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It
THE CAJ^ADIAN PACIRC RAILWAY,
An Insight into its Management and Policy.
FACTS AND FIGURES.
A S<:rlc>< of Uffer. as jmUwJ»d i„ fh. Quebec, {Dominion nf Canado)
''H'duraaij Bix^jef," MarcK 1889.
{From the Saturday Budget, Quebec, Ganada.)
THE CANADIAN PAC[FIC RAILWAY.
Letter No. I,
It is not difficult to understand the strong feeling which pervades
Canada, with regard to the proceedings lately taken by the Canadian
Pacific Railway, to prevent a line not of tlieir system cros.sing thoir
track in Manitoba. Many important principles were involved in thi.s
simple matter. No one travelling a few miles on a railway car can
fail to perceive that the track is traversed by other linos ; and a
glance at the map will show that a main line possessing the right to
prevent s ich a crossing would virtually make tiie constriictioii of other
railways impassible, whenever it was thought fit to exercise this power
of repression.
There has been much feeling, passion, and partizanship shewn on
both sides of this controversy : they must be entirely set aside in any
narrative of the event What is called for at this hour is a calm
dispassionate statement of the facts, so that the true issue involved
can be clearly understood, and the important principles which lie
beneath the outer event be plainly made known.
Hitherto for the twenty two years of Confederation the power of
granting a railway charter has been fuUv recognized to belong to the
Provincial Legislature, and has been accepted by the Dominion Par-
liament as being perfectly legal. It has been even unquestioned.
Lines of any length, extending over the boundaries of more than one
province, have obtained their charter from the House of Commons :
more as a matter of convenience than from the theory of receiving
wider and more assured privileges. 'I he Provincial charters were in
every respect as full and as valid. Had the presentations of the
Canadian Pacific in this instance been countenanced, all power of
chartering a railway would have been taken from the Provincial Legis-
lature not simply in Manitoba, but in Ontario, Quebec and the
Maritime Provinces. The Dominion Government alone Avould have
possessed .|o\ver sufficient to call into operation a Provinciiil line of
any lengtli extending from one point of the province to another, far
distant, involving crossing a main line under Dominicm control. How
would such a decision have been accepted.? With the passionate cry
of indignation whicli a sense of wrong calls forth. However, techinal
and logical such a legal conclusion might be, the country would have
been awu^kened by this usurpation of power covertly obtained ; and
an issue would have been raised to make all other political relation-
ships subordinate to it. It would doubtless have led to a reconstitution
of political parties ; so important was the principle at stake. Public
opinion certainly in Quebec. Ontario and Manitoba Avould have called
for a declaratory statute to make any such condition impossible, and
it is by no means improbable that an adverse vote would have given
the death warrant to the party in power.
Equally important is the consideration of the wound to
public morality traceable in these proceedings. The point involved
was whether a deliberately accepted oblig.ition incurred on receipt of
valuable considerations can be set aside on merely technioiil grounds;
whether a public company having parted with an important privilege
owing tu the receipt of what may be justly described as a large sum
of money, can reassert that privilege under another aspect. Whether
a solemn engagement with the country is to be faithfully kept, or
m*y be avoided through the cunning of the attorney hitting upon
another means of reasserting it, whether in short the doctrines of
honour and fair dealing and truth, are or are u')t to prevail.
