the Government refused to sell the town site at Golden[862] at
$250 per acre, or to sell 500 acres at Revelstoke. For land situated in
Government parks, leases were granted at favourable rates. For a
lease[863] of 38 acres to be used for hotel purposes a charge of $20 per
acre per year was made on five acres for 42 years and of $5 per acre per
year on the remainder for 21 years. The regular rates were $30 per acre
per year. There were, on the other hand, several evidences of resistance
on the part of the Government. On October 6, 1886, the company[864]
claimed a grant of 101 acres in Winnipeg as necessary for railway
purposes. The Department of Railways recommended[865] the grant although
the Government engineer had pointed out that it would only be necessary
if the whole was to be used as stockyards. On July 29, 1890, an offer
was made[866] subject to the condition that the company reserved the
right to obtain it as a free grant. Upon the Government's refusal to
accept these terms the company purchased[867] the land on September 22
at $100 per acre--the Government deducting 8 acres given as right of
way. At Glacier, British Columbia, in a similar fashion, the company
refused to purchase[868] 40 acres, reserving the right to obtain the
grant free of charge. With the Government's offer to place the matter in
the hands of the Exchequer Court, the company returned a cheque for the
purchase price of the land. At Griffin's Lake[869] the Government
refused to grant 3 acres of extra land and the company was obliged to
purchase. At Tappen siding[870] even cheese-paring was evident--a grant
of 1497 acres was asked but only 1342 acres given, and the remainder,
155 acres, purchased at $5 per acre. The Government engineer was
continually on the alert in his approval of the number of acres granted.
At Illicilliwaet on July 19, 1887, the company asked[871] for 56 acres
and was granted 30 acres. At Moberly[872] on February 23, 1889, a grant
of 45 acres was asked for--14 acres were given. At Field[873] on
December 2 46 acres were applied for and 26 acres granted. At
Beaver[874] on January 16, 1890, an application for 51 acres succeeded
in securing 17 acres. At Sicamous[875] on February 10, 1891, an
application for 5 acres declared not to be excessive for the use of the
C.P.R. and the Shuswap and Okanagan Railway was refused on the ground
that the latter railway was a leased line.

The company was fortunate with respect to the location of town sites, as
it had been generally with other forms of real estate. Early in 1883 an
agreement[876] was made placing all town sites, (1) sections belonging
jointly to the Government and to the country, (2) those belonging to the
company, in the hands of trustees. These trustees, Messrs. R. B. Angus,
E. B. Osler, D. A. Smith and W. B. Scarth, were accountable to the
Government for the proceeds of the sales of land belonging to it.
Letters patent were issued directly to the company for its lands. Under
this agreement, four sections were laid out at Regina, two at Moosejaw,
four at Qu'Appelle and one at Virden, and transferred to the
trustees--the proceeds being divided equally between the Government and
the company. The arrangement proved generally advantageous in the
control given to the company in the location of town sites.

To some extent, a similar form of control was given over the
agricultural policy of districts in which the land grant was reserved.
On April 12, 1886, an agreement[877] was made with the Government in
which all odd sections were regarded as railway lands although not yet
accepted by the company. Rent of these lands was paid to the Government
and the account adjusted with final acceptance. The company secured the
advantage of rent[878] from the lands before they were accepted and at
the same time exercised practical control of the agricultural policy of
the districts concerned. The Government leased large tracts of land to
ranchers on condition that the lease should terminate upon the
application of the company for the land. The company exercised[879] its
prerogative much to the chagrin of ranching communities.

The general business capacity of the company was amply shown in
transactions involving the transfer of lands and the necessary issue of
patents. Promptness in the issue of these instruments was essential in
the sale of lands, and in securing power to evict squatters. To avoid
unusual delays, the company compiled a list of lands most speedily
required and patents were registered in the shortest possible time.
Difficulties occasioned by the refusal of registrars to register the
instruments were overcome through measures suggested by the company. In
1887 on application of the company,[880] delays and expense were reduced
through the issuance of patents direct to purchasers of company lands.
Attempts were made to eliminate the governmental red tape involving
unusual delays in cases of mistake in the name of the patentee, of
filing acts of incorporation and letters of attorney, of incomplete
descriptions, of the death of the patentee, and of changes in the form
of patents, but with little success. Many sections were asked for in
error, were already sold or squatted upon. There were errors in plans
and surveys, and lands were sold by the company outside its belt by
mistake. Inaccurate descriptions in patents for the right of way largely
disappeared and some improvement was made by excepting the right of way
from patents to settlers and granting the patents direct to the company.
In the form of patents the company insisted that no reservations[881]
should be made to the Crown for gold, silver, copper or other mines, and
a patent reserving fisheries was immediately returned for correction. In
this the Government did not concur but promised to omit such
reservations in later patents.[882]

Questions regarding timber limits were of a particularly difficult
character.[883] The company was careful to protect its own interests but
careless in regard to interests of the Government. In September, 1885,
protests[884] were made by the company against the cutting of timber on
sections within the reserve of the Manitoba and South-Western Railway.
The Government recognized the validity of the protests, and parties
owning timber mills on the sections involved were notified that their
licences would not be renewed. On the other hand charges were made that
the company was unusually wasteful[885] in the cutting of lumber on
Government lands. It was stated that lumbermen[886] were selling lumber
cut for the company to other parties. Complaints were made that on the
Bow River[887] the company was cutting timber belonging to others. It
was held[888] that the timber in question, namely that on the berths of
the Eau Clair and Bow River Timber Company, had been cut before the
grants were made, but the Government proved this untrue. Charges[889]
that timber of more than 5 in. at the butt was used, were denied. The
company[890] persistently refused to give any statement as to the
amount of lumber cut. To check the abuses which these protests implied
the Government adopted various measures but with varying success. As to
the cutting of timber without a permit it was decided[891] to hold the
company liable for timber cut by trespassers until it proved itself
guiltless. Moreover, permits were restricted[892] to timber used for
construction purposes on the main line. It was even held that the
company was not entitled[893] to take timber free for the construction
of the extension of the main line to Vancouver. Restrictions[894] were
placed on the right of the company to cut timber for sale because of the
disadvantages to other lumber dealers of competition. In an attempt of
the Government to supply timber necessary for construction purposes,
five timber berths[895] of ten square miles each were reserved in
convenient localities one on each side of Boulder Creek, and one on the
Columbia River, the Kicking Horse River and Otter Tail Creek.
Timber[896] licences could be obtained for an area not exceeding 1,000
acres and for not more than four years at $10 per year and a charge of
15 c. per tree and 20 c. per 1,000 feet in logs. In the construction of
snowsheds, the company held that timber used for this purpose was timber
used in the construction of the main line and therefore should be free
under the terms of the contract. For this purpose[897] it was claimed
that cedar was necessary and could not be found within the reservations,
and that the reservations were too far distant. It was also claimed that
the reservations had been made to prevent a combination of mill owners
from obtaining a monopoly on timber. For these reasons the company
proceeded to cut timber outside of the limits. Against this the
Government protested, stating that there was no danger of monopoly since
the company controlled the freight rates, and that the object of the
reservations was to prevent the slashing of trees. Finally it threatened
to sell the reservations if the company persisted in cutting timber on
Crown lands.

In the collection of timber dues the Government finally secured the
promise from the company that it would make deductions in the case of
all parties contracting with it who had not a clearance from the
Government. In the case of good trees cut by contractors, the
company[898] was charged the price of lumber. For cordwood a charge of
25 c. per cord was made, for ties 3 c. each, for piles  c. per foot,
and for fence posts $250 per thousand. From December, 1885, to May 31,
1887, $4,74475 was paid[899] for cordwood, and the Government
sanctioned[900] the deduction of 26,919 cords claimed to have been used
on construction engines although the amount was recognized as
exorbitant. To a contention[901] of the company on February 3, 1890,
that it was entitled to patents with the construction of every ten miles
of line and therefore was not required to pay timber dues, a ruling was
given that the company had no right to timber farther than 50 feet from
the centre of the track. To an application[902] for limits 14 and 15 on
the Columbia River, the Government answered in offering them by tender.

The more immediate results of the charter privileges pertaining to land
grants[903] and other forms of real estate, enhanced in value largely
through the business astuteness of the company, were revealed in the
amount of proceeds from these sources. The most significant item of
these returns was that from land sales.[904] In 1890 the company had
sold 3,601,428 acres of the grant secured from the Manitoba South-West
Colonization Railway and had realized $11,462,165 or an average of 309
c. per acre--the average price of land sold in that year being 3834
cts. Deducting 6,793,014 acres surrendered by agreement to the
Government and adding 640,000 acres earned on the Souris branch, the
company held in that year 16,488,959 acres. During the next decade the
land situation reflected the general period of depression. In 1893
scarcely any land was sold and it was not until ten years later that the
price reached the level of 1890. In the later years to 1914 the average
rapidly increased--the price in that year being $1657. The war period
generally brought a decline. Land in Alberta brought under cultivation
by irrigation works sold at a much higher price. The average price in
1909 was $2471 per acre, in 1918 $4294 and in 1921 $5313. The
receipts from the land grant varied widely as a result of the
susceptibility of the land situation, of the policy of the company in
opening up settlements, of climatic conditions, of periods of boom
peculiar to the north-west, and of periods of depression influencing the
trade of Canada generally. From $105,789 in 1892, they declined to
$20,317 in three years as a result of the depression. In 1902 proceeds
from land sales had increased to $1,569,901 and in 1913 to $5,795,978. A
general decline was evident in the war years and to 1921. The largest
returns--$8,316,335--from land sales were received in 1907. These
proceeds were supplemented by receipts from the sale of town sites. In
1890 the sale of town sites had brought $2,056,291. From nine acres of
land given by the Government of British Columbia at Vancouver Island in
consideration of the extension of the main line to Port Moody, 9 miles,
the company secured sufficient revenue to pay for the extension and to
build a branch to Westminster in addition. To 1916 the proceeds from
land and town sites[905] totalled $123,810,124.

In 1921 the company held 5,606,351 acres valued at approximately
$91,962,630. Of this 3,446,416 acres were agricultural lands in the
western provinces valued at from $10 to $13 per acre, 352,714 acres were
irrigated lands valued at from $30 to $40 per acre, 563,732 acres were
timber lands valued at from $150 to $3 per acre, 1,073,651 acres in
British Columbia valued at from $2 to $5 per acre and 94,584 acres in
town sites in the prairie provinces. Total town sites were valued at
$20,157,900. In addition coal lands, petroleum rights and natural-gas
rights were held at nominal figures. It is scarcely possible that the
number of acres held will increase appreciably through later land
grants, but that there will be an increase in value is probable. At best
the land grant is an asset which will continue to decrease in
importance, though such a decrease is not of vital significance to the
prosperity of the company. The total proceeds[906] secured from the land
grant and town sites to 1916 were less than the net revenue from
operation for three years ending June 30, 1916, and about equal to the
gross revenue from operation in the year 1912. The importance of land
sales as an item in the gross receipts of the company varied widely.
But generally periods of prosperity in which net earnings tended to
increase were periods in which land sales were largest and periods of
depression with declining net earnings were periods of declining land
sales. The land situation was probably more sensitive to local
conditions, but these in turn reflected general and prevailing
world-wide conditions. In any event land sales are destined to be of
less importance in the future.

[Footnote 822: Of considerable importance was the fixing of a western
limit to the land grant. The charter had placed the limit at Jasper
House, but in the Act of 1882, changing the route from Yellowhead Pass
to Kicking Horse Pass, no provision was made for the necessary
rearrangements. Early in February, 1884, the Government suggested that
the land grant should terminate about the same number of miles from the
summit of the mountains as Jasper House had been by the route
contemplated in the Act of incorporation. The company asked that the
limit should be set at the same distance on the new line as Jasper House
on the old line or to the summit of the Rocky Mountains. This plan gave
the company access to sections supplying timber and coal. With the same
object in view it asked that a base line should be run along the valley
of the Bow River. The agreement dated March 3, 1886, placed the limit at
a point on the Canadian Pacific Railway where it was intersected by the
boundary line between ranges ten and eleven. _Sessional Papers_, No. 34,
1887, p. 12.]

[Footnote 823: 49 Vic. c. 9, p. 66.]

[Footnote 824: _Sessional Papers_, No. 34, 1892, p. 4.]

[Footnote 825: _Ibid._, No. 34, 1892, p. 7.]

[Footnote 826: _Ibid._, No. 34, 1892, p. 21.]

[Footnote 827: _Ibid._, No. 31_a_, 1890, p. 20.]

[Footnote 828: _Ibid._]

[Footnote 829: The agreement stipulated further--the lands to be fit for
settlement, the company to reimburse the Government 10 cents per acre
for the cost of surveying, each _bona fide_ settler on the land granted
to the company at the time the grant was earned had the right to retain
land occupied by him to an extent not over 320 acres on paying the
company a rate not over $250 per acre payable one-quarter in cash and
one-quarter in each of three succeeding years with interest at 6 per
cent.]

[Footnote 830: _Ibid._, p. 21.]

[Footnote 831: _Ibid._, p. 23.]

[Footnote 832: _Ibid._, No. 34, 1892, p. 64.]

[Footnote 833: _Sessional Papers_, No. 34, 1892, p. 73.]

[Footnote 834: _Ibid._, No. 25, 1891, p. 109.]

[Footnote 835: _Ibid._, p. 108.]

[Footnote 836: _Ibid._, No. 34, 1892, p. 96.]

[Footnote 837: _Ibid._, p. 55.]

[Footnote 838: _Ibid._, No. 34, 1887, p. 93.]

[Footnote 839: Irrigation works were begun by the company on this
section in 1904. For the western portion of the block, water was
diverted from the Bow River about 2 miles east of Calgary and carried in
a main canal 17 miles to a larger reservoir for distribution. This
system was completed in 1912. For the central and eastern portions a
huge dam was built at Bassano and the water distributed through a canal
system.]

[Footnote 840: Lands were first examined in the more immediate
neighbourhood of principal settlements, and though at first rejected,
with increased settlement and enhanced value were at length selected.
Typical transactions are those stating acceptance of lands formerly
rejected. _Sessional Papers_, No. 35, 1886, p. 242.]

[Footnote 841: _Ibid._, No. 27, 1883, p. 32.]

[Footnote 842: _Sessional Papers_, No. 27, 1883, p. 35.]

[Footnote 843: Lots to be reserved to access facing Thunder Bay and
reasonable access to the waters of the bay to be given inhabitants.]

[Footnote 844: The Consolidated Railway Act grants 99 ft.]

[Footnote 845: _Sessional Papers_, No. 35, 1886, p. 23.]

[Footnote 846: _Ibid._, No. 34b, 1887, p. 93.]

[Footnote 847: _Ibid._, No. 25, 1885, p. 48.]

[Footnote 848: _Ibid._, No. 27, 1883, p. 37.]

[Footnote 849: Major _v._ C.P.R. 13, C.S.C.R. 233.]

[Footnote 850: _Sessional Papers_, No. 34, 1892, pp. 58-9.]

[Footnote 851: _Ibid._, No. 36, 1889, p. 239.]

[Footnote 852: _Ibid._, No. 34, 1887, p. 103.]

[Footnote 853: _Ibid._, No. 34, 1887, p. 100.]

[Footnote 854: See the case of the Selkirk branch, 1887, _Ibid._, p.
94.]

[Footnote 855: _Ibid._, No. 25, 1891, p. 89.]

[Footnote 856: _Ibid._, p. 93 ff.]

[Footnote 857: _Ibid._, No. 35, 1886, p. 20.]

[Footnote 858: _Ibid._, p. 15.]

[Footnote 859: _Ibid._, No. 34, 1887, p. 13.]

[Footnote 860: _Ibid._, No. 25_a_, 1888, p. 6.]

[Footnote 861: _Ibid._, No. 36, 1889, p. 3.]

[Footnote 862: _Ibid._, No. 25, 1891, p. 38.]

[Footnote 863: _Ibid._, No. 25_a_, 1888, p. 53.]

[Footnote 864: _Ibid._, No. 34, 1887, p. 98.]

[Footnote 865: _Ibid._, No. 34_b_, 1887, p. 119.]

[Footnote 866: _Ibid._, No. 25, 1891, p. 16.]

[Footnote 867: _Ibid._, p. 17.]

[Footnote 868: _Ibid._, p. 50.]

[Footnote 869: _Ibid._, No. 25, 1891, p. 10.]

[Footnote 870: _Ibid._, No. 34, 1896, p. 36.]

[Footnote 871: _Ibid._, No. 25_a_, 1888, p. 16.]

[Footnote 872: _Ibid._, No. 31_a_, 1890, p. 7.]

[Footnote 873: _Ibid._, p. 5.]

[Footnote 874: _Ibid._, p. 16.]

[Footnote 875: _Ibid._, No. 25, 1891, p. 48.]

[Footnote 876: _Ibid._, No. 34_c_, 1887, p. 146.]

[Footnote 877: _Sessional Papers_, No. 34, 1887, p. 31.]

[Footnote 878: To March 31, 1887, rent received on the company's account
totalled $7,711.]

[Footnote 879: _Sessional Papers_, No. 31_a_, 1890, p. 18.]

[Footnote 880: _Ibid._, No. 34, 1887, p. 106.]

[Footnote 881: _Ibid._, No. 25, 1885, p. 230.]

[Footnote 882: _Ibid._, No. 36, 1889, p. 281.]

[Footnote 883: For a statement of the general privileges granted, see
Clause 10, Article 6 and Clause 19 of the Act of Incorporation, Appendix
B.]

[Footnote 884: _Sessional Papers_, No. 35, 1886, p. 261.]

[Footnote 885: _Ibid._, p. 259.]

[Footnote 886: _Ibid._, p. 257.]

[Footnote 887: _Ibid._, p. 262.]

[Footnote 888: _Ibid._, p. 266.]

[Footnote 889: _Ibid._]

[Footnote 890: _Ibid._, p. 264.]

[Footnote 891: _Sessional Papers_, No. 34, 1887, p. 39.]

[Footnote 892: _Ibid._]

[Footnote 893: _Ibid._, p. 42.]

[Footnote 894: _Ibid._, p. 46.]

[Footnote 895: _Ibid._, p. 56.]

[Footnote 896: _Ibid._, p. 51.]

[Footnote 897: _Ibid._, No. 25_a_, 1888, p. 27.]

[Footnote 898: _Ibid._, No. 34, 1887, p. 49.]

[Footnote 899: _Ibid._, No. 25_a_, 1888, p. 29.]

[Footnote 900: _Ibid._, p. 42.]

[Footnote 901: _Ibid._, No. 25, 1891, p. 78.]

[Footnote 902: _Ibid._, p. 80.]

[Footnote 903: According to the charter "lands of the company in the
North-West Territories until they are either sold or occupied shall also
be free from such taxation for twenty years after the grant thereof from
the crown." Attempts of the prairie provinces to tax these lands for
school and municipal purposes have been unsuccessful, 35 C.S.C.R. 551.
The Privy Council, as the result of an appeal, held, in a judgment of
February 3, 1911 (1911 _Appeal Cases_, p. 328), that unoccupied lands
were not taxable until twenty years after the actual grant of letters
patent to the settler and that lands sold on the instalment plan were
not taxable until all the instalments were paid. This situation has been
an important factor in the natural resources question. Martin, Chester,
_Natural Resources Question, Report of the Ontario Commission on Railway
Taxation_, 1905, p. 190 ff.; Clark, A. B., _An Outline of Provincial and
Municipal Taxation in British Columbia, Alberta and Saskatchewan_;
Vineberg, S., _Provincial and Local Taxation in Canada_. Land acquired
through subsidiary companies and in other ways on the other hand is
liable to taxation except in cases of special provision. These taxes
vary in different provinces and are relatively unimportant. _Ibid._]

[Footnote 904: Land receipts, 1889-1921:

    1889 (Calendar year)              $31,18352
    1890                               33,54185
    1891                               14,01818
    1892                              105,78880
    1893                               65,06488
    1894                               68,86040
    1895                               20,31718
    1896                              216,94162
    1897                              217,08129
    1898                              233,59811
    1899                              400,60825
    1901 (Fiscal year)                667,12811 (18 months)
    1902                            1,569,90148
    1903                            2,908,02855
    1904                            2,703,05321
    1905                            3,302,75898
    1906                            5,168,50163
    1907                            8,316,33543
    1908                            5,701,85420
    1909                            4,193,12962
    1910                            6,106,48815
    1911                              877,61673
    1912                              927,13611
    1913                            5,795,97760
    1914                            1,129,17708
    1915                              374,55016
    1916                            3,106,38251
    1916 (six months)               1,547,08019
    1917 (Calendar year)            6,588,74040
    1918                            5,834,05465
    1919                            4,654,51243
    1920                            3,852,37677
    1921                            1,979,48089

These statistics are compiled from company reports from sections
described as Receipts and Expenditure, sub-heading Land Department,
Deferred Payments. Sales expenses and other items are deducted from the
proceeds of sales as per account.

  Compiled from _C.P.R. Reports_.]

[Footnote 905: _Railway Inquiry Commission Report_, 1917, p. xvii.]

[Footnote 906: $123,810,124. Net proceeds from land sales, deducting
expenditure on irrigation, hotels, development projects, etc., in 1916
were $68,255,803. In 1921 net proceeds from lands and town sites
totalled $93,798,267, surpassing in that year the estimated value of the
assets, in lands and properties, $91,962,630.]


  _D._ Total Receipts

Net earnings from operation, other income, and proceeds from land sales,
included in total receipts constituted a final index of the earning
capacity of the road. In total receipts, fluctuations in constituent
items occasioned by changes in accounting practice disappeared and the
general standing of the company was most clearly revealed. Net earnings
from operation were directly related to the growth of traffic. Other
income because of changes in the classification of accounts became more
directly related to traffic but included earnings from securities held
and though these were related to traffic, fluctuations were of less
significance. Proceeds from land sales fluctuated violently, because of
a variety of considerations, but generally reflected the importance of
the west.

Prior to 1888 land receipts were largely expended in advertising
campaigns and in improvements, and were consequently unimportant. Since
that time large portions of these proceeds have been devoted to the same
purpose, but the statistics chosen represent the net amount remaining
after such expenditures have been made. These statistics have been taken
from "receipts and expenditures." They do not represent the amount
realized from land sales in any given year but the amount actually
received after allowance for deferred payments and for expenditures for
purposes stated in that particular account. Other income was not of
material importance until 1892, after which date the fund guaranteed by
a deposit with the Government for the payment of dividends was
exhausted. The first decade of the company's history was particularly
subject to the uncertainties of early expansion, and was consequently
of slight importance from the standpoint of total receipts.

From 1888 to 1892 total receipts[907] increased steadily as a result of
the increase in net earnings, and to 1894 declined to a marked extent
with a decline in net earnings, and despite a slight increase in land
receipts and a marked increase in other income. Throughout the remainder
of the decade, total receipts increased steadily with a similar increase
in net earnings, despite a decline in other income to 1897 and in land
receipts in 1895. Land receipts increased slowly during the first two
years of this period, and with other income very rapidly in the last two
years. In 1901 a decline in net earnings, a decline in other income, and
an increase in land receipts, brought a decline in total receipts, and
to 1903, an increase in all the constituent items, an increase in the
total. In 1904 a decline in land sales and in net earnings led to a
decline in the total, despite an increase in other income. Total
receipts and land earnings increased from 1905 to 1907 despite a decline
in other income in 1906. In 1908 all these items declined. In 1909 a
slight increase in total receipts followed a slight increase in net
earnings, an increase in other income, and a decline in land receipts.
From 1909 to 1913 total receipts practically doubled as a result of an
increase of 100 per cent. in net earnings, an increase of 200 per cent.
in other income, and an increase in land receipts in 1910, a marked
decline in 1911 and rapid recovery in the last two years. In 1914 and
1915 a decline in total receipts followed a marked decline in land
receipts, and in net earnings, despite an increase in other income. In
1916 total receipts increased as a result of an increase in net
earnings, and in land sales, and a slight decline in other income. In
the following year, total receipts again increased, for the first time,
despite a decrease in net earnings, and with an increase in other income
and in land receipts. In 1918 and 1919, as a result of a decline in net
earnings and in land receipts, and despite an increase in other income,
total receipts declined. In 1920 an increase in net earnings and in
other income brought an increase in total receipts, despite a decline in
land receipts. In 1921, for the first time, an increase in net earnings
and in other income was followed by a decline in total receipts, because
of the decline in land receipts. With two exceptions, 1917 and 1921,
total receipts fluctuated in consonance with net earnings. The exception
in 1917 was the result of the reclassification of accounts, which
transferred steamship earnings from earnings from operation to other
income, and strictly speaking was not an exception. In 1921 the increase
in net earnings and in other income was slight, and the result of
considerable economy, consequently it did not offset the marked decline
in land receipts. Net earnings were therefore of dominant importance in
the total receipts of the company.

Net earnings were in turn dependent on gross earnings and expenses.
Expenses related to passenger traffic were unusually high, and the
percentage of passenger earnings to gross earnings was much lower than
that of freight earnings. Consequently net earnings dependent on gross
earnings were in turn particularly dependent on freight earnings. This
was especially the case since freight traffic was handled much more
efficiently and since freight expenses were consequently lower. Net
earnings were, therefore, largely dependent on freight earnings and on
freight traffic. Freight earnings and freight traffic have depended
directly and indirectly to a very large extent on the expansion of
western Canada, especially with the development of the west, and with
the effect of higher rates resulting from a non-competitive situation in
that area. The contributions of western Canada were evident in the
receipts from land. It follows, therefore, that to a very large extent
the net earnings and total receipts of the Canadian Pacific Railway have
been directly obtained from western Canada.

[Footnote 907: Total receipts, 1888-1921:

    1888 (Calendar year)             $4,175,98110
    1889                              6,040,74286
    1890                              6,333,24236
    1891                              8,023,67805
    1892                              8,729,73908
    1893                              8,016,34380
    1894                              6,825,99539
    1895                              8,054,18113
    1896                              8,835,68846
    1897                             10,861,56366
    1898                             11,132,33659
    1899                             13,780,97231
    1900 (Fiscal year) (6 months)     6,289,30550
    1901                             13,709,92871
    1902                             16,614,64053
    1903                             20,031,68674
    1904                             18,607,42675
    1905                             20,362,51091
    1906                             29,458,68473
    1907                             35,260,47594
    1908                             29,036,09425
    1909                             29,055,28092
    1910                             42,372,92131
    1911                             42,624,30372
    1912                             49,383,96434
    1913                             58,640,00308
    1914                             52,142,97529
    1915                             44,918,50914
    1916                             62,273,25791
    1916 (6 months)                  38,837,19850
    1917 (Calendar year)             63,848,05872
    1918                             48,465,19316
    1919                             46,636,89065
    1920                             47,971,86918
    1921                             47,168,42632

  Compiled from _C.P.R. Reports_.

These do not include contributions to pension fund. This fund was
started in 1903 with an original contribution of $250,000. To 1911
yearly contributions of $80,000 were made, to 1915 of $125,000, in 1916
of $200,000, and to 1921 of $500,000.]




  X

  Capital


Physical expansion of the road to a large extent determined, and was
determined by, the growth of traffic. The development of physical
property was generally reflected in capital, represented by instruments
as bonds and stocks, and by accounts as surplus and reserves; and the
growth of traffic was generally reflected in total receipts, which were
disbursed in the form of payment of interest on bonds, of dividends on
stocks, and of additions to reserve and surplus accounts. Disbursements
depended largely, therefore, on the quantity and form of the securities
involved, and these in turn depended on the particular conditions under
which capital was obtained, and on the policy adopted to meet those
conditions. Government aid was a determining condition as to the
character and extent of securities issued. Aid in land, in money, and in
other privileges outlined in the charter, enhanced in value through the
business astuteness of the company, was of vital importance in the
construction of the main line. Of necessity it continued to exercise a
significant influence over the financial policy of the company.

The business astuteness of the company, evident in relation to the land
grant and other privileges, was prominent in later negotiations with the
Government leading to the final settlement of the payment of the money
subsidy. After the completion of the main line, a financial controversy
appeared as to the payment of interest on $9,880,912 loaned by the
Government in the Act of 1885. The loan was secured by a first lien on
all the unsold lands of the company, and the company claimed[908] that
since it was secured only by the lands, interest could be paid only from
the proceeds of land sales. At the same time the Government had in its
possession $8,996,000 of land grant bonds. Questions arose as to whether
these bonds were still subject to redemption under the terms of the land
grant mortgage, since the road was completed and the bonds therefore
earned, and as to whether the Government could collect interest on these
bonds and apply it to the interest due on the loan of $9,880,912. These
questions were asked in a letter dated January 22, 1886, and on January
28 the company paid no interest[909] on the loan. A ruling[910] was made
on February 8 in accordance with the ruling of January 7, 1885. It was
held that the land grant bonds might be treated as earned and issued,
and that the Government was entitled to the interest, such interest to
be applied to the principal and interest on the loan of $9,880,912. The
security for the loan was: first, $8,996,000 of land grant bonds;
second, a first lien on all the company's lands after the land grant
bonds were redeemed; third, the Algoma branch and the interest of the
company in leased lines; fourth, the company's entire revenue, and
lastly, the liability of the company. Consequently the loan was not
secured by the land alone, and the company was obliged to pay the
interest on it.

A final adjustment of the main accounts was made in an agreement[911] of
March 30, 1886. The company agreed to pay the debt of $19,150,700 to the
Government in two instalments, the first on May 1, 1886, and the second
on July 1, with interest at 4 per cent. The remainder of the debt,
$9,880,912, was extinguished by reduction of the land grant. On payment
of the debt, the Government agreed to cancel all the land grant bonds in
excess of $5,000,000 held as security for the construction of the road,
to return $300,000 of debenture stock of the Ontario and Quebec
Railroad,[912] deposited with the Government as security for the loan,
and to authorize the company to mortgage the Algoma branch to the same
amount per mile as the charter of the company authorized for the main
line. The company was given power to issue land grant bonds on the
remainder of the land grant, though not in excess of $2 per acre, and
after provision had been made for the bonds already outstanding. Of
these the public held $3,612,500, and against them the company had
interest bearing obligations for lands sold on deferred payments,
$1,579,708 and 14,734,667 acres of land. The Government accepted the new
land grant bonds to be issued, after provision had been made for the
outstanding bonds, in lieu of the $5,000,000 of land grant bonds held as
security for construction of the road. On May 1, 1886, the company paid
in $9,887,347, and on July 1, $9,163,353. The land[913] was formally
agreed upon on July 22.

A minor adjustment was made later with reference to the nine miles of
permanent road which had not been built in the Rocky Mountains. The
engineer-in-chief held that the grade of 238 feet per mile used for the
temporary road was below the standard of the Union Pacific and $460,087
of subsidy was withheld. On November 2, 1886, an agreement[914] was
approved by the Government, and on November 15 signed. In consideration
of the early completion of the road, and of its being opened for traffic
and regular operation on June 28, and in consideration of the repayment
of the loans, it was agreed: (1) that the Government should accept the
road; (2) that the company should accept the road built by the
Government subject to deficiencies; (3) that the Government should pay
the balance of the subsidy; (4) that the Government should release
$5,000,000 of land grant bonds held as security, and (5) that the
company should make improvements at Mount Stephen and should deposit
$1,000,000 of land grant bonds with the Government to be held until they
were made. On November 20, $458,058 was paid[915] to the company. To
this amount, objection was made that no adjustment was provided as to
the value of ballast pit rails on the Pembina branch, and of materials
on the Thunder Bay branch. The Government replied[916] on December 8
that the rails were to be transferred to the company at cost
price--cost being the amount paid by the Government in 1879, the date of
purchase--and that this amount, plus the cost of materials on the
Thunder Bay branch, had been deducted. A final dispute arose as to the
character of the road handed over by the Government in British Columbia.
Messrs. John A. Boyd, Thos. C. Keefer and Chas. C. Gregory were
appointed as arbitrators by an Order in Council[917] of January 5, 1888.
A claim of $12,000,000 on the part of the company gained an award of
$579,255.

Aid given directly to the company by the Dominion Government was
supplemented by aid from Provincial and Municipal Governments,
especially through assistance given to subsidiary companies. This aid,
as has been shown, was given partly in land grants. It was also given in
the form of subscriptions to bonds or stock, and in cash payments. The
total amount of aid given in cash by the Dominion Government was[918]
$30,289,343. The cost of the road handed over by the Government to the
company was $37,785,320. Provincial Governments gave directly to the
Canadian Pacific a relatively small sum, $412,878, and municipalities,
$464,761. Through subsidiary companies the Dominion Government gave
indirectly to the Canadian Pacific in cash, $13,129,873, Provincial
Governments gave $12,016,257, and municipalities, $4,632,422. Almost as
much cash aid was given to the company indirectly through its
subsidiaries as directly through the charter. In the acquisition of
lines through subsidiary companies the company was in a strategic
position. These lines, often largely built with money subscribed by
various Governments,[919] were in many cases unable to meet heavy fixed
charges, because of reckless expenditure in construction, encouraged by
financial aid of this character, and because of ill-advised
construction.[920] Operating expenses were seriously increased because
of this ill-advised construction, and with low revenue a characteristic
feature, the companies were involved in serious difficulties.
Consequently the Canadian Pacific was in a position to acquire the
roads at a relatively low price, and although they were inefficiently
operated as separate lines, as parts of a complete system or as part of
a through connexion, they were of considerable advantage. For example,
the Canada Central was subsidized from Pembroke to Callander, 120 miles,
at $12,000 per mile by the Dominion Government, by a municipal bonus of
$75,000; and by municipal subscriptions of $42,500. As part of a through
route to the west it was invaluable. Again; the South-Eastern Railway,
consisting of several ill-pieced sections of road, was acquired through
the foreclosure of a mortgage, and became a valuable portion of a
through route to Boston and St. John. Branch lines unable to exist by
themselves became valuable feeders to a complete system, as in the case
of the Manitoba South-West Colonization Railway, the Laurentian Railway,
or the St. Lawrence and Ottawa Railway. Charters of subsidiary companies
were of a valuable character. Bonds and securities could be issued on
the property of the subsidiary line without seriously impairing the
security of bonds on the main lines. Loans, subsidies, and various
privileges which could not be obtained directly by the Canadian Pacific
could be obtained through these charters. Access to territory otherwise
impossible was obtained through extension rights. The disadvantages
occasioned through heavy operating expenses were, in contrast to the
advantages, of relatively slight importance.

The strategic position of the company, evident in the substantial
Government aid and in the acquisition of other roads under favourable
conditions, was a cause and a result of the stability of the management
under which the policy of the company was formulated. The management
which carried through the construction of the main line with minor
changes remained in control throughout the history of the road. In 1886
Messrs. Grenfell and Rose of London retired in favour of Mr. Levi P.

Morton and Mr. R. J. Cross of New York, members of the firm of Morton,
Bliss & Co., the American branch of Morton, Rose & Co. In the following
year, Mr. H. S. Northcote retired, and the Hon. G. A. Kirkpatrick, M.P.,
of Kingston, was appointed. In 1888 Mr. Grenfell again became a
director, as did also Mr. W. D. Matthews of Toronto, Mr. D. McInnes of
Hamilton, and Mr. J. J. C. Abbott, solicitor of the company. Following
these changes, in the next year, Messrs. Grenfell and Morton retired in
favour of Mr. Thomas Skinner of London. In 1890, Mr. Martinsen retired
in favour of Mr. Samuel Thomas of New York. In 1891 Mr. Thomas and Mr.
Kirkpatrick retired, and Mr. J. W. Mackay of New York was appointed. Two
years later Mr. R. J. Cross retired. Mr. C. R. Hosmer was added in 1899.
Mr. J. W. Mackay died in 1902. The Hon. G. Drummond, the Hon. R. Mackay
and the Hon. R. G. Reid were added in the following year. Mr. L. J.
Forget was added in 1909. The Hon. G. Drummond was replaced by Mr. A. R.
Creelman in 1910. Mr. H. S. Holt was added in 1912, and Mr. A. Nanton
took the place of Mr. Creelman in 1914. Mr. J. K. L. Ross and Sir George
Bury became members in 1915. Senator F. L. Beique and Sir Vincent
Meredith were added in 1916, and Mr. R. Mackay retired. Sir George Bury
retired from the directorate and the executive committee in 1918. Mr. R.
Dunsmuir was succeeded by the Hon. W. J. Shaughnessy in 1920. Sir John
Eaton became a director on December 8, 1919, and continued until his
death in 1922. These changes were changes in personnel rather than
changes in the interests represented. Mr. Sandford Fleming was a member
from 1885 until the time of his death in 1916. Mr. Donald McInnes was a
member until 1904, the date of his death. Mr. G. R. Harris represented
Blake Bros. & Co. of Boston from 1885 to 1904. Mr. W. D. Matthews was a
member from 1889 until his death in 1920. Mr. Thomas Skinner has been a
member from 1888. Membership of the executive committee was even more
continuous. In 1887 this committee was revived with Messrs. Stephen, Van
Horne, Smith and Angus as members. Mr. R. B. Angus has been a member
since that date.[921] Lord Strathcona was a member until 1915, the date
of his death. Sir Edmund Osler has been a member since 1899. Mr. D.
McNicoll became a member in 1907 and continued until 1917. During the
war period, Mr. Grant Hall and Mr. H. Holt became members. In the more
important offices continuity has also been characteristic. Mr. W. C. Van
Horne became president in 1890, and Mr. T. G. Shaughnessy
vice-president. Mr. Van Horne continued as president until 1899, when he
became chairman of the executive committee. He was a member of this
committee until his death in 1916. Mr. Shaughnessy became vice-president
in 1891 and president in 1899, continuing in that capacity until 1918,
when he became chairman of the executive committee and was succeeded by
Mr. E. W. Beatty as president. From the year of its inception to 1918
the company has had three presidents, all of whom had been with the road
from the beginning. Sir William Van Home and Lord Shaughnessy were
typically expert railroad men, and from the standpoint of technical
efficiency the road was admirably served.

