Macdonald's White Elephant: the Canadian Pacific Railway to British Columbia

Although the conditions under which the Canadian Pacific railway is to be built are not definitely known, the general statement that an international syndicate, composed of capitalists of London, Paris, and New York, has entered upon the work has not been denied, and there is also good authority for the assertion that the Dominion Government has agreed to hand over to the company $25,000,000 in bonds, that portion of the trans-continental railway that has already been built, and to make to it very large grants of public land in alternate sections. If this is all that the building company is to receive, it must be admitted that Sir John Macdonald, the Canadian Premier, who has been for some months past in England endeavoring to arrange for the completion of the road, has made a very successful bargain. Under its agreement the company will be called upon to construct more than 2,500 miles of road, the greater part of it above the fiftieth parallel of latitude. This, upon the American continent, is a task of no slight magnitude.

Within the past year or two a great deal has been said about the fertility of the valleys of the Saskatchewan and the Athabasca Rivers, and while it may be true that these tracts of land are destined to be colonized by farmers, it is also beyond dispute that the severity of the climate in the Winter season will be a barrier in the way of the coming of the ordinary immigrant. It is not to be believed that while vacant lands are obtainable elsewhere immigrants will move to take up farms in a country where, for eight months out of the twelve, out-of-door life has few, if any, attractions. For this reason the company may find it difficult to realize much of a revenue in the immediate future by the disposal of its land, and may also have to wait for some time before its local and through trade brings in to it a reasonable working return.

Indeed, the great trouble with the Canadian Pacific Railway is its political character. In order to give stability to the Dominion and induce British Columbia to become a part of the confederation, the promise of building the road was made, and in the terms of the union it was announced that it would be completed in 1883; and while British Columbia is willing to waive the condition of time, her handful of people - for the Province has only about 80,000 inhabitants - insist that the railroad shall be built. The fate of the Dominion may be said to hang upon this issue, for if one Province goes out it is highly probable that one or two of the others will take advantage of the confusion to clear themselves from their share in the growing indebtedness of the confederation. It is, therefore, essential that the road should be built, and when Sir John Macdonald went to England it was given out that his first purpose would be to induce the British Government to aid Canada to the extent of $100,000,000 in this work of railroad building. Indeed, a well-informed writer, a member of the House of Commons, in the current number of the Contemporary Review has gone so far as to hint that if England does not supply the desired $100,000,000 the Canadians are likely to obtain this amount from the Government of the United States, on the condition that the Dominion join a Customs union with this country by which, for all purposes of trade, the two countries would be as one.

But the Canadian Premier seems to have prevented the carrying out of any scheme like this, by turning the railroad over to a private company. All that Canada will now be called upon to do will be to make an outright payment of $25,000,000, for it is not understood that this money is to be in the nature of a loan. The Dominion debt, which bears with great severity upon the people, is now about $160,000,000, and though the addition proposed might seem to us a small amount, it will add very greatly to the financial difficulties with which Canada is struggling. However, rather than allow the Dominion to go to pieces, or borrow under onerous conditions the money needed from our Government - an operation which we fancy would be much more difficult than some alarmed Englishmen suppose - it is prudent to run the risk of increasing the debt.

The road once built, the conditions of the union will be complied with. That it will be of material service to the country or the company for years to come we can hardly believe. If it came to an end on this side of the Rocky Mountains, 500 miles west of Winnipeg, it would fulfill all of the possible requirements of trade. In carrying it to the Pacific Ocean, 600 miles or more of road has to be built through a difficult, mountainous country. The natural resources of British Columbia have not thus far proved very attractive to settlers, and there is no reason to suppose that there will be a rush of immigrants in that direction when the railroad has opened the country.

Equally unpromising is the outlook for the railroad to obtain a large share in the trans-continental and Anglo-Chinese trade, for the terminal facilities and greater local trade of the Southern, and rival routes of travel would enable them to offer more favorable rates for through business. The Canadian Pacific Railway is essentially a political enterprise, and Premier Sir John Macdonald has certainly shown rare business ability in transferring his white elephant upon such favorable terms.

Position at Railway Completion ... or Significance to the CPR:

Sir John A. Macdonald, Prime Minister of Canada, 1873 Pacific Scandal veteran
Sir Donald Smith, Director & original (*off the contract) Syndicate member, 1873 Pacific Scandal veteran
... but on the *wrong side !
W.C. Van Horne, Vice-President and General Manager
R.B. Angus, Vice President & original Syndicate member
J.J.C. Abbott, First CPR Counsel, Conservative MP for Argenteuil, 1873 Pacific Scandal veteran
Charles Drinkwater, First CPR Secretary-Treasurer
Sir George Stephen, First CPR President & original Syndicate member, Donald Smith's cousin

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An American Editorial on the Canadian Pacific Railway