The facts of the case can be simply set forth :
In the contract entered into by the Canadian Government with
the Canadian Pacific Railway on the 21st of October, 1880, among
other considerations, the monopoly wis granted so far as the
Dominion could grant it for twenty years, that no foreign line should
be constructed to the so ith-west of the main line within fifteen miles
of the forty-ninth degree of latitude. The condition is set forth in
clause. 15 of the contract. During the debate at the time the opinion
was freely expressed, that it was questionable if the Dominion could
bind the Province of Manitoba, created with full Provincial rights in
1879; in other words, if this legislation couM coerce the F rovince in
any such agreement. For whatsoever right appertained to the
wealthy Province of Ontario, equally belonged to the struggling thinly
settled Western Province. Her rights are identic il with those of her
prosperous powerful sister, and the theory that the Dominion House
of Commons " as a policy " would attempt to make special arrange-
3
menis to the injury of Ontario without the cons-^nt of tlie Province, is
too ridiculous to need refutation, wliatever the mere lawyer may
assert. ■•■'■ •- •, > ' ; • . ■. •■ .. . . , ^ . . j
(Jeneral dissatisfaction with the policy of the Canadian Pacific
Railway, led to a desire for a connection to be made from the City of
Winnipeg to the southern boundary of the Province by a line of
railway, by means of which comnrinicatiun with the Northern Pacific
Railway would be obtained ; a connection only to be formed, neces-
sarily to be developed, without the charter for the construction of this
line which passed the Provincial Legislature, had been vetoed by the
Dominion Government, it had been nevertheless determined to per-
severe in the construction of the railway, livery means was taken
by the Canadian Pacific to prevent the work being carried on. Ground
was purchased, over which the line must pass, and possession of it
was refused. Every possible impediment was thrown in the wa}'' of
its legal appropriation. The opposition was repeated wherever op-
portunity offered. Finally the difficulties being removed, the line
was placed under contract. : ' • • ; "
Public feeling threughout the country was much excited During
the applicati'^'-i to Parliament in 1885 by the Canadian Pacific for
relief, the motion was direculy made for the monopoly clause to be
rescinded. It was, however, voted down. From that date, the
policy, the wisdom, the justice of the clause in the contract of the
Canadian Pacific Railway has been contested by many out of the
Province of Manitoba ; within it, the exceptions were tiliose in its
favour. In 1888 the dispute came before the i'ominion Parliament,
not in its consitutional bearing, not as an abstract power possessed
by Parliament, but an arrangement was attained without entering
into consideration of what had been done. The necessities of the
Canadian Pacific Railway had again made its J^xecutive Committee
applicants to the Dominion Parliament for relief. , , . .•
The term Executive Committee may need some explanation, for
the mode ot directing the operations of the line dirt'er from the course
which has been hitherto generally followed in the construction of
railways. It has i een the custom for the directors of a railway to
control its fortunes, and the compound character of thi se selected to
tome extent has furnished a guarantee of the coarse which would be
followed With the Canadian Pacific, those serving ou the direction
have been merely nominal appointments. Tlie impression prevails
that they exercise neither control nor ir.'Iuence. Their names are
given, and they attend at certain meetings, but so far as the outer
world can draw its conclusions from what takes place, the whole
policy of the Canadian Pacific has been determined by tlie Executive
Committee elected Irom the directors. Hitherto it ban consisted of
Sir George Stephen, i-ir Donald Smith, Mr, Angus and Mr. Van Home.
In the first years it included Mr. McTntyre, but he early publicly
dipsevered hia connection with the company. Sir George Stephen
sent in his resignation a few months back, and published his reasons
for doing so. \Vljellier Sir Donald Smith has retired or not cannot
be positively taid. 7 he newspapers, however, announce that he is
proceediu'g to the south of France for bis henlth. Mr. Angus' name
never appears The principal actor is Mr. Van Home, a United
States citizen who went from the State of Minnesota to Canada sonio
eight years ago. He is practically the one man in power, I'or good
or for evil, he has directed the fortunes of tha Canadian Pacific. He
selected the location, abandoning that of Mr. Fleming to descend and
ascend the terrible grndes of the " temporary track " down the
Kicking Horse Pass, he carried the line accross the Selkirks, by what
Canadian Pacific writers delight to call the "Rogers Pass" although
known and discarded by Mr. Fleming from the dangerous character
of the prevalent avalanches, snow and boulder slides. It is he who
has developed the Canadian Pacific system by new and expensive
railway lin.es ^nd branches to Detroit, and at this date is constructing
a line side bv side with the Grand Trunk branch from London to
Windsor, 110 miles in length. By a bridge over the St. Lawrence at
Lachine, and with a line extending to the State of Maine and travers-
ing that JLiiate, has obtained control of a railway to connect with the
New Brunswick and Nova Scotia, proposed system under the manage-
ment of a company considered to be controlled by Sir George Stephen
and his friends independently of the Canadian Pacific lines as a com-
pany; as a theory to proceed onward to Louisburg, there to form a
new seaport. Those who know the country ask how the interest for
the bridge over the GutofCanso, which at least will cost some
$2,000,000, can be met, and they also maintain the opinion that a
bridge over the narrows of the Bras d'or is simply an impossibility so
that Louisburg cannot be reached by railway.