The continuity and ability of the management were causes and effects of
the dominance of individual members as holders of capital stock. In
October, 1883,[922] there were 550,000 shares of this stock held by 525
shareholders. These shareholders were scattered through the states of
the Union, through the British Isles, and four of the leading countries
of Europe, and through different parts of Canada. The State of New York
had within its boundaries individuals holding 290,000 shares, the
province of Quebec over 100,000, the British Isles over 90,000, Holland
57,000 and France 15,000. Shares were concentrated largely in New York
and Montreal. Morton, Bliss & Company held 32,000 shares, Mr. George
Stephen 31,000, Morton, Rose & Company 27,500, Mr. D. A. Smith 23,000,
Mr. D. McIntyre 20,000, Mr. R. B. Angus, 15,000, and Messrs. J. S.
Kennedy and J. J. Hill 10,000 each. In 1915 it was stated that 1364 per
cent. of the shareholders were in Canada, 6288 per cent. in the United
Kingdom, and 1039 per cent. in the United States. Assuming that slight
change[923] has been made since 1915--a reasonable assumption in view
of the stable character of the shares as securities--it would appear
that 478 per cent. of the shares were distributed among 6288 per cent.
of the shareholders in the United Kingdom, and that control from the
United Kingdom was not concentrated but rather in the hands of several
smaller shareholders; that 2410 per cent. of the shares were
distributed among 1039 per cent. of the shareholders in the United
States, and that control was more distinctly concentrated, and that
1773 per cent. of the shares were distributed among 1364 per cent. of
the shareholders in Canada--further evidence of concentrated
control.[924] In 1921 eleven members of the directorate were resident in
Montreal, two members in Toronto, one member each in Winnipeg, and
London, England. All the members of the executive committee were
resident in Montreal except Sir Edmund Osler, a resident of Toronto.
This situation, of course, was rather the result of the fact that the
head offices of the company were in Montreal than of any question of
control. But generally control remained concentrated in the hands of a
continuous management.

The liberal character of Government aid, continuity and efficiency of
management, physical expansion of the road, growth of traffic, and the
character of securities issued, were interdependent factors upon which
depended the disbursement of net earnings. In the period prior to the
completion of the main line the attitude of the Government toward the
company was of considerable importance. The difficulties of the period
from 1870 to 1880 in relation to Government contracts, the economic and
national development of Canada which demanded the immediate construction
of the road, and the difficulties of construction, made essential
construction by private enterprise and necessitated liberal terms. The
terms were no less liberal as a result of the experience and ability of
the promoters of the private corporation shown in the success attending
their efforts in the construction and operation of the St. Paul,
Minneapolis and Manitoba Railway, and as a result of an appreciation of
the fact that party government involved continued support to the
corporation from the date of initiation of construction to the date of
completion. The success of the Government was the success of the
Canadian Pacific Railway.[925] As a result of this inevitable
liberality[926] of the Government, the financial policy of the company
during the period prior to the completion of the main line was
characterized by issues of stock. The general failure of the company to
finance construction through the sale of land grant bonds led to an
attempt to sell stock. Earnings derived from roads acquired in Eastern
Ontario were far from sufficient to warrant confidence in the company's
capital stock, and a device in the nature of a guarantee for payment of
dividends in the deposit of funds with the Government, to increase and
stabilize the price of stock, failed. This deposit seriously reduced the
company's working funds, and tended to destroy the confidence it was
hoped the device would create. The payment of dividends to the extent of
$2,128,000 to August, 1883, to keep up the price of stock, or to prevent
shareholders from sacrificing property[927] because of attacks on the
company, had an effect contrary to that intended. With uncertain market
conditions, effective hostile attacks on the New York market by the
Northern Pacific and on the London market by the Grand Trunk, and the
questionableness of the policy itself, stock declined in price. Failure
to finance construction through the sale of stock occasioned persistent
demands from the Government in which loans were successfully secured at
favourable rates. Moreover, governmental patronage was of consequence in
stabilizing the position of the company. Objections on the part of the
opposition occasioned unusual caution on the part of the Government, but
the dependence of the Government on the success of the road made the
loans inevitable. Aid in the form of loans from the Government was in
part an explanation of the financial policy of the company in issuing
stock rather than bonds. The ability of the company to secure this aid
was of natural consequence to the character of the securities issued.

As a result of the liberality of the Government, the number of bonds
outstanding was relatively small. Consequently with the completion of
the main line the net earnings of the company were not unduly burdened
in the payment of fixed charges. In 1886 the amount paid[928] in fixed
charges (including rentals) totalled $3,068,082 or $68729 per mile.
Throughout the whole period of the company's history it continued to
remain of minor importance. In 1890 it had increased to $4,246,618 or
$76323 per mile, in 1899 to $6,816,676 or $97381 per mile and in 1921
to $11,519,072 or $85681 per mile. The percentage of fixed charges to
net earnings decreased from 557 per cent, in 1899 to 307 per cent. in
1921. This favourable situation in the later years was not an immediate
result of Government aid but an indirect result--through the rapid
physical expansion of the road and the increase in traffic which the
liberality of the Government had made possible. The rapid increase in
net earnings enabled the company through the soundness of its position
to secure capital during the later years at a comparatively low rate of
interest. Application[929] was made to Parliament in 1889 for power to
issue debenture stock for the purpose of consolidating obligations to
the company and reducing the interest rate on those obligations. Two
years later power[930] was given to raise additional debenture stock for
other purposes. To enable the company to secure capital without
increasing the fixed charges, the Government was asked to restore the
privilege granted in the charter but cancelled in the Loan Act of 1884-5
of issuing 4 per cent. preference stock. In 1893 power[931] was given to
issue stock which was non-cumulative, which was limited in quantity to
one-half the common stock and which was not to affect any lien created
by a mortgage debenture or bond. The depression[932] of the nineties
which occasioned a decline in earnings and in the earnings of subsidiary
lines, the Duluth, South Shore and Atlantic, and the Minneapolis, St.
Paul and Sault Ste. Marie, made impossible the sale of preference stock
at a satisfactory price and even made it necessary to reassume 300,000
of this stock negotiated before the depression. With recovery 100,000
was marketed[933] at nearly par in 1897 and 2,285,000 a year later. At
the end of the decade, the company had outstanding $26,791,000 of this
stock. During the period of rapid expansion after 1900, and the
consequent improvement of the company's financial standing, additional
capital was secured through the sale of this stock ensuring a low rate
of interest and preventing an increase in fixed charges. The amount
outstanding increased to $80,681,921 in 1915 and remained at that point
to 1921. Most rapid increases were evident during the period of greatest
prosperity, from 1911 to 1913, since it was only under these conditions
that a security of this character could be sold. During the war it was
found necessary to issue other securities.

Fixed charges were also kept at a low level by the sale of 4 per cent.
consolidated debenture stocks. Through this form of security capital was
again secured at a low rate of interest and with relatively slight
difficulty. During the decade from 1890 to 1900 the amount of this stock
outstanding increased from $4,380,000 to $54,380,000, the increase being
most rapid during the years before the depression. Following the
depression a steady increase was evident. With rapid expansion[934] of
the road after 1900 consolidated debenture[935] stock increased to
$176,284,882 in 1915 and to $238,206,432 in 1921. During the war
$40,000,000 of debenture stock was issued[936] as a loan to the British
Treasury. The stock was purchased by the Imperial Government at 80 per
cent. of its face value and the proceeds, $32,000,000, loaned at an
annual interest rate of 5 per cent. payable semi-annually. This loan
facilitated credit operations of the Imperial Government on the American
market and netted the company an annual premium of  per cent. In 1921
4,800,000 was sold on the London market and $25,000,000 in New York.
Consolidated debenture stock was issued to secure capital at a low rate
of interest and to cancel obligations having a higher rate of interest.
Its effect on fixed charges was evident. In 1921 of a total of
$11,519,072 of fixed charges, $7,854,544 was due to consolidated stock.

The ability of the company to secure capital at a low rate of interest
and to keep fixed charges at a low level occasioned by the rapid
expansion of the road was a cause and an effect of the favourable
position of the company in the issue of common stock as a security to
obtain additional capital. Liberal Government aid, which to a large
extent made possible the rapid physical expansion of the road, the
marked increase in traffic, and the favourable position of the company
from the standpoint of fixed charges, had its effect consequently on the
amount of capital stock issued and the dividends paid. To August, 1893,
3 per cent. dividends were paid from a deposit of $15,942,645 made by
the company with the Government in accordance with an agreement under
the Loan Act, and were not therefore paid from the immediate earnings of
the company. To provide for the payment of dividends after the
exhaustion of the deposit at that date, a reserve fund was started.
Surplus[937] of net earnings after payment of fixed charges was set
aside for that purpose. In 1889 this surplus increased 600 per cent. The
yearly surplus declined slightly in 1890, but the reserve fund in that
year totalled $2,656,433. The rapid accumulation of surplus in 1889 was
accomplished through a decline in expenses--particularly in locomotive
expenses--despite an increase in traffic and an increase in mileage. The
slight decline of surplus in 1890 followed an increase in fixed charges
and in expenses, despite a decline in maintenance expenses with an
increased mileage of 7 per cent. Gross earnings increased steadily
during the two years. From the fund accumulated, a dividend of 1 per
cent. on February 17, 1890, and on August 17 and February 17, 1891, was
declared. In 1893 the accumulated reserve totalled $1,261,213, but with
the depression and the expiration of the guarantee it was exhausted, and
in 1895 the rate of dividends declined to 1 per cent. During the
recovery[938] the rate steadily increased, reaching 5 per cent. in 1899.
In 1903 it increased to 5 per cent., in 1904 to 6 per cent., in 1907 to
7 per cent., in 1911 to 8 per cent., and in 1912 to 10 per cent.,
remaining at that point throughout the remainder of the company's
history. On the stock market C.P.R. quotations accompanied the rise in
dividend rates. Following the depression stock increased in price from
50 to 85 in 1897, rose above par in 1901, and reached 139 in 1903, 190
in 1906, 240 in 1911 and the highest point, 276, in 1912. The expansion
in traffic and in earnings during the period was not only reflected in
an increased dividend rate and in market quotations. The favourable
position of the company on the financial market made possible the sale
of stock under fortunate circumstances and with an increase in dividend
rates came an increase[939] in capital stock. In 1902 an issue of
$19,500,000 was authorized and largely sold to shareholders at par.
Again in 1904 at the same price another issue of $25,500,000 was sold
and largely subscribed by shareholders. In 1913 capital stock had
increased to $260,000,000 and on sales a premium had been realized of
$45,000,000. From the beginning of the century to 1913 the company had
received $240,000,000 from sales of capital stock. Capital was secured
from the sale of common stock, particularly during a period of
prosperity.

With the depression beginning in 1914, the difficulty of securing
capital by the sale of debenture stock at low interest rates led to the
issue of $52,000,000 of 6 per cent. note certificates due in 1924
against deferred payments and securities on land to the extent of
$57,131,199. During the war similar conditions prevailed and on January
1, 1915, the company issued $8,930,000 of Victoria Rolling Stock and
Realty Company equipment trust 4 per cent. certificates. In addition to
capital obtained from these securities, adjustments were made in surplus
and reserve accounts to meet necessary expenditures on capital.

The disbursement of total receipts was determined by the character and
number of the securities issued. Fixed charges were to a large
extent[940] dependent on the issue of consolidated debenture stock and a
relatively small proportion of total receipts was absorbed in this item.
Dividends on preferred stock[941] were an even smaller proportion of
total receipts. In 1921 dividends on this security were less than
one-third of fixed charges. Dividends on common stock[942] have taken an
increasing share. Prior to 1908 fixed charges absorbed a larger share
of total receipts than dividends on common stock, but since that year,
following the marked expansion of the road, dividends have rapidly
increased. An increasing dividend rate and larger issues of stock led to
a marked increase in dividends from $9,508,800 in 1908 to $26,000,000 in
1914. Since that year dividends have remained at the latter figure. The
remainder of total receipts after the payment of fixed charges and of
dividends on preference stock and on common stock accumulated as
surplus. As a tribute to the increase in the earning capacity of the
road despite an increase in dividends and in fixed charges, surplus has
steadily increased following the recovery of the nineties. In 1899 it
had increased to $9,614,528, in 1914 to $79,711,092 and in 1921, despite
the difficulties of the war, to $128,481,120. In addition in the latter
year reserves had been provided for equipment replacement $10,780,420,
for steamship replacement $19,185,402 and for contingencies and taxes
$46,638,048. Finally the company had over $5,000,000 of cash on hand,
and in Government securities (Imperial, Dominion, Provincial and
Municipal) $29,327,396.

Total receipts, which depended primarily on net earnings and to a large
extent on freight traffic, and the situation in western Canada, were
disbursed primarily in dividends on common stock and in the accumulation
of surplus. Dividends above a normal return on common stock have,
therefore, existed as the result of the expansion of the road in western
Canada and have largely been paid from the economic development of that
area.

[Footnote 908: _Sessional Papers_, No. 35, 1886, p. 19.]

[Footnote 909: _Ibid._, p. 22.]

[Footnote 910: _Ibid._, p. 23.]

[Footnote 911: 49 Vic. c. 9.]

[Footnote 912: 47 Vic. c. 61, sect. 1.]

[Footnote 913: _Sessional Papers_, No. 34, 1887, p. 105.]

[Footnote 914: _Ibid._, No. 34_b_, p. 127.]

[Footnote 915: _Ibid._, p. 128.]

[Footnote 916: _Ibid._, p. 129.]

[Footnote 917: _Ann. Report Dept. of Railways and Canals_, 1894-5, p.
xvi.]

[Footnote 918: _Railway Inquiry Commission_, 1917, p. xvi.]

[Footnote 919: British Columbia was typically a province in which
difficulties of construction made necessary the existence of various
subsidiary companies and liberal Government support.]

[Footnote 920: See _Economic Journal_, vol. 12, p. 405.]

[Footnote 921: The death of Mr. Angus since this book went to press
removes the last member of the first directorate of the Company.]

[Footnote 922: _Sessional Papers_, No. 31, 1884, p. 225.]

[Footnote 923: On March 1, 1921, shares were distributed:

    United Kingdom           1,242,837     478  per cent.
    Canada                     460,838     1773   "
    United States              626,510     2410   "
    France                      79,123      304   "
    Other holdings.            190,692      733   "]

[Footnote 924: Additional sales of stock were largely subscribed by
shareholders.--_Address of Lord Shaughnessy to C.P.R. shareholders_, May
1, 1918.]

[Footnote 925: The words of John Pope: "The day the Canadian Pacific
busts, the Conservative party busts the day after." Skelton, O. D.,
_Life and Letters of Sir Wilfrid Laurier_, vol. I, p. 273.]

[Footnote 926: It will be understood that the word "liberality" is used
to express neither condemnation nor approval. It is intended to refer
only to the fact that a substantial aid was given.]

[Footnote 927: Circular to shareholders, December 29, 1883. _Sessional
Papers_, No. 25, 1885, p. 237.]

[Footnote 928: 1886-1921:

                                               Fixed
                                Fixed         Charges
                               Charges        per Mile

    1886 (Calendar year)     $3,068,08184     $68729
    1887                      3,250,26381      64057
    1888                      3,544,35100      68344
    1889                      3,779,13294      75146
    1890                      4,246,61800      76323
    1891                      4,664,49345      80896
    1892                      5,102,01809      84821
    1893                      5,338,59722      84345
    1894                      6,581,37882    1,03866
    1895                      6,659,47832    1,03383
    1896                      6,708,08442    1,03583
    1897                      6,783,36726    1,03279
    1898                      6,774,32124    1,01396
    1899                      6,816,67636      97381
    1900 (Fiscal year)        3,434,24467 (six months).
    1901                      7,305,83549      96599
    1902                      7,334,82509      96676
    1903                      7,052,19727      91019
    1904                      7,586,09624      91047
    1905                      7,954,06576      92834
    1906                      8,350,54484      95141
    1907                      8,511,75556      92984
    1908                      8,770,07671      93041
    1909                      9,427,03274      95434
    1910                      9,916,94033      98401
    1911                     10,011,07144      96800
    1912                     10,524,93749      97751
    1913                     10,876,35215      95691
    1914                     10,227,31117      86488
    1915                     10,446,50983      84464
    1916                     10,306,19600      79787
    1916                      5,132,55109  six months
    1917 (Calendar year)     10,229,14343      77658
    1918                     10,177,51298      78348
    1919                     10,161,50977      75894
    1920                     10,177,40899      75939
    1921                     11,519,07197      85681

  Compiled from _C.P.R. Reports_.]

[Footnote 929: 52 Vic. c. 69. This stock is a first charge on the road,
but it is perpetual and irredeemable with no right of foreclosure in the
event of default.]

[Footnote 930: 54-55 Vic. c. 71.]

[Footnote 931: 56 Vic. c. 41.]

[Footnote 932: _C.P.R. Report_, 1893.]

[Footnote 933: Preferred stock, 4 per cent., 1893-1921:

    1893      $6,424,00000
    1894       6,424,00000
    1895       6,424,00000
    1896       8,005,66667
    1897       9,830,66667
    1898      20,951,00000
    1899      26,791,00000
    1901      31,171,00000
    1902      31,171,00000
    1903      32,500,00000
    1904      33,473,33333
    1905      37,853,33333
    1906      42,719,99904
    1907      43,936,66570
    1908      48,803,33233
    1909      52,696,66571
    1910      55,616,66571
    1911      57,076,66570
    1912      66,695,09786
    1913      74,331,33997
    1914      78,224,67303
    1915      80,681,92112
    1916      80,681,92112
    1917      80,681,92112
    1918      80,681,92112
    1919      80,681,92112
    1920      80,681,92112
    1921      80,681,92112

  Compiled from _C.P.R. Reports_.]

[Footnote 934: General purposes, 2,804,873; China and Japan steamship,
720,000; Souris branch, 1,169,000; retirement of Canada Central bonds,
450,000; Pacific Coast steamers, 650,000; Atlantic steamship,
2,217,500; branch lines and acquisition of mortgage bonds, 26,593,192;
discharge of debt to Quebec Government, 1,438,356; lake steamers,
180,000.]

[Footnote 935: Consolidated debenture stock, 4 per cent., 1889-1921:

    1889        $4,380,00000
    1890        12,040,60600
    1891        19,770,49265
    1892        34,953,00828
    1893        39,819,67500
    1894        41,279,67500
    1895        42,353,01833
    1896        45,347,84333
    1897        46,055,87033
    1898        48,061,86653
    1899        54,237,08253
    1901        60,369,08253
    1902        63,532,41586
    1903        67,252,25252
    1904        82,355,21766
    1905        89,200,54932
    1906       101,519,41121
    1907       106,045,41121
    1908       115,657,07788
    1909       128,930,13252
    1910       136,711,61618
    1911       142,861,46226
    1912       153,823,70686
    1913       163,257,22432
    1914       173,307,47009
    1915       176,284,88210
    1916       176,284,88210
    1917       176,284,88210
    1918       216,284,88210
    1919       216,284,88210
    1920       216,284,88210
    1921       238,206,43168

  Compiled from _C.P.R. Reports_.]

[Footnote 936: 7-8 Geo. V. c. 8, _C.P.R. Report_, 1916.]

[Footnote 937: Surplus, 1886-90:

    1886         $635,44470
    1887          253,85435
    1888          326,42392
    1889        2,461,70834
    1890        2,053,08251

  Compiled from _C.P.R. Reports_.]

[Footnote 938: Dividend rate, 1884-1921:

            Per
            cent.

    1884      3
    1885      3
    1886      3
    1887      3
    1888      3
    1889      3
    1890      5
    1891      5
    1892      5
    1893      5
    1894      25
    1895      15
    1896      2
    1897      4
    1898      4
    1899      5
    1901      5
    1902      5
    1903      55
    1904      6
    1905      6
    1906      6
    1907      7
    1908      7
    1909      7
    1910      75
    1911      85
    1912     10
    1913     10
    1914     10
    1915     10
    1916     10
    1917     10
    1918     10
    1919     10
    1920     10
    1921     10

  Compiled from _C.P.R. Reports_.]

[Footnote 939: 1890-1921:

                       Price of Stocks                Common
                     Low    High  Average             Stock

    1890             67     84    755            65,000,00000
    1891             72     91    815            65,000,00000
    1892             86     94    90              65,000,00000
    1893             66     90    78              65,000,00000
    1894             58     73    655            65,000,00000
    1895             33     62    475            65,000,00000
    1896             52     62    57              65,000,00000
    1897             46     82    64              65,000,00000
    1898             72     90    81              65,000,00000
    1899             84     99    915            65,000,00000
    1900             84     99    915            65,000,00000
    1901             87    117   102              65,000,00000
    1902            112    145   1285            65,000,00000
    1903            115    138   1265            72,624,16200
    1904            109    135   122              84,500,00000
    1905            130    177   1535            98,738,24000
    1906            155    201   178             105,995,19000
    1907            138    195   1665           121,680,00000
    1908            140    180   160             141,534,43600
    1909            165    189   177             150,000,00000
    1910            176    202   189             173,530,08500
    1911            195    247   221             180,000,00000
    1912            226    283   2545           196,806,62100
    1913            204    266   235             200,000,00000
    1914            153    220   1865           260,000,00000
    1915            138    194   166             260,000,00000
    1916            162    183   1725           260,000,00000
    1917            126    167   1405           260,000,00000
    1918            135    174   1545           260,000,00000
    1919            126    171   1485           260,000,00000
    1920            109    134   1215           260,000,00000
    1921            101    123   112             260,000,00000

Compiled from _C.P.R. Reports_ and files of the _Commercial and
Financial Chronicle_.]

[Footnote 940: In 1921, of a total of $11,519,072, rentals totalled
$1,862,131 and interest on bonds $1,802,397.]

[Footnote 941: Dividends, preferred stock, 1894-1921:

    1894             $256,96000
    1895              128,48000
    1896              281,29333
    1897              327,52666
    1898              432,16000
    1899              656,18250
    1900 (six months) 599,08667
    1901              173,39934
    1902              1,246,84000
    1903              1,273,42000
    1904              1,303,40665
    1905              1,455,73331
    1906              1,562,79999
    1907              1,711,89488
    1908              1,819,07376
    1909              2,029,99997
    1910              2,156,53330
    1911              2,224,66666
    1912              2,399,86663
    1913              2,807,28847
    1914              3,031,65359
    1915              3,169,90626
    1916              3,227,27684
    1916 (six months) 1,612,63842
    1917              3,227,27684
    1918              3,227,27684
    1919              3,227,27684
    1920              3,227,27684
    1921              3,227,27684

  Compiled from _C.P.R. Reports_.]

[Footnote 942: Common stock, dividends, 1890-1921:

    1890              $1,300,000
    1891               1,300,000
    1892               1,300,000
    1893               1,300,000
    1894               3,250,000
    1895               1,231,960
    1896               1,625,000
    1897               1,625,000
    1898               2,925,000
    1899               2,600,000
    1900 (six months)  1,625,000
    1901               5,200,000
    1902               3,250,000
    1903               3,737,500
    1904               5,070,000
    1905               5,070,000
    1906               6,084,000
    1907               7,300,800
    1908               9,508,800
    1909              10,500,000
    1910              18,600,000
    1911              18,000,000
    1912              19,000,000
    1913              23,000,000
    1914              26,000,000
    1915              26,000,000
    1916              26,000,000
    1916 (six months) 13,000,000
    1917              26,000,000
    1918              26,000,000
    1919              26,000,000
    1920              26,000,000
    1921              26,000,000

  Compiled from _C.P.R. Reports_.]




  XI

  Conclusion


The history of the Canadian Pacific Railroad is primarily the history of
the spread of western civilization over the northern half of the North
American continent. The addition of technical equipment described as
physical property of the Canadian Pacific Railway Company was a cause
and an effect of the strength and character of that civilization. The
construction of the road was the result of the direction of energy to
the conquest of geographic barriers. The effects of the road were
measured to some extent by the changes in the strength and character of
that civilization in the period following its construction.

The strength and character of western civilization in North America were
the results of the qualities and numbers of its population. The
adaptability and virility of this population were evident in the
rapidity and directness with which institutions brought from Europe were
abandoned or adjusted, or with which new institutions were created to
meet effectively conditions imposed by a new environment. For the
French, institutions in many cases proved inadequate on account of the
difficulties of environment, due to harshness of climate, the
inhospitable character of the soil, and the hostility of the natives and
other nationalities, and the civilization concerned disappeared.
Eventually with an increased knowledge of new conditions, with the
necessary adaptability and with the more suitable environment
characteristic of Quebec in the St. Lawrence valley, this civilization
gained a foothold on the eastern shores of the continent and grew
steadily and persistently. In this growth, feudalism as an institution
was especially significant. Its centralizing tendencies shown in its
advantages from a military standpoint were strengthened by the constant
warfare of the Indians and the English, which made essential the
concentration of population at strategic points along the St. Lawrence
basin. The strength of this tendency toward centralization more than
offset the effects of the individualism essential to the fur trade,
which with the ease of penetration to the interior by waterways was
especially pronounced. The opposition of these effects was evident in
the number of _coureurs de bois_ and in the attempts of the French
authorities to prevent the population from taking to this life, but
generally the _seigneurial_ system, the effects of military struggle,
the character of the St. Lawrence river basin, the influences of
language, religion and customs promoted the development of homogeneous
settlement, and the growth of a distinct national feeling.

For the English and other nationalities, difficulties of environment
were also apparent in the failures of early settlements, although
farther south along the Atlantic coast conditions, especially as to
climate, were more favourable. But again adjustments essential to the
existence and growth of settlement were accomplished. Monopolies as a
part of the institutional equipment, especially of the English, and the
consequent centralizing tendencies, largely disappeared because of the
relatively minor importance of military exigencies. The inaccessibility
of the interior, and the consequent disregard of the fur trade, and
attention to agriculture, fishing, lumbering and the extractive
industries in general, were conditions promoting a steady growth of
settlement, a feeling of solidarity and the development of enterprise,
initiative and aggressiveness.

The constant expansion westward of English settlement especially in the
northern section of the Atlantic seaboard--of what is now the United
States--led to increased friction with the French settlements along the
St. Lawrence and eventually to the struggle for supremacy of the North
American continent. In this struggle, lack of cohesion in the French
settlements stretching from the mouth of the St. Lawrence to the mouth
of the Mississippi, and effectiveness of British naval supremacy, were
determining factors leading to the disappearance of French control.
Following this result the aggressiveness of English colonists became
more in evidence and westward expansion became more pronounced. In turn
there came the struggle against control over the colonies exercised by
Great Britain and the success of the colonists in territory in which
British naval supremacy was of slight avail.

Westward colonization by English settlers received fresh stimulus with
this victory, and settlements were established along the north shores of
Lake Ontario and Lake Erie, or in the territory known as Upper Canada.
Of these settlers, the majority were known as United Empire Loyalists,
but essentially they were the same aggressive, enterprising type as the
New England colonists. Demands on the part of these settlers for
assistance from the British Government, anxious as to the outcome of
expansion to the south, were met with substantial liberality. This
general encouragement given to emigration for the settlement of Upper
Canada led to the development of a distinct feeling of dependence on
Great Britain.

These general characteristics of the settlers of Upper Canada contrasted
with the characteristics of the French in Lower Canada. Solidarity
developed in the centralization of the old regime especially in the
struggle leading to the downfall of New France and, strengthened by
devices of the British Government intended to foster their loyalty to
the new authorities, was at variance with the aggressive individualism
of the population of Upper Canada. Demands of the settlers of Upper
Canada for an outlet by the St. Lawrence and for all the rights implied
in self-government led to differences which were settled in the Act of
1791. The loyalty of Upper Canada and of Lower Canada encouraged by
these adjustments of the British Government was strengthened by the
necessity of co-operation occasioned by the attacks of the United States
in 1812, but the variance between the attitudes of Upper Canada and
Lower Canada continued. The loyalty to Great Britain characteristic of
Upper Canada during this early period and the particular aggressiveness
of this settlement were evident in later developments. Possibilities of
advantage from the diversion of traffic of the rapidly expanding
western states down the St. Lawrence made advisable appeals for aid from
the British Government leading to the construction of canals. The
attempts to improve the St. Lawrence occasioned difficulties with the
French of Lower Canada, which were eventually settled, after Lord
Durham's Report, by the Act of Union.

The attitude of dependence on Great Britain characteristic of English
colonies was strengthened by the persistent appeals and the success with
which they were met. The general aggressiveness of these settlers and
especially of the trading interests led to the tariff adjustments of
1843 directed to the diversion of traffic along the St. Lawrence canals
and through Montreal, and following the disappearance of advantages
gained with the adjustments through the abolition of the Corn Laws in
1846 led to the Annexationist Manifesto in 1849. Of more significance,
renewed efforts were made to capture the trade of the western states in
the construction of the Grand Trunk as an offset to the competitive
disadvantages of canals. To relieve the situation further negotiations
for reciprocity were successfully terminated in 1854. The abrogation of
this treaty in 1866, the feeling of jealousy and anxiety as to the
attitude of the United States and the demand for improvements in
transportation giving an outlet to the sea during the winter season
(always with a view to a larger share of the traffic of the western
states) led to further requests for aid from Great Britain and finally
brought the construction of the Intercolonial and Confederation.

Generally, during the period prior to confederation, Upper Canada had
developed a spirit of dependence on Great Britain which might be
characterized, with no implication of condemnation, as unhealthy. The
aggressive, individualistic character of its early settlers had been
strengthened under the stress of circumstances and had developed
especially in the trading and governing classes to the point of
selfishness and of acquisitiveness. Frequent advantage was taken of the
possibilities of securing aid from Great Britain for the purpose of
constructing improvements designed to secure trade from the western
states. This acquisitive temperament was especially significant in the
attitude of Canada, especially of Toronto and Upper Canada, toward the
increased trade between the United States and the settlements which had
grown up in the Hudson Bay drainage basin and in the Pacific coast
drainage basin. Trade from the Red River settlement with the United
States had increased greatly by virtue of direct communication and its
potentialities were early recognized by Canada. In the Pacific coast
district (now British Columbia) the discovery of the gold-mines and the
consequent rapid immigration and development of the country were
occasions for further alarm. The solicitude of Canada and of Great
Britain as to these areas and their trade with the United States
hastened an agreement with British Columbia which led eventually to the
construction of the Canadian Pacific railroad.

This agreement, resulting largely from the acquisitiveness
characteristic of eastern Canada, led to difficulties, since by virtue
of the same characteristics eastern Canada found itself unable to give
the support necessary to the fulfilment of its obligations. The refusal
of the people to bear an increase in taxation to construct the road, the
jealousies of Toronto and Montreal, the dependence on private enterprise
and the accompanying fiasco in the Pacific Scandal, the gradual process
of construction under the Mackenzie regime, the appeals to Great Britain
for aid, and the liberality of the contract with the Canadian Pacific in
1881--a liberality based on a money subsidy which it was hoped could be
recovered from sales of lands in western Canada, and on land grants in
the same territory--were evidences of these particular characteristics
of the national outlook. The terms of the contract with the Canadian
Pacific Railway Company were designed to develop the trade of the
north-west and of British Columbia, and to divert that trade from the
United States to eastern Canada.

Under these conditions, the Canadian Pacific Railway was constructed
through the long stretch of unproductive land difficult territory north
of Lake Superior, and traffic was developed in western Canada by means
of various devices and with the utmost possible rapidity. Private
enterprise had undertaken the task, and by virtue of the liberality of
the terms, the general attitude of the Canadian Government, the spread
of population in the western states, the completion of the St. Paul,
Minneapolis and Manitoba Railway to Winnipeg, and the knowledge gained
of the nature of the task during the earlier years, the road was
completed to the Pacific coast in 1886. Its completion, moreover, found
the Canadian Pacific Railway Company in a satisfactory financial
condition.

The addition of the Canadian Pacific Railroad to the technological
equipment of Western civilization and the conditions under which it was
accomplished have had many and varied effects. Settlement was advanced
in every possible way. Immigration increased rapidly as a result of the
efforts of the company and of the Government. Branch lines were laid out
first in the territory south of the main line and later throughout the
whole area. These branches were strategically located, with reference to
possible, competitors, to the development of traffic, and to the sale of
the company's land. The marked increase in the production of grain and
especially of wheat in western Canada, stimulated by efforts to develop
traffic, and favoured by a world movement characterized by a general
rise in the price of wheat, and its diversion over lines to eastern
Canada, made necessary the improvement and increased control of
transportation facilities in the latter area. According to plan, the
economic development of the west stimulated the economic development of
the east. The marked prosperity of Canada, especially from 1896 to 1913,
paralleled the prosperity, the expansion, and the integration of the
Canadian Pacific during that period. Following the general progress of
Canada, occasioned by the opening of the west, advantage was taken by
eastern Canada (always with an eye to the main chance) of stimulating
progress still further by the construction of the Canadian Northern and
the Grand Trunk Pacific. To the difficulties which overtook these roads
were added the difficulties of the Intercolonial and the Grand Trunk,
which have suffered losses partly as a result of the effectiveness of
competition from Canadian Pacific lines in eastern Canada. Such were
some of the important effects of the construction of the Canadian
Pacific Railroad.

The diversion of traffic to eastern Canada by the Canadian Pacific and
other roads has been accomplished successfully, but to some extent at
least at the expense of Western Canada and with considerable protest
from that area. The existence of a large surplus on the balance sheet of
the Canadian Pacific Railway Company and the consistent payment of large
dividends,[943] accomplished through a high dividend rate and relatively
large issues of common stock, have been shown to be largely the result
of the freight situation[944] in western Canada. The successful protests
of western Canada against the monopoly clause did not materially change
the situation, nor did the Crows Nest Pass Agreement or the appointment
of the Board of Railway Commissioners. Nor does there seem to exist any
prospect of immediate change. The general acquisitive attitude of
eastern Canada, the result of its historical background, will scarcely
sanction an increase in the deficits of the Canadian National
Railways[945] in order to allow a lowering of rates in western Canada,
nor will it agree to an increase of rates in eastern Canada. It will
scarcely permit the reduction of a tariff[946] which would endanger the
traffic of the National Railways, consequently increasing their deficits
and at the same time diverting traffic to the United States. It will
scarcely be tactless enough to increase taxes on the Canadian Pacific to
reduce its dividends and its surplus because of the resulting
disturbance to the financial situation in Canada, because of the
well-known astuteness of that organization and because of a possible
decline in morale which might result.

On the other hand, the tax which has been paid by western Canada as a
result of the particular attitude of eastern Canada has provoked a
movement the strength of which is difficult to estimate. The land
situation involving the holding of alternate sections by the Canadian
Pacific seriously hampers social development. With tax exemption, the
construction of schools is restricted. The taxation problem, in general,
has been seriously increased because of tax exemption privileges. The
immigration problem has followed, and will follow, the necessities of
the railroads. The question as to whether the prairie provinces shall
control their own natural resources has become increasingly difficult.
The rise of the Progressive party, its increasing strength with
increasing population in western Canada--a population with
characteristics similar to those of eastern Canada--with its attitude
toward the railway rate problem, toward the natural resources question,
and toward the tariff, will become increasingly significant, but
prediction is dangerous. On the whole, important as the movement in
western Canada must become for the future development of the country,
the dominance of eastern Canada over western Canada seems likely to
persist. Western Canada has paid for the development of Canadian
nationality, and it would appear that it must continue to pay. The
acquisitiveness of eastern Canada shows little sign of abatement.

The Canadian Pacific Railway, as a vital part of the technological
equipment of western civilization, has increased to a very marked extent
the productive capacity of that civilization. It is hypothetical to ask
whether under other conditions production would have been increased or
whether such production would have contributed more to the welfare of
humanity.

[Footnote 943: Controversy has been frequent as to the right of the
company to issue dividends in excess of 10 per cent., the limit laid
down in the charter. It is claimed by the company that this limit no
longer exists, following the changes incidental to the regulation of
rates by the Board of Railway Commissioners (see Speech of Lord
Shaughnessy to the C.P.R. Shareholders, May 1, 1918). It is scarcely
probable that the dividend rate will be increased, because of the
hostility this move would create. But in any case the discussion is not
to the point. The existence of a large surplus and the payment of large
dividends are the causes of complaints.]

[Footnote 944: This has been brought out very well in the House of
Commons Inquiry regarding the abrogation or suspension of the Crows Nest
Pass agreement (see especially the statement of Mr. E. W. Beatty,
President of the Canadian Pacific).]

[Footnote 945: See the statement of Mr. D. B. Hanna, President of the
Canadian National Railways (_ibid._).]

[Footnote 946: The budget of Hon. W. S. Fielding is in point. Reductions
are of relatively slight importance, and these pertain more largely to
the preferential tariff. This will not be a substantial relief to the
west.]




[Illustration]




  Appendix "A"

  TERMS OF AGREEMENT OF ENTRANCE OF BRITISH COLUMBIA IN UNION


"The Government of the Dominion undertake to secure 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 point 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 ten years from the date of union. And the Government
of British Columbia agree to convey to the Dominion Government, in
trust, to be appropriated in such manner as the Dominion Government may
deem advisable, in furtherance of the construction of the said railway,
a similar extent of public lands along the line of the railway
throughout its entire length in British Columbia, (not to exceed,
however, 20 miles on each side of the said line,) as may be appropriated
for the same purpose by the Dominion Government from the public lands in
the North-West Territories and Province of Manitoba; provided that the
quantity of land which may be held under the pre-emption right or by the
Crown grant within the limits of the tract of land in British Columbia
to be so conveyed to the Dominion Government shall be made good to the
Dominion from the contiguous public lands; and provided further that
until the commencement, within two years, as aforesaid, from the date of
the union, of the construction of the said railway, the Government of
British Columbia shall not sell or alienate any further portions of the
public lands of British Columbia in any other way than under the right
of pre-emption requiring the actual residence of the pre-emptor on the
land claimed by him. In consideration of the land to be so conveyed in
aid of the construction of the said railway, the Dominion Government
agree to pay British Columbia, from date of union, the sum of $100,000
per annum, in half-yearly payments in advance." Article II, _Order in
Council respecting the Province of British Columbia Statutes of Canada_
1872, p. lxxxviii.




  Appendix "B"

  44 VICTORIA




  CHAPTER I

  AN ACT RESPECTING THE CANADIAN PACIFIC RAILWAY

  (_Assented to February_ 15, 1881)


[Sidenote: Preamble.]

Whereas by the terms and conditions of the admission of British Columbia
into Union with the Dominion of Canada, the Government of the Dominion
has assumed the obligation of causing a railway to be constructed,
connecting the seaboard of British Columbia with the railway system of
Canada;

[Sidenote: Preference of Parliament for construction by a company.]

And whereas the Parliament of Canada has repeatedly declared a
preference for the construction and operation of such Railway by means
of an incorporated Company aided by grants of money and land, rather
than by the Government, and certain Statutes have been passed to enable
that course to be followed, but the enactments therein contained have
not been effectual for that purpose;

[Sidenote: Greater part still unconstructed.]

And whereas certain sections of the said railway have been constructed
by the Government, and others are in course of construction, but the
greater portion of the main line thereof has not yet been commenced or
placed under contract, and it is necessary for the development of the
North-West Territory and for the preservation of the good faith of the
Government in the performance of its obligations, that immediate steps
should be taken to complete and operate the whole of the said railway;

[Sidenote: Contract entered into.]

And whereas, in conformity with the expressed desire of Parliament, a
contract has been entered into for the construction of the said portion
of the main line of the said railway, and for the permanent working of
the whole line thereof, which contract with the schedule annexed has
been laid before Parliament for its approval and a copy thereof is
appended hereto, and it is expedient to approve and ratify the said
contract, and to make provision for the carrying out of the same:

Therefore Her Majesty, by and with the advice and consent of the Senate
and House of Commons of Canada, enacts as follows:--

[Sidenote: Contract approved.]

1. The said contract, a copy of which, with schedule annexed, is
appended hereto, is hereby approved and ratified, and the Government is
hereby authorized to perform and carry out the conditions thereof,
according to their purport.

[Sidenote: Charter may be granted.]

[Sidenote: Publication and effect of charter.]

2. For the purpose of incorporating the persons mentioned in the said
contract, and those who shall be associated with them in the
undertaking, and of granting to them the powers necessary to enable them
to carry out the said contract according to the terms thereof, the
Governor may grant to them in conformity with the said contract, under
corporate name of the Canadian Pacific Railway Company, a charter
conferring upon them the franchises, privileges, and powers embodied in
the schedule to the said contract and to this Act appended, and such
charter, being published in the Canada _Gazette_, with any Order or
Orders in Council of the Parliament of Canada, and shall be held to be
an Act of incorporation within the meaning of the said contract.

[Sidenote: Certain grants of money and land may be made to the company
chartered.]

[Sidenote: Conversion of money grant authorized.]

3. Upon the organization of the said Company, and the deposit by them,
with the Government, of one million dollars in cash, or securities
approved by the Government, for the purpose in the said contract
provided, and in consideration of the completion and perpetual and
efficient operation of the railway by the said Company, as stipulated in
the said contract, the Government may grant to the Company a subsidy of
twenty-five million dollars in money, and twenty-five million acres of
land, to be paid and conveyed to the Company in the manner and
proportions, and upon the terms and conditions agreed upon in the said
contract, and may also grant to the Company the land for right of way,
stations, and other purposes, and such other privileges as are provided
for in the said contract. And in lieu of the payment of the said money
subsidy direct to the Company, the Government may convert the same, and
any interest accruing thereon, into a fund for the payment, to the
extent of such fund, of interest on the bonds of the Company, and may
pay such interest accordingly; the whole in manner and form as provided
for in the said contract.

[Sidenote: Certain materials may be admitted free of duty.]

4. The Government may also permit the admission free of duty, of all
steel rails, fish plates, and other fastenings, spikes, bolts and nuts,
wire, timber and all material for bridges to be used in the original
construction of the said Canadian Pacific Railway, as defined by the
Act thirty-seventh Victoria, chapter fourteen, and of a telegraph line
in connexion therewith, and all telegraphic apparatus required for the
first equipment of such telegraph line, the whole as provided by the
tenth section of the said contract.

[Sidenote: Company to have possession of completed portions of the
railway.]

[Sidenote: Conveyance thereof to company when the contract is
performed.]

5. Pending the completion of the eastern and central sections of the
said railway as described in the said contract, the Government may also
transfer to the said Company the possession and right to work and run
the several portions of the Canadian Pacific Railway as described in the
said Act thirty-seventh Victoria, chapter fourteen, which are already
constructed, and as the same shall be hereafter completed; and upon the
completion of the said eastern and central sections the Government may
convey to the Company, with a suitable number of station buildings, and
with water service (but without equipment), those portions of the
Canadian Pacific Railway constructed, or agreed by the said contract to
be constructed by the Government, which shall then be completed; and
upon completion of the remainder of the portion of the said railway to
be constructed by the Government, that portion also may be conveyed by
the Government to the Company, and the Canadian Pacific Railway defined
as aforesaid shall become and be thereafter the absolute property of the
Company; the whole, however, upon the terms and conditions, and subject
to the restrictions and limitations contained in the said contract.

[Sidenote: Security may be taken for operation of the railway.]

6. The Government shall also take security for the continuous operation
of the said Railway during the ten years next subsequent to the
completion thereof in the manner provided by the said contract.


  SCHEDULE

This Contract and Agreement Made Between Her Majesty the Queen, acting
in respect of the Dominion of Canada and herein represented and acting
by the Honourable Sir Charles Tupper, K.C.M.G., Minister of Railways and
Canals and George Stephen and Duncan McIntyre, of Montreal, in Canada,
John S. Kennedy of New York, in the State of New York, Richard B. Angus,
and James J. Hill, of St. Paul, in the State of Minnesota, Morton, Rose
& Co., of London, England, and Kohn, Reinach & Co., of Paris, France,
Witnesses:

That the parties hereto have contracted and agreed with each other as
follows, namely:--

[Sidenote: Interpretation clause.]

[Sidenote: Eastern section.]

[Sidenote: Lake Superior Section.]

[Sidenote: Central Section.]

[Sidenote: C.P. Railway.]

[Sidenote: Company.]

1. For the better interpretation of this contract, it is hereby declared
that the portion of railway hereinafter called the Eastern section,
shall comprise that part of the Canadian Pacific Railway to be
constructed, extending from the Western terminus of the Canada Central
Railway, near the East end of Lake Nipissing, known as Callander
Station, to a point of junction with that portion of the said Canadian
Pacific Railway now in course of construction extending from Lake
Superior to Selkirk on the East side of Red River; which latter portion
is hereinafter called the Lake Superior section. That the portion of
said railway, now partially in course of construction, extending from
Selkirk to Kamloops, is hereinafter called the Central Section; and the
portion of said railway now in course of construction, extending from
Kamloops to Port Moody, is hereinafter called the Western section. And
that the words, "the Canadian Pacific Railway," are intended to mean the
entire railway, as described in the Act thirty-seventh Victoria, chapter
fourteen. The individual parties hereto are hereinafter described as the
Company; and the Government of Canada is hereinafter called the
Government.

[Sidenote: Security to be given by the company.]

[Sidenote: Conditions thereof.]

2. The contractors, immediately after the organization of the said
Company, shall deposit with the Government $1,000,000 in cash or
approved securities, as a security for the construction of the railway
hereby contracted for. The Government shall pay to the Company interest
on the cash deposited at the rate of four per cent. per annum,
half-yearly, and shall pay over to the Company the interest received
upon securities deposited--the whole until default in the performance of
the conditions hereof, or until the repayment of the deposit; and shall
return the deposit to the Company on the completion of the railway,
according to the terms hereof, with any interest accrued thereon.

[Sidenote: Eastern and central sections to be constructed by company
described.]

[Sidenote: Standard of railway and provision in case of disagreement as
to conformity to it.]

3. The Company shall lay out, construct and equip the said Eastern
section, and the said Central section, of a uniform gauge of 4 feet 8
inches; and in order to establish an approximate standard whereby the
quality and the character of the railway and of the materials used in
the construction thereof, and of the equipment thereof may be regulated,
the Union Pacific Railway of the United States as the same was when
first constructed, is hereby selected and fixed as such standard. And if
the Government and the Company should be unable to agree as to whether
or not any work done or materials furnished under this contract are in
fair conformity with such standard, or as to any other question of fact,
excluding questions of law, the subject of disagreement shall be, from
time to time, referred to the determination of three referees, one of
whom shall be chosen by the Government, one by the Company, and one by
the two referees so chosen, and such referees shall decide as to the
party by whom the expense of such reference shall be defrayed. And if
such two referees should be unable to agree upon a third referee, he
shall be appointed at the instance of either party hereto, after notice
to the other, by the Chief Justice of the Supreme Court of Canada. And
the decision of such referees, or of the majority of them, shall be
final.

[Sidenote: Commencement and regular progress of the work.]

[Sidenote: Period for completion.]

4. The work of construction shall be commenced at the eastern extremity
of the Eastern section not later than the first day of July next, and
the work upon the Central section shall be commenced by the Company at
such point towards the eastern end thereof on the portion of the line
now under construction as shall be found convenient and as shall be
approved by the Government, at a date not later than the 1st May next.
And the work upon the Eastern and Central sections shall be vigorously
and continuously carried on at such rate of annual progress on each
section as shall enable the Company to complete and equip the same and
each of them, in running order, on or before the first day of May, 1891,
by which date the Company hereby agree to complete and equip the said
sections in conformity with this contract, unless prevented by the act
of God, the Queen's enemies, intestine disturbances, epidemics, floods,
or other causes beyond the control of the Company. And in case of the
interruption or obstruction of the work of construction from any of the
said causes, the time fixed for the completion of the railway shall be
extended for a corresponding period.

[Sidenote: As to portion of central section made by Government.]

5. The Company shall pay to the Government the cost, according to the
contract, of the portion of railway, 100 miles in length, extending from
the city of Winnipeg westward, up to the time at which the work was
taken out of the hands of the contractor and the expenses since incurred
by the Government in the work of construction, but shall have the right
to assume the said work at any time and complete the same paying the
cost of construction as aforesaid, so far as the same shall then have
been incurred by the Government.


[Sidenote: Government to construct portions now under contract within
periods fixed by contract.]

6. Unless prevented by the act of God, the Queen's enemies, intestine
disturbances, epidemics, floods or other causes beyond the control of
the Government, the Government shall cause to be completed the said Lake
Superior section by the dates fixed by the existing contracts for the
construction thereof; and shall also cause to be completed the portion
of the said Western section now under contract, namely, from Kamloops to
Yale, within the period fixed by the contracts therefor, namely, by the
thirtieth day of June, 1885; and shall also cause to be completed, on or
before the first day of May, 1891, the remaining portion of the said
Western section, lying between Yale and Port Moody, which shall be
constructed of equally good quality in every respect with the standard
hereby created for the portion hereby contracted for. And the said Lake
Superior section, and the portions of the said Western section now under
contract, shall be completed as nearly as practicable according to the
specifications and conditions of the contracts therefor, except in so
far as the same have been modified by the Government prior to this
contract.

[Sidenote: Completed railway to be property of company.]

[Sidenote: Transfer of portions constructed by Government.]

[Sidenote: Company to operate the railway for ever.]

7. The railway constructed under the terms hereof shall be the property
of the Company: and pending the completion of the Eastern and Central
sections, the Government shall transfer to the Company the possession
and right to work and run the several portions of the Canadian Pacific
Railway already constructed or as the same shall be completed. And upon
the completion of the Eastern and Central sections, the Government shall
convey to the Company, with a suitable number of station buildings and
with water service (but without equipment), those portions of the
Canadian Pacific Railway constructed or to be constructed by the
Government which shall then be completed; and upon completion of the
remainder of the portion of railway to be constructed by the Government,
that portion shall also be conveyed to the Company; and the Canadian
Pacific Railway shall become and be thereafter the absolute property of
the Company. And the Company shall thereafter and for ever efficiently
maintain, work and run the Canadian Pacific Railway.

[Sidenote: Company to equip portions transferred to them.]

8. Upon the reception from the Government of the possession of each of
the respective portions of the Canadian Pacific Railway, the Company
shall equip the same in conformity with the standard herein established
for the equipment of the sections hereby contracted for, and shall
thereafter maintain and efficiently operate the same.

[Sidenote: Subsidy in money and land.]

9. In consideration of the premises, the Government agree to grant to
the Company a subsidy in money of $25,000,000 and in land of 25,000,000
acres, for which subsidies the construction of the Canadian Pacific
Railway shall be completed and the same shall be equipped, maintained
and operated--the said subsidies respectively to be paid and granted as
the work of construction shall proceed, in manner and upon the
conditions following, that is to say:--

[Sidenote: Apportionment of money.]

(_a_) The said subsidy in money is hereby divided and appropriated as
follows, namely:--

                    Central Section.

  Assumed at 1,350 miles:--
  1st--900 miles at $10,000 per mile          $9,000,000
  2nd--450  "    "   13,333 "   "              6,000,000
                                              ----------
                                                         15,000,000

                   Eastern Section.

  Assumed at 650 miles, subsidy equal to
    $15,384.61 per mile                                  10,000,000
                                                         ___________
                                                        $25,000,000

[Sidenote: And of land.]

And the said subsidy in land is hereby divided and appropriated as
follows, subject to the reserve hereinafter provided for:--

                    Central Section.

  1st--900 miles at 12,500   acres per mile   11,250,000
  2nd--450  "    "  16,666.66 "    "   "       7,500,000
                                              ----------
                                                          18,750,000

                       Eastern Section.

  Assumed at 650 miles, subsidy equal to
    9,615.35 acres per mile       . . . .                  6,250,000
                                                          __________
                                                          25,000,000

[Sidenote: When to be paid or granted.]

[Sidenote: Option of company to take terminable bonds.]

(_b_) Upon the construction of any portion of the railway hereby
contracted for, not less than 20 miles in length, and the completion
thereof so as to admit of the running of regular trains thereon,
together with such equipment thereof as shall be required for the
traffic thereon, the Government shall pay and grant to the Company the
money and land subsidies applicable thereto, according to the division
and appropriation thereof made as hereinbefore provided; the Company
having the option of receiving in lieu of cash terminable bonds of the
Government bearing such rate of interest, for such period and nominal
amount as may be arranged, and which may be equivalent according to
actuarial calculation to the corresponding cash payment--the government
allowing four per cent. interest on moneys deposited with them.

[Sidenote: Provision as to materials for construction delivered by
company in advance.]

(_c_) If at any time the Company shall cause to be delivered on or near
the line of the said railway, at a place satisfactory to the Government,
steel rails and fastenings to be used in the requirements for such
construction, the Government, on the requisition of the Company, shall,
upon such terms and conditions as shall be determined by the Government,
advance thereon three-fourths of the value thereof at the place of
delivery. And a proportion of the amount so advanced shall be deducted,
according to such terms and conditions, from the subsidy to be
thereafter paid, upon the settlement for each section of 20 miles of
railway--which proportion shall correspond with the proportion of such
rails and fastenings which have been used in the construction of such
sections.

[Sidenote: Option of the company during a certain time to substitute
payment of interest on certain bonds instead of issuing land grant
bonds.]

[Sidenote: Deposit of proceeds of sale of such bonds.]

[Sidenote: Payments to company out of such deposits.]

[Sidenote: Payment by delivery of bonds.]

[Sidenote: Sinking fund.]

(_d_) Until the first day of January, 1882, the Company shall have the
option, instead of issuing land grant bonds as hereinafter provided, of
substituting the payment by the Government of the interest (or part of
the interest) on bonds of the Company mortgaging the railway and the
lands to be granted by the Government, running over such term of years
as may be approved by the Governor in Council, in lieu of the cash
subsidy hereby agreed to be granted to the Company or any part
thereof--such payments of interest to be equivalent according to
actuarial calculation to the corresponding cash payment, the Government
allowing four per cent. interest on moneys deposited with them; and the
coupons representing the interest on such bonds shall be guaranteed by
the Government to the extent of such equivalent. And the proceeds of the
sale of such bonds to the extent of not more than $25,000,000 shall be
deposited with the Government, and the balance of such proceeds shall be
placed elsewhere by the Company, to the satisfaction and under the
exclusive control of the Government; failing which last condition the
bonds in excess of those sold shall remain in the hands of the
Government. And from time to time as the work proceeds, the Government
shall pay over to the Company: firstly, out of the amount so to be
placed by the Company--and, after the expenditure of that amount, out of
the amount deposited with the Government--sums of money bearing the same
proportion to the mileage cash subsidy hereby agreed upon, which the net
proceeds of such sale (if the whole of such bonds are sold upon the
issue thereof, or, if such bonds be not all then sold, the net proceeds
of the issue, calculated at the rate at which the sale of part of them
shall have been made), shall bear to the sum of $25,000,000. But if only
a portion of the bond issue be sold, the amount earned by the Company
according to the proportion aforesaid shall be paid to the Company,
partly out of the bonds in the hands of the Government, and partly out
of the cash deposited with the Government, in similar proportions to the
amount of such bonds sold and remaining unsold respectively; and the
Company shall receive the bonds so paid, as cash, at the rate at which
the said partial sale thereof shall have been made. And the Government
will receive and hold such sum of money towards the creation of a
sinking fund for the redemption of such bonds, and upon such terms and
conditions as shall be agreed upon between the Government and the
Company.

[Sidenote: Alteration in apportionment of money grant in such case.]

(_e_) If the Company avail themselves of the option granted by clause
_d_, the sum of $2,000 per mile for the first eight hundred miles of the
Central section shall be deducted _pro rata_ from the amount payable to
the Company in respect of the said eight hundred miles, and shall be
appropriated to increase the mileage cash subsidy appropriated to the
remainder of the said Central section.

[Sidenote: Grant of land required for railway purposes.]

[Sidenote: Admission of certain materials free of duty.]

[Sidenote: Sale of certain materials to company by Government.]

10. In further consideration of the premises, the Government shall also
grant to the Company the lands required for the road-bed of the railway,
and for its stations, station grounds, workshops, dock ground and water
frontage at the termini on navigable waters, buildings, yards and other
appurtenances required for the convenient and effectual construction and
working of the railway, in so far as such land shall be vested in the
Government. And the Government shall also permit the admission free of
duty of all steel rails, fish plates and other fastenings, spikes, bolts
and nuts, wire, timber and all material for bridges to be used in the
original construction of the railway, and of a telegraph line in
connexion therewith, and all telegraphic apparatus required for the
first equipment of such telegraph line; and will convey to the Company,
at cost price, with interest, all rails and fastenings bought in or
since the year 1879, and other materials for construction in the
possession of or purchased by the Government, at a valuation--such
rails, fastenings and materials not being required by it for the
construction of the said Lake Superior and Western sections.

[Sidenote: Provision respecting land grant.]

[Sidenote: Case of deficiency of land on line of railway provided for.]

[Sidenote: Selection by company in such case, with consent of
Government.]

11. The grant of land, hereby agreed to be made to the Company, shall be
so made in alternate sections of 640 acres each, extending back 24 miles
deep, on each side of the railway, from Winnipeg to Jasper House, in so
far as such lands shall be vested in the Government--the Company
receiving the sections bearing uneven numbers. But should any of such
sections consist in a material degree of land not fairly fit for
settlement, the Company shall not be obliged to receive them as part of
such grant; and the deficiency thereby caused and any further deficiency
which may arise from the insufficient quantity of land along the said
portion of railway, to complete the said 25,000,000 acres, or from the
prevalence of lakes and water stretches in the sections granted (which
lakes and water stretches shall not be computed in the acreage of such
sections), shall be made up from other portions in the tract known as
the fertile belt, that is to say, the land lying between parallels 49
and 57 degrees of north latitude, or elsewhere at the option of the
Company, by the grant therein of similar alternate sections extending
back 24 miles deep on each side of any branch line or lines of railway
to be located by the Company, and to be shown on a map or plan thereof
deposited with the Minister of Railways; or of any common front line or
lines agreed upon between the Government and the Company--the conditions
hereinbefore stated as to lands not fairly fit for settlement to be
applicable to such additional grants. And the Company may, with the
consent of the Government, select in the North-West Territories any
tract or tracts of land not taken up as a means of supplying or
partially supplying such deficiency. But such grants shall be made only
from lands remaining vested in the Government.

12. The Government shall extinguish the Indian title affecting the lands
herein appropriated, and to be hereafter granted in aid of the railway.

[Sidenote: Location of railway between certain terminal points.]

13. The Company shall have the right, subject to the approval of the
Governor in Council, to lay out and locate the line of the railway
hereby contracted for, as they may see fit, preserving the following
terminal points, namely: from Callander station to the point of junction
with the Lake Superior section; and from Selkirk to the junction with
the Western section at Kamloops by way of the Yellow Head Pass.

[Sidenote: Power to construct branches.]

[Sidenote: Lands necessary for the same.]

14. The Company shall have the right from time to time to lay out,
construct, equip, maintain and work branch lines of railway from any
point or points along their main line of railway, to any point or points
within the territory of the Dominion. Provided always, that before
commencing any branch they shall first deposit a map and plan of such
branch in the Department of Railways. And the Government shall grant to
the Company the lands required for the road-bed of such branches, and
for the stations, station grounds, buildings, workshops, yards and other
appurtenances requisite for the efficient construction and working of
such branches, in so far as such lands are vested in the Government.

[Sidenote: Restrictions as to competing lines for a limited period.]

15. For twenty years from the date hereof, no line of railway shall be
authorized by the Dominion Parliament to be constructed South of the
Canadian Pacific Railway, from any point at or near the Canadian Pacific
Railway, except such line as shall run South West or to the Westward of
South West; nor to within fifteen miles of Latitude 49. And in the
establishment of any new Province in the North-West Territories,
provision shall be made for continuing such prohibition after such
establishment until the expiration of the same period.

[Sidenote: Exemption from taxation in N.W. territories.]

16. The Canadian Pacific Railway, and all stations and station grounds,
workshops, buildings, yards and other property, rolling stock and
appurtenances required and used for the construction and working
thereof, and the capital stock of the Company, shall be for ever free
from taxation by the Dominion, or by any Province hereafter to be
established, or by any Municipal Corporation therein; and the lands of
the Company, in the North-West Territories, until they are either sold
or occupied, shall also be free from such taxation for 20 years after
the grant thereof from the Crown.

[Sidenote: Land grant.]

[Sidenote: Their nature and conditions of issue by the company.]

[Sidenote: Deposit with Government: for what purposes and on what
conditions.]

[Sidenote: If the company make no default in operating railway.]

[Sidenote: In case of such default.]

17. The Company shall be authorized by their Act of incorporation to
issue bonds, secured upon the land granted and to be granted to the
Company, containing provisions for the use of such bonds in the
acquisition of lands, and such other conditions as the Company shall see
fit--such issue to be for $25,000,000. And should the Company make such
issue of land grant bonds, then they shall deposit them in the hands of
the Government; and the Government shall retain and hold one-fifth of
such bonds as security for the due performance of the present contract
in respect of the maintenance and continuous working of the railway by
the Company, as herein agreed, for ten years after the completion
thereof, and the remaining $20,000,000 of such bonds shall be dealt with
as hereinafter provided. And as to the said one-fifth of the said bonds,
so long as no default shall occur in the maintenance and working of the
said Canadian Pacific Railway, the Government shall not present or
demand payment of the coupons of such bonds, nor require payment of any
interest thereon. And if any of such bonds, so to be retained by the
Government, shall be paid off in the manner to be provided for the
extinction of the whole issue thereof, the Government shall hold the
amount received in payment thereof as security for the same purposes as
the bonds so paid off, paying interest thereon at four per cent. per
annum so long as default is not made by the Company in the performance
of the conditions hereof. And at the end of the said period of ten years
from the completion of the said railway, if no default shall then have
occurred in such maintenance and working thereof, the said bonds, or if
any of them shall then have been paid off, the remainder of said bonds
and the money received from those paid off, with accrued interest, shall
be delivered back by the Government to the Company with all the coupons
attached to such bonds. But if such default should occur, the Government
may thereafter require payment of interest on the bonds so held and
shall not be obliged to continue to pay interest on the money
representing bonds paid off; and while the Government shall retain the
right to hold the said portion of the said land grant bonds, other
securities satisfactory to the Government may be substituted for them by
the Company, by agreement with the Government.

[Sidenote: Provision if such bonds are sold faster than lands are earned
by the company, and deposit on interest with Government, and payments by
Government to company.]

[Sidenote: Lands to be granted subject to such bonds.]

18. If the Company shall find it necessary or expedient to sell the
remaining $20,000,000 of the land grant bonds or a larger portion
thereof than in the proportion of one dollar for each acre of land then
earned by the Company, they shall be allowed to do so, but the proceeds
thereof, over and above the amount to which the Company shall be
entitled as herein provided, shall be deposited with the Government. And
the Government shall pay interest upon such deposit half-yearly, at the
rate of four per cent. per annum, and shall pay over the amount of such
deposit to the Company from time to time, as the work proceeds, in the
same proportions, and at the same times and upon the same conditions as
the land grant--that is to say: the Company shall be entitled to receive
from the Government out of the proceeds of the said land grant bonds,
the same number of dollars as the number of acres of the land subsidy
which shall then have been earned by them, less one-fifth thereof, that
is to say, if the bonds are sold at par, but if they are sold at less
than par, then a deduction shall be made therefrom corresponding to the
discount at which such bonds are sold. And such land grant shall be
conveyed to them by the Government, subject to the charge created as
security for the said land grant bonds, and shall remain subject to such
charge till relieved thereof in such manner as shall be provided for at
the time of the issue of such bonds.

[Sidenote: Company to pay certain expenses.]

19. The Company shall pay any expenses which shall be incurred by the
Government in carrying out the provisions of the last two preceding
clauses of this contract.

[Sidenote: If land bonds are not issued, one-fifth of land to be
retained as security.]

[Sidenote: How to be disposed of.]

20. If the Company should not issue such land grant bonds, then the
Government shall retain from out of each grant to be made from time to
time, every fifth section of the lands hereby agreed to be granted, such
lands to be so retained as security for the purposes and for the length
of time, mentioned in section eighteen hereof. And such lands may be
sold in such manner and at such prices as shall be agreed upon between
the Government and the Company; and in that case the price thereof shall
be paid to, and held by the Government for the same period, and for the
same purposes as the land itself, the Government paying four per cent.
per annum interest thereon. And other securities satisfactory to the
Government may be substituted for such lands or money by agreement with
the Government.

[Sidenote: Company to be incorporated as by Schedule A.]

21. The Company to be incorporated, with sufficient powers to enable
them to carry out the foregoing contract, and this contract shall only
be binding in the event of an Act of incorporation being granted to the
Company in the form hereto appended as Schedule A.

[Sidenote: Railway Act to apply.]

[Sidenote: Exceptions.]

22. The Railway Act of 1879, in so far as the provisions of the same are
applicable to the undertaking referred to in this contract, and in so
far as they are not inconsistent herewith or inconsistent with or
contrary to the provisions of the Act of incorporation to be granted to
the Company, shall apply to the Canadian Pacific Railway.

In witness whereof the parties hereto have executed these presents at
the City of Ottawa, this twenty-first day of October, 1880.

  (Signed) Charles Tupper,
             Minister of Railways and Canals.
           Geo. Stephen,
           Duncan McIntyre,
           J. S. Kennedy,
           R. B. Angus,
           J. J. Hill,
             Per pro. Geo. Stephen.
           Morton, Rose & Co.,
           Kohn, Reinach & Co.,
             By P. Du P. Grenfell.
  Signed in presence of F. Braun,
    and Seal of the Department
    hereto affixed by Sir Charles
    Tupper, in presence of
      (Signed) F. Braun.


  SCHEDULE A, REFERRED TO IN THE FOREGOING CONTRACT

        Incorporation

[Sidenote: Certain persons incorporated.]

[Sidenote: Corporate name.]

1. George Stephen, of Montreal, in Canada, Esquire; Duncan McIntyre, of
Montreal, aforesaid, Merchant; John S. Kennedy, of New York, in the
State of New York, Banker; the firm of Morton, Rose and Company, of
London, in England, Merchants; the firm of Kohn, Reinach and Company, of
Paris, in France, Bankers; Richard B. Angus, and James J. Hill, both of
St. Paul, in the State of Minnesota, Esquires; with all such other
persons and corporations as shall become shareholders in the Company
hereby incorporated, shall be and they are hereby constituted a body
corporate and politic, by the name of the "Canadian Pacific Railway
Company."

[Sidenote: Capital stock and shares.]

[Sidenote: Paid up shares.]

2. The capital stock of the Company shall be twenty-five million
dollars, divided into shares of one hundred dollars each--which shares
shall be transferable in such manner and upon such conditions as shall
be provided by the by-laws of the Company: and such shares, or any part
thereof may be granted and issued as paid-up shares for value _bona
fide_ received by the Company, either in money at par or at such price
and upon such conditions as the Board of Directors may fix, or as part
of the consideration of any contract made by the Company.

[Sidenote: Substitution of Company as contractors; and when.]

[Sidenote: Effect of such substitution.]

[Sidenote: Notice in the _Canada Gazette_.]

[Sidenote: Further instalment to be paid up.]

[Sidenote: And rest of $5,000,000.]

3. As soon as five million dollars of the stock of the Company have been
subscribed, and thirty per centum thereof, paid up, and upon the deposit
with the Minister of Finance of the Dominion of one million dollars in
money or in securities approved by the Governor in Council, for the
purpose and upon the conditions in the foregoing contract provided the
said contract shall become and be transferred to the Company, without
the execution of any deed or instrument in that behalf; and the Company
shall, thereupon, become and be vested with all the rights of the
contractors named in the said contract, and shall be subject to, and
liable for, all their duties and obligations, to the same extent and in
the same manner as if the said contract had been executed by the said
Company instead of by the said contractors; and thereupon the said
contractors, as individuals, shall cease to have any right or interest
in the said contract, and shall not be subject to any liability or
responsibility under the terms thereof otherwise than as members of the
corporation hereby created. And upon the performance of the said
conditions respecting the subscription of stock, the partial payment
thereof, and the deposit of one million dollars to the satisfaction of
the Governor in Council, the publication by the Secretary of State in
the _Canada Gazette_, of a notice that the transfer of the contract to
the Company has been effected and completed shall be conclusive proof of
the fact. And the Company shall cause to be paid up, on or before the
first day of May next, a further instalment of twenty per centum upon
the said first subscription of five million dollars, of which call
thirty days' notice by circular mailed to each shareholder shall be
sufficient. And the Company shall call in, and cause to be paid up, on
or before the 31st day of December, 1882, the remainder of the said
first subscription of five million dollars.

[Sidenote: Necessary franchises and powers granted.]

[Sidenote: Proviso.]

4. All the franchises and powers necessary or useful to the Company to
enable them to carry out, perform, enforce, use, and avail themselves
of, every condition, stipulation, obligation, duty, right, remedy,
privilege, and advantage agreed upon, contained or described in the said
contract are hereby conferred upon the Company. And the enactment of the
special provisions hereinafter contained shall not be held to impair or
derogate from the generality of the franchises and powers so hereby
conferred upon them.

  Directors

[Sidenote: First directors of the company.]

[Sidenote: Number limited.]

5. The said George Stephen, Duncan McIntyre, John S. Kennedy, Richard B.
Angus, James J. Hill, Henry Stafford Northcote, of London, aforesaid,
Esquires, Pascoe du P. Grenfell, of London, aforesaid, Merchant, Charles
Day Rose of London, aforesaid, Merchant, and Byron J. de Reinach, of
Paris, aforesaid, Banker, are hereby constituted the first directors of
the Company, with power to add to their number, but so that the
directors shall not in all exceed fifteen in number; and the majority of
the directors, of whom the President shall be one, shall be British
subjects. And the Board of Directors so constituted shall have all the
powers hereby conferred upon the directors of the Company, and they
shall hold office until the first annual meeting of the shareholders of
the Company.

[Sidenote: Qualification of directors.]

[Sidenote: Alteration of number by by-law.]

[Sidenote: Ballot.]

6. Each of the directors of the Company, hereby appointed, or hereafter
appointed or elected, shall hold at least two hundred and fifty shares
of the stock of the Company. But the number of directors to be hereafter
elected by the shareholders shall be such, not exceeding fifteen, as
shall be fixed by by-law, and subject to the same conditions as the
directors appointed by, or under the authority of, the last preceding
section; the number thereof may be hereafter altered from time to time
in like manner. The votes for their election shall be by ballot.

[Sidenote: Quorum.]

[Sidenote: Proviso.]

[Sidenote: Three must be present.]

7. A majority of the directors shall form a quorum of the board; and
until otherwise provided by by-law, directors may vote and act by
proxy--such proxy to be held by a director only; but no director shall
hold more than two proxies, and no meeting of directors shall be
competent to transact business unless at least three directors are
present thereat in person, the remaining number of directors required to
form a quorum being represented by proxies.

[Sidenote: Executive committee.]

[Sidenote: President to be one.]

8. The Board of Directors may appoint, from out of their number, an
Executive Committee, composed of at least three directors, for the
transaction of the ordinary business of the Company, with such powers
and duties as shall be fixed by the by-laws; and the President shall be
_ex officio_ a member of such committee.

[Sidenote: Chief place of business. Other places.]

[Sidenote: How to be notified.]

[Sidenote: Service of process thereat.]

[Sidenote: And if Company fail to appoint places.]

9. The chief place of business of the Company shall be at the City of
Montreal, but the Company may, from time to time, by by-law, appoint and
fix other places within or beyond the limits of Canada at which the
business of the Company may be transacted, and at which the directors or
shareholders may meet, when called as shall be determined by the
by-laws. And the Company shall appoint and fix by by-law, at least one
place in each Province or Territory through which the railway shall
pass, where service of process may be made upon the Company, in respect
of any cause of action arising within such Province or Territory, and
may afterwards, from time to time, change such place by by-law. And a
copy of any by-law fixing or changing any such place, duly authenticated
as herein provided, shall be deposited by the Company in the office, at
the seat of Government of the Province or Territory to which such by-law
shall apply, of the clerk or prothonotary of the highest, or one of the
highest, courts of civil jurisdiction of such Province or Territory. And
if any cause of action shall arise against the Company within any
Province or Territory, and any writ or process be issued against the
Company thereon out of any court in such Province or Territory, service
of such process may be validly made upon the Company at the place within
such Province or Territory so appointed and fixed; but if the Company
fail to appoint and fix such place, or to deposit, as hereinbefore
provided, the by-law made in that behalf, any such process may be
validly served upon the Company, at any of the stations of the said
railway within such Province or Territory.


  Shareholders

[Sidenote: First and other annual meetings.]

[Sidenote: Notice.]