The merits of this policy and the present condition of the Cana-
dian Pacific is universally looked upon as the creation of Mr. Van
Home, the one man in power, the originator of the new station in
Montreal, who is solely responsible for all that takes place w'th regard
to the railway. It was Mr. Van Home who negotiated with the
Government in the commencement of 1888. Whether the necessities
of the Railway Company made it imperative for some pecuniary relief
to be obtained, or whether doubts began to be felt that the rights ot
Manitoba would find an echo in the other provinces, and if at Ottawa
law could not be found in the Statute book to relieve the Province ;
legiBlfltion would be battled for toobtain it, and the right of construct-
ing Provincial lines would be fully established, the Canadian Pacific
Eailway accepted a compromise on the Dominion Government guaran-
teeing fifteen millions of 3^ per cent land bonds in the plainest lan-
guage the Canadian Pacific Railway abandoned its monopoly in the
North-West. The position of tliat company consequent on this
arrangement was net forth by Mr. Blake in the following words in his
addi'ess to the Supreme Court on the 2l8t November last. Every
shred of this right of monopoly by the railways being voluntarily
ceded on this occasion : —
" It is notorious," remarked Mr. B'ake, "thai disputes tool; place
* * * as to the actual and implied obligations of the Gov-
ernment and of the Parlinment of Canada towards the Canadian
Pacific Ptailway Company *> * % with reference to the
Province of Manitoba. Tt is notorious that for many years that
Province had been asserting its rights under the constitution * *
* * to charter Provincial railways which should nm in the
specified direction and enter the prohibited territory of fifteen miles.
It is notorious that agitation and discontent had ensued upon the re-
peated disallowance of those acts of the Executive of Cannda, and that
the executive action of the Government of Canada had been ratified
and confirflied by the Parliament of Canada. All these disputes
culminated last session, in an arrangement which is upon the statute
book whereby the clause in question was erased from the contract
with the Canadian Pacific Failway Company for certain considerations
which the Government^ with the assent cf Parliament agreed to give
in the shape of a guarantee ; and therefore all the obligations of the
Parliament of Canada and of the Executive of Canada whether
actually expressed or implied, whether more or less extensive, weie
entirely blotted out and the Canadian Pacific Railway Company had
no longer any special or specific, or particular right to call lor inter-
venticm or inaction on the part of the Parliament of Canada by virtue
of its contract (tStrong J.,) or the Executive of Canada ?
Mr. Blake — Yes, either executive or legislative. That is all
blotted out. The Company has no legal and no moral right to come
forward and say it is to be considered in any other position than any
other individual or corporation on the face of the land with reference
to this matter any more."
Argument of Mr. Blake before the Supreme Court, p. 31.
6
LkttkrNo. ir.
By the condition of nflairs thus described, not only in the Pro-
vince of Manitoba, but throughout the Dominion among those with
whom the subject had attracted attention, it was considered that tlio
action of Parliameiit had linaliy settled the (juestion, and that the
Provincial railways would be permitted to carry out the policy de-
tennined on without further opposition.
'J he abandonment by the Canadian Pacific Eailway of its mo-
nopoly, had hi en nrraistiikable, unqualilied, and (Kjmplete, and all
that was looked for, was, that the Company would honorably fulfil its
obligationis, and accept the inevitable consequences to which their
engagements would leaii.
The contrary has proved to be the case. -
The line constructed under the authority of the Manitol»a
Govern»nent, in connection with the Northern Pacific could only be
looked upon ns the lirfct siep towards the development of a system
independent of that of the Canadian Pacific. Consequently on the
completion of the line runnirg south to the boundary, two branches
have been projected, one to run to the south of the /\fsiniboine,
crossing the river to portage la-Frairie. At this place an independent
line has been constiucted to the north west; the Manitoba and North
Western which hitherto has been a feeder to the Canadian Pacitic
Railway. But the connection of this line with the newly constructed
( branch would attain for it an outlet to the Northern Pacific, a second
branch is proposed to leave the first constructed line nearer the
bonndary and proceed to Beaconsfield, whence turning north westerly
it will run 1o Brandon 135 miles from Winnipeg. h\ addition
engineers are examining a location to prolong the line westerly from
Beaconsfield to the touris river.
It is necessary fully to explain what the cause of dispute really
is between the newly constructed lines and the Canadian Pacific
Railway. It has been lost sight of in the multitude of words used
during the contest and consequently it is only imperfectly understood.
'I he claim has been put forward by the lines, having a charter
from the Manitoba Government that thev nossess the rij>ht to con-
struct a line tween the points named, and consequently when they
meet a railw., . intersecting their line, they are at liberty to cross the
track provided they do sj safely in accordance with law. Jn the
Dominion of Canada, they are some hundreds of such crossings; on
the Continent of iSorth Americi several thousands; and with the
observance of the precautions laid down by law, there is perfect
unanimity from danger. The principle observed is that all trains
npproacliing Buch a crossing on all otcnHionf, stop for one minute. Tbu.s
the one risk, that ot collision, is avoided. 'J lie iron croesing plate ia
a simple contrivance ; the rail is left open on both lines, the opening
being protected by guard rails, so the wheels cannot leave the track,
the plate being carefully wrought to the angle formed by the junction
of the two lines.