10. The first annual meeting of the shareholders of the Company, for the
appointment of directors, shall be held on the second Wednesday in May,
one thousand eight hundred and eighty-two, at the principal office of
the Company, in Montreal; and the annual general meeting of
shareholders, for the election of directors and the transaction of
business generally, shall be held on the same day in each year
thereafter at the same place unless otherwise provided by the by-laws.
And notice of each of such meetings shall be given by the publication
thereof in the _Canada Gazette_ for four weeks, and by such further
means as shall, from time to time, be directed by the by-laws.

[Sidenote: Special general meetings: notice.]

[Sidenote: Place.]

11. Special general meetings of the shareholders may be convened in such
manner as shall be provided by the by-laws; and except as hereinafter
provided, notice of such meetings shall be given in the same manner as
notices of annual general meetings, the purpose for which such meeting
is called being mentioned in the notices thereof; and except as
hereinafter provided, all such meetings shall be held at the chief place
of business of the Company.

[Sidenote: Provision if a meeting be necessary before notice as
aforesaid can be given.]

[Sidenote: Notice in such case.]

[Sidenote: Meetings always valid if all shareholders or their proxies
are present.]

12. If at any time before the first annual meeting of the shareholders
of the Company, it should become expedient that a meeting of the
directors of the Company, or a special general meeting of the
shareholders of the Company, should be held, before such meeting can
conveniently be called, and notice thereof given in the manner provided
by this Act, or by the by-laws, or before by-laws in that behalf have
been passed, and at a place other than at the chief place of business of
the Company in Montreal before the enactment of a by-law authorizing the
holding of such meeting elsewhere; it shall be lawful for the President
or for any three of the directors of the Company to call special
meetings either of directors or of shareholders, or of both, to be held
at the City of London, in England, at times and places respectively, to
be stated in the notices to be given of such meetings respectively. And
notices of such meetings may be validly given by a circular mailed to
the ordinary address of each director or shareholder as the case may be,
in time to enable him to attend such meeting, stating in general terms
the purpose of the intended meeting. And in the case of a meeting of
shareholders, the proceedings of such meeting shall be held to be valid
and sufficient, and to be binding on the Company in all respects, if
every shareholder of the Company be present thereat in person or by
proxy, notwithstanding that notice of such meeting shall not have been
given in the manner required by this Act.

[Sidenote: Limitations as to votes and proxies.]

13. No shareholder holding shares upon which any call is overdue and
unpaid shall vote at any meeting of shareholders. And unless otherwise
provided by the by-laws, the person holding the proxy of a shareholder
shall be himself a shareholder.

[Sidenote: And as to calls.]

14. No call upon unpaid shares shall be made for more than twenty per
centum upon the amount thereof.


  Railway and Telegraph Line

[Sidenote: Line and gauge of railway.]

[Sidenote: Commencement and completion.]

[Sidenote: Other branches.]

[Sidenote: Name of Railway.]

15. The Company may lay out, construct, acquire, equip, maintain and
work a continuous line of railway, of the gauge of four feet eight and
one-half inches; which railway shall extend from the terminus of the
Canada Central Railway near Lake Nipissing, known as Callander Station,
to Port Moody in the Province of British Columbia; and also a branch
line of railway from some point on the main line of railway to Fort
William on Thunder Bay: and also the existing branch line of railway
from some point on the main line of railway to Fort William on Thunder
Bay; and also the existing branch line of railway from Selkirk, in the
Province of Manitoba, to Pembina in the said Province; and also other
branches to be located by the Company from time to time as provided by
the said contract--the said branches to be of the gauge aforesaid; and
the said main line of railway, and the said branch lines of railway,
shall be commenced and completed as provided by the said contract; and
together with such other branch lines as shall be hereafter constructed
by the said Company, and any extension of the said main line of railway
that shall hereafter be constructed or acquired by the Company, shall
constitute the line of railway hereinafter called The Canadian Pacific
Railway.

[Sidenote: Company may construct lines of telegraph or telephone, and
work them and collect tolls.]

[Sidenote: Subject to Con. Stat. Can., c. 67, ss. 14, 15, 16.]

16. The Company may construct, maintain and work a continuous telegraph
line and telephone lines throughout and along the whole line of the
Canadian Pacific Railway, or any part thereof, and may also construct or
acquire by purchase, lease or otherwise, any other line or lines of
telegraph connecting with the line so to be constructed along the line
of the said railway, and may undertake the transmission of messages for
the public by any such line or lines of telegraph or telephone, and
collect tolls for so doing; or may lease such line or lines of telegraph
or telephone, or any portion thereof; and if they think proper to
undertake the transmission of messages for hire, they shall be subject
to the provisions of the fourteenth, fifteenth and sixteenth sections of
chapter sixty-seven of the Consolidated Statutes of Canada. And they may
use any improvement that may hereafter be invented (subject to the
rights of patentees) for telegraphing or telephoning, and any other
means of communication that may be deemed expedient by the Company at
any time hereafter.


  Powers

[Sidenote: Application of 42 V., c. 9.]

17. "_The Consolidated Railway Act_, 1879," in so far as the provisions
of the same are applicable to the undertaking authorized by this
charger, and in so far as they are not inconsistent with or contrary to
the provisions hereof, and save and except as hereinafter provided, is
hereby incorporated herewith.

[Sidenote: Exceptions as to such application.]

18. As respects the said railway, the seventh section of "_The
Consolidated Railway Act_, 1879," relating to Powers, and the eighth
section thereof relating to Plans and Surveys, shall be subject to the
following provisions:--

[Sidenote: As to lands of the Crown required.]

_a._ The Company shall have the right to take, use and hold the beach
and land below high-water mark, in any stream, lake, navigable water,
gulf or sea, in so far as the same shall be vested in the Crown and
shall not be required by the Crown, to such extent as shall be required
by the Company for its railway and other works, and as shall be
exhibited by a map or plan thereof deposited in the office of the
Minister of Railways. But the provisions of this sub-section shall not
apply to any beach or land lying East of Lake Nipissing except with the
approval of the Governor in Council.

[Sidenote: Plans and book of reference.]

_b._ It shall be sufficient that the map or plan and book of reference
for any portion of the line of the railway not being within any district
or country for which there is a Clerk of the Peace, be deposited in the
office of the Minister of Railways of Canada; and any omission,
mis-statement or erroneous description of any lands therein may be
corrected by the Company, with the consent of the Minister and certified
by him; and the Company may then make the railway in accordance with
such certified correction.

[Sidenote: Deviations from line on plan.]

_c._ The eleventh sub-section of the said eighth section of the Railway
Act shall not apply to any portion of the railway passing over ungranted
lands of the Crown, or lands not within any surveyed township in any
Province; and in such places, deviations not exceeding five miles from
the line shown on the map or plan as aforesaid, deposited by the
Company, shall be allowed, without any formal correction or certificate;
and any further deviation that may be found expedient may be authorized
by order of the Governor in Council and the Company may then make their
railway in accordance with such authorized deviation.

[Sidenote: Deposit of plan of main line, etc.]

[Sidenote: And of branches.]

[Sidenote: Copies thereof.]

_d._ The map or plan and book of reference of any part of the main line
of the Canadian Pacific Railway made and deposited in accordance with
this section, after approval by the Governor in Council, and of any
branch of such railway hereafter to be located by the said Company in
respect of which the approval of the Governor in Council shall not be
necessary, shall avail as if made and deposited as required by the said
"_Consolidated Railway Act_, 1879," for all the purposes of the said
Act, and of this Act; and any copy of, or extract therefrom, certified
by the said Minister or his deputy, shall be received as evidence in any
court of law in Canada.

[Sidenote: Registration thereof.]

_e._ It shall be sufficient that a map or profile of any part of the
completed railway, which shall not lie within any country or district
having a registry office, be filed in the office of the Minister of
Railways.

[Sidenote: Company may take materials from public lands and a greater
extent for stations, and, etc., than allowed by 42 V., c. 9.]

[Sidenote: Proviso.]

19. It shall be lawful for the Company to take from any public lands
adjacent to or near the line of the said railway, all stone, timber,
gravel and other materials which may be necessary or useful for the
construction of the railway; and also to lay out and appropriate to the
use of the Company, a greater extent of lands, whether public or
private, for stations, depots, workshops, buildings, side-tracks,
wharves, harbours and roadway, and for establishing screens against
snow, than the breadth and quantity mentioned in "_The Consolidated
Railway Act_, 1879,"--such greater extent taken, in any case being
allowed by the Government, and shown on the maps or plans deposited with
the Minister of Railways.

[Sidenote: Reduction by Governor in Council extended in like manner.]

20. The limit to the reduction of tolls by the Parliament of Canada
provided for by the eleventh sub-section of the 17th section of "_The
Consolidated Railway Act_, 1879," respecting Tolls, is hereby extended,
so that such reduction may be to such an extent that such tolls when
reduced shall not produce less than ten per cent. per annum profit on
the capital actually expended in the construction of the railway,
instead of not less than fifteen per cent. per annum profit, as provided
by the said sub-section; and so also that such reduction shall not be
made unless the net income of the Company, ascertained as described in
said sub-section, shall have exceeded ten per cent. per annum instead of
fifteen per cent. per annum as provided by the said sub-section. And the
exercise by the Governor in Council of the power of reducing the tolls
of the Company as provided by the tenth sub-section of said section
seventeen is hereby limited to the same extent with relation to the
profit of the Company, and to its net revenue, as that to which the
power of Parliament to reduce tolls is limited by said sub-section
eleven as hereby amended.

[Sidenote: Restriction as to transfers of stock.]

[Sidenote: Advances on, by Company forbidden.]

21. The first and second sub-sections of section 22 of "_The
Consolidated Railway Act_, 1879," shall not apply to the Canadian
Pacific Railway Company; and it is hereby enacted that the transfer of
shares in the undertaking shall be made only upon the books of the
Company in person or by attorney, and shall not be valid unless so made;
and the form and mode of transfer shall be such as shall be, from time
to time, regulated by the by-laws of the Company. And the funds of the
Company shall not be used in any advance upon the security of any of the
shares or stock of the Company.

[Sidenote: Transfer or transmission to non-shareholders subject to veto
of directors until completion of contract.]

[Sidenote: Proviso: as to transfer by a firm to a partner.]

22. The third and fourth sub-sections of said section 22 of "_The
Consolidated Railway Act_, 1879," shall be subject to the following
provisions, namely--that if before the completion of the railway and
works under the said contract, any transfer should purport to be made of
any stock or share in the Company, or any transmission of any share
should be effected under the provisions of said sub-section four, to a
person not already a shareholder in the Company, and if in the opinion
of the board it should not be expedient that the person (not being
already a shareholder) to whom such transfer or transmission shall be
made or effected should be accepted as a shareholder, the directors may
by resolution veto such transfer or transmission; and thereafter, and
until after the completion of the said railway and works under the said
contract, such person shall not be, or be recognized as a shareholder in
the Company; and the original shareholder, or his estate, as the case
may be, shall remain subject to all the obligations of a shareholder in
the Company, with all the rights conferred upon a shareholder under this
Act. But any firm holding paid-up shares in the Company may transfer the
whole or any of such shares to any partner in such firm having already
an interest as such partner in such shares, without being subject to
such veto. And in the event of such veto being exercised, a note shall
be taken of the transfer or transmission so vetoed in order that it may
be recorded in the books of the Company after the completion of the
railway and works as aforesaid; but until such completion, the transfer
or transmission so vetoed shall not confer any rights, nor have any
effect of any nature or kind whatever as respects the Company.

[Sidenote: Certain other provisions of 42 V., c. 9, not to apply.]

23. Sub-section sixteen of section nineteen, relating to President and
Directors, their Election and Duties; sub-section two of section
twenty-four relating to by-laws, Notices, etc., sub-sections five and
six of section twenty-eight, relating to General Provisions, and section
ninety-seven, relating to Railway Fund, of "_The Consolidated Railway
Act_, 1879," shall not, nor shall any of them apply to the Canadian
Pacific Railway or to the Company hereby incorporated.

[Sidenote: Company to afford reasonable facilities to and receive the
like from certain other railway companies.]

[Sidenote: As to rates of carriage of traffic in such cases.]

[Sidenote: Reservation as to purchasers of land, and immigrants.]

[Sidenote: Contrary agreements void.]

24. The said Company shall afford all reasonable facilities to the
Ontario and Pacific Junction Railway Company, when their railway shall
be completed to a point of junction with the Canadian Pacific Railway,
and to the Canada Central Railway Company, for the receiving, forwarding
and delivering of traffic upon and from the railways of the said
Companies, respectively, and for the return of carriages, trucks and
other vehicles; and no one of the said Companies shall give or continue
any preference or advantage to, or in favour of either of the others, or
of any particular description of traffic, in any respect whatsoever; nor
shall any one of the said Companies subject any other thereof, or any
particular description of traffic, to any prejudice or disadvantage in
any respect whatsoever; and any one of the said Companies which shall
have any terminus or station near any terminus or station of either of
the others, shall afford all reasonable facilities for receiving and
forwarding all the traffic arriving by either of the others, without any
unreasonable delay, and without any preference or advantage, or
prejudice or disadvantage, and so that no obstruction may be offered in
the using of such railway as a continuous line of communication, and so
that all reasonable accommodation may, at all times, by the means
aforesaid, be mutually afforded by and to the said several railway
companies; and the said Canadian Pacific Railway Company shall receive
and carry all freight and passenger traffic shipped to or from any point
on the railway of either of the said above-named railway companies
passing over the Canadian Pacific Railway or any part thereof, at the
same mileage rate and subject to the same charges for similar services,
without granting or allowing any preference or advantage to the traffic
coming from or going upon one of such railways over such traffic coming

from or going upon the other of them, reserving, however, to the said
Canadian Pacific Railway Company the right of making special rates for
purchasers of land or for immigrants or intending immigrants, which
special rates shall not govern or affect the rates of passenger traffic
as between the said Company and the said two above-named Companies or
either of them. And any agreement made between any two of the said
Companies contrary to the foregoing provisions, shall be unlawful, null
and void.

[Sidenote: Company may purchase or acquire by lease or otherwise certain
other railways or amalgamate with them.]

[Sidenote: And borrow to a limited amount on bonds in consequence.]

[Sidenote: Not to affect prior mortgages.]

25. The Company, under the authority of a special general meeting of the
shareholders thereof, and as an extension of the railway hereby
authorized to be constructed, may purchase or acquire by lease or
otherwise, and hold and operate, the Canada Central Railway, or may
amalgamate therewith, and may purchase or acquire by lease or otherwise
and hold and operate a line or lines of railway from the City of Ottawa
to any point at navigable water on the Atlantic seaboard or to any
intermediate point, or may acquire running powers over all railway now
constructed between Ottawa and any such point or intermediate point. And
the Company may purchase or acquire any such railway, subject to such
existing mortgages, charges or liens thereon as shall be agreed upon,
and shall possess with regard to any lines or railway so purchased, or
acquired, and becoming the property of the Company, the same powers as
to the issue of bonds thereon, or on any of them, to an amount not
exceeding twenty thousand dollars per mile, and as to the security for
such bonds, as are conferred upon the Company by the twenty-eighth
section hereof, in respect of bonds to be issued upon the Canadian
Pacific Railway. But such issue of bonds shall not affect the right of
any holder of mortgages or other charges already existing upon any line
of railway so purchased or acquired; and the amount of bonds hereby
authorized to be issued upon such line of railway shall be diminished by
the amount of such existing mortgages or charges thereon.

[Sidenote: Company may have docks, etc., and run vessels on any
navigable water their railway touches.]

26. The Company shall have power and authority to erect and maintain
docks, dockyards, wharves, slips and piers at any point on or in
connection with the said Canadian Pacific Railway, and at all the
termini thereof on navigable water, for the convenience and
accommodation of vessels and elevators; and also to acquire and work
elevators, and to acquire, own, hold, charter, work and run steam and
other vessels for cargo and passengers upon any navigable water, which
the Canadian Pacific Railway may reach or connect with.


  By-Laws

[Sidenote: By-laws may provide for certain purposes.]

[Sidenote: Must be confirmed at next general meeting.]

27. The by-laws of the Company may provide for the remuneration of the
president and directors of the Company, and of any executive committee
of such directors; and for the transfer of stock and shares; the
registration and inscription of stock, shares and bonds, and the
transfer of registered bonds; and the payment of dividends and interest
at any place or places within or beyond the limits of Canada; and for
all other matters required by the said contract or by this Act to be
regulated by by-laws: but the by-laws of the Company made as provided by
law shall in no case have any force or effect after the next general
meeting of shareholders which shall be held after the passage of such
by-laws, unless they are approved by such meeting.


  Bonds

[Sidenote: Amount of bonds limited.]

[Sidenote: Mortgages for securing the same on all the property of the
company.]

[Sidenote: Proviso: in case land grant bonds have been issued under
section 30.]

[Sidenote: Evidence of mortgage and what conditions the bonds may
contain.]

[Sidenote: Right of voting may, in such case, be transferred to
bondholders.]

[Sidenote: Cancellation of shares deprived of voting power.]

[Sidenote: Enforcing conditions.]

[Sidenote: Further provisions under mortgage deed.]

[Sidenote: Increase of borrowing power if no land grant bonds are
issued.]

28. The Company, under the authority of a special general meeting of the
shareholders called for the purpose, may issue mortgage bonds to the
extent of ten thousand dollars per mile of the Canadian Pacific Railway
for the purposes of the undertaking authorized by the present Act; which
issue shall constitute a first mortgage and privilege upon the said
railway, constructed or acquired, and to be thereafter constructed or
acquired, and upon its property, real and personal, acquired and to be
thereafter acquired, including rolling stock and plant, and upon its
tolls and revenues (after deduction from such tolls and revenues of
working expenses), and upon the franchises of the Company; the whole as
shall be declared and described as so mortgaged in any deed of mortgage
as hereinafter provided. Provided always, however, that if the Company
shall have issued, or shall intend to issue, land grant bonds under the
provisions of the thirtieth section hereof, the lands granted and to be
granted by the Government to the Company may be excluded from the
operation of such mortgage and privilege: and provided also that such
mortgage and privilege shall not attach upon any property which the
Company are hereby, or by the said contract, authorized to acquire or
receive from the Government of Canada until the same shall have been
conveyed by the Government to the Company, but shall attach upon such
property, if so declared in such deed, as soon as the same shall be
conveyed to the Company. And such mortgage and privilege may be
evidenced by a deed or deeds of mortgage executed by the Company, with
the authority of its shareholders expressed by a resolution passed at
such special general meeting; and any such deed may contain such
description of the property mortgaged by such deed, and such conditions
respecting the payment of the bonds secured thereby and of the interest
thereon, and the remedies which shall be enjoyed by the holders of such
bonds or by any trustee or trustees for them in default of such payment,
and the enforcement of such remedies, and may provide for such
forfeitures and penalties, in default of such payment, as may be
approved by such meeting; and may also contain, with the approval
aforesaid, authority to the trustee or trustees, upon such default, as
one of such remedies, to take possession of the railway and property
mortgaged, and to hold and run the same for the benefit of the
bondholders thereof for a time to be limited by such deed, or to sell
the said railway and property, after such delay, and upon such terms and
conditions as may be stated in such deed: and with like approval any
such deed may contain provisions to the effect that upon such default
and upon such other conditions as shall be described in such deed, the
right of voting possessed by the shareholders of the Company, and by the
holders of preferred stock therein, or by either of them, shall cease,
and holders, or to them and to the holders of the whole or of any part
of the preferred stock of the Company, as shall be declared by such
deed: and such deed may also provide for the conditional or absolute
cancellation after such sale of any or all of the shares so deprived of
voting power, or of any or all of the preferred stock of the Company, or
both; and may also, either directly by its terms, or indirectly by
reference to the by-laws of the Company, provide for the mode of
enforcing and exercising the powers and authority to be conferred and
defined by such deed, under the provisions hereof. And such deed, and
the provisions thereof made under the authority hereof, and such other
provisions thereof as shall purport (with like approval) to grant such
further and other powers and privileges to such trustee or trustees and
to such bondholders, as are not contrary to law or to the provisions of
this Act, shall be valid and binding. But if any change in the ownership
or possession of the said railway and property shall, at any time, take
place under the provisions hereof, or of any such deed, or in any other
manner, the said railway and property shall continue to be held and
operated under the provisions hereof, and of "_The Consolidated Railway
Act_, 1879," as hereby modified. And if the Company does not avail
itself of the power of issuing bonds secured upon the land grant along
as hereinafter provided, the issue of bonds hereby authorized may be
increased to any amount not exceeding twenty thousand dollars per mile
of the said Canadian Pacific Railway.

[Sidenote: Provision if such bonds are issued before completion of
railway.]

29. If any bond issue be made by the Company under the last preceding
section before the said railway is completed according to the said
contract, a proportion of the proceeds of such bonds, or a proportion of
such bonds if they be not sold, corresponding to the proportion of the
work contracted for then remaining incomplete, shall be received by the
Government, and shall be held, dealt with, and from time to time paid
over by the Government to the Company upon the same conditions, in the
same manner and according to the same proportions as the proceeds of the
bonds, the issue of which is contemplated by sub-section _d_ of Clause 9
of the said contract, and by the thirty-first section hereof.

[Sidenote: Provision as to issue of land grant mortgage bonds.]

[Sidenote: Evidence of mortgage and conditions.]

[Sidenote: Name of and how dealt with.]

30. The Company may also issue mortgage bonds to the extent of
twenty-five million dollars upon the lands granted in aid of the said
railway and of the undertaking authorized by this Act; such issue to be
made only upon similar authority to that required by this Act for the
issue of bonds upon the railway; and when so made such bonds shall
constitute a first mortgage upon such lands, and shall attach upon them
when they shall be granted, if they are not actually granted at the time
of the issue of such bonds. And such mortgage may be evidenced by a deed
or deeds of mortgage to be executed under like authority to the deed
securing the issue of bonds on the railway; and such deed or deeds under
like authority may contain similar conditions, and may confer upon the
trustee or trustees named thereunder, and upon the holders of the bonds
secured thereby, remedies, authority, power and privileges, and may
provide for forfeitures and penalties, similar to those which may be
inserted and provided for under the provisions of this Act in any deed
securing the issue of bonds on the railway, together with such other
provisions and conditions not inconsistent with law or with this Act as
shall be so authorized. And such bonds may be styled Land Grant Bonds,
and they and the proceeds thereof shall be dealt with in the manner
provided in the said contract.

[Sidenote: Issue of bonds in place of land grant bonds under agreement
with Government.]

[Sidenote: To include franchise as well as property of company.]

[Sidenote: Section 28 to apply.]

31. The Company may, in the place and stead of the said land grant
bonds, issue bonds, under the twenty-eighth section hereof, to such
amount as they shall agree with the Government to issue, with the
interest guaranteed by the Government as provided for in the said
contract; such bonds to constitute a mortgage upon the property of the
Company and its franchises acquired and to be thereafter
acquired--including the main line of the Canadian Pacific Railway, and
the branches thereof hereinbefore described, with the plant and
rolling-stock thereof acquired and to be thereafter acquired, but
exclusive of such other branches thereof and of such personal property
as shall be excluded by the deed of mortgage to be executed as security
for such issue. And the provisions of the said twenty-eighth section
shall apply to such issue of bonds, and to the security which may be
given for the payment thereof, and they and the proceeds thereof shall
be dealt with as hereby and by the said contract provided.

[Sidenote: Facilities for issue of mortgage bonds as to seal and
signatures.]

32. It shall not be necessary to affix the seal of the Company to any
mortgage bond issued under the authority of this Act; and every such
bond issued without such seal shall have the same force and effect, and
be held, treated and dealt with by all courts of law and of equity as if
it were sealed with the seal of the company. And if it is provided by
the mortgage deed executed to secure the issue of any bonds that any of
the signatures to such bonds or to the coupons thereto appended may be
engraved, stamped or lithographed thereon, such engraved, stamped or
lithographed signatures shall be valid and binding on the Company.

[Sidenote: "Working expenses" defined.]

33. The phrase "working expenses" shall mean and include all expenses of
maintenance of the railway, and of the stations, buildings, works and
conveniencies belonging thereto, and of the rolling and other stock and
moveable plant used in the working thereof, and also all such tolls,
rents or annual sums as may be paid in respect of the hire of engines,
carriages or wagons let to the Company; also all rent, charges or
interest on the purchase money of lands belonging to the Company,
purchased but not paid for, or not fully paid for; and also all expenses
of, and incidental to, working the railway and the traffic thereon,
including stores and consumable articles; also rates, taxes, insurance
and compensation for accidents or losses; also all salaries and wages of
persons employed in and about the working of the railway and traffic,
and all office and management expenses, including directors' fees,
agency, legal and other like expenses.

[Sidenote: Currency on which bonds may be issued.]

[Sidenote: Price and conditions of sale.]

[Sidenote: May be exchanged for inscribed stock, etc.]

34. The bonds authorized by this Act to be issued upon the railway or
upon the lands to be granted to the Company, or both, may be so issued
in whole or in part in the denomination of dollars, pounds sterling, or
francs, or in any or all of them, and the coupons may be for payment in
denominations similar to those of the bond to which they are attached.
And the whole or any of such bonds may be pledged, negotiated or sold
upon such conditions and at such price as the Board of Directors shall
from time to time determine. And provision may be made by the by-laws of
the Company, that after the issue of any bond, the same may be
surrendered to the Company by the holder thereof, and the Company may,
in exchange therefor, issue to such holder inscribed stock of the
Company--which inscribed stock may be registered or inscribed at the
chief place of business of the Company or elsewhere, in such manner,
with such rights, liens, privileges and preferences, at such place, and
upon such conditions, as shall be provided by the by-laws of the
Company.

[Sidenote: Bonds need not be registered.]

[Sidenote: Mortgage deed, how deposited.]

[Sidenote: And agreements under s. 36.]

[Sidenote: Certified copies.]

35. It shall not be necessary, in order to preserve the priority, lien,
charge, mortgage or privilege, purporting to appertain to or be created
by any bond issued or mortgage deed executed under the provisions of
this Act, that such bond or deed should be enregistered in any manner,
or in any place whatever. But every such mortgage deed shall be
deposited in the office of the Secretary of State--of which deposit
notice shall be given in the _Canada Gazette_. And in like manner any
agreement entered into by the Company, under section thirty-six of this
Act, shall also be deposited in the said office. And a copy of any such
mortgage deed, or agreement, certified to be a true copy by the
Secretary of State or his deputy, shall be received as _prima facie_
evidence of the original in all courts of justice, without proof of the
signatures or seal upon such original.

[Sidenote: Agreement with bondholders, etc., for restricting issues.]

[Sidenote: Effect thereof.]

36. If, at any time, any agreement be made by the Company with any
persons intending to become bondholders of the Company, or be contained
in any mortgage deed executed under the authority of this Act,
restricting the issue of bonds by the Company, under the powers
conferred by this Act, or defining or limiting the mode of exercising
such powers, the Company, after the deposit thereof with the Secretary
of State as hereinbefore provided, shall not act upon such powers
otherwise than as defined, restricted and limited by such agreement. And
no bond thereafter issued by the Company, and no order, resolution or
proceeding thereafter made, passed or had by the Company, or by the
Board of Directors, contrary to the terms of such agreement, shall be
valid or effectual.

[Sidenote: Company may issue guaranteed or preferred stock to a limited
amount.]

[Sidenote: Not to affect privileges of bondholders.]

[Sidenote: Voting.]

37. The Company may, from time to time, issue guaranteed or preferred
stock, at such price, to such amount, not exceeding ten thousand dollars
per mile, and upon such conditions as to the preferences and privileges
appertaining thereto, or to different issues or classes thereof, and
otherwise, as shall be authorized by the majority in value of the
shareholders present in person or represented by proxy at any annual
meeting or at any special general meeting thereof called for the
purpose--notice of the intention to propose such issue at such meeting
being given in the notice calling such meeting. But the guarantee or
preference accorded to such stock shall not interfere with the lien,
mortgage and privilege attaching to bonds issued under the authority of
this Act. And the holders of such preferred stock shall have such power
of voting at meetings of shareholders as shall be conferred upon them by
the by-laws of the Company.


  Execution of Agreements

[Sidenote: Contracts, bills, etc., by its agents to bind the company.]

[Sidenote: Proof thereof.]

[Sidenote: Non-liability of such agents.]

[Sidenote: Proviso: as to notes.]

38. Every contract, agreement, engagement, scrip certificate or bargain
made, and every bill of exchange drawn, accepted or endorsed, and every
promissory note and cheque made, drawn or endorsed on behalf of the
Company, by any agent, officer or servant of the Company, in general
accordance with his powers as such under the by-laws of the Company,
shall be binding upon the Company: and in no case shall it be necessary
to have the seal of the Company affixed to any such bill, note, cheque,
contract, agreement, engagement, bargain or scrip certificate, or to
prove that the same was made, drawn, accepted or endorsed, as the case
may be, in pursuance of any by-law or special vote or order; nor shall
the party so acting as agent, officer or servant of the Company be
subjected individually to any liability whatsoever to any third party
therefor: Provided always, that nothing in this Act shall be construed
to authorize the Company to issue any note payable to the bearer
thereof, or any promissory note intended to be circulated as money, or
as the note of a bank, or to engage in the business of banking or
insurance.


  General Provisions

[Sidenote: Reports to Government.]

39. The Company shall, from time to time, furnish such reports of the
progress of the work, with such details and plans of the work as the
Government may require.

[Sidenote: Publication of notices.]

40. As respect places not within any Province, any notice required by
"_The Consolidated Railway Act_, 1879," to be given in the "Official
Gazette" of a Province, may be given in the _Canada Gazette_.

[Sidenote: Form of deeds, etc., to the Company.]

41. Deeds and conveyances of lands to the Company for the purpose of
this Act (not being letters patent from the Crown), may, in so far as
circumstances will admit, be in the form following, that is to say:--

[Sidenote: Form.]

"Know all men by these presents, that I, A. B., in consideration of
                     paid to me by the Canadian Pacific Railway
Company, the receipt whereof is hereby acknowledged, grant, bargain,
sell and convey unto the said The Canadian Pacific Railway Company,
their successors and assigns, all that tract or parcel of land
(_describe the land_) to have and to hold the said land and premises
unto the said Company, their successors and assigns for ever.

"Witness my hand and seal, this       day of
one thousand eight hundred and             .

[Sidenote: Obligation of the grantor.]

"Signed, sealed and delivered
   in presence of                 A. B.   (L. S.)
                  "C. D.
                  "E. F.

or in any other form to the like effect. And every deed made in
accordance herewith shall be held and construed to impose upon the
vendor executing the same the obligation of guaranteeing the Company and
its assigns against all dower and claim for dower and against all
hypothecs and mortgages and against all liens and charges whatsoever,
and also that he has a good, valid and transferable title thereto.




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Pope, Sir Joseph--"Memoirs of the Rt. Hon. Sir John A. MacDonald."
London, 1894.

Preston, W. T. R.--"Life and Times of Lord Strathcona." London, 1914.

Pritchard, John--"Narratives respecting the aggressions of the
North-West Company against the Earl of Selkirk's Settlement." London,
1819.

Prowse, D. W.--"History of Newfoundland from English, Colonial and
Foreign Records." London, 1895.

Pyle, J. G.--"Life of James J. Hill." Garden City, 1917.

Radisson, Pierre Esprit--"Voyages, 1652-84." Boston, 1885.

Rame, A.--"Documents indits sur le Canada. 1865-7."

Rameau, De S. R.--"Une Colonie Fodale en Amrique--l'Acadie,
1604-1881." Montreal, 1889.

Robson, J.--"An Account of Six Years' Residence in Hudson's Bay, 1733-6
and 1744-7." London, 1752.

Rogers, Robert--"Ponteach or the Savages of America, a Tragedy." London,
1766.

Roosevelt, Theodore--"The Winning of the West." New York, 1889-96.

Ross, Alexander--"Adventures of the First Settlers on the Oregon or
Columbia River." London, 1849.

Ross, Alexander--"The Red River Settlement: Its Use, Progress and
Present State." London, 1856.

Schoolcraft, Henry R.--"Summary Narrative of an Exploratory expedition
to the Sources of the Mississippi River, 1820." Philadelphia, 1855.

Scholefield, E. O. S.--"British Columbia from the Earliest Times to the
Present." Vancouver, 1914.

Seemann, Berthold C.--"Narrative of the Voyage of H.M.S. Herald."
London, 1853.

Selkirk, Thomas D., Earl of--"Observations on the Present State of the
Highlands of Scotland." London, 1805.

Semple, Ellen C.--"American History and its Geographic Conditions."
Boston, 1903.

Shortt, Adam ed.--"Canada and its Provinces." Edinburgh, 1914-17.

Simpson, Alexander--"Life and Times of Thomas Simpson, the Arctic
Discoverer." London, 1845.

Skelton, O. D.--"Life and Letters of Sir Wilfrid Laurier." Toronto,
1921.

Skelton, O. D.--"The Railway Builders." Toronto, 1916.

Slafter, E. F.--"Sir William Alexander and American Colonization."
Boston, 1873.

Smalley, E. V.--"History of the Northern Pacific Railroad." New York,
1883.

Smith, Hon. William--"History of the Late Province of New York--to
1762." New York, 1829.

"Sources of the History of Oregon." University of Oregon, Dept. of
Economics and History--Contributions. Eugene, 1897-9.

Sparks, Jared--"The Works of Benjamin Franklin." 1844.

Stone, Wm. L.--"The Life and Times of Sir William Johnston, Bart."
Albany, 1865.

Strachan, John--"A Letter to the Right Hon. the Earl of Selkirk on his
settlement at the Red River near Hudson's Bay." London, 1816.

Sult, Benjamin--"Histoire de la Ville des Trois Rivires et de ses
environs." Montreal, 1870.

Synge, M. H.--"Great Britain One Empire, 1852." London, 1852.

Thompson, D.--"History of the Late War between Great Britain and the
United States of America." Niagara, 1832.

Thompson, David--"Narrative of Exploration in Western America,
1784-1812." Ed. Tyrell, J. B., Champlain Society Publ. vol. XII.
Toronto, 1916.

"Toronto--History of Toronto and the County of York, Ontario." Toronto,
1885.

Trout, J. M., and Edw.--"The Railways of Canada for 1870-1." Toronto,
1871.

Tupper, Sir Charles--"Recollections of Sixty Years in Canada." London,
1914.

Umfreville, E.--"The Present State of Hudson's Bay." London, 1790.

Vaughan, Walter--"Life and Work of Sir William Van Horne." New York,
1920.

Vineberg, S.--"Provincial and Local Taxation in Canada." New York, 1912.

Wallace, W. S.--"The United Empire Loyalists." Toronto, 1914.

Washington--"Journal of Colonel George Washington." Ed. Toner, J. M.
Albany, 1893.

Watkin, Sir E. W., Bart., M.P.--"Canada and the States, Recollections
1851-86." London, 1887.

Weise, A. J.--"Discoveries of North America to the year 1525." New York
and London, 1884.

White, James--"Altitudes in Canada." Ottawa, 1915.

Whymper, Frederick--"Travel and Adventure in the Territory of Alaska."
London, 1869.

Willison, Sir J. S.--"Sir Wilfrid Laurier and the Liberal Party."
Toronto, 1903.

Willson, Henry Beckles--"Life of Lord Strathcona and Mount Royal."
London, 1915.

Willson, Henry Beckles--"Lord Strathcona, The Story of His Life."
Toronto, 1902.

Willson, Henry Beckles--"The Great Company." London, 1900.

Wilson, F. A., and Richards, A. B.--"Britain Redeemed and Canada
Preserved." London, 1850.

Winthrop, John--"Journal in Original Narratives of Early American
History of New England." 1630-49. New York, 1908.

Wolseley, G. J. F. M., Viscount--"Story of a Soldier's Life."
Westminster, 1903.

Wood, Wm. C. H.--"The War with the United States: A Chronicle of 1812."
Toronto, 1915.


  II. Newspapers and Magazines

"Commercial and Financial Chronicle." New York.

"Economic Journal." London.

"Economist." London.

"Globe." Toronto.

"Leader." Toronto.

"London Times." London.

"Railway Age Gazette." Chicago.

"United Service Journal and Naval and Military Magazine." London,
1829-1865.


  III. Pamphlets

Allan, H.--"_The Times_ and its Correspondents on Canadian Railways."
London, 1875.

Bell, Charles N.--"Some Historical Names and Places of the Canadian
North-West"; _Transactions of the Manitoba Historical and Scientific
Society_, No. 17. Winnipeg, 1885.

British Columbia--"Letters of Britannicus." Ottawa, 1876.

Bross, W.--"The Toronto and Georgian Bay Ship Canal." Chicago, 1864.

Ellice, Edward--"Communications of Mercator." Montreal, 1817.

Foster, John--"Descriptions of a Wooden Railway." Montreal, 1870.

Foster, John--"Railway from Lake Superior to Red River Settlement."
Montreal, 1869.

Hogan, J. S.--"Canada." Montreal, 1855.

Letter from "Mohawk"--"The Canadian Pacific Railway and its Assailants."
London, 1882.

MacDonnell, Allen--"The North-West Transportation, Navigation and
Railway Company. Its Objects." Toronto, 1858.

Meddaugh, E. W., and Raymond, A. C.--"The Canadian Railway Question."
Detroit, 1891.

"Notice on the Claims of the Hudson's Bay Company and the Conduct of its
Adversaries." Montreal, 1817.

"Open Letter to the shareholders of the Canadian Pacific Railway
Company, 1st October, 1887. Ashdown, J. H., and Robinson, J. C. Issued
by authority of the Winnipeg Board of Trade and the Brandon Board of
Trade.

"Railway Interests of the City of Montreal." Montreal, 1872.

Smith, T. T. Vernon--"Pacific Railway Claims of St. John to be the
Atlantic Terminus." 1858.

Smyth, Carmichael--"Employment of People and Capital in Great Britain in
her own Colonies." Ottawa, 1871.

Smyth, Sir J.--"Railroad Communication." Toronto, 1845.

Waddington, Alfred--"Sketch of Proposed Railroad Line Overland through
British North America." Ottawa, 1871.

Wilson, J. R.--"The Oregon Question"; _Quarterly of the Oregon
Historical Society_, vol. I. September, 1900.

Wilson, Wm.--"Dominion of Canada and the Canadian Pacific Railway."
Victoria, 1874.


  IV. Official Reports and Documents

Andrews, Israel D.--"Report on Trade and Commerce of British North
America Colonies. Report of the Secretary of the U.S. Treasury in answer
to a resolution of the Senate calling for information in relation to
trade and commerce of the British American colonies with the United
States and other countries since 1829." 1851.

"Annual Reports of the Board of Railway Commissioners." Ottawa.

"Annual Reports of the Canadian Pacific Railway."

"Annual Reports of the Department of Railways and Canals." Ottawa.

"Atlas of Canada, 1915." Canada, Dept. of the Interior.

"British Columbia Yearbooks." Victoria.

"Canada--Board of Registration and Statistics, 1849." Appendix to the
first report. Montreal.

"Canada Gazette." Ottawa.

"Canada House of Commons and Senate Debates."

"Canada Yearbooks." Ottawa. (Statistical Abstract and Record of Canada,
1886-8, The Statistical Yearbook of Canada, 1889-1904. Present title
since.)

"Canadian Archives Reports." Ottawa.

"Canadian Cases in the Judicial Committee of the Privy Council--Appeal
Cases." London.

"Canadian Pacific Railway Royal Commission Report." Ottawa, 1882.

"Canadian Supreme Court Reports."

"Census of Canada." Ottawa.

"Census of Nova Scotia." Halifax, 1862.

"Collection de documents relatifs  la Histoire de la Nouvelle France."
Quebec, 1885.

"Copies of extracts of any dispatches--on the subject of the
establishment of a representative assembly at Vancouver's Island."
London, 1857.

"Copies or extracts of correspondence relative to the discovery of gold
in Fraser's River District in British North America." London, 1858.

"Copy of correspondence between the chairman of the Hudson Bay Company
and the Secretary of State for the colonies relative to the colonization
of Vancouver's Island." London, 1848.

"Copy of Treasury Minute dated 18th July, 1889, and of contract with
Canadian Pacific Railway dated 15th July, 1889, for conveyance of Her
Majesty's mails, troops and stores between Halifax or Quebec and Hong
Kong and for hire and purchase of vessels as cruisers and transports."
London, 1889.

"Correspondence, Papers and Documents of dates, 1856 to 1882 incl.,
relating to Northerly and Westerly boundaries of the Province of
Ontario." Toronto, 1882.

"Correspondence relative to the Canadian Pacific Railway." London, 1874.

"Correspondence relative to the Negotiation of the Question of disputed
right to the Oregon territory--subsequent to the Treaty of Washington of
August 9, 1842." 1846.

"Correspondence relative to the Recent Disturbances in the Red River
Settlement." London, 1870.

"Correspondence respecting the Canadian Pacific Railway Act so far as
regards British Columbia." London, 1875.

"Correspondence respecting the North-West Territory including British
Columbia." Ottawa, 1868.

Dawson, Simon J.--"Report on exploration of the country between Lake
Superior and the Red River Settlement and between the latter place and
the Assiniboine and Saskatchewan. 1858." Toronto, 1859.

"Documents relative to the Colonial History of the State of New York."
Albany, 1861.

Durham, Earl of--"Report on the Affairs of British North America."
London, 1839.

"Edits, Ordonnances Royaux, Dclarations et Arrts du Conseil d'tat du
Roi concernant de Canada." Quebec, 1855.

Fleming, Sandford--"Report and Documents in reference to the Canadian
Pacific Railway." Ottawa, 1872-80.

Fleming, Sandford--"Report on Surveys and preliminary operations on the
Canadian Pacific Railway to January, 1877." Ottawa, 1877.

"Further Copies or Extracts of correspondence relative to the affairs of
Lower and Upper Canada." London, 1837-8.

Hart, A. B., and Channing, E.--"American History Leaflets, Colonial and
Constitutional." New York, 1892-1911.

Hind, Henry Youle--"Narrative of the Canadian Red River exploring
expedition of 1857 and of the Assiniboine and Saskatchewan expedition of
1858." London, 1860.

"Interstate Commerce Commission Reports."

"Journals of the Legislative Assemblies of the Provinces."

"Journals of the House of Commons of the Dominion of Canada."

"Judgments, Orders, Regulations and Rulings of the Board of Railway
Commissioners of Canada." Ottawa.

Langevin, Hon. H. L.--"British Columbia Report." Ottawa, 1872.

MacDonald, W.--"Select Documents of the History of the United States."
New York, 1898.

MacMurchy and Dennison, or MacMurchy and Spence--"Canadian Railway
Cases." Toronto.

"Messages and Papers of the Presidents." Vol. IX. Washington.

"Minutes of evidence taken before the Select Committee of the Senate
appointed to inquire into all matters relating to the Canadian Pacific
Railway and Telegraph west of Lake Superior." Ottawa, 1879.

Palliser, Capt. John--"Journals, detailed reports and observations
relative to the exploration--1857-8, 9, 1860." London, 1859-63.

"Papers connected with the awarding of section 15 of the C.P.R." Ottawa,
1877.

"Papers relating to the Hudson Bay Company, 1842-70." London, 1842, 49,
50, 58.

"Papers relating to the Red River Settlement." 1819.

"Papers relative to the Affairs of British Columbia." 1859-62.

"Report and Minutes of evidence taken before the Select Committee of the
Senate appointed to inquire into and report upon the purchases of lands
at Fort William for a terminus to the Canadian Pacific Railway." Ottawa,
1878.

"Report and minutes of evidence taken before the Select Committee of the
Senate to inquire into and report upon the route of the C.P.R. from
Keewatin westward." Ottawa, 1877.

"Report from the committee appointed to inquire into the state and
condition of the countries adjoining to Hudson Bay, and of the Trade
carried on there." London, 1749.

"Report from the Select Committee on the Hudson's Bay Company." 1857.

"Report of the Commission appointed to inquire into the affairs of the
Grand Trunk Railway." 1861.

"Report of the Ontario Commission on Railway Taxation." Toronto, 1905.

"Report of the Royal Commission appointed to inquire into and report
upon the several matters relating to the C.P.R." Ottawa, 1873.

"Report of the Royal Commission to Inquire into Methods by which
Oriental labourers have been induced to come to Canada." Ottawa, 1908.

Selkirk, Earl of--"Report of Proceedings at a court of oyer and terminer
appointed for the investigation of cases from the Indian Territories."
1819.

Selkirk, Earl of--"Report of the Proceedings connected with the disputes
between the Earl of Selkirk and the North-West Company at the Assizes at
York, 1818." London, 1819.

"Sessional Papers, Federal and Provincial, of the Dominion of Canada and
Parliamentary Papers of Great Britain."

Shortt, Adam, and Doughty, A. G.--"Documents relating to the
constitutional History of Canada." Ottawa, 1907-14.

"Statistical Abstract of the United States." Washington, 1919.

"Statutes and Proclamations, Federal and Provincial, of the Dominion of
Canada."

"Statutes of Great Britain."

"United States Senate and Congressional Reports and Papers."

Wood, Wm.--"Select British Documents of the Canadian War of 1812."
_Champlain Society Publ_. vol. XIII. Toronto, 1920.




  INDEX


  Abbott, J. J. C, 102, 275

  Abercorn, 135 _n._

  _Aberdeen_, the, 150

  Acadia, 54 _n._, 57 _n._, 60 _n._

  Accidents, 231

  Acme, 153

  Acquisition, 111, 122, 134, 135 _n._, 136, 140, 141, 142, 143, 158, 169,
      199, 237, 248, 249, 255, 273, 281 _n._

  Act, 14, 17 _n._, 38, 39, 40, 63 _n._, 67 _n._, 89 _n._, 100, 120, 123,
      174, 179, 184, 186, 251, 255, 256, 257, 270, 289
    British North America, 45, 72 _n._, 179, 180, 181
    Canadian Pacific Railway, 81 _n._, 83, 85 _n._, 124, 172, 250 _n._
    Consolidated Railroad, 172, 256
    Loan, 125, 126, 280, 282
    Manitoba, 50
    of Union, 66, 75, 75 _n._, 76 _n._, 290
    Quebec, 62 _n._
    Rupert's Land, 46, 46 _n._
    Railway Taxation, 239 _n._

  Admiralty, 139, 170

  Agincourt, 156

  Agriculture, 6, 7, 7 _n._, 8, 9, 16, 28 _n._, 29, 38 _n._, 42 _n._, 130,
      141, 145, 146, 147, 162, 163, 164, 183, 185, 199, 216, 245, 260, 265,
      288

  Alaska, 19

  Albany, 56, 56 _n._
    River, 23 _n._, 24 _n._, 25 _n._

  Alberni, 154

  _Alberta_, the, 134

  Alberta, 152, 153, 170, 191 _n._, 255, 264
    Central Railway, 154
    Railway and Coal Co., 139
    Railway and Irrigation Co., 154, 191 _n._

  Aldersyde, 152

  Alexander, Sir William, 55 _n._

  Alexandria, 15

  Algoma Mills, 106, 107, 112, 115, 121, 125, 134, 137, 271, 272

  Alida, 153

  Allan, Sir Hugh, 79, 79 _n._, 80 _n._, 81 _n._, 82, 82 _n._, 83, 95 _n._,
      102
    Line, 170

  Alleghany Mountains, 59, 61, 73
    River, 60 _n._

  Almonte Knitting Co. case, 189

  Alps, 170

  America, 19, 22 _n._, 34 _n._, 41 _n._, 52, 70 _n._

  _America_, the, 10 _n._

  American, 6, 8, 19, 32 _n_., 49, 61 _n._, 62 _n._, 64, 64 _n._, 67 _n._,
      77 _n._, 79, 79 _n._, 81 _n._, 82, 82 _n._, 98, 100, 134, 138, 182,
      188, 189, 189 _n._, 191, 194, 274, 282
    Anglo-American, 44
    Civil War, 71 _n._
    expansion, 42 _n._, 69 _n._, 71
    fur trade, 26
    Imperialism, 32, 35, 44
    lines, 139, 180, 181, 193, 207
    railroads, 69 _n._, 70, 93 _n._, 112, 113 _n._, 137, 139, 154, 158,
      173, 174, 179, 183, 187, 189, 191, 192, 194, 195, 205, 206, 207, 208
    Revolution, 61
    route, 42 _n._, 193, 195
    traffic, 77, 78 _n._, 80, 83

  Amsterdam, 114

  Anderson, 11 _n._

  Anglo-American capitalists, 44

  Angus, R. B., 97, 102, 113, 114, 259, 275, 275 _n._, 276

  Annexationist Manifesto, 68 _n._, 290

  Anticosti, 33 _n._

  Appropriation, 90 _n._

  Archibald, Lieut.-Gov., 51

  Arcola, 152

  Arctic Ocean, in, 2

  Aroostook Junction, 143

  Arrowhead, 142

  Ashburton treaty, 70 _n._

  Ashley Creek, 6 _n._

  Asia, 66 _n._

  Asquith, 153

  Assessment, 80 _n._, 81 _n._

  Assin Poets, 23 _n._

  Assiniboia, 153
    Council of, 29 _n._, 31 _n._, 47 _n._
    Valley, 78 _n._

  Assiniboine, branch, 103
    House, 25 _n._
    River, 23 _n._, 24 _n._, 25 _n._, 28, 36 _n._
    territory, 27 _n._

  Astoria, 6, 7, 8 _n._

  _Athabasca_, the, 134

  Athabasca territory, 27 _n._, 67 _n._

  _Athenian_, the, 150

  Atlantic and Northwest Railway, 122, 122 _n._, 135, 137, 142
    and Pacific Transit and Telegraph Co., 42 _n._
    coast, 68, 70, 70 _n._, 73, 135, 136, 155, 169, 181, 195, 209, 288
    division, 33 _n._
    Ocean, 1 _n._, 3 _n._, 18 _n._, 26, 42 _n._, 55 _n._, 62 _n._, 69 _n._,
      70, 169, 281 _n._

  Attorney-general, 37 _n._
    of British Columbia, 189

  Austrian Government, 170

  Aylmer, 112, 112 _n._, 156


  Baffin, 22 _n._

  Baggage, mail and express car, 133, 201, 201 _n._
    rates, 86 _n._

  Bald Range, 78 _n._

  Ballast pit, 257, 272

  Baltimore and Ohio Co., 151

  Banff, 204

  Bank of Montreal, 92 _n._, 97, 117

  Baring, Rt. Hon. A. C., 126
    and Co., 127

  Barkerville, 17 _n._

  Barnard, F. J., 88 _n._

  Barnesville, 93 _n._

  Barnet and McKay, 99 _n._

  Barney, A. H., 80 _n._, 81 _n._

  Basins, drainage, 1, 2, 3, 74
    Arctic, 1 _n._
    Atlantic, 1 _n._
    Hudson Bay, 1 _n._
    Pacific, 1 _n._
    St. Lawrence, 52, 59

  Bassano, 152, 153, 255 _n._

  Battleford, 3 _n._, 252, 254

  Bay of Fundy, 54 _n._, 71 _n._, 158, 169
    Quinte, 63 _n._
    St., Toronto, 137

  Bear Lake, 9 _n._

  Beatty, E. W., 276

  Beaubassin, 60 _n._

  Beauharnois Canal, 67 _n._

  Beausejour, 60 _n._

  _Beaver_, the, 13 _n._

  Beaver Creek, 110
    Line, 169
    River, 25 _n._, 110
    town, 259

  Bedford House, 25 _n._

  Beique, Senator F. L., 275

  Belle Isle, Straits of, 53

  Bellevue Islands, 157

  Berlin, Waterloo, Wellesley and Lake Huron Railway, 157

  Berthier, 123 _n._
    Junction, 123 _n._

  Berwyn, 154

  Bethany Junction, 156

  Biencourt, 55 _n._

  Big Bend, 15

  "Big Hill" grade, 155

  Bill of Rights, Settlers', 50 _n._

  Billings, Frederick, 80 _n._, 81 _n._

  Binscarth, 152

  Birdtail Creek, 87 _n._

  Biscayan Whaling expedition, 53

  Black Sturgeon district, 78 _n._

  Blake Bros. & Co., 275

  Blakiston, Lieut., 35 _n._

  Blanshard, Richard, 12 _n._, 13

  Board, 95 _n._, 188
    of directors, C. P. R., 82 _n._
    of directors, Hudson's Bay Co., 48 _n._
    of Railway Commissioners, 186, 188, 189, 190, 190 _n._, 191 _n._, 196,
      209, 220, 221, 230, 293, 293 _n._
    of Trade, 36, 69 _n._, 100, 176, 180

  Boarding, tool and auxiliary cars, 150, 150 _n._, 168, 168 _n._

  Bobcaygeon, 157

  Boissevain, 153

  Bolton Junction, 156

  Bond, 81 _n._, 101, 107, 118, 118 _n._, 119, 120, 121, 123, 124, 125,
      126, 127, 135, 182, 270, 271, 272, 273, 274, 279, 280, 281 _n._
    land grant 98, 101, 103, 104, 107, 108, 109, 115, 116, 117, 118, 118
      _n._, 125, 182, 250, 271, 272, 278

  Bonus, 92 _n._, 100, 181, 274

  Boston, 4 _n._, 62, 79 _n._, 92 _n._, 112, 114, 135, 156, 157, 192, 194,
      207, 274, 275
    Lowell Railway, 135
    Port Bill, 61 _n._

  Boston Bar, 88 _n._

  Bostonian, 57 _n._

  Boulder Creek, 262

  Bow River, 250 _n._, 255 _n._, 261

  Bowie and McNaughton, 89 _n._

  Box cars, 133, 182

  Boyd, John A., 273

  Braddock, General, 60 _n._

  Brampton, 99 _n._

  Branch, 88 _n._, 89 _n._, 91 _n._, 93, 93 _n._, 98, 99, 103, 105, 106,
      107, 112, 112 _n._, 113, 114, 115, 120, 121, 122, 129, 135, 137, 138,
      139, 140, 141, 142, 143, 150, 151, 152, 153, 154, 155, 156, 157, 158,
      171, 174, 180, 181, 183, 185, 186, 189, 190, 203, 205, 251, 252, 253,
      254, 255, 256, 257 _n._, 264, 265, 271, 272, 273, 274, 281 _n._, 292

  Brandon, 103, 104, 106, 140, 155, 176 _n._, 177, 177 _n._, 178, 178 _n._,
      185, 186, 205, 252
    Board of Trade, 180
    House, 25 _n._

  Brantford, 143

  Breckenridge, 93 _n._

  Bridge, railway, 78 _n._, 89 _n._, 112, 113, 114, 115, 122, 122 _n._,
      135, 136 _n._, 137, 140, 150, 158, 181, 182
    transcontinental, 72, 74, 96, 128

  Bridger, Mr., 23 _n._

  Bristol, 170

  Britain, 66 _n._

  British, 14, 17 _n._, 19, 35 _n._, 47 _n._, 50 _n._, 62 _n._, 64, 71
      _n._, 73, 80 _n._, 81 _n._, 82 _n._, 101, 206, 288, 289
    America, 34 _n._, 38 _n._
    authorities, 10, 19, 37, 40, 65 _n._
    colony, 35, 67 _n._
    Government, 10, 11, 12 _n._, 13, 30, 42, 289, 290
    investors, 95 _n._
    Isles, 276
    navy, 64 _n._
    North America Act, 45, 72 _n._, 179, 180, 181
    territory, 11, 17, 68 _n._, 76 _n._, 138
    Treasury, 282

  British Columbia, 14, 15, 17, 17 _n._, 18, 18 _n._, 19, 20, 21, 22, 33,
      35, 35 _n._, 38 _n._, 39, 39 _n._, 41 _n._, 43 _n._, 48 _n._, 68 _n._,
      69 _n._, 72, 73, 74, 75 _n._, 77, 77 _n._, 78 _n._, 81 _n._, 84, 84
      _n._, 85 _n._, 87, 87 _n._, 96, 98, 98 _n._, 100, 104, 127, 130 _n._,
      139, 141, 150, 154, 155, 169, 170, 183, 184, 189, 190, 193, 237, 255,
      258, 259, 265, 273, 273 _n._, 291
    Overland Transit Co., 18
    settlement, 8, 10
    Southern Railway, 139, 255

  Broadview, 177 _n._, 178 _n._

  Brockville, 112, 112 _n._, 120, 134

  Brookport, 156

  Brown, Hon. George, 44, 44 _n._

  Brydges, Mr., 19 _n._, 80 _n._

  Buckingham, 142
    House, 25 _n._
    Junction, 142

  Buffalo, 68 _n._, 195
    Wool Co., 28 _n._

  Buffaloes, 28 _n._, 29, 29 _n._, 39 _n._, 42 _n._

  Bulyea, 152

  Burketon Junction, 157

  Burpee, 20 _n._

  Burrard Inlet, 87 _n._, 88 _n._, 138

  Bury, Sir George, 275

  Bute Inlet, 77 _n._

  Button, 22 _n._


  Cabinet, 79 _n._

  Cable, 19
    Commercial, 151
    French Atlantic, 151

  Cabot, 52

  Cache Creek, 16, 78 _n._, 88 _n._

  Caithness, 154

  Caledonia Springs, 204

  Calgary, 111, 141, 152, 153, 178 _n._, 255 _n._, 256, 257
    and Edmonton Railway, 141, 152

  California, 11, 32 _n._, 193, 206

  Callander, 98, 99, 100, 106, 107, 109, 111, 112, 112 _n._, 120, 121, 121
      _n._, 128, 256, 274

  Campbell, Sir A., 104

  Campbellford, Lake Ontario and Western Railway, 156

  Camosun Harbour, 9

  Canada, 2, 3, 17 _n._, 18, 19, 19 _n._, 20, 21, 24, 27 _n._, 33 _n._,
      35, 35 _n._, 36 _n._, 37, 37 _n._, 38, 38 _n._, 39, 40, 40 _n._, 41,
      41 _n._, 42 _n._, 43, 44, 44 _n._, 45, 46, 46 _n._, 47, 47 _n._, 49,
      49 _n._, 50, 50 _n._, 51, 52, 52 _n._, 61, 61 _n._, 62 _n._, 64, 66
      _n._, 67 _n._, 69 _n._, 71 _n._, 72, 72 _n._, 73, 74, 76, 76 _n._,
      77, 78 _n._, 81 _n._, 82 _n._, 83, 84 _n._, 85, 85 _n._, 87 _n._, 88,
      93, 93 _n._, 94 _n._, 95 _n._, 96, 97, 97 _n._, 99, 127, 128, 133,
      135, 151, 170, 172, 181, 184, 188, 190, 192, 193, 224, 225, 264, 276,
      276 _n._, 277, 290, 292, 294
    Central Railway, 88, 88 _n._, 92 _n._, 97, 100, 101, 102, 106, 112, 112
      _n._, 131, 134, 173 _n._, 274, 281 _n._
    Corn Bill, 67 _n._
    Eastern, 52, 55, 112, 122, 140, 145, 146, 155, 158, 161, 163,
      173, 174, 176, 186, 187, 190, 192, 193, 195, 196, 198, 199, 215, 220,
      221, 227, 229, 247, 291, 292, 293, 294
    Land and Improvement Co., 80 _n._
    Lower, 32 _n._, 64, 64 _n._, 65, 66, 66 _n._, 289, 290
    Pacific Railway, 20 _n._, 77 _n._, 78 _n._, 79, 79 _n._, 81 _n._, 82
      _n._, 89 _n._
    Southern, 122, 143
    Upper, 32 _n._, 63 _n._, 64, 64 _n._, 65, 66, 66 _n._, 70, 70 _n._, 73,
      289, 290, 291
    Western, 58 _n._, 89, 93, 97, 129, 130, 137, 140, 144, 146, 147, 150,
      151, 154, 155, 158, 165, 173, 174, 175, 186, 187, 188, 189, 190, 191,
      194, 196, 197, 199, 205, 209, 214, 216, 222, 247, 250, 255, 269, 286,
      291, 292, 293, 294

  Canadian, 19, 20, 20 _n._, 46, 46 _n._, 64 _n._, 65 _n._, 67, 67 _n._,
      70, 72, 72 _n._, 78 _n._, 83, 114, 115, 128, 129, 159, 186, 189, 189
      _n._, 194, 294
    Australian, 170
    authorities, 39, 42, 42 _n._, 44 _n._, 45, 47 _n._
    Confederacy, 20, 48 _n._
    delegates, 41, 45 _n._, 47 _n._
    directors, 80 _n._, 105
    Express Co., 124
    French, 7
  Government, 17 _n._, 18 _n._, 36 _n._, 37 _n._, 39 _n._, 40 _n._, 41
      _n._, 42, 45, 46 _n._, 47 _n._, 48 _n._, 49, 50, 50 _n._, 84 _n._,
      127, 128, 136, 139, 181, 182, 292
    House, 18 _n._
    Joint Freight Association, 193
    National Railways, 188, 292
    Northern, 187, 188, 292
    North West Land Co., 104, 107
    Pacific Railway and Navigation Co., 77 _n._
    Parliament, 75, 75 _n._, 77 _n._, 80 _n._, 99, 123, 138, 174
    railroad, 79 _n._, 88 _n._, 117, 192 _n._, 193, 194, 195
    settlers, 42 _n._, 48 _n._

  Canadian Pacific Ocean Steamship Services Co., 170, 224 _n._

  Canadian Pacific Railway Company, 1, 2, 80 _n._, 84 _n._, 90 _n._, 92
      _n._, 93 _n._, 97, 99, 100, 102, 104, 105, 108, 109, 111, 112, 117,
      122, 123, 124, 128, 128 _n._, 129, 131, 135, 136, 136 _n._, 137, 138,
      139, 141, 151, 156, 158, 170, 173, 173 _n._, 175, 178, 179, 180, 180
      _n._, 181, 182, 183, 184, 185, 186, 188, 189, 190, 191, 191 _n._, 192,
      192 _n._, 193, 194, 195, 196, 206, 207, 208, 210, 224, 239 _n._, 250
      _n._, 253, 254, 259, 269, 273, 274, 278, 278 _n._, 283, 287, 291, 292
    Act, 85 _n._, 95 _n._

  Canal, 51 _n._, 65, 66 _n._, 67 _n._, 72 _n._, 195, 255 _n._, 290
    Beauharnois, 67 _n._
    Cornwall, 67 _n._
    Erie, 65 _n._
    Farrans Point, 67 _n._
    Fort Francis, 87 _n._
    Galops, 67 _n._
    Iroquois, 67 _n._
    Lachine, 65 _n._, 67 _n._
    Ohio, 65 _n._
    Oswego, 65 _n._
    Rapide Plat, 67 _n._
    Rideau, 65 _n._
    Sault Ste. Marie, 25 _n._
    Welland, 65 _n._, 67 _n._

  Canda, C. J., 80 _n._, 81 _n._
    F. E., 80 _n._, 81 _n._

  Canfield, T. H., 80 _n._, 81 _n._

  Canterbury, 72 _n._

  Canton, 67 _n._

  Cap de la Madeleine, 157
    Railway, 157

  Cape Breton, 55 _n._, 60 _n._
    Horn, 17
    of Good Hope, 34 _n._
    Spencer, 7 _n._

  Capital, 18 _n._, 33 _n._, 35 _n._, 41 _n._, 76 _n._, 79 _n._, 80 _n._,
      82 _n._, 94 _n._, 95 _n._, 98, 101, 109, 120, 125, 172, 182, 187,
      245, 270, 280, 281, 282, 284, 285 stock, 101, 119, 239 _n._, 276,
      278, 284

  Capitalist, 19 _n._, 44, 95, 96, 96 _n._, 97

  Capitalization, 44 _n._

  Capo de Buona Speranca, 22 _n._

  Car, 167, 202, 204, 208, 222, 223, 240
    baggage, mail and express, 133, 201, 201 _n._
    boarding, tool and auxiliary, 150, 150 _n._, 168, 168 _n._
    box, 133
    freight and cattle, 133, 133 _n._, 149, 149 _n._, 167, 167 _n._, 168,
      169
    load, 176, 185, 186, 190, 193
    passenger, 133, 134, 201, 201 _n._, 202, 203
    platform, 133, 133 _n._

  Car repairs, 239, 239 _n._, 240, 244
    shops, 134, 167
    sleeping and dining, 203, 203 _n._
    smoking, 133, 201
    tool, 133, 133 _n._

  Cardston, 154
    Board of Trade, 190 _n._

  Cariboo territory, 15
    trail, 16

  Carignan Salieres regiment, 58 _n._

  Carleton, 134
    Place, 112 _n._

  Carman, 141

  Carmi, 155

  Carnarvon, Earl of, 84, 84 _n._, 85 _n._, 88 _n._
    terms, 85, 87 _n._

  Carpenter, W. H. & Co., 86 _n._

  Carruthers, J., 99 _n._

  Cartier, Sir G. E., 19 _n._, 81 _n._
    Jacques, 53, 53 _n._

  Carts, 17 _n._, 18 _n._, 29 _n._, 51 _n._

  Cascade Range, 78 _n._

  Casco Bay, 58 _n._

  Cass, G. W., 80 _n._, 81 _n._

  Cass, Lewis, 32 _n._

  Castlegar Junction, 142 _n._

  Cataract Junction, 122 _n._

  Cathay, 22 _n._

  Cattle, 7 _n._, 9 _n._, 17 _n._, 31 _n._, 97

  Celoron, 60 _n._

  Centerville, 158

  Central America, 34 _n._
    Canada Railway, 154
    division, 33 _n._
    Vermont Railroad, 79 _n._

  Chalk River, 137

  Chambly, 58 _n._

  Champlain, 54 _n._, 55, 55 _n._, 56 _n._

  Charlton Island, 25 _n._

  Charnis, 57 _n._

  Charter, 18 _n._, 69 _n._, 139, 140, 142, 154, 156, 157, 174, 175, 179
    Canada Pacific Railway, 20 _n._
    Canadian Pacific Railway, 80 _n._, 82, 104, 108, 109, 115, 118, 172,
      250, 252, 255, 263, 263 _n._, 270, 272, 273, 274, 280, 293 _n._
    Company of New France, 56, 56 _n._, 57
    Hudson Bay Co., 10, 22, 37, 37 _n._, 38 _n._, 46
    West India Co., 58 _n._

  Chater, 151

  Chauvin, Pierre, 54 _n._, 55 _n._

  Cheadle, Dr., 18

  Chedabouctou, 59 _n._

  Cheney, B. P., 81 _n._

  Chequamegon Bay, 58 _n._

  Chesterfield House, 25 _n._

  Chicago, 42 _n._, 67 _n._, 68 _n._, 79 _n._, 139, 155, 192, 192 _n._,
      194, 195, 206, 208
    Milwaukee and St. Paul, 113, 194

  Chilwater Plain, 78 _n._

  China, 4, 4 _n._, 66 _n._, 67 _n._, 138, 193, 281 _n._

  Chinese, 16 _n._, 206

  Chisholm, K., 99 _n._

  Churchill River, 2, 23 _n._, 24 _n._, 25 _n._

  Chutaghicks, 59 _n._

  Cincinnati, 192

  Clay, 64 _n._

  Climate, 1, 54, 73, 287, 288
    Battleford, 3 _n._
    Edmonton, 3 _n._
    Kingston, 2 _n._
    Montreal, 2 _n._
    Port Arthur, 2 _n._
    Quebec, 2 _n._
    Toronto, 2 _n._
    Vancouver, 3 _n._
    Winnipeg, 3 _n._

  Clinton, 15

  Coal, 11, 11 _n._, 112, 165, 170, 175 _n._, 176, 183, 190 _n._, 250 _n._,
      265
    fields, 102, 140, 254
    mining, 17, 17 _n._

  Cochran, Hon. J., 97

  Collingwood, 69 _n._

  Colonial office, 40 _n._
    secretary, 46 _n._

  Colonists, 11 _n._, 27 _n._, 28 _n._, 54 _n._, 55 _n._, 61, 61 _n._, 289

  Colonization, 11 _n._, 12 _n._, 13, 27, 27 _n._, 39, 45, 54, 54 _n._, 56,
      56 _n._, 69, 96 _n._, 98, 289

  Colonsay, 152

  Colony, 14 _n._, 15, 20, 29, 29 _n._, 31 _n._, 32 _n._, 35, 35 _n._, 47
      _n._, 54 _n._, 55, 55 _n._, 56 _n._, 58, 58 _n._, 59, 60, 61, 62, 62
      _n._, 70 _n._, 73, 289, 290

  Columbia, 19, 44 _n._
    and Kootenay Railway, 139, 255
    and Kootenay River Navigation Co., 141
    and Western Railway, 140, 142 _n._
    River 6, 6 _n._, 9, 9 _n._, 11, 13, 14, 14 _n._, 15, 16, 21, 26 _n._,
      67 _n._, 110, 140, 262, 263

  Columbus, 52

  Colvalli, 155

  Colville, 17 _n._

  Commercial cable, 151
    telegraph, 243, 243 _n._, 249

  Commission, Interstate Commerce, 191 _n._, 192, 196, 207, 208
    Railway, 184, 185
    Railway rates, 183
    Royal, 82 _n._, 90 _n._, 92 _n._

  Commissioners, Board of, 95 _n._
    Board of Railway, 186, 188, 189, 190, 190 _n._, 191 _n._, 195, 209,
      220, 221, 230, 292, 293 _n._
    Board of Three, 37 _n._
    High, 127
    Land, 98 _n._

  Committee, 44 _n._, 45 _n._, 81 _n._, 82 _n._, 192, 194, 208
    Executive C.P.R., 113, 114, 275, 276, 277
    Judicial, 37 _n._, 46 _n._
    of Senate, 29 _n._
    Select, of 1857, 34, 35, 36, 37, 69 _n._
    Select, on Hudson's Bay Company, 14, 14 _n._

  _Commodore_, the, 14 _n._

  Commons, House of, 12 _n._, 18, 30 _n._, 34 _n._, 47 _n._, 50 _n._, 75
      _n._, 82 _n._, 85 _n._, 88 _n._, 92 _n._, 174, 251, 293 _n._

  Comox, 154

  Company of New France, 56, 57, 57 _n._

  Competition, 4, 5, 10, 12 _n._, 54, 55, 55 _n._, 56, 57 _n._, 59, 60, 72,
      78, 79 _n._, 82, 93 _n._, 122, 123, 139, 170, 173, 178, 181, 185, 187,
      189, 190, 191, 192, 193, 195, 205, 206, 208, 209, 230, 231, 250, 262,
      292
    fur trade, 10, 23, 24, 25, 27, 28, 32 _n._, 57

  Conducting transportation, 232, 233, 233 _n._, 234, 235, 238

  Conductors' vans, 149, 149 _n._, 168, 168 _n._

  Confederation, 72, 73, 290
    delegates, 44

  Congress, 5 _n._, 8, 8 _n._, 32 _n._, 194

  Conmee vs. C.P.R., 106

  Conservative party, 278 _n._

  Consolidated  Railroad Act, 172, 256

  Constitutional Act, 63 _n._

  Construction, canal, 65
    forts, 23
    railroad, 35 _n._, 70 _n._, 72 _n._, 76, 76 _n._, 77, 79, 79 _n._, 80
      _n._, 83, 84, 84 _n._, 85 _n._, 87 _n._, 88, 88 _n._, 89, 89 _n._, 90
      _n._, 91 _n._, 92, 93, 97, 98, 99, 100, 101, 102, 103, 106, 106 _n._,
      107, 110, 111, 113, 115, 117, 118, 120, 121, 124, 127, 129, 129 _n._,
      133, 134, 135, 136, 140, 141, 142, 143, 150, 151, 153, 154, 155, 156,
      157, 158, 166, 169, 170, 172, 175, 180, 180 _n._, 181, 182, 187, 190,
      192, 199, 204, 250, 252, 253, 255, 257, 262, 263, 270, 271, 272, 273,
      273 _n._, 274, 277, 278, 287, 290, 291, 293, 294
    roads, 15, 21, 43 _n._, 45, 50, 51 _n._, 71 _n._
    route 16

  Contract, 80 _n._, 81 _n._, 83, 85 _n._, 86 _n._, 88 _n._, 89 _n._, 90
      _n._, 96, 97, 98, 98 _n._, 99, 100, 101, 102, 103, 109, 111, 112,
      114, 124, 127, 128, 138, 143, 174, 179, 180 _n._, 262, 277, 291
    No. 1, 88 _n._, 91 _n._
    No. 2, 88 _n._, 91 _n._
    No. 3, 88 _n._, 91 _n._
    No. 4, 88 _n._, 91 _n._
    No. 5, 89 _n._, 91 _n._, 92 _n._
    No. 12, 88 _n._, 92 _n._
    No. 13, 89 _n._, 90 _n._, 91 _n._
    No. 14, 89 _n._, 90 _n._, 91 _n._
    No. 15, 89 _n._, 90 _n._, 91 _n._
    No. 16, 88 _n._
    No. 25, 89 _n._, 91 _n._, 92 _n._
    No. 33, 89 _n._
    No. 37, 88 _n._
    No. 42, 89 _n._, 92 _n._
    No. 43, 89 _n._, 91 _n._
    No. 48, 89 _n._, 91 _n._
    No. 60, 88 _n._, 91 _n._
    No. 61, 88 _n._, 91 _n._
    No. 62, 88 _n._, 91 _n._
    No. 63, 88 _n._, 91 _n._
    No. 66, 89 _n._, 91 _n._

  Contractor, 83 _n._, 91 _n._, 92 _n._, 106 _n._, 110, 111, 112, 115, 263
    Barnard, F. J., 88 _n._
    Bowie and McNaughton, 89 _n._
    Fraser, Grant and Pitblado, 89 _n._
    Fuller, Richard, 88 _n._
    Heney, Charlebois and Flood, 88 _n._
    Kavanagh, Murphy and Upper, 89 _n._
    Oliver, Davidson and Brown, 88 _n._
    Onderdonk, Andrew, 88 _n_., 91 _n._
    Purcell, Ryan, Goodwin and Smith, 88 _n._, 89 _n._
    Ryan, J., 89 _n._
    Sifton and Ward, 89 _n._
    Sifton, Glass and Fleming, 88 _n._
    Upper, Swift and Folger, 89 _n._
    Whitehead, Joseph, 89 _n._