It was to oppose the introduction of this crossing in the track of
an unimportant branch of the Canadian Pacific, the Pembena Mountain
Railway that the difficulty took place. To speak of any inconvenience
or danger, or additional expense is totally beside the question; for
the latter is borne by the latest constructed railway. On the Pem-
bena branch there are but four trains a week only. Even on the
Canadian Pacific main line, there is only one passenger train up and
down, likewise one freight train each way, the latter being often
cancelled. Consequently the argument of expediency is not permis-
sible. I'he crossing itself is a very small matter, but it has been
made to embrace an important principle nothing less, in short, than
an attempt to stay the construction of a system of railways, which the
Canadian Pacific justly recognizes to be a rivalship to its own.
When the Canadian Pacific accepted the terms on which it aban-
<loned its privileges, the managers must clearly have understood the
consequences involved in that act. They must havj known that
Manitoba was not lighting for shadows. They must have foreseen
the construction of lines similar to those they are opposing, neverthe-
less they abandoned their rights with deliberation, and any oppo-
sition on their parts to lines chartered by the Province on any
pretence whatever, is a direct violation of their acceptance of the
agreement. Who will not ask if it be not a wound to public morality,
when acompany on technical grounds endeavors to reassert privileges
for the abandonment oi which it received the highest money consider-
ation ? .; ; . ;. .,.
What were thoss technical grounds?
In the same session of 1888, in which the guarantee of the
fifteen millions of land bjnds was vote i to the Canadian Pacific
Vtailway ; by a somewhat singular coincidence the Railway /Vet was
amended, and it was according to the assumed meaning of the clause
of the act that the Canadian Pacitio Railway endeavored to reassert
their privileges of monopoly. The attempt has been to introduce a
constitutional doctrine on the subject of the simple matter of a railway
crossing, a mere arrangement by which tv."^ railways running in
different directions can proceed each on its way uninterruptedly.
By the Imperial North American Act the power of the several
Provinces are defined, and what is not precisely set forth as appertain-
8
! !
ing to the Province comes within the rule of the Dominion. Among
the ])uwers given to the former is the right of executing local works
and urdertakings with the exception of works 'd.eclared by the
Parliament of Canada to be for the general advantage of Canada." To
object to a Province constructing a railwr^-y for the reason that it
crosses another track, is to declare the railway crossing plate to be ot
such paramount importance that the line is not permissablej an
objection contradicted by our daily experience.
There has been a great deal of mystification of this simple matter
and it is surprising to us that the able civil servants in the railway
and canal department did not correctly see this point Or did they
fee it and the inlluence sustainining it, and suggest the course of
bringing it before the bupreme Court to obtain the unanimous, satis-
factory, and unqualified answer to the query submitted, which the
Court has given? i<y the Consolidated Railway Act of 1870 ten
railways were brought into the category of being •• for the general
advantage of Canada," and so were placed under Dominion Control.
Among these, the Canadian Pacific Eailway, not only the main
line, but also "branch lines or railways connecting with or crossing
them or any of them/' The meaning of the original specification of
the powers in the Imperial Act to our mind is very plain — that in the
event of a work being proposed by a Province and held to be of such
a character that it shnuld be undertaken by the Dominion, that the
work could be taken from Dominion control — and carried on by the
Central Government.
It never could have meant that a work should be declared "of
advantage to Canada," and by that means its construction should ba
stopped, the Province being prevented from undertaking it, while the
Dominion refused to take Inrther proceedings with regard to it. Ex-
tend the theories which have been propounded concerning this clause,
to the reductio ad absurd am the Dominion Parliament could declare
every Provincial railway or any Provincial w -rk of 'whatever
character to be in the category named and to make all Provincial
effort impos3ible.
The present difficulty has arisen simply from the bad English
used in the Railway Act of 1883, and as we have remarked by a
strange coincidence affirmed in. the Act of 1888 — at the time the
fifteen million guarantee was given in which we read—*' branch lines
or lailways connecting with " or crossimj them.'" The words we
italicize are simply tneaningless nonsense. A branch line has a definite
signification. It sets