  Convention of 1818, 6 _n._
    of 1824 and 1825, 7

  Cook, Capt. James, 4
    H. H., 99 _n._
    Jay, 79 _n._
    & Co., 80 _n._, 81 _n._

  Coquihalla River, 11 _n._

  Corbett, Rev., 43 _n._

  Cordillera ranges, 3

  Corn Laws of Great Britain, 68, 290

  Cornwall, 158
    Canal, 67 _n._

  Coronation, 154

  Coteau Hills, 107
    region, 14

  Council, governor in, 83 _n._, 172, 179, 184
    Legislative, 20, 36
    of Assiniboia, 29 _n._, 31 _n._, 47 _n._
    order in, 84 _n._, 88 _n._, 103, 108, 174, 188, 239 _n._, 252, 273
    Privy, 37 _n_., 45 _n._, 46 _n._, 263 _n._

  Coutannais Pass, 17 _n._

  Coutts, 154

  Cowichan Lake, 154

  Cox, G. A., 99 _n._

  Craigellachie, 128

  Credit Valley Railroad, 108, 120, 122

  Creelman, A. R., 275

  Crofton, Col., 31 _n._

  Crookston, 93 _n._

  Cross, Lake, 89 _n._, 103
    R. J., 275

  Crowfoot Creek, 111

  Crown Lands, Commissioner of, 45 _n._
    Point, 60 _n._

  Crow's Nest Pass, 139, 155, 184
    Agreement, 186, 188, 293, 293 _n._

  Cruizer, the, 170

  Cullom, Senator, 192, 194, 208

  Cumberland House, 24 _n._

  Curle, Mr. W. H., 135 _n._

  Current River, 256

  Cutknife, 153


Dalles, 14 _n._

Davis, 22, 22 _n._

Dawson, route, 86, 92 _n._
  S. J., 36 _n._, 38, 45
  Wm. MacD., 36 _n._

Debate, 75, 92 _n._

De Caens, 56 _n._

Deerfield, 60 _n._

Deloraine, 140, 141, 252

De Meurons, 28 _n._

Dennis, Col. J. S., 48

Denouville, 58 _n._

Department of Railways, 258

Depression, 19, 94 _n._, 127, 132, 144, 145, 146, 148, 150, 159, 160,
    163, 164, 169, 198, 199, 200, 202, 203, 211, 217, 218, 219, 220, 221,
    222, 223, 224, 225, 227, 228, 229, 230, 235, 236, 237, 238, 241, 245,
    246, 249, 264, 265, 266, 280, 281, 283, 284

Derby, 15 _n._, 17 _n._

Des Quinze River, 158, 255

Detroit, 18 _n._, 42 _n._, 58 _n._, 61 _n._, 155, 195
  River, 65 _n._, 137

Devil's Nose, 33 _n._

Dewdney Trail, 16

D'Iberville, 58 _n._, 59 _n._

Differential, 191, 194, 206, 207, 208

Directors, 33 _n._, 78 _n._, 79 _n._, 80 _n._, 81 _n._, 82 _n._, 99
    _n._, 100, 101, 103, 104, 105, 113, 124, 180 _n._, 275

Dirt Hills, 107

Dividend, 109, 115, 116, 117, 120, 125, 241, 248, 266, 270, 278, 282,
    283, 285, 286, 293, 293 _n._
  common stock, 285, 285 _n._
  preferred stock, 285, 285 _n._
  rate, 283, 283 _n._, 284, 286, 293

Dixon, George, 4 _n._

Docks, 101, 182

Dominion Atlantic Railway, 156, 158
  government, 20, 76 _n._, 84 _n._, 85 _n._, 87 _n._, 123, 174, 175, 179,
    180, 181, 182, 187, 190, 239 _n._, 250, 255, 256, 258, 273, 274, 286
  Parliament, 173, 180, 189

Donald, 258

Dorval, 112

Douglas, 88 _n._
  Gov. James, 9 _n._, 13, 18 _n._

Drainage basin--see Basins

Draper, Chief Justice, 35, 35 _n._

Drawbacks, 115

Drayton-Acworth Report, 188

Drexel, Morgan & Co., 109

Drinkwater, C., 102

Drummond, Hon. G., 275

Drummondville, 135 _n._
  Junction, 135 _n._

Dryad, the, 7 _n._

Dulhut, 58 _n._

Duluth, 124, 185, 187
  South Shore and Atlantic Railway Co., 137, 249, 280

Dunmore, 139

Dunraven, 154

Dunsmuir, R., 275

Durham, Lord, 66, 290

Dutch, 56, 56 _n._

Duty, 11 _n._, 66, 67 _n._, 72 _n._, 95 _n._, 99, 114, 115
  export, 29 _n._
  import, 29 _n._, 30 _n._, 72 _n._

Dyment, 142


  Eagle Pass, 17 _n._
    River, 89 _n._

  Earnings, 192 _n._, 193, 196, 210, 211, 216, 219, 220, 226, 227, 228,
      229, 230, 239 _n._, 244, 245, 246, 250, 278, 280, 282, 283, 286
    express, 222, 222 _n._, 223, 224, 224 _n._
    freight, 210, 212, 212 _n._, 215, 215 _n._, 216, 224, 228, 244, 245,
      246, 268, 269
    freight train mile, 227, 227 _n._, 228, 228 _n._, 229, 230, 231
    gross, 193, 210, 211 _n._, 212, 216, 226, 227, 239 _n._, 241, 244, 248,
      268, 282
    mail, 224, 224 _n._, 225, 225 _n._
    miscellaneous, 222, 223, 223 _n._, 224
    net, 224 _n._, 239 _n._, 243 _n._, 247, 247 _n._, 248, 248 _n._, 249,
      250, 266, 267, 268, 269, 277, 279, 282
    parlour and sleeping car, 222, 222 _n._, 223, 224
    passenger, 216, 219, 219 _n._, 220, 220 _n._, 221, 221 _n._, 224, 230,
      268
    passenger train mile, 229, 229 _n._, 230, 231
    steamship, 224
    train mile, 226, 226 _n._, 227, 228, 230

  East Richford, 135 _n._

  Eastern rates decision, 186, 196

  Eastray, 157

  Eaton, Sir John, 275

  Eau Clair and Bow River Timber Co., 261

  Edgar, J. D., 84 _n._, 85 _n._, 92 _n._

  Edmonton, 3 _n._, 88 _n._, 153, 154, 252
    Dunvegan and British Columbia Railway, 154
    House, 25 _n._

  Edmunston, 142

  Efficiency, 226, 227, 229, 230, 231, 234, 238, 239, 276

  Eganville, 142
    Junction, 142

  Ehaine Junction, 154

  Eholt Junction, 142 _n._

  Elder Dempster Co., 169

  Elevators, 101, 134, 150, 170, 182, 223, 224

  Elm Creek, 141

  Elora, 122 _n._

  Elphinstone, Lord, 105

  Embankment, 107, 137, 150

  Embro, 156

  Emerson, 89 _n._, 174, 178 _n._, 205
    and North West Railway Co., 174, 179
    and Turtle Mountain Rr., 174

  Emory's Bar, 88 _n._

  _Empress of Asia_, 169
    _of Britain_, 169
    _of China_, 139
    _of India_, 139
    _of Ireland_, 170
    _of Japan_, 139
    _of Russia_, 169

  Engine, 110, 114, 123, 133, 133 _n._, 263
    repairs, 232, 232 _n._, 233, 244

  Engineer, 83 _n._, 91 _n._, 92 _n._, 128, 257, 258, 259
    in chief, 91 _n._, 113, 272

  England, 4, 12 _n._, 13, 18 _n._, 26 _n._, 33 _n._, 35 _n._, 38, 40
      _n._, 42 _n._, 44 _n._, 46, 52, 52 _n._, 53 _n._, 60 _n._, 61, 61
      _n._, 79 _n._, 82 _n._, 95 _n._, 96 _n._, 97 _n._, 102, 103

  English, 4, 6, 23, 33 _n._, 36 _n._, 55, 55 _n._, 56, 56 _n._, 57 _n._,
      58, 58 _n._, 59 _n._, 60 _n._, 61, 61 _n._, 63 _n._, 71 _n._, 73, 98,
      105, 288, 289
    Bay, 154, 256
    colonies, 59, 60, 62, 290
    River, 89 _n._
    traders, 24, 29 _n._, 61, 61 _n._

  Equipment, 89 _n._, 112, 130, 133, 133 _n._, 134, 149, 150, 151, 167,
      169, 170, 171, 199, 200, 201, 202, 203, 204, 240, 247, 285, 286, 287,
      288, 292, 294

  Erie, 114
    Canal, 65 _n._

  Esquimault, 84 _n._, 85 _n._, 86 _n._
    and Nanaimo Railway, 154
    and Nanaimo Railway Bill, 87 _n._

  Estevan, 140, 153

  Europe, 19, 52, 54, 66 _n._, 79, 79 _n._, 276, 287

  European, 5, 42 _n._, 208
    and North American Railroad case, 181

  Exchequer court, 259

  Executive committee, 113, 114, 275, 276, 277
    Council of Manitoba, 181

  Expanse, 153

  Expenses, 231, 232, 233, 234, 235, 236, 237, 238, 239, 240, 242, 243,
      244, 245, 246, 247, 268, 273, 274, 283
    car repairs, 239, 239 _n._, 240, 244
    commercial telegraph, 243, 243 _n._
    conducting transportation, 232, 233, 233 _n._, 234, 235, 238
    engine repairs, 232, 232 _n._, 233, 244
    freight, 268
    general, 238, 238 _n._, 239, 239 _n._
    lake and river, 237, 237 _n._
    maintenance, 241, 241 _n._, 242, 243, 244, 245, 283
    maintenance of cars, 240, 240 _n._
    maintenance of equipment, 240, 240 _n._, 241
    maintenance of way and structures, 241, 241 _n._, 242, 243
    maintenance of way per mile, 242, 242 _n._
    motive power, 232, 232 _n._, 233, 234, 235, 238
    parlour and sleeping car, 235, 236, 236 _n._
    total, 231, 231 _n._, 232, 244
    traffic, 235, 235 _n._

  Exploration, 2, 3, 35 _n._, 59, 73

  Explorers, 3, 53 _n._

  Exports, 16 _n._, 29 _n._, 31 _n._, 67 _n._, 68 _n._, 94 _n._, 95 _n._

  Express earnings, 222, 222 _n._, 223, 224, 224 _n._


  Fairford House, 25 _n._

  Fairville, 158

  Farnham, 135

  Farrans Point Canal, 67 _n._

  Fays, Wm. G., 80 _n._

  Features, geographic, 13, 21, 52
    topographic, 1

  Federal authorities, 180
    government, 179

  Feeder, 67 _n._, 100, 156, 274

  Fenian raids, 76 _n._

  Field, 155, 259

  Fielding, Hon. W. S., 293 _n._

  Firewood, 131, 132, 132 _n._, 147, 147 _n._, 164, 164 _n._, 165

  Fisher's Landing, 93 _n._

  Fisheries, 26, 52, 52 _n._, 53, 54, 72, 261

  Fishery and Fur Co., 26

  Fixed charges, 279, 279 _n._, 280, 281, 282, 283, 285, 286

  Flat cars, 182

  Fleming, Sandford, 42 _n._, 77 _n._, 83 _n._, 92 _n._, 95 _n._, 114, 275

  Flour, 16 _n._, 64 _n._, 65 _n._, 67 _n._, 68 _n._, 131, 132, 132 _n._,
      145, 145 _n._, 160, 160 _n._, 161, 175 _n._, 185, 194

  Forget, L. J., 275

  Formations, geological, 1, 2

  Forrest, 152

  Fort, 6, 6 _n._, 7, 9, 9 _n._, 11 _n._, 13 _n._, 23, 23 _n._, 24 _n._,
      25 _n._, 56 _n._, 58, 58 _n._, 59, 59 _n._, 60 _n._

  Fort Abercrombie, 93 _n._
    a la Corne, 24 _n._
    Alexander, 9
    Alexander, 28, 51
    Athabasca, 24 _n._
    Augustus, 25 _n._
    aux Trembles, 24 _n._
    Bourbon, 24 _n._
    Carlton, 25 _n._
    Cataracqui, 58 _n._
    Charles, 23 _n._
    Charters, 59 _n._
    Chilcotin, 9 _n._
    Chipawean, 25 _n._
    Colville, 9 _n._
    Connolly, 9 _n._
    Crevecoeur, 58 _n._
    Dauphin, 23 _n._
    Douglas, 28, 28 _n._
    du Bas de la Rivire, 26 _n._, 28
    Durham, 13 _n._
    Edmonton, 19
    Ellice, 103
    Esperance, 25 _n._
    Francis Canal, 87 _n._
    Fraser, 6 _n._
    Frontenac, 60 _n._, 61
    Gary, 18, 19, 33 _n._, 38 _n._, 42 _n._, 45, 49, 50, 50 _n._, 51, 51
      _n._, 77 _n._, 80 _n._, 86 _n._, 88 _n._, 93 _n._
    Gemesie, 59 _n._
    George, 6
    George, 25 _n._
    Hope, 11 _n._, 15, 16 _n._, 17 _n._
    La Boeuf, 60 _n._
    La Jonquiere, 24 _n._
    Langley, 9 _n_., 11 _n._, 13 _n._, 15 _n._, 42 _n._
    La Reine, 23 _n._
    La Traite, 24 _n._
    Machault, 60 _n._
    McLeod, 6 _n._
    McLoughlin, 13 _n._
    Maurepas, 23 _n._
    Miami, 58 _n._
    Nanaimo, 11 _n._
    Necessity, 60 _n._
    Niagara, 58 _n._, 60 _n._, 61 _n._
    Nisqually, 9 _n._, 13 _n._
    Orange, 56 _n._
    Pelly, 88 _n._
    Pitt, 61 _n._
    Pond, 25 _n._
    Poskoyac, 24 _n._
    Providence, 25 _n._
    Resolution, 25 _n._
    Richelieu, 57 _n._, 58 _n._
    Rupert, 11 _n._
    St. Charles, 23 _n._
    St. Frederick, 60 _n._
    St. James, 6 _n._
    St. Jean, 57 _n._
    St. Louis, 58 _n._
    Sainte Pierre, 23 _n._
    St. Teresa, 58 _n._
    Simpson, 13 _n._
    Sorel, 58 _n._
    Stikeen, 13 _n._
    Thompson, 14 _n._
    Vancouver, 7, 9, 13, 13 _n._
    Victoria, 9, 11
    William, 26, 26 _n._, 27 _n._, 28, 38 _n._, 40 _n._, 45, 50, 51, 89
      _n._, 91 _n._, 92 _n._, 114, 134, 150, 155, 170, 180, 184, 186, 196
    William Henry, 60 _n._
    Yale, 11 _n_., 15, 15 _n._, 17 _n._

  Forty Mile Creek, 111

  Foster, Hon. A. B., 88 _n._, 92 _n._

  Fox, Luke, 22 _n._

  Foxton, 153

  France, 5 _n._, 54 _n._, 56, 57, 57 _n._, 60 _n._, 61, 276, 276 _n._

  Frankfort, 98

  Franklin, 62 _n._

  Fraser, Grant and Pitblado, 89 _n._
    Lake, 6 _n._
    River, 6 _n._, 9, 11, 11 _n._, 14, 14 _n._, 15, 15 _n._, 16 _n._, 17,
      18, 20, 21, 33 _n._, 43 _n._
    Simon Fraser, 5, 5 _n._, 6 _n._

  Fraxa Junction, 122 _n._

  Fredericton, 99 _n._, 136 _n._, 143, 158
    and Grand Lake Coal Co., 158
    Junction, 143

  Freight, 18 _n._, 86 _n._, 93 _n._, 101, 111, 112, 114, 129, 130, 131,
      131 _n._, 132, 134, 136 _n._, 144, 144 _n._, 148, 150, 159, 159 _n._,
      160, 162, 166, 167, 168, 169, 171, 173 _n._, 179, 185, 188, 192, 192
      _n._, 197, 199, 204, 205, 206, 210, 212, 213, 214, 222, 226, 228,
      229, 235, 239, 286, 293
    and cattle cars, 133, 133 _n._, 149, 149 _n._, 167, 167 _n._, 168, 169
    carried, 213, 213 _n._, 214, 216, 234, 238, 239
    earnings, 212, 212 _n._, 213, 215, 215 _n._, 216, 224, 228, 244, 245,
      246, 268, 269
    expenses, 268
    rate, 172, 183, 184, 186, 188, 191, 191 _n._, 205, 207, 210, 216, 262
    train load, 148, 148 _n._
    train mile earnings, 227, 227 _n._, 228, 228 _n._, 229, 230, 231
    train mileage, 132, 132 _n._, 148, 148 _n._, 149, 166, 166 _n._, 167,
      168, 199, 200, 227, 228

  French, 23, 23 _n._, 24, 24 _n._, 27 _n._, 53 _n._, 54 _n._, 55 _n._,
      56, 57 _n._, 58 _n._, 59, 59 _n._, 60, 60 _n._, 61, 61 _n._, 73, 287,
      288, 289, 290
    Atlantic cable, 151
    Canadian, 7
    Creek, 60 _n._
    Government, 55 _n._, 58 _n._
    half breeds, 48 _n._, 49 _n._
    Indian, 59 _n._
    River, 88 _n._

  Frobisher, 21, 24 _n._

  Fuller, Richard, 88 _n._

  Fundy, Bay of, 54 _n._, 71 _n._, 158, 169

  Fur trade, 4, 5, 8, 9, 10, 11, 12, 23, 24, 25, 26, 27 _n._, 28, 28 _n._,
      32 _n._, 33, 37, 38 _n._, 40, 44, 44 _n._, 48, 48 _n._, 51, 53, 54,
      55, 56, 57, 57 _n._, 58 _n._, 59, 62, 65 _n._, 73, 97 _n._, 288
    expansion, 11, 13, 14, 16, 21, 22
    Hudson's Bay Co., 6, 7, 7 _n._, 10, 11, 12 _n._, 13, 13 _n._, 14, 14
      _n._, 22
    Northwest Co., 5, 6, 9 _n._, 10, 10 _n._, 24
    Pacific Fur Co., 6, 9 _n._
    Russian American Fur Co., 6
    supplies, 7, 9, 11 _n._
    X. Y. Co., 25 _n._

  Fur traders, 8, 17, 21, 29 _n._, 53

  Furs, 6, 11, 13, 22, 22 _n._, 23, 25, 29 _n._, 30 _n._, 31 _n._, 39 _n._,
      51, 54


  Galops Canal, 67 _n._

  Galt, 157

  Gasp, 54 _n._

  Gauthier Junction, 152

  General expenses, 238, 238 _n._, 239, 239 _n._

  Georgian Bay, 25 _n._, 69 _n._, 83 _n._, 88, 88 _n._, 91 _n._
    and Seaboard Ry., 155

  German, 170

  Gerrard, 142 _n._

  Gibson, 158
    Alexander, 99 _n._

  Gilliam, Zachariah, 22 _n._

  Gilmour, Allan, 99 _n._

  Gimli, 153

  Glacier, 258, 259

  Gladman, George, 36 _n._

  Gladstone, 195

  Gleichen, 152

  Glen Tay, 156

  Glenannan, 142

  Glenboro, 140, 141, 253

  Glengarry and Stormont Ry., 158

  Glyn, Rt. Hon. G. G., 126

  Goderich, 157

  Godfrey, 156

  Gold, 43 _n._, 46 _n._, 47 _n._, 261, 291
    discoveries, 11, 14, 16, 17, 18, 21, 84
    districts, 15 _n._, 38 _n._
    fields, 39
    production, 16 _n._
    revenue, 43 _n._
    rush, 16, 19, 69 _n._, 198, 219

  Golden, 155, 258

  Gomez, Stephen, 53 _n._

  Gordon, Capt., 10 _n._

  Government, 3, 4, 7 _n._, 8, 10, 10 _n._, 14, 15, 18 _n._, 19 _n._, 21,
      30 _n._, 31 _n._, 32, 35 _n._, 38 _n._, 44 _n._, 46 _n._, 48, 62
      _n._, 66 _n._, 68 _n._, 90 _n._
    Austrian, 170
    British, 10, 11, 12 _n._, 13, 32, 37 _n._, 40 _n._, 42 _n._, 289, 290
    Canadian, 17 _n._, 36 _n._, 38 _n._, 39 _n._, 40 _n._, 41 _n._, 42, 45,
      46 _n._, 47 _n._, 48 _n._, 49, 50, 50 _n._, 75, 75 _n._, 76, 77, 77
      _n._, 78 _n._, 79 _n._, 81 _n._, 82 _n._, 83, 84 _n._, 86 _n._, 87
      _n._, 88 _n._, 90, 90 _n._, 91, 91 _n._, 92 _n._, 93, 94, 96 _n._,
      98, 98 _n._, 99, 100, 101, 103, 104, 105, 106, 108, 109, 111, 112,
      113, 114, 115, 116, 117, 118, 119, 120, 121, 123, 124, 125, 126, 127,
      128, 130, 136, 136 _n._, 139, 174, 175, 176, 181, 182, 187, 188, 194,
      197, 201, 205, 210, 212, 220, 223, 224, 225, 231, 232, 238, 239, 241,
      242, 247, 250 _n._, 251, 252, 253, 253 _n._, 254, 255, 256, 257, 258,
      259, 260, 261, 262, 263, 264, 265, 270, 271, 272, 273, 273 _n._, 274,
      277, 278, 279, 282, 286, 292
    Dominion, 20, 76 _n._, 84 _n._, 85 _n._, 87 _n._, 123, 174, 175, 179,
      180, 182, 187, 255, 256, 273, 274
    French, 55 _n._, 58 _n._
    Imperial, 35 _n._, 41 _n._, 44, 44 _n._, 69 _n._, 95 _n._, 282
    Provincial, 181
    United States, 19 _n._, 32 _n._

  Governor, 62 _n._
    General, 39 _n._
    in council, 172, 179, 184
    of Canada, 43
    Red River, 40 _n._, 42 _n._

  Grade, 89 _n._, 107, 110, 111, 137, 150, 155, 182, 247, 247 _n._

  Gradient, 90 _n._, 91 _n._, 92 _n._, 149

  Grain, 29, 131, 132, 132 _n._, 144 _n._, 145, 147, 149, 150, 151, 158,
      159, 159 _n._, 160, 161, 162, 163, 165, 166, 167, 175 _n._, 176, 178,
      183, 185, 186, 198, 214, 215, 216, 223, 224, 229, 244, 245, 246, 247,
      250, 292
    barley, 7 _n._, 195
    oats, 7 _n._, 11 _n._, 185, 195
    trade, 67 _n._, 68 _n._, 69 _n._
    wheat, 7 _n._, 11 _n._, 16 _n._, 31 _n._, 64 _n._, 65 _n._, 67 _n._,
      68 _n._, 130, 144, 145, 160, 162

  Grand Fork, 154
    Portage, 25 _n._, 26, 26 _n._
    Prairie, 154
    Trunk Pacific, 187, 188, 292
    Trunk Railroad, 18 _n._, 40, 40 _n._, 69 _n._, 70, 71 _n._, 79, 80 _n._,
      81 _n._, 82, 95 _n._, 112, 122, 123, 124, 136, 137, 138, 143, 156,
      178, 183, 187, 195, 208, 278, 290, 292

  Grandes Piles, 123 _n._

  Grandmere, 157

  Grant, 32 _n._, 34 _n._, 97 _n._
    of land, 34 _n._, 46 _n._, 62 _n._, 63 _n._, 66 _n._, 75 _n._, 76, 76
      _n._, 80 _n._, 98, 99, 108, 118, 120, 121, 181, 187, 190, 250, 251,
      252, 254, 255, 256, 258, 259, 260, 261, 263, 263 _n._, 264, 265, 270,
      271, 272, 273, 291
    of Red River, 26, 26 _n._, 27 _n._, 31 _n._, 32 _n._
    of Vancouver Island, 11, 11 _n._, 12, 12 _n._

  Grave, Dupont, 54 _n._
    Franois, 54 _n._

  Gray, Capt., 4 _n._

  Great Bend of the Missouri, 69 _n._
    Britain, 5 _n._, 6 _n._, 7, 7 _n._, 8, 10, 21, 26, 32 _n._, 33 _n._,
      35, 40, 52, 62, 63, 67 _n._, 68, 71 _n._, 76 _n._, 289, 290, 291
    Falls, 15
    Lakes, 2, 59, 69 _n._, 134, 155, 195
    Northern Railroad, 139, 206, 207
    Northwest Central Railway, 151, 152, 254, 255
    Western Railroad, 69 _n._, 70

  Green Bay, 58 _n._

  Greenwood, 142 _n._

  Gregory, Chas. C., 273

  Grenfell, P. Du Pont, 98, 113, 274, 275

  Gretna, 113, 205

  Grey, Earl, 12 _n._, 30 _n._, 31 _n._

  Griffin Lake, 258, 259

  Griffiths, Major, 31 _n._

  Groseilliers, 58 _n._

  Gross earnings, 193, 210, 211 _n._, 212, 216, 226, 227, 239 _n._, 241,
      244, 248, 268, 283

  Guarantee, 83 _n._, 85 _n._, 115, 119, 120, 182, 241, 278, 283
    governmental, 41 _n._, 187
    Imperial, 70 _n._, 76, 76 _n._, 83 _n._

  Guelph, 142, 157
    and Goderich Railway, 157
    Junction, 142, 157
    Junction Railway, 142

  Guise, Capt., 4 _n._, 5 _n._

  Gunn, Donald, 27 _n._


  Half-breed, 29, 48, 48 _n._, 49 _n._, 51 _n._

  Halifax, 33 _n._, 60 _n._, 70 _n._, 72 _n._, 113, 135, 136, 136 _n._,
      139, 156
    and Quebec Railroad, 70 _n._

  Hall, Grant, 275

  Hamilton, 99 _n._, 143, 157, 275

  Hamiota, 151

  Hankinson, 139

  Hanna, Capt., 4

  Harris, G. R., 114, 275

  Harrison, Lake, 15
    President, 194

  Hartney, 140

  Harvey, 136 _n._

  Hayfield, 28 _n._

  Hay's Island, 23 _n._

  Head, Sir Edmund, 43, 46

  Hearne, Samuel, 24 _n._

  Hector, 155

  Hendrie, Wm., 99 _n._

  Heney, Charlebois and Flood, 88 _n._

  Henley House, 24 _n._

  Hespeler, 157

  Hill, J. J., 93 _n._, 97, 102, 102 _n._, 113, 189 _n._, 276

  Hinckman, W., 80 _n._, 81 _n._

  Hincks, Sir Francis, 79 _n._

  Hind, Prof. H. Y., 36 _n._, 38

  Hochelaga, 53, 108, 124, 134

  Holland, 140, 276

  Holt, H. S., 275

  Hong Kong, 34 _n._, 138, 139

  Hope, 155

  Hore, Master, 53 _n._

  Horsefly Lake, 78 _n._
    River, 78 _n._

  Horses, 9 _n._, 18 _n._, 31 _n._, 51 _n._

  Hosmer, C. R., 275

  Hotel, 92 _n._, 204, 224, 249, 258, 265 _n._

  Houlton, 143

  Howe, Joseph, 70 _n._

  Howland, Sir W. P., 99 _n._

  Hudson Bay, 1, 1 _n._, 2, 3, 21, 22, 24 _n._, 25 _n._, 26 _n._, 41 _n._,
      58 _n._, 72, 170, 171, 247 _n._, 291
    Henry, 22
    River, 56, 60, 62 _n._, 73
    Strait, 3, 22, 22 _n._

  Hudson's Bay Company, 6, 7, 7 _n._, 10, 11, 11 _n._, 12 _n._, 13, 13
      _n._, 14, 14 _n._, 22, 23, 23 _n._, 24, 25 _n._, 26 _n._, 27, 27
      _n._, 28, 30 _n._, 32 _n._, 33 _n._, 34, 34 _n._, 35 _n._, 37 _n._,
      38 _n._, 39, 39 _n._, 40, 40 _n._, 41 _n._, 42 _n._, 43, 45, 46, 50,
      50 _n._, 51, 69 _n._, 71 _n._, 93 _n._, 97 _n._, 98 _n._
    House, 25 _n._

  Hull, 112 _n._
    Junction, 156

  Huron, 56, 57 _n._


  Icelandic River, 153

  Ile la Crosse, 25 _n._

  Illecillewaet, 259
    River, 110

  Illinois, 62 _n._
    Indians, 59 _n._
    River, 58 _n._

  Immigrants, 14, 16, 19, 129 _n._, 173 _n._, 176, 205, 208

  Immigration, 7, 8, 21, 71 _n._, 129, 180, 197, 201, 205, 206, 222, 236,
      291, 292, 294

  Imperial, 38 _n._, 9, 41 _n._, 50, 63 _n._, 96 _n._, 286
    authorities, 18 _n._, 37 _n._, 39, 41 _n._, 44 _n._, 45, 45 _n._, 46,
      46 _n._, 47, 47 _n._, 49, 50 _n._, 83 _n._, 84, 88 _n._, 138
    Government, 35 _n._, 41 _n._, 44, 44 _n._, 69 _n._, 95 _n._, 138
    guarantee, 70 _n._, 76, 76 _n._
    support, 41, 70 _n._, 95 _n._

  Imports, 16 _n._, 29, 29 _n._, 30 _n._, 52 _n._, 64 _n._, 67 _n._, 68
      _n._, 94 _n._, 95 _n._, 192 _n._

  India, 4, 34 _n._, 67 _n._

  Indians, 10, 23 _n._, 27, 33 _n._, 40 _n._, 49 _n._, 53, 56, 56 _n._, 57
      _n._, 59 _n._, 60 _n._, 61, 61 _n._, 62, 62 _n._, 288
    Assinae Poets, 23 _n._

    chiefs, 53 _n_.
    Chutaghicks (Illinois), 59 _n._
    French, 59 _n._
    Huron, 56, 57 _n._
    Iroquois, 56, 58, 59
    Ottawa, 57 _n._
    Twightwies (Miamis), 59 _n._

  Ingersoll, 156
    Junction, 156

  Intercolonial Railway, 41, 70 _n._, 71 _n._, 72, 73, 112, 136, 136 _n._,
      158, 290, 292

  Interest, 41 _n._, 80 _n._, 116, 117, 120, 121, 124, 125, 126, 127, 182,
      187, 191 _n._, 248, 249, 251, 253 _n._, 270, 271, 280, 281, 282, 284

  _International_, the, 93 _n._

  International boundary, 106, 108
    Railway Co., 135

  Interoceanic Co., 78, 78 _n._, 79, 79 _n._, 81 _n._, 82 _n._

  Interprovincial and James Bay Railway Co., 158, 255

  Interstate Commerce, 194
    Commission, 191 _n._, 192, 196, 207, 208
    law, 195

  Iroquois, 56, 58, 59
    Canal, 67 _n._

  Irricana Junction, 153

  Isbister, A. K., 30, 30 _n._, 33

  Islanda, 52 _n._


  Jacques Cartier Union Railway, 123, 124

  James, 22 _n._

  Japan, 193, 281 _n._

  Jasper House, 42 _n._, 98, 250 _n._

  Jaunaye, Capt., 54 _n._

  Jay Grenville treaty, 24, 63 _n._

  Jefferson, President, 5 _n._, 64 _n._

  Jesuit priests, 54 _n._, 58 _n._

  Johnson, 60 _n._

  Johnson's Straits, 78 _n._

  Joliette and Brandon Railway, 157
    Junction, 123 _n._

  Junction, 92 _n._, 100, 110, 123, 136 _n._, 158, 173 _n._
    Flat, 88 _n._


  Kaleida, 153

  Kamarno, 153

  Kaministiquia, 26, 34 _n._
    River, 23 _n._

  Kamloops, 9, 9 _n._, 11 _n._, 14 _n._, 17 _n._, 98, 99, 105, 109

  Kaskaskia River, 59 _n._

  Kaslo, 155
    and Slocan Railway, 155

  Kavanagh, Murphy and Upper, 89 _n._

  Keefer, Thos. C., 273

  Keewatin, 89 _n._

  Kelfield, 154

  Kelsey, Henry, 23 _n._

  Kendrick, Capt., 4 _n._

  Kennedy, J. S., 110, 113, 114, 276
    & Co., 102 _n._, 104

  Kentville, 158

  Kerrobert, 153

  Kersteman, Wm., 77 _n._

  Kettle Falls, 87 _n._
    Valley Railroad, 155

  Kicking Horse Creek, 110
    Pass, 111, 250 _n._
    River, 110, 262
    Valley, 121

  Kimball, 154

  Kimberley, 142 _n._

  King, Ed., 110
    George's Sound Co., 4 _n._

  King's Proclamation, 62 _n._

  Kingsgate, 154

  Kingsport, 158

  Kingston, 2 _n._, 66 _n._, 99 _n._, 156, 274
    and Pembroke Ry., 156, 191 _n._

  Kipawa, 142, 158, 255
    Junction, 142

  Kipp, 152

  Kirkella, 152

  Kirkpatrick, Hon. G. A., 274, 275

  Klondike, 198, 207, 217, 220, 222, 236

  Koehn, Loeb & Co., 109

  Kootenae House, 6 _n._

  Kootenay and Arrowhead Railway, 142 _n._
    Central Railway, 154
    Lakes, 141, 184
    Landing, 139
    Mining district, 141
    River, 15

  Kullyspell House, 6 _n._


  Labelle, 142, 157

  Lac d'Orignal Fort, 25 _n._
    du Bonnet, 142

  Lachine Canal, 65 _n._, 67 _n._
    Massacre, 59 _n._
    Rapids, 55 _n._, 56 _n._

  Lacombe, 153

  La Jemeraye, 23 _n._

  Lake Anderson 15
    and river expense, 237, 237 _n._
    Athabasca, 25 _n._
    Babine, 9 _n._, 15 _n._
    Champlain, 60 _n._, 62 _n._, 68 _n._
    Champlain and St. Lawrence Junction Railroad, 135 _n._
    division, 33 _n._
    Erie, 2, 58 _n._, 60 _n._, 62 _n._, 63, 65 _n._, 66 _n._, 69 _n._,
      156, 157, 289
    Erie and Northern Railway, 157
    George, 60 _n._
    Huron, 34 _n._, 58 _n._, 62 _n._, 66 _n._, 67 _n._, 69 _n._, 78 _n._,
      102
    Joseph, 58 _n._
    Lillooet, 15
    Manitoba, 23 _n._
    Michigan, 32 _n._, 58 _n._
    Nipigon, 23 _n._
    Nipissing, 79 _n._, 80 _n._, 113 _n._, 121 _n._, 137, 180
    of the Woods, 23 _n._, 34 _n._, 38 _n._, 45, 51 _n._, 78 _n._, 86 _n._
    Ontario, 2, 60 _n._, 62 _n._, 63, 65 _n._, 68, 69 _n._, 156, 157, 289
    Pend d'Oreille, 6 _n._
    St. Anne, 33 _n._
    St. Clair, 65 _n._
    Saskatchewan, 103
    Seton, 15
    Shebandowan, 89 _n._
    Simcoe, 65 _n._, 69 _n._
    Superior, 2, 3, 17 _n._, 18 _n._, 20, 23, 26, 32 _n._, 35 _n._, 36, 38,
      38 _n._, 42 _n._, 45, 45 _n._, 48 _n._, 50 _n._, 51, 51 _n._, 58
      _n._, 62 _n._, 66 _n._, 67 _n._, 68 _n._, 76 _n._, 77 _n._, 78 _n._,
      83 _n._, 85 _n._, 86 _n._, 87, 87 _n._, 89, 92 _n._, 98, 99, 100, 102,
      109, 113, 134, 170, 173, 175, 184, 186, 219, 247 _n._, 291
    Temiskaming Colonization Ry., 142
    Winnipeg, 36 _n._, 92 _n._

  Land, 11 _n._, 12 _n._, 31 _n._, 33 _n._, 36 _n._, 40 _n._, 42 _n._, 43
      _n._, 46 _n._, 52 _n._, 66, 80 _n._, 81 _n._, 83 _n._, 84 _n._, 92
      _n._, 95 _n._, 96 _n._, 97, 97 _n._, 98, 98 _n._, 99, 104, 105, 107,
      118 _n._, 119, 120, 125, 126, 170, 182, 183, 190 _n._, 247 _n._, 250,
      251, 252, 253 _n._, 254, 255, 255 _n._, 256, 257, 258, 259, 260, 261,
      263, 263 _n._, 264, 265, 266, 270, 271, 272, 284, 292, 294
    carriage, 38 _n._, 138
    grant, 26, 26 _n._, 28 _n._, 32 _n._, 34 _n._, 41 _n._, 47 _n._, 62
      _n._, 63 _n._, 66 _n._, 75 _n._, 76, 76 _n._, 80 _n._, 108, 118, 120,
      121, 181, 187, 190, 250, 250 _n._, 251, 252, 254, 255, 256, 258, 260,
      261, 263, 264, 265, 270, 271, 272, 273, 291
    grant bonds, 101, 103, 104, 107, 108, 109, 115, 116, 117, 118,
      118 _n._, 125, 182, 250, 271, 272, 278
    price of, 28, 30 _n._
    receipts, 264, 264 _n._, 265, 266, 267, 268, 269
    sale, 28 _n._, 48, 77 _n._, 80 _n._, 103, 250, 259, 264, 265, 265 _n._,
      266, 268, 271, 291
    title, 29 _n._, 249

  Langden, 153

  Lanigan, 152

  La Noe, 23 _n._

  La Pointe, 58 _n._

  Lardeau, 142 _n._

  La Rivire, 153

  Larkin, P., 99 _n._

  Larocque, 30 _n._

  La Salle, 58 _n._

  La Tour, 57 _n._

  Lauder, 153

  Laurent, Regis, 30 _n._

  Laurentian formation, 2, 3
    Railway, 274

  _Lausanne_, the, 8 _n._

  L'Avenir, 135 _n._

  La Verendrye, 23, 23 _n._

  Lease, 135, 136, 136 _n._, 137, 139, 140, 141, 142, 143, 151, 152,
      154, 156, 157, 158, 174, 182, 184, 250, 255, 258, 259, 260, 271

  Leaside Junction, 137

  Le Borgne, 57 _n._

  Lee, Jason, 8, 8 _n._

  Legislature, 87 _n._, 88 _n._

  Lennoxville, 135

  Lenore, 152

  Lethbridge, 139, 152, 154, 184

  Levis, 157

  Lewis and Clark expedition, 5

  Lieutenant Governor, 49, 51

  Lillooet, 15, 17 _n._

  Lindsay, Bobcaygeon and Pontypool Ry., 157

  Linwood, 157

  Listowel, 157

  Liverpool, 170

  Livestock, 131, 132, 132 _n._, 147, 147 _n._, 161, 161 _n._, 162, 175 n.,
      183, 185

  Loan, 76, 76 _n._, 120, 124, 125, 126, 127, 248, 249, 270, 271, 272,
      274, 278, 282
    Act, 125, 280, 282

  Loch Earn, 154

  Lock, 51 _n._, 67 _n._

  Locomotive, 115, 133, 134, 149, 149 _n._, 168, 168 _n._, 182, 232, 283
    shops, 182

  Lomond, 154

  London, 13 _n._, 48, 66 _n._, 67 _n._, 104, 113, 127, 170, 274, 275,
      277, 278, 282
    (Ont.) 99 _n._, 137
    Junction Ry., 122

  Long, Major S. H., 32 _n._

  Lords Commissioners for Trade and Plantations, 62 _n._

  Lorie, Capt., 4 _n._, 5 _n._

  Lorraine, 154

  Louisburg, 60 _n._, 61

  Louise bridge, 181

  Louisiana purchase, 32 _n._

  Lovitt, W. B., 99 _n._

  Lumber, 131, 132, 132 _n._, 146, 146 _n._, 164, 164 _n._, 175 _n._,
      176, 183, 261, 262, 263, 288

  Lyleton, 141

  Lynn River, 65 _n._

  Lytton, 15 _n._, 17 _n._, 18 _n._, 88 _n._
    Sir E., 37 _n._


  MacDonald, Sir John A., 19 _n._, 20 _n._, 81 _n._, 82 _n._, 96, 96 _n._,
      97, 174

  MacFie, D., 99 _n._

  MacKenzie, Alexander, 5, 26
    Hon. Alexander, 83, 84 _n._, 85 _n._, 89 _n._, 104, 291
    River, 2

  MacPherson, Hon. D. L., 79, 79 _n._, 80 _n._, 82 _n._

  McAdoo award, 188

  McAuley, 152

  McBride's Junction, 154

  McDonnell, Allan, 36 _n._

  McDougall, Hon. Wm., 49, 49 _n._

  McEwen, 44 _n._

  McGregor, 151

  McInnes, D., 275

  McIntyre, Duncan, 96 _n._, 97, 102, 113, 114, 276
    & Co., 102 _n._

  McLaren, D., 80 _n._, 81 _n._
    James, 99 _n._

  McLean, Prof. S. J., 185

  McLennan, 154

  McLeod Lake, 6 _n._

  Malcolm, 42 _n._

  McMaster, A. R., 99 _n._

  McMullen, Geo. W., 79 _n._, 80 _n._, 81 _n._, 82 _n._

  McNicoll, D., 275

  McTavish, Governor, 45 _n._

  Machias, 57 _n._

  Mackay, J. W., 275
    Hon. R., 275

  Macklin, 152, 153

  Macleod, 184

  Mail, 39 _n._, 41 _n._, 112, 138
    earnings, 224, 224 _n._, 225, 225 _n._

  Maine, 70 _n._, 135, 136 _n._, 143

  Maintenance expense, 241, 241 _n._, 242, 243, 244, 245, 283
    of cars, 240, 240 _n._
    of equipment, 240, 240 _n._, 241
    of way and structures, 241, 241 _n._, 242, 243
    of way per mile, 242, 242 _n._

  Maissoneuve, Sieur de, 56 _n._

  Manager, 97, 113, 114

  Manchester, Duke of, 105
    House, 25 _n._

  Manitoba, 50, 51, 72, 76 _n._, 78 _n._,
  87 _n._, 93, 93 _n._, 100, 102, 108,
  130 _n._, 153, 174, 175, 179, 180, 180 _n._, 181, 182, 183, 187, 252
    and North West Farmers' Alliance, 178

  Manitoba and Northwestern Ry., 152, 254
    and South West Colonization Ry., 108, 139, 253, 255, 261, 264, 274
    Central Ry., 179
    population, 51 _n._, 93 _n._
    Tramway Co., 174

  _Manitoba_, the, 93 _n._

  Manitou, 140

  Maniwaki, 156

  Manufactured articles, 131, 132, 132 _n._, 145, 145 _n._, 146, 162,
  162 _n._, 163, 164, 245, 246

  Marks and Conmee, 89 _n._

  Martinez, 4 _n._

  Martinsen, R. V., 110, 114, 275

  Marysville, 158
    Junction, 158

  Massachusetts Bay Bill, 61 _n._

  Mattawa, 77 _n._, 142

  Mattawamkeag, 135, 136

  Matthews, W. D., 275

  Medicine Hat, 111, 178 _n._

  _Medora_, the, 170

  Megantic, 135, 157

  Melville Junction, 122 _n._

  Memorial, 8 _n._, 12 _n._, 20 _n._, 30 _n._, 32, 42 _n._, 48 _n._, 100,
      181

  Menteith, 141

  Menzies, Wm. John, 105

  Merchant's Line, 93 _n._

  Meredith, Sir Vincent, 275

  Merritt, 155

  _Metagama_, the, 170

  Miamis, 59 _n._

  Michigan Central Ry., 122, 143

  Michilimackinac, 58 _n._

  Midway, 140, 155

  Mile End, 112, 122 _n._

  Mileage, 94 _n._, 112 _n._, 120, 131, 132, 136 _n._, 143, 143 _n._, 145,
      169, 178, 187, 193, 197, 200, 202, 203, 204, 210, 211, 211 _n._, 214,
      215, 218, 219, 220, 227, 228, 230, 235, 242, 243, 247, 248, 283
    freight train, 132, 132 _n._, 133, 148, 148 _n._, 149, 166,
      166 _n._, 167, 168, 199, 200, 227, 228
    mixed train, 132 _n._, 166, 166 _n._, 228, 230
    passenger train, 199, 199 _n._, 200, 200 _n._, 204, 229, 230, 231,
      233, 234, 235, 238, 239
    rates, 100, 101, 112, 173 _n._, 175, 183
    total train 132, 132 _n._, 133, 148, 148 _n._, 165, 165 _n._, 227,
      232, 233, 234, 235, 238

  Mileage, train 133, 147, 149, 150, 165, 166, 168, 200, 227, 228, 229,
      230, 232, 234, 235, 240

  Millbank Sound, 13 _n._

  Mills, D. O., 92 _n._

  Milltown, 143
    Junction, 143

  Milton, Viscount, 18, 18 _n._

  Milwaukee, 42 _n._, 67 _n._

  Mineota, 151

  Mines, 17 _n._, 19, 142, 170

  Mining, 11, 15, 141, 142, 142 _n._
    coal, 17, 17 _n._, 170

  Minister of Finance, 101
    of Public Works, 45 _n._, 48

  Minneapolis, 192, 194, 208
    St. Paul and Sault Ste. Marie Ry. Co., 137, 139, 155, 206, 249, 280

  Minnedosa, 152

  _Minnesota_, the, 93 _n._

  Minnesota, 20 _n._, 32 _n._

  Minto, 158

  Miscellaneous earnings, 222, 223, 223 _n._, 224

  _Missanabie_, the, 170

  Mission, 138

  Missionaries, 8, 8 _n._, 55 _n._, 56

  Mississippi River, 59, 59 _n._, 62 _n._, 67 _n._, 73, 288

  Missouri River, 5 _n._, 69 _n._, 191, 195

  McKey, John, 5 _n._

  Moberly, 259
    W., 17 _n._, 110

  Mobile, 59 _n._

  Mohawk valley, 62 _n._

  Molson, 142, 155

  Moncton, 136 _n._, 187

  Monongahela River, 60 _n._

  Monopoly, C.P.R., 99, 130, 174, 179, 181, 182, 189, 190, 262, 293
    Hudson's Bay Co., 12 _n._, 28, 29, 30, 33
    trading, 54 _n._, 55, 55 _n._, 56 _n._, 288

  Mont Laurier, 157

  Montana, 6 _n._

  Montcalm, 61 _n._

  _Monteagle_, the, 169

  Montreal, 2 _n._, 53, 56, 56 _n._, 57 _n._, 63 _n._, 65, 65 _n._, 66
      _n._, 67 _n._, 68, 68 _n._, 69 _n._, 77 _n._, 78, 78 _n._, 79 _n._,
      82, 97, 99, 99 _n._, 100, 102, 104, 112, 113, 120, 122, 123, 128,
      134, 135, 136, 136 _n._, 137, 150, 155, 156, 157, 158, 170, 173, 187,
      208, 276, 277, 290, 291
    and Ottawa Ry., 137, 142
    and Western Ry., 142
    Bank of Montreal, 92 _n._, 97, 103, 117

  Montreal Telegraph Co., 42 _n._
    Ottawa and Western Ry., 95 _n._

  Monts, Sieur de, 54 _n._, 55 _n._

  Moose River, 25 _n._, 106

  Moosejaw, 139, 152, 153, 178 _n._, 206, 256, 259
    Creek, 103, 106

  Moose-Sebee, 23 _n._

  Morin, Hon. A. N., 69 _n._

  Mortgage, 104, 109, 120, 125, 126, 127, 182, 271, 274, 280, 281 _n._

  Morton, Bliss & Co., 98, 98 _n._, 102 _n._, 274, 276
    Levi P., 274, 275
    M. P., 98 _n._
    Rose & Co., 98, 103, 274, 276
  Mother Lode, 142 _n._

  Motive Power, 232, 232 _n._, 233, 234, 235, 238

  Mount Stephen, 272

  Mountain City, 174
    division, 33 _n._

  Mowbray, 153

  Munson, N. C., 92 _n._

  Musgrave, Governor, 20


  Nass River, 13 _n._

  Nakusp, 142
    and Slocan Ry., 141

  Nanaimo, 84 _n._, 85 _n._, 86 _n._

  Nanton, A., 275

  Napinka, 141

  National policy, 95 _n._

  Neebing Hotel, 92 _n._

  Neepigon, 78 _n._
    River, 256

  Nelson, 139, 141, 184
    River, 2

  Neptune, 153

  Nesbitt, 141

  Net earnings, 224 _n._, 239 _n._, 243 _n._,
  247, 247 _n._, 248, 248 _n._, 249,
  250, 266, 267, 268, 269, 277, 279, 282, 286

  New Brunswick, 19, 33 _n._, 44 _n._, 70 _n._, 71 _n._, 72 _n._, 74, 93
      _n._, 136, 158
    Coal and Ry. Co., 158
    Railway, 136 _n._, 142
    Southern Ry., 158

  New England, 289
    colonies, 61
    states, 71 _n._

  New France, 289
    Company of, 56, 57, 57 _n._

  New Georgia Gulf, 33 _n._

  New Jersey, 109

  New Orleans, 59 _n._

  New Severn, 23 _n._

  New Westminster, 17 _n._, 154

  New York, 8 _n._, 62 _n._, 67 _n._, 68, 80, 104, 109, 112, 113, 156,
      192, 192 _n._, 194, 275, 276, 278, 282
    Central Ry., 143

  New Zealand, 34 _n._

  Newburg Junction, 143

  Newcastle, Duke of, 40 _n._, 41 _n._, 43 _n._

  Newfoundland, 53, 54, 59 _n._
    fisheries, 52, 72

  Newport, 135, 157
    and Richford Ry., 135 _n._

  Niagara, 78 _n._
    district, 63 _n._, 143
    peninsula, 65 _n._, 70
    River, 65 _n._

  Nipigon Bay, 77 _n._
    Harbour, 42 _n._
    River, 77 _n._, 121 _n._

  Nipissingen Post, 88 _n._

  Nisqually River, 13 _n._

  Nominingue, 157

  Nootka, 5, 67 _n._
    Sound Controversy, 4

  Norquay, Premier, 180

  Norridgewock, 60 _n._

  North America, 1, 6 _n._, 10 _n._, 14, 22, 26, 32 _n._, 33 _n._, 38 _n._,
      52, 59, 171, 287, 288

  North American Railway Contracting Co., 109, 117

  North Bay, 138, 156, 208
    Dakota, 139
    Shore Ry., 122, 123, 124
    Star Junction, 142 _n._
    Troy, 135 _n._

  Northcote, 92 _n._
    H. S., 102 _n._, 104, 113, 274

  Northern Colonization Ry., 78 _n._, 79 _n._, 95 _n._, 157
    Pacific Railroad, 19, 19 _n._, 79 _n._, 80 _n._, 81 _n._, 93 _n._, 102,
      181, 183, 185, 207, 278
    Railroad, 69 _n._

  Northwest, 13 _n._, 22, 22 _n._, 36, 39, 42 _n._, 51 _n._, 59, 69 _n._,
      72, 79 _n._, 82 _n._, 88 _n._, 183, 185, 186, 189, 189 _n._, 205,
      264, 291
    Company, 5, 6, 9 _n._, 10, 10 _n._, 24, 25 _n._, 27, 27 _n._, 28
    Navigation and Railroad Co., 40, 51 _n._
    Passage, 1, 3, 21, 53
    rebellion, 128
    territory, 40, 43 _n._, 44, 45, 46 _n._, 47 _n._, 49, 49 _n._, 52, 52
      _n._, 71 _n._, 173, 263 _n._
    Transportation, Navigation and Railroad Co., 38

  _Nor'Wester, The_, 43 _n._

  "Notre Dame de Montreal," Society of, 56 _n._

  Nouel, Jacques, 54 _n._

  Nova Scotia, 19, 33 _n._, 44 _n._, 57 _n._, 70 _n._, 71 _n._, 72 _n._,
      74, 93 _n._, 156, 158


  Oak Lake, 106

  Ochiltrie, Lord, 55 _n._

  Ogden, Wm. B., 80 _n._, 81 _n._

  Ogdensburg, 68 _n._

  Ohio Canal, 65 _n._
    River, 59, 60 _n._, 65 _n._, 73
    valley, 60 _n._, 62, 62 _n._

  Okanagan Landing, 141
    River, 9, 9 _n._

  Oliver, Davidson and Brown, 88 _n._

  Onderdonk, Andrew, 88 _n._, 91 _n._

  Ontario, 92 _n._, 99, 99 _n._, 100, 122, 131, 132, 150, 151, 154, 183,
      278
    and Pacific Junction Ry., 92 n., 100, 173 n.
    and Quebec Ry., 114, 122, 134, 271
    Government, 255, 256
    population, 74, 93 _n._

  Operating ratio, 244, 244 _n._, 245, 245 _n._, 246, 247, 248

  Order in council, 84 _n._, 88 _n._, 103, 108, 174, 188, 239, 252, 273

  Oregon, 7, 8, 10, 10 _n._, 12 _n._, 13, 14, 21, 22, 32 _n._, 68 _n._, 193
    treaty, 10, 11, 12

  Orford Mountain Ry., 157

  Orient, 3, 52, 138, 139

  Oriental, 138, 206

  Osborne Bay, 154

  Osler, Sir E. B., 104, 105, 114, 259, 275, 277

  Osnaburg House, 25 _n._

  Oswego, 60 _n._, 62 _n._, 68, 68 _n._, 70, 78 _n._
    Canal, 65 _n._
    River, 60 _n._

  Other articles, 131, 132 _n._, 146, 146 _n._, 163, 163 _n._, 246
    income, 248, 249, 249 _n._, 250, 266, 267, 268

  Otis, 61 _n._, 158

  Ottamine, 142

  Ottawa, 20, 50, 69 _n._, 77 _n._, 78 _n._, 79 _n._, 99 _n._, 112, 112
      _n._, 134, 137, 156, 187
    Indians, 57 _n._
    Northern and Western Ry., 156
    River, 78 _n._
    valley, 55 _n._

  Otter Summit, 155
    Tail Creek, 262

  Overland, 18, 18 _n._, 19, 58 _n._
    Railway, 17 _n._

  Owen Sound, 122, 134, 150, 155

  Oxen, 31 _n._, 51 _n._


  Pacific coast, 3, 6, 40, 40 _n._, 41, 41 _n._, 42 _n._, 86 _n._, 132,
      138, 139, 150, 169, 191, 206, 208, 281 _n._, 292
    division, 33 _n._
    drainage basin, 1 _n._, 2, 171, 291
    fishery, 26
    Fur Co., 6, 9 _n._
    Ocean, 3 _n._, 5, 5 _n._, 6 _n._, 9, 18 _n._, 26, 26 _n._, 34 _n._, 41,
      67, 68 _n._, 69, 69 _n._, 70 _n._, 71, 72, 77 _n._, 169
    railroad, 19 _n._, 76 _n._, 79 _n._, 90 _n._
    road, 33 _n._
    Scandal, 82, 83, 291

  Padmore, 111

  Palliser, Capt., 34

  Panama Canal, 192
    Isthmus of, 17

  _Panama_, the, 14 _n._

  Panic of 1873, 94 _n._

  Paris, 98
    treaty of, 71 _n._

  Parliament, 19 _n._, 30 _n._, 37 _n._, 41 _n._, 45, 46 _n._, 69 _n._,
      75, 75 _n._, 77 _n._, 80 _n._, 82 _n._, 99, 101, 120, 123, 128, 138,
      172, 173, 174, 180, 181, 188, 189, 280

  Parlour car and sleeping car earnings, 222, 222 _n._, 223, 224
    expenses, 235, 236, 236 _n._
    official and paymasters' cars, 203, 204, 204 _n._

  Partners, wintering, 44, 44 _n._, 48, 48 _n._, 97 _n._

  Pasqua, 139

  Passenger, 18 _n._, 86 _n._, 111, 112, 149, 184, 192, 197, 198, 198
      _n._, 199, 200, 201, 202, 203, 204, 205, 206, 209, 217, 219, 221,
      222, 229, 230, 231, 233, 235
    carried, 217, 217 _n._, 218, 219, 234
    cars, 133, 134, 182, 201, 201 _n._, 202, 203
    density, 218, 218 _n._, 219
    earnings, 219, 219 _n._, 220, 220 _n._, 221, 221 _n._, 224, 230, 268
    traffic, 101, 129, 169, 173 _n._, 202, 204, 205, 206, 216, 220, 221,
      224, 226, 231, 235, 239, 247, 268
    train mile earnings, 229, 229 _n._, 230, 231
    train mileage, 199, 199 _n._, 200, 200 _n._, 204, 230, 231, 233, 234,
      235, 239

  Payson, H. R., 80 _n._, 81 _n._

  Peace River, 25 _n._, 87 _n._
    Crossing, 154
  Pelly, Sir J. H., 31 _n._

  Pembina, 38 _n._, 42 _n._, 49, 52 _n._, 78 _n._, 93 _n._, 103, 105, 106,
      114, 120, 272
    Mountain Junction, 113
    River, 25 _n._

  Pembroke, 88 _n._, 106, 112, 112 _n._, 274

  Peninsular and Oriental Steam Navigation Co., 138

  Penobscot River, 55 _n._, 57 _n._

  Pentagoet, 57 _n._, 59 _n._

  People's Rights Association, 178

  Perth, 122 _n._, 151
    Junction, 143

  Peterboro', 99 _n._

  Petition, 18 _n._, 36, 36 _n._, 42 _n._, 62 _n._, 69 _n._, 77 _n._, 92
      _n._
    Red River, 30 _n._, 32, 47 _n._, 48 _n._

  Philadelphia, 192

  Phoenix, 142 _n._

  Pictou, 72 n.

  Pike, Lieut. Z. M., 32 _n._

  Piles Junction, 123 _n._, 157

  Pine Fort, 25 _n._
    River, 87 _n._

  _Pioneer_, the, 93 _n._

  Pipestone, 141, 152

  Pittsburgh, 192

  Plain, 3, 20 _n._, 21, 22, 23, 42 _n._

  Plaster Rock, 143

  Platform cars, 133, 133 _n._

  Plymouth, 57 _n._

  Point Fortune, 142
    Levis, 112

  Pond, Peter, 24 _n._

  Pontiac, 61

  Pope, John, 278 _n._
    Hon., J. H., 96 _n._

  Population, 8, 33 _n._, 38 _n._, 57 _n._, 58 _n._, 63 _n._, 74, 85 _n._,
      93 _n._,  130, 130 _n._, 183, 185, 197, 287, 288, 289, 292, 294
    increase in, 28, 29, 31 _n._, 43 _n._
    of Manitoba, 51 _n._
    of New Brunswick, 72 _n._
    of Nova Scotia, 71 _n._

  Port Anderson, 17 _n._
    Arthur, 2 _n._, 92 _n._, 107, 111, 112, 121, 124, 128, 134, 178, 178
      _n._, 185, 206, 207, 256
    Burwell, 156
    Dalhousie, 66 _n._
    de la Heve, 57 _n._
    Douglas, 17 _n._
    Dover, 157
    Lomeron, 55 _n._

  Port McNicoll, 155, 170
    Maitland, 66 _n._
    Moody, 88 _n._, 98, 120, 134, 138, 154, 256, 265
    Nelson, 22 _n._, 23 _n._, 26 _n._
    Pemberton, 17 _n._
    Royal, 54 _n._, 55 _n._, 57 _n._, 59 _n._, 60 _n._
    Talbot, 65 _n._

  Portage la Prairie, 47 _n._, 103, 152, 155, 176 _n._, 177, 177 _n._, 178
    _n._, 185

  Portland (Maine), 69 _n._, 70, 79, 135
    (Oregon), 207

  Portlock, Capt., 4 _n._

  Portuguese, 22 _n._

  Postal, 225
    service, 39, 39 _n._
    subsidy, 18 _n._, 115, 116
    Telegraph Co., 151

  Posts, fur trading, (see Fort), 4, 6, 8, 9, 11, 13, 21, 22, 23, 24, 39
      _n._, 46 _n._, 47 _n._, 51, 55, 56, 58, 58 _n._, 59, 61, 61 _n._
    Assiniboine House, 25 _n._
    Bedford House, 25 _n._
    Brandon House, 25 _n._
    Buckingham House, 25 _n._
    Chedabouctou, 59 _n._
    Chesterfield House, 25 _n._
    Cumberland House, 24 _n._
    Edmonton House, 25 _n._
    Fairford House, 25 _n._
    Grand Portage, 26
    Henly House, 24 _n._
    Hudson's House, 25 _n._
    Kaministiquia, 26
    Kamloops, 9, 9 _n._, 11 _n._, 14 _n._, 17 _n._
    Kootenae House, 6 _n._
    Kullyspell House, 6 _n._
    Lac d'Orignal Fort, 25 _n._
    La Pointe, 58 _n._
    Louisburg, 60 _n._, 61
    Manchester House, 25 _n._
    Mobile, 59 _n._
    Montreal, 53, 56, 56 _n._, 57 _n._
    New Orleans, 59 _n._
    New Severn, 23 _n._
    Osnaburg House, 25 _n._
    Pentagoet, 57 _n._, 59 _n._
    Port de la Heve, 57 _n._
    Port Lomeron, 55 _n._
    Port Nelson, 23 _n._
    Port Royal, 54 _n._, 55 _n._, 57 _n._, 59 _n._
    Prince of Wales Fort, 23 _n._
    Quebec, 55, 57 _n._, 59 _n._, 60 _n._
    Rocky Mountain House, 25 _n._
    St. Ignace, 58 _n._
    Saleesh House, 6 _n._
    Souris River Fort, 25 _n._
    South Branch House, 25 _n._, 36 _n._
    Tadousac, 56, 57 _n._
    Three Rivers, 53, 54 _n._

  Potter, Mr., 95 _n._

  Poutrincourt, M. de., 54 _n._

  Prairie division, 33 _n._
    fires, 40 _n._
    provinces, 187, 263 _n._, 265, 294
    section, 107, 174, 189

  Precipitation, 2, 2 _n._, 3, 3 _n._

  Premier, 91 _n._, 180

  President, Bank of Montreal, 97
    C.P.R., 81 _n._, 82 _n._, 101, 102, 180, 276
    Grand Trunk, 95 _n._, 113
    Northern Pacific, 80 _n._
    United States, 5 _n._, 64 _n._, 194

  Presque Isle, 60 _n._, 143

  Preston, 157

  Prince Albert, 141
    Arthur's Landing, 88 _n._, 92 _n._, 107, 111
    Edward Island, 27 _n._
    of Wales Fort, 23 _n._
    Rupert, 187
    River, 22 _n._, 23 _n._

  Princeton, 16

  Privy Council, 37 _n._, 45 _n._, 46 _n._, 263 _n._

  Proclamation, 29 _n._, 32 _n._, 62 _n._

  Proctor, 139
    John P., 99 _n._

  Progressive party, 189, 294

  Province, 32 _n._, 50, 50 _n._, 51, 58 _n._, 62 _n._, 66, 66 _n._, 71,
      71 _n._, 76 _n._, 78 _n._, 84, 84 _n._, 86 _n._, 87 _n._, 158, 173,
      174, 179, 180, 181, 187, 188, 190, 263, 265, 273 n., 286, 297

  Provincial, 38 _n._, 87 _n._, 250, 273

  Public Works, 90 _n._
    Department of, 83 _n._
    Minister of, 45 _n._, 48

  Puget Sound, 206

  Purcell, Ryan, Goodwin and Smith, 88 _n._, 89 _n._


  Qu'Appelle, 260
    Forks of, 103
    Long Lake and Saskatchewan Railroad and Steamship Co., 141, 254
    River, 25 _n._

  Quebec, 2 _n._, 33 _n._, 55, 59 _n._, 60 _n._, 61, 62, 62 _n._, 66 _n._,
      68, 68 _n._, 70 _n._, 92 _n._, 97, 112, 113, 122, 123, 124, 134, 135,
      139, 182, 187

  Quebec Act, 62 _n._
    Central Ry., 157
    Conference, 71 _n._
    Montreal, Ottawa and Occidental Ry., 107, 112
    population, 57 _n._, 74, 93 _n._
    Province of Quebec, 58 _n._, 62 _n._, 72 _n._, 151, 276, 281 _n._, 287

  Quesnel River, 15

  Quinte, Bay of, 63 _n._


  Radisson, 58 _n._

  Rae, Dr., 43 _n._

  Rail, 183, 184, 223

  Rails, 91 _n._, 99, 102, 107, 108, 124, 130, 150, 254, 272, 273

  Railroad, 33 _n._, 34, 34 _n._, 35 _n._, 38 _n._, 40 _n._, 42 _n._, 51
      _n._, 67 _n._, 68, 69, 69 _n._, 70, 70 _n._, 72, 76, 76 _n._, 77, 79
      _n._, 81 _n._, 84, 88, 88 _n._, 89 _n._, 91 _n._, 92 _n._, 93, 93
      _n._, 96, 96 _n._, 97, 98, 99, 100, 102, 107, 108, 109, 111, 113, 113
      _n._, 114, 117, 125, 128, 129, 129 _n._, 131, 131 _n._, 136, 137, 138,
      140, 141, 145, 146, 147, 150, 151, 154, 155, 158, 161, 164, 166, 170,
      172, 176, 177, 179, 180, 181, 183, 184, 186, 187, 191, 192 _n._, 194,
      195, 197, 205, 206, 208, 211, 214, 216, 217, 218, 219, 220, 221, 223,
      225, 226, 228, 229, 234, 236, 239, 239 _n._, 243, 244, 246, 248, 252,
      255, 256, 270, 271, 272, 273, 274, 276, 278, 279, 282, 286, 292, 294

  Railway, 17 _n._, 18 _n._, 21, 40, 40 _n._, 41 _n._, 43 _n._, 75 _n._,
      77 _n._, 78, 78 _n._, 80 _n._, 83 _n._, 84 _n._, 85 _n._, 86 _n._, 88
      _n._, 90 _n._, 94 _n._, 95 _n._, 98, 99, 100, 101, 105, 111, 112, 119,
      120, 124, 127, 135, 139, 141, 158, 173, 173 _n._, 174, 180 _n._, 183,
      188, 189, 189 _n._, 190, 190 _n._, 195, 200, 205, 251, 252, 257, 258,
      259, 260
    Commission, 184, 185
    Rates Commission, 183
    Taxation Act, 239 _n._

  Railways:
    Alberta Central, 154
    Alberta Railway and Coal Co., 139
    Alberta Railway and Irrigation Co., 154
    Atlantic and Northwest, 122, 122 n., 135, 137, 142
    Berlin, Waterloo, Wellesley and Lake Huron, 157
    Boston, Lowell, 135
    British Columbia Southern, 139, 254
    Calgary and Edmonton, 141, 152
    Campbellford, Lake Ontario and Western, 156
    Canada Central, 88, 88 _n._, 92 _n._, 97, 100, 101, 102, 106, 112, 112
      _n._, 131, 134, 173 _n._, 273, 281 _n._
    Canada Pacific, 20 _n._, 77 _n._, 78, 78 _n._, 112, 136, 136 _n._
    Canada Southern, 122, 143
    Canadian National, 188, 292
    Canadian Northern, 187, 188, 292
    Canadian Pacific, see Canadian Pacific Railway
    Canadian Pacific Railway and Navigation Co., 77 _n._
    Cap de la Madeleine, 157
    Central Canada, 154
    Central Vermont, 79 n.
    Chicago, Milwaukee and St. Paul, 113, 194
    Columbia and Kootenay, 139, 255
    Columbia and Western, 140, 142 n.
    Credit Valley, 108, 120, 122
    Dominion Atlantic, 156, 158
    Duluth, South Shore and Atlantic, 137, 249, 280
    Edmonton, Dunvegan and British Columbia, 154
    Emerson and Northwestern, 174, 179
    Emerson and Turtle Mountain, 174
    Esquimault and Nanaimo, 154
    Georgian Bay and Seaboard, 155
    Glengarry and Stormont, 158
    Grand Trunk, see Grand Trunk Railroad
    Great Northern, 139, 206, 207
    Great North West Central, 151, 152, 254, 255
    Great Western, 69 _n._, 70
    Guelph and Goderich, 157
    Halifax and Quebec, 70 _n._
    Intercolonial, 41, 70 _n._, 71 _n._, 72, 73, 290, 292
    International, 135
    Interprovincial and James Bay, 158, 255
    Jacques Cartier Union, 123
    Kaslo and Slocan, 155
    Kettle Valley, 155
    Kingston and Pembroke, 156
    Kootenay and Arrowhead, 142 _n._
    Kootenay Central, 154
    Lake Champlain and St. Lawrence
    Junction, 135 _n._
    Lake Erie and Northern, 157
    Lake Temiskaming Colonization, 142
    Laurentian, 274
    Lindsay, Bobcaygeon and Pontypool, 157
    London Junction, 122
    Manitoba Central, 179
    Manitoba and Northwestern, 152, 154
    Manitoba and South West Colonization, 108, 140, 253, 255, 261, 264, 274
    Michigan Central, 122, 143
    Minneapolis, St. Paul and Sault Ste. Marie, 137, 139, 155, 206, 249,
      280
    Montreal and Ottawa, 137, 142
    Montreal, Ottawa and Western, 95 _n._
    Montreal and Western, 142
    Nakusp and Slocan, 141
    New Brunswick Coal and Railway Co., 158
    New Brunswick, 136 _n._, 142
    New Brunswick Southern, 158
    New York Central, 143
    North Shore, 122, 124
    Northern Colonization, 78 _n._, 79 _n._, 95 _n._, 157
    Northern Pacific, 19 _n._, 79 _n._, 93 _n._, 102, 181, 183, 185, 207,
      278
    Northern, 69 _n._
    Ontario and Pacific Junction, 92 _n._, 173 _n._
    Ontario and Quebec, 114, 122, 134, 271
    Orford Mountain, 157
    Ottawa Northern and Western, 156
    Pacific, 19 _n._, 33 _n._, 79, 79 _n._, 80 _n._, 81 _n._, 82 _n._
    Qu'Appelle, Long Lake and Saskatchewan, 141, 259
    Quebec Central, 157
    Quebec, Montreal, Ottawa and Occidental, 108, 112
    Red River Valley, 179
    Richelieu, Drummond and Arthabaska Counties, 135 _n._
    St. Andrews and Quebec, 70 _n._
    St. Lawrence and Ottawa, 274
    St. Marys and Western, 157
    St. Maurice Valley, 157
    St. Paul, Minneapolis and Manitoba, 93 _n._, 97, 98 _n._, 99
    St. Paul and Pacific, 89 _n._, 93 _n._
    St. Stephen and Milltown, 143
    Shuswap and Okanagan, 141, 259
    South Ontario Pacific, 157
    Southampton, 158
    Southeastern, 135, 274
    Southern Pacific, 194
    Tilsonburg, Lake Erie and Pacific, 156
    Tobique Valley, 143
    Toronto, Grey and Bruce, 122
    Toronto, Hamilton and Buffalo, 143
    Union Pacific, 102, 272
    Vancouver and Lulu Island, 154
    Wabash, 195
    Walkerton and Lucknow, 157
    Waterloo and Magog, 135
    Winnipeg Southeastern, 174, 175
    Winnipeg and Southern, 179
    Wisconsin Central, 155

  Rainy Lake, 23 _n._, 26, 34 _n._
    River, 87 _n._

  Raley, 154

  Ramsey, Alexander, 105

  Rapide Plat Canal, 67 _n._

  Rapids, Lachine, 55 _n._, 56 _n._

  Rat Portage, 87 _n._, 114, 124
    River, 34 _n._

  Rates, 86 _n._, 100, 101, 112, 123, 130, 136 _n._, 173, 173 _n._, 175,
      176, 177, 178, 179, 180, 183, 184, 185, 186, 186 _n._, 187, 188, 189,
      190, 191, 191 _n._, 192 _n._, 193, 193 _n._, 194, 195, 196, 198, 199,
      205, 206, 207, 208, 212, 215, 216, 219, 220, 221, 226, 227, 229, 230,
      239 _n._, 258, 269, 278, 293, 293 _n._, 294
    freight, 172, 183, 188, 191, 191 _n._, 205, 209, 210, 216, 229, 262
    passenger, 205, 209, 216, 221

  Razilly, 57 _n._

  Rebellion of 1837, 66
    of 1885, 128, 144

  Receipts, total, 265, 266, 267, 267 _n._, 268, 269, 270, 285, 286

  Receiver-general, 76 _n._

  Reciprocity, 189 _n._, 290
    treaty, 68, 72

  Red Deer, 154
    Fox Creek, 106
    River, 17 _n._, 18 _n._, 23 _n._, 27, 27 _n._, 28, 32, 32 _n._, 35, 35
      _n._, 36, 36 _n._, 37, 38 _n._, 39, 39 _n._, 40 _n._, 42 _n._, 43, 45,
      45 _n._, 47 _n._, 51, 52, 77 _n._, 87, 87 _n._, 88, 88 _n._, 89, 89
      _n._, 93 _n._, 98 _n._, 105, 114, 140, 180

  Red River expedition, 86 _n._
    settlement, 17 _n._, 31 _n._, 32, 34, 35, 46 _n._, 51, 52, 67 _n._, 68
      _n._, 74, 77, 93 _n._, 291
    settlers, 45, 50
    Transportation Line, 93 _n._
    Valley Co., 179

  Reford, 154

  Regina, 106, 141, 152, 155, 177, 177 _n._, 178 _n._, 185, 259

  Regulation, 10, 11, 29, 61, 83 _n._, 172, 173, 185, 186, 209, 225, 230,
      239 _n._, 293 _n._

  Reid, R. G., 275

  Reinach, Baron J. de, 113, 114
    & Co., 98, 103

  Renfrew, 99 _n._, 156

  Representatives, House of, 19

  Reserves, 270, 282, 283, 285, 286

  Resolution, 20, 29, 30 _n._, 45 _n._, 46 _n._, 47 _n._, 71 _n._, 75 _n._,
    87 _n._, 96 _n._, 179, 194, 205

  Reston, 152

  Retallack, 155

  Revelstoke, 142, 256, 258

  Revenue, 33 _n._, 43 _n._, 95 _n._, 116, 126, 172, 193, 229, 265, 271,
      273

  Revolution, American, 61, 71 _n._

  Rice, R. D., 80 _n._, 81 _n._

  Richmond, 72 _n._

  Richelieu, Drummond and Arthabaska Counties Ry., 135 _n._
    Ottawa Navigation Co., 124
    River, 55 _n._

  Rideau Canal, 65 _n._

  Riel, Louis, 49, 128 _n._

  Rigaud, 142

  Right of Way, 256, 257, 259, 261

  Riverton, 153

  Riviere a la Biche, 24 _n._
    du Loup, 69 _n._, 70, 70 _n._
    du Paskoya, 24 _n._

  Road, 11, 15, 17, 17 _n._, 20, 20 _n._, 21, 32 _n._, 43, 43 _n._, 45,
      50, 51, 51 _n._, 65 _n._, 71 _n._
    wagon, 20, 38 _n._, 51 _n._, 70 _n._, 84 _n._, 85 _n._, 86 _n._

  Roberval, M. de, 53 _n._, 54

  Robson, 140

  Roche, Marquis de la, 54 _n._

  Rockefeller, W., 109

  Rocky Mountain House, 25 _n._
    Summit, 111, 121 _n._, 250 _n._

  Rocky Mountains, 2, 3, 5, 5 _n._, 6 _n._, 9, 14 _n._, 17 _n._, 21, 23,
      24 _n._, 26 _n._, 33 _n._, 34 _n._, 38 _n._, 40 _n._, 44 _n._, 66
      _n._, 67 _n._, 70 _n._, 77 _n._, 78 _n._, 83, 100, 103, 106, 110,
      111, 121, 134, 272

  Rolling stock, 77 _n._, 114, 182

  Romford Junction, 156

  Rose, C. D., 113, 114, 274
    Sir John, 95 _n._, 127

  Ross, A. W., 99 _n._
    J. K. L., 275
    Lake, 89 _n._

  Rossland, 142 _n._

  Rosser, General, 113

  Rouen, 54 _n._

  Route, 11 _n._, 14, 15, 15 _n._, 16, 17, 19, 21, 24, 25, 28, 32, 34
      _n._, 35 _n._, 38 _n._, 39 _n._, 43 _n._, 45 _n._, 48 _n._, 51, 52
      _n._, 53, 62 _n._, 66 _n._, 71, 73, 85 _n._, 86, 87 _n._, 92 _n._, 93,
      102, 104, 107, 112, 114, 122, 135, 138, 139, 155, 178, 183, 193, 194,
      195, 208, 244, 250 _n._, 274

  Rudyard, 153

  Rupert, Prince, 22 _n._

  Rupert's Land, 12 _n._, 46 _n._, 48 _n._
    Act, 46, 46 _n._

  Russell, 152

  Russia, 6, 6 _n._, 7 _n._, 19

  Russian American Fur Co., 6, 7, 13 _n._

  _Ruthenia_, the, 170

  Ryan, J., 89 _n._


  Sable Island, 54 _n._

  St. Andrews, 70 _n._, 72 _n._, 143
    and Quebec Railroad Co., 70 _n._

  St. Anne lock, 67 _n._

  St. Boniface, 89 _n._, 93 _n._, 130, 182

  St. Catherines, 99 _n._

  St. Crois Island, 54 _n._

  St. Dennis, Louis, 30 _n._

  St. Eustace, 112 _n._

  St. Felix, 123 _n._, 157

  St. Gabriel, 157

  St. Germain en Laye, treaty of, 55 _n._

  St. Guillaume, 135 _n._

  St. Ignace, 58 _n._

  St. Jerome, 112, 112 _n._, 142

  St. John, 53, 59 _n._, 70 _n._, 72 _n._, 135, 136, 156, 157, 158, 274
    River, 57 _n._

  St. Joseph's, 58 _n._

  St. Lawrence drainage basin, 52, 59, 73, 288
    Gulf of, 55 _n._
    and Ottawa Ry., 274
    River, 2, 23, 53, 53 _n._, 54, 54 _n._, 55, 55 _n._, 56, 57, 59, 63
      _n._, 64, 64 _n._, 65, 65 _n._, 66, 66 _n._, 71 _n._, 73, 78 _n._,
      112, 122, 122 _n._, 135, 157, 158, 171, 287, 289, 290
    Valley, 55 _n._, 62, 63

  St. Lin, 112 _n._
    Junction, 122 _n._

  St. Malo, 54 _n._

  St. Martin's Junction, 123, 158

  St. Mary, Falls of, 34 _n._
    River, 78 _n._, 81 _n._

  St. Marys, 157, 158
    and Western Ry., 157

  St. Maurice Valley Ry., 157

  St. Paul, 18, 18 _n._, 19, 32, 42 _n._, 93 _n._, 113, 139, 152, 192, 194,
      206, 208
    and Pacific Ry., 89 _n._, 93 _n._
    Minneapolis and Manitoba Rr. Co., 93 _n._, 97, 98 _n._, 99, 102, 114,
      178, 206, 277, 292

  St. Polycarpe's Junction, 158

  St. Sabine, 158

  St. Stephen, 143, 158
    and Milltown Ry., 143

  St. Therese, 112 _n._

  St. Thomas, 122, 134, 137

  St. Vincent, 176 _n._, 177 _n._, 178, 178 _n._

  St. Vincent de Paul, 123

  Saguenay River, 53

  Salabery, Col. de, 50

  Saleesh House, 6 _n._

  Salisbury, 136 _n._

  Salmon Falls, 58 _n._

  Sandon, 142

  San Francisco, 14 _n._, 17, 151, 191, 192

  Sarnia, 69 _n._, 84 _n._

  Saskatchewan Legislature, 239 _n._
    plains, 20 n., 77 _n._
    Rivers, 2, 23 _n._, 24 _n._, 25 _n._, 26 _n._, 33 _n._, 34 _n._, 36
      _n._, 87 _n._, 92 _n._, 109, 111, 205
    territory, 19, 35 _n._, 37, 38 _n._, 39, 44 _n._
    Valley, 17 _n._, 18 _n._, 39 _n._

  Saskatoon, 252, 254

  Saugeen Junction, 157

  Sault au Recollet, 123

  Ste. Marie, 58 _n._, 69 _n._, 80 _n._, 100, 102, 106, 137, 194

  Ste. Marie Canal, 25 _n._

  Savonas Ferry, 88 _n._

  Sayre, Wm., 30 _n._

  Scarth, W. B., 104, 105, 259

  Schreiber, 120

  Schwieger, 43 _n._

  Scotch directors, 105

  Scott, Thos. A., 80 _n._
    Hon. W. L., 110, 114

  Seattle, 138, 206, 207

  Secretary, C.P.R., 102, 107
    Colonial, 35, 46 _n._

  Selkirk, 19, 44 _n._, 89 _n._, 92 _n._, 98, 99, 102, 103, 105, 111, 153,
      257 _n._

  Selkirk, Earl of, 26 _n._, 27, 28 _n._, 29 _n._, 32 _n._
    Range, 110
    West, 113, 140, 153

  Senate, 47 _n._, 50 _n._, 89 _n._, 92 _n._, 194
    Committee of, 92 _n._

  Service, 247
    ocean, 169, 170
    passenger, 231, 233
    postal, 39, 39 _n._
    steamship, 237, 238
    train, 207

  Settlement, 2, 3, 4, 5, 6, 8, 9, 10, 11, 11 _n._, 12, 12 _n._, 13, 14,
      16, 21, 22, 23 _n._, 25, 26, 27, 27 _n._, 28, 29 _n._, 30, 31, 31
      _n._, 33, 33 _n._, 35, 35 _n._, 36 _n._, 39 _n._, 40, 42, 43 _n._, 44,
      44 _n._, 47, 47 _n._ 50, 51, 53, 54, 54 _n._, 55, 56, 57, 58, 59, 61,
      62, 62 _n._, 63, 63 _n._, 64, 65 _n._, 66, 68 _n._, 71 _n._, 72, 73,
      84, 86, 92 _n._, 98, 105, 107, 129, 130, 132, 175, 250, 252, 253, 253
      _n._, 255, 255 _n._, 264, 288, 289, 291, 292

  Settlers, 8 _n._, 12 _n._, 13, 13 _n._, 17 _n._, 27 _n._, 28 _n._, 29,
      30, 31 _n._, 36, 40 _n._, 42 _n._, 43, 51 _n._, 57 _n._, 61 _n._, 63
      _n._, 86 _n._, 87, 92 _n._, 102, 105, 130, 131, 147, 176, 184, 253
      _n._, 258, 261, 263 _n._, 289, 290
    Bill of rights, 50 _n._

  Seven Oaks, 27 _n._

  Seymour, 16
    Governor, 20, 20 n.

  Shanghai, 138, 139

  Shareholders, 18 _n._, 44 _n._, 48 _n._, 80 _n._, 97 _n._, 109, 180, 276,
      277, 277 _n._, 278, 284

  Shaughnessy, T. G., 113, 114, 184, 276
    Hon. W. J., 275

  Shebandowan, 86 _n._

  Shedden Cartage Co., 124

  Shediac, 72 _n._

  Sheep, 9 _n._, 28 _n._, 31 _n._

  Shepard, 152

  Sherbrooke, 135, 157

  Shipping, 11, 16

  Ships, 10 n., 13, 26 _n._

  Shirley, 60 _n._

  Shops, 180
    car, 134, 167
    division, 180
    locomotive, 182
    repair, 134

  Shuswap Lake, 16
    and Okanagan Ry., 141, 259

  Sicamous, 141, 259

  Sifton, Glass and Fleming, 88 _n._
    and Ward, 89 _n._

  Similkameen River, 15, 16, 16 _n._

  Simpson, George, 31 _n._

  Skinner, Thos., 275

  Sleeping and dining cars, 203, 203 _n._

  Slocan, 142
    Junction, 142

  Smelter Junction, 142 _n._

  Smith, Chas. M., 79 _n._, 80 _n._, 81 _n._
    Hon. D. A., 49, 97, 97 _n._, 102 _n._, 105, 113, 114, 124, 127, 259,
      275, 276
    Falls 122 _n._, 134, 137, 208
    J. Gregory, 80 _n._, 81 _n._
  Smoking cars, 133 _n._, 201

  Smuggler's Point, 106

  Smyth, Sir John, 67 _n._

  Snowflake, 153

  Socit Gnrale, 98

  Solicitor, C.P.R., 275
    General, 37 _n._

  "Soo" line, 207, 208

  Sorel, 58 _n._, 135 _n._
    River, 57 _n._, 58 _n._

  Souris, 140, 141, 253
    branch, 105, 141, 264, 281 _n._
    coal fields, 102, 140, 254
    River, 25 _n._
    River Fort 25 _n._

  South Branch House, 25 _n._, 36 _n._
    Ontario Pacific Ry., 157
    Saskatchewan Creek, 106
    Sea, 22 _n._

  Southampton Junction, 158
    Railway, 158

  South-Eastern Railway, 135, 274

  Southern Pacific Railroad, 194

  Spain, 4, 4 _n._, 5 _n._, 53 _n._

  Spaulding, H. F., 110

  Spokane, 154

  Stamp Act, 61 _n._

  Stanbridge, 135 _n._

  State, Secretary of, 14

  Station, 77 _n._, 112, 177, 204, 257, 258

  Steamer, 14, 18 _n._, 79 _n._, 93 _n._, 102, 112, 138, 169, 182, 191,
      206, 237, 281 _n._

  Steamship, 139, 141, 150, 169, 192 _n._, 204, 237, 238, 249, 281 _n._,
      286
    earnings, 223, 224, 268
    line, 79, 170

  Stephen, George, 89 _n._, 96 _n._, 97, 102, 102 _n._, 113, 275, 276

  Stephenson, P. S., 99 _n._

  Steveston, 154

  Stewart, J. A., 110

  Stickney, George B., 102, 113

  Stikeen River, 13 _n._

  Stirling, 153, 154

  Stock, 80 _n._, 81 _n._, 97 _n._, 101, 102, 103, 108, 109, 110, 115,
      116, 117, 125, 126, 187, 191 _n._, 239 _n._, 270, 273, 277 _n._, 278,
      279, 280, 283, 286
    capital, 101, 119, 239 _n._, 276, 278, 284
    common 280, 282, 284, 284 _n._, 285, 285 _n._, 286, 293
    consolidated debenture 281, 281 _n._, 282, 284, 285
    preferred 101, 280, 280 _n._, 281, 285, 285 _n._, 286
    price of 284 _n._

  Stonewall, 103, 153

  Stoughton, 152

  Straits of Belle Isle, 53

  Strathcona, 141, 153
    Lord, 275

  Streetsville Junction, 122 _n._

  Stuart, David, 9 _n._
    John, 99 _n._
    Lake, 6 _n._, 15 _n._
    River, 6 _n._

  Subsidy, 41 _n._, 106, 108, 126, 184, 187, 190, 270, 272, 291
    land, 104
    money, 19 _n._, 75 _n._, 88 _n._, 98, 99, 118, 120, 139
    postal, 18 _n._, 115, 116, 126

  Sudbury, 142, 156
    Junction, 122

  Suez, 138, 193

  Suffield, 154

  Summit region, 51 _n._

  Sunshine Creek, 89 _n._

  Superintendent, C.P.R., 102, 113
    Indian affairs, 256

  Supplies, 7, 7 _n._, 8, 9, 11, 11 _n._, 13, 26, 27, 39 _n._, 51

  Surplus, 249, 270, 282, 282 _n._, 283, 285, 286, 293, 293 _n._

  Surveys, 11, 11 _n._, 47 _n._, 48, 62 _n._, 70 _n._, 77 _n._, 84 _n._,
      85 _n._, 86 _n._,  87 _n._, 91 _n._, 92 _n._, 98, 103, 283 _n._, 261

  Suspension Bridge, 69 _n._

  Swan River district, 35 _n._

  Swift Current, 152, 153, 178 _n._
    Creek, 106

  Swiss colonists, 27 _n._
    regiment, 28 _n._

  Sydney, 34 _n._


  Tach, Bishop, 50

  Tacoma, 207

  Tadousac, 53, 54 _n._

  Tako River, 13 _n._

  Tallow Co., 28 _n._

  Tamiscaming Lake, 33 _n._

  Tappen siding, 259

  Tariff, 189, 192 _n._, 289, 293, 293 _n._, 294
    of prices, 28 _n._
    rate, 136 _n._, 175, 176, 177, 178, 184, 205, 206

  Tartar, 150

  Tax, 136 _n._, 239, 239 _n._, 263 _n._, 286, 293, 293 _n._, 294
    land, 46 _n._
    exemption, 47 _n._

  Taxation, 75, 83, 85 _n._, 87 _n._, 99, 181, 239 _n._, 263 _n._, 291, 294

  Teeswater, 122 _n._

  Telegraph, 40 _n._, 42 _n._, 43, 85 _n._, 92 _n._, 151, 223, 249
    American Telegraph Co., 49
    Atlantic and Pacific Transit and Telegraph Co., 42 _n._
    line, 39, 41, 41 _n._, 83 _n._, 84 _n._, 85 _n._, 86 _n._, 88, 101, 133
    Montreal Telegraph Co., 42 _n._
    system, 49, 243
    United States Telegraph Companies, 42 _n._

  Temiskaming (Tamiscaming), 142

  Temperature, 2, 3

  Terminus, 79 _n._, 83, 87 _n._, 88 _n._, 89 _n._, 91 _n._, 100, 119, 134,
      150, 151, 155, 170, 256

  Territory, 2, 10, 12 _n._, 13, 15, 19, 19 _n._, 24, 26 _n._, 27 _n._,
      28, 28 _n._, 32 _n._, 34 _n._, 38, 38 _n._, 39, 39 _n._, 41 _n._, 43
      _n._, 44 _n._, 45, 45 _n._, 46 _n._, 47 _n._, 48, 49 _n._, 53, 58, 61,
      62, 63, 63 _n._, 71 _n._, 72 _n._, 73, 85 _n._, 91 _n._, 97 _n._, 103,
      122, 129, 130 _n._, 138, 152, 153, 173, 180, 181, 184, 186, 187, 188,
      189 _n._, 190, 191, 191 _n._, 192, 196, 199, 203, 229, 237, 244, 247,
      251, 252, 255, 263 _n._, 274, 289
    British, 11, 17, 36 _n._, 68 _n._

  Tte Jaune Cache, 19, 87 _n._

  Teulon, 153

  Thames River, 65 _n._

  Thibault, 49

  Thorn, Judge, 29 _n._

  Thomas, Samuel, 275

  Thompson, David, 6 _n._
    River, 9, 14, 18

  Thorne, Robert, 53 _n._
    S., 104

  Three Forks, 154
    Rivers, 56, 57 _n._, 157

  Thunder Bay, 78 _n._, 86 _n._, 102, 113 _n._, 124, 177, 256 _n._, 272, 273

  Ticonderoga, 60 _n._

  Ties, 91 _n._, 107, 124, 263

  Tilsonburg, Lake Erie and Pacific Ry., 156

  _Times_, the, 95 _n._

  Tobique Valley Railroad, 143

  Tod, J. Kennedy, 104

  Tolls, 101, 172, 184, 189, 190 _n._

  Tool cars, 133, 133 _n._, 182

  Torbrook, 158

  Toronto, 2 _n._, 25 _n._, 38 _n._, 42 _n._, 67 _n._, 69 _n._, 78, 78
      _n._, 79 _n._, 82, 99, 99 _n._, 100, 134, 137, 138, 150, 156, 158,
      173, 187, 208, 275, 277, 291
    Board of Trade, 36, 69 _n._, 100
    Grey and Bruce Ry., 122
    Hamilton and Buffalo Ry., 143

  Touchwood Hills, 103

  Tourist traffic, 203, 204, 217, 218, 224, 236, 258

  Towne, A. N., 194

  Track, 107, 111, 128, 184
    double, 155, 156, 171
    laying, 89 _n._

  Trade, 16, 22, 22 _n._, 24 _n._, 26, 26 _n._, 28 _n._, 30 _n._, 31
      _n._, 32, 35, 36, 38 _n._, 40 _n._, 51, 52, 52 _n._, 53, 54, 55 _n._,
      56, 57 _n._, 58, 59, 61, 62 _n._, 64, 65, 67, 67 _n._, 68, 69 _n._, 71
      _n._, 72, 92 _n._, 93, 93 _n._, 94 _n._, 95 _n._, 100, 122, 181, 186,
      189 _n._, 206, 258, 264, 288, 290, 291
    Board of, 36, 69 n., 100, 176, 180

  Traders, 5, 54 _n._, 56, 93 _n._
    English, 24, 61
    fur, 8, 17, 21, 29 n., 53, 61, 61 _n._

  Traffic, 25 _n._, 26, 41 _n._, 67 _n._, 68, 69 _n._, 70, 70 _n._, 72,
      72 _n._, 76, 77, 78, 78 _n._, 79, 79 _n._, 80, 86 _n._, 93 _n._, 95
      _n._, 97, 99, 100, 101, 112, 114, 122, 123, 128, 129, 130, 131, 132,
      132 _n._, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 146,
      147, 149, 150, 151, 153, 154, 155, 156, 158, 160, 165, 167, 168, 169,
      170, 172, 173, 173 _n._, 174, 175, 176, 177, 178, 180, 181, 184, 185,
      186, 187, 189, 191, 191 _n._, 192, 192 _n._, 193, 194, 195, 196, 197,
      199, 200, 202, 203, 204, 205, 206, 207, 208, 209, 211, 212, 213, 214,
      215, 216, 217, 220, 221, 223, 226, 228, 229, 230, 232, 233, 234, 235,
      236, 237, 239, 240, 241, 242, 243, 244, 245, 246, 247, 253
    density, 214, 214 _n._, 215
    expense, 235, 235 _n._, 239
    freight, 18 _n._, 101, 112, 129, 134, 169, 171, 197, 212, 226, 268,
      269, 286
    liquor, 57
    passenger, 18 _n._, 101, 112, 129, 169, 197, 216, 220, 221, 224, 226,
      231, 235, 247, 268
    through, 111, 112, 168, 213, 214, 216, 217, 218, 219, 220, 221, 222,
      224, 228, 229, 235, 236, 237, 266, 270, 272, 277, 279, 282, 283, 290,
      291, 292, 293
    tourist, 203, 204, 217, 218, 224, 236

  Trail, 142 _n._

  Train, 112, 168, 183, 207
    freight mileage, 132, 132 _n._, 133, 148, 148 _n._, 149, 166, 166
      _n._, 167, 168, 199, 200, 228, 233, 234, 235, 238, 239
    load, 148, 148 _n._, 149, 165, 165 _n._, 233
    mile earnings, 226, 226 _n._, 227, 227 _n._, 228, 228 _n._, 229, 229
      _n._, 230
    mileage, 133, 147, 149, 150, 165, 166, 168, 200, 227, 228, 229, 230,
      232, 234, 235, 240
    mixed, 166
    mixed mileage, 132 _n._, 166, 166 _n._, 228, 230
    passenger train mileage, 199, 199 _n._, 200, 200 _n._, 204, 229, 230,
      231, 233, 234, 235, 239
    total mileage, 132, 132 _n._, 133, 148, 148 _n._, 165, 165 _n._, 227,
      232, 233, 234, 235, 238

  Transcontinental, 208
    Association, 191, 206
    bridge, 72, 74, 128
    road, 20, 20 _n._, 34 _n._, 96, 187
    traffic, 173, 181, 186, 191, 192, 193, 195, 196, 205, 206, 217
    Trans-Missouri rate case, 207

  Treasurer, 102

  "Trent Affair," 71 _n._

  Trestles, 91 _n._, 182

  Trieste, 170

  Trout Lake, 142 _n._

  Troy Junction, 157

  Truro, 72 _n._, 156

  Tupper, Sir Charles, 96 _n._, 126, 127, 179

  Turnbull, 114

  Turtle Mountain branch, 107

  Twightwies, 59 _n._

  _Tyrolia_, the, 170


  Union, 20, 20n., 21, 45 _n._, 52, 67 _n._, 72, 74, 75 _n._, 84, 84 _n._,
      85 _n._, 86, 96
    Act of, 66, 75, 75 _n._, 76 _n._, 290
    Pacific Railroad, 102, 272
    states of, 276

  United Empire Loyalists, 63, 63 _n._, 71 _n._, 289
    Kingdom, 94 _n._, 95 _n._, 276, 276 _n._, 277

  United States, 5, 5 _n._, 6, 6 _n._, 7, 8, 21, 24, 32, 32 _n._, 33,
      35, 35 _n._, 48 _n._, 52, 63, 72, 76 _n._, 78, 78 _n._, 80 _n._, 85
      _n._, 86 _n._, 89, 93, 93 _n._, 94 _n._, 95 _n._, 98 _n._, 130, 140,
      146, 151, 163, 174, 191, 192, 192 _n._, 197, 199, 205, 215, 276, 276
      _n._, 277, 288, 290, 291, 293
    Congress, 5 _n._, 8, 8 _n._, 32 _n._
    Government, 19 _n._
    House of Representatives, 19
    imports and exports, 16 _n._, 29 _n._, 52 _n._, 65 _n._, 67 _n._, 72
      _n._
    Secret Service, 8 _n._
    Telegraph Companies, 42 _n._

  Upper Arrow Lake, 33 _n._, 142
    Slave Lake, 25 _n._
    Swift and Folger, 89 _n._

  Utrecht, treaty of, 23, 60 _n._


  Valeport, 152

  Valleyfield Junction, 157

  Vancouver, 3 _n._, 128, 138, 151, 153, 154, 155, 182, 183, 187, 191, 193,
      204, 207, 256, 262
    and Lulu Island Ry., 154
    Eastbound, 189
    Island, 4, 9, 11, 12, 12 _n._, 14, 14 _n._, 20, 41 _n._, 84 _n._, 154,
      169, 265
    North Vancouver, 154

  Vanguard, 153

  Van Horne, W. C, 113, 114, 128 _n._, 151, 189 _n._, 275, 276

  Varcoe, 151

  Vavasour, Lieut., 10 _n._

  Versailles, treaty of, 62

  Vessels, 3 _n._, 13 _n._, 22, 101, 139, 237

  Vice-President, C.P.R., 102, 113, 114, 184, 276
    Northern Pacific, 80 _n._

  Victoria, 10 _n._, 14 _n._, 17, 18, 20, 21, 84 _n._, 103, 154, 204
    Rolling Stock and Realty Co., 285

  Ville Marie, 158, 255

  Virden, 152, 259

  Voyage, 4 _n._, 5, 21, 22, 22 _n._, 52, 53, 54 _n._


  Wabash Railroad, 195

  Waddington, Alfred, 18, 18 _n._, 20, 20 _n._, 77 _n._, 79 _n._

  Waldo, 154

  Walkem, 85 _n._

  Walker, John, 99 _n._

  Walkerton, 157
    and Lucknow Ry., 157

  Waltham, 156

  War, American Civil, 71 _n._
    of 1812, 6, 71 _n._, 73

  Warre, Lieut., 10 _n._

  Warrender, Sir George, 105

  Washington, 19 _n._
    Major, 60 _n._
    state of, 193
    treaty of, 10 _n._

  Waskada, 141

  Waterloo, 135, 157
    and Magog Ry., 135

  Watkin, E. W., 40, 41 _n._, 42 _n._, 43, 44 _n._, 71 _n._

  Watt Junction, 142, 143

  Way, 86 _n._
    right of, 256, 257, 259, 261

  Welland Canal, 65 _n._, 67 _n._

  Wellington, 154

  West India Co., 58
    Lynne, 179
    MacLeod, 141
    Robson, 140
    Selkirk, 113, 140, 153

  Western Rates case, 188
    Junction, 122 _n._
    Union Telegraph Co., 19

  Westminster, 265

  Weston, 158

  Wetaskiwin, 152, 153

  Weyburn, 152, 153

  Wheat, 7, 7 _n._, 11 _n._, 16 _n._, 31 _n._, 64 _n._, 65 _n._, 67
      _n._, 68 _n._, 130, 144, 145, 160, 162, 178, 179, 292

  White, Hon. Thos., 174, 179
    Mouth River, 78 _n._

  Whitehead, Joseph, 89 _n._

  Whitewater, 154

  Whitney, 32 _n._, 69 _n._

  Whittier Junction, 155

  Wild Horse Creek, 15, 16

  Wilkie, 153

  Wilkinson, S., 80 _n._, 81 _n._

  Willson, Henry Beckles, 48 _n._

  Wilmot, 158

  Windermere Lake, 6 _n._

  Windowa, W., 80 _n._, 81 _n._

  Windsor, 69 _n._, 72 _n._, 137, 156, 158
    Mills, 157
    Street, Montreal, 122 _n._

  Windy Gates, 153

  Wingham, 142

  Winnipeg, 3 _n._, 67 _n._, 78 _n._, 92 _n._, 93, 97, 98, 99 _n._, 103,
      105, 106, 111, 113, 122, 130, 134, 137, 140, 141, 142, 152, 153, 155,
      174, 176 _n._, 177, 177 _n._, 178, 178 _n._, 179, 180, 181, 183, 185,
      186, 187, 197, 204, 206, 208, 220, 247 _n._, 257, 258, 277, 292
    and Pembina Mountain branch, 103, 105, 106
    and Southern Ry., 179
    Beach, 153
    Board of Trade, 176, 181
    population, 93 _n._
    River, 23, 23 _n._, 78 _n._
    Southeastern Ry., 174, 175

  Winslow, Lanier & Co., 109

  Wisconsin Central Ry., 155

  Wolseley, 152

  Wood, A. T., 99 _n._
    Bay, 153

  Woodstock, 137, 143

  Wyeth, Nathaniel, 8, 8 _n._

  Wylie Milling Co., 191 _n._


  X. Y. Company, 25 _n._


  Yarmouth, 55 _n._, 99 _n._, 158

  Yellowhead Pass, 18, 19, 20 _n._, 87 _n._, 99, 103, 105, 111, 250 _n._

  Yokohama, 139, 192 _n._

  Yonge St., Toronto, 25 _n._, 65 _n._

  Yorkton, 152


  Zaneville, 156




  BOOKS TO READ


THE PRINCIPLE OF OFFICIAL INDEPENDENCE.

With particular reference to the political history of Canada. By R.
MacGregor Dawson, M.A., D.Sc.(Econ.). With Introduction by Graham
Wallas, M.A., Professor of Political Science in the University of
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No. 64 in the series of Monographs by writers connected with the London
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Contents.--I. The Principle of Official Independence--II. The
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officialism in democratic communities his book is both useful and
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TRUSTS IN BRITISH INDUSTRY, 1914-1921.

A Study of Recent Developments in Business Organization. By J. Morgan
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in Economics and Political Science, University College of Wales,
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_Times._--"A useful and painstaking survey, with full bibliographies, of
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which control the Government, and he discusses measures of reform. Any
successful handling of the problem must, in his view, be preceded by
State ownership of the primary industrial enterprises of power and
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nationalization of banking."


REPARATIONS, TRADE AND FOREIGN EXCHANGE.

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WEALTH AND TAXABLE CAPACITY.

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In the House of Commons, during the debate on the Budget for 1922, this
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THE DEVELOPMENT OF THE CIVIL SERVICE.

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Cary, M.A., Harold J. Laski, Lord Eustace Percy, M.P., Sir Lawrence
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K.C.B., Millicent Murby, Constance Smith, J. A. Salter, C.B., Sir
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in Economics. 18_s._ Postage, 1_s._

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The Agricultural Club was formed by members of the Agricultural Wages
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COAL IN INTERNATIONAL TRADE.

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CO-OPERATION AT HOME AND ABROAD.

Second Edition. Revised and brought up to date. By C. R. Fay, M.A.,
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his widespread research with a pen that is never dull but is always
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most remarkable movements of modern times."


THE CO-OPERATIVE MOVEMENT IN JAPAN.

By Kyoshi Ogata, Professor of Special Department of Commerce, University
of Tokyo.

_Ready June_ 1923.


  P. S. KING & SON, LTD.,
  Orchard House, 2 and 4 Great Smith Street, Westminster.


  =Transcriber's Notes:=
  hyphenation, spelling and grammar have been preserved as in
    the original
  various pages, per cent ==> per cent.
  various pages, op cit. ==> op. cit.
  various pages, Sessional Paper ==> Sessional Papers
  Page 2, south-east along ==> south-west along [Ed. 2 places]
  Page 8, op. cit. p. 459. ==> op. cit., p. 459.
  Page 10, (ibid., p. 18 ff. ==> (ibid., p. 18 ff).
  Page 13, (ibid., p. 647) Fort ==> (ibid., p. 647), Fort
  Page 17, Mayne, R. C. Four ==> Mayne, R. C., Four
  Page 22, Ibid., p. 247. ==> Ibid., p. 247).
  Page 23, Winnipeg river ==> Winnipeg River
  Page 24, op cit. ==> op. cit.,
  Page 27, Assiniboine terrirory ==> Assiniboine territory
  Page 27, August, 1912 ==> August, 1812
  Page 32, Geo. III, c 138 ==> Geo. III, c. 138
  Page 34, 12634 ==> 12,634
  Page 39, non-user. ==> non-use.
  Page 41, 4 per cent ==> 4 per cent.
  Page 53, D. W. Ibid. ==> D. W., Ibid.
  Page 58, t tablissements ==> et tablissements
  Page 58, ibid. p. 146 ==> ibid., p. 146
  Page 60, pp. 211-13 ==> pp. 211-3
  Page 60, Norridgework ==> Norridgewock [Ed. for consistency]
  Page 63, four four-digit numbers (at lower right) with commas should be
    years (no commas)
  Page 65, vol. I. p. 236 ==> vol. I, p. 236
  Page 68, 66001 ==> 66,001
  Page 71, p. 52 ==> p. 52)
  Page 79, 1872," printed ==> 1872, printed
  Page 82, pp. 114-15 ==> pp. 114-5
  Page 83, 37 Vic., c. ==> 37 Vic. c. [Ed. 2 places]
  Page 88, 37 Vic., c. ==> 37 Vic. c.
  Page 89, tracklaying ==> track-laying [Ed. for consistency]
  Page 91, solid rock, 260,000 yds. ==> solid rock, 26,000 yds.
  Page 92, ibid,. ==> ibid.,
  Page 92, Sess. Paper ==> Sess. Papers
  Page 102, March 3 stock ==> March 3, stock
  Page 102, McIntyre and Co. 4,750 ==> McIntyre and Co., 4,750
  Page 103, Sessional Papers No. ==> Sessional Papers, No. [Ed. 2 places]
  Page 108, Manitoba bounddary ==> Manitoba boundary
  Page 113, J. G. op. cit. ==> J. G., op. cit.,
  Page 123, 48-49 Vic., c. 59. ==> 48-49 Vic. c. 59.
  Page 124, $9,538 45 ==> $9,538.45
  Page 136, by a 990-year lease ==> by a 999-year lease
  Page 137, Duluth Railway in 1889 ==> Duluth Railway in 1889[]
  Page 144, Freight carried, 1885-99 ==> Freight carried, 1886-99
  Page 156, Ibid, 1903 ==> Ibid., 1903
  Page 173, competion ==> competition
  Page 177, 2nd line for (4) 27  ==> 29 [Ed. for consistency with
    previous lines]
  Page 182, 51 Vic. C32 ==> 51 Vic. c. 32
  Page 184, 60-61 Vic. C5 ==> 60-61 Vic. c. 5
  Page 188, Ibid., 1919. p. 48. ==> Ibid., 1919., p. 48.
  Page 189, western Canada, ==> western Canada.
  Page 190, in classification,[4], ==> in classification,[4]
  Page 192, Pittsburg ==> Pittsburgh [Ed. for consistency]
  Page 193, removed decimal points in Rates table in Footnote
  Page 198, to 26,685,730 in 1890 ==> to 2,685,730 in 1890
  Page 198, 1917[*]  15,462,276 ==> 1917[+]  15,462,276
  Page 200,201,204,211 2nd 1916 line  ==> 1916 (six months) [Ed. for
    consistency with previous tables]
  Page 200, 1917[*]  18,093,554 ==> 1917[+]  18,093,554
  Page 201, 1917[*]  2,191 ==> 1917[+]  2,191
  Page 217, 334,307.590 ==> 334,307,590
  Page 218, missing "Compiled from C.P.R. Reports." from table in Footnote
  Page 233, 23,765,138 08 ==> 23,765,13808
  Page 242, missing "Compiled from C.P.R. Reports." from table in Footnote
  Page 271, 49 Vic. C9 ==> 49 Vic. c. 9
  Page 317, comtrary ==> contrary
  Page 327, Cavalier ==> Cavelier
  Page 335, Island. London, 1857. ==> Island." London, 1857.
  Page 339, 82, 92n., ==> 82, 82n.,
  Page 340, 36 n ==> 36 n.
  Page 341, 72 n. 179 ==> 72 n., 179
  Page 341, 39 n., 42 n, ==> 39 n., 42 n.
  Page 342, 117,, 122 ==> 117, 122
  Page 342, 192 n. 193 ==> 192 n., 193
  Page 342, Galops, 67 n, ==> Galops, 67 n.
  Page 344, of Senate 29, ==> of Senate, 29
  Page 345, Drayton-Ackworth ==> Drayton-Acworth [Ed. for consistency]
  Page 346, 229 _n_, 230"  ==> "229 _n._, 230
  Page 347, Crevescoeur ==> Crevecoeur [Ed. for consistency]
  Page 348, 27 n. 53 n., ==> 27 n., 53 n.,
  Page 348, X. Y Co. ==> X. Y. Co.
  Page 350, Icelandic River 153 ==> Icelandic River, 153
  Page 351, Jacque ==> Jacques
  Page 351, 66 n. 67 n., ==> 66 n., 67 n.,
  Page 353, freight, train 132 ==> freight train, 132
  Page 355, 207, 278. ==> 207, 278
  Page 356, 201 201 n. ==> 201, 201 n.
  Page 357, 54 n. 55 n. ==> 54 n., 55 n.
  Page 357, 273, n., 286 ==> 273 n., 286
  Page 357, Department of ==> Department of,
  Page 357, Minister of ==> Minister of,
  Page 360, Russel ==> Russell [Ed. for consistency]
  Page 361, 55, 56 57, ==> 55, 56, 57,
  Page 364, 276 n. 277 ==> 276 n., 277
  Page 366, of thv development ==> of the development




[End of A History of the Canadian Pacific Railway, by Harold A. Innis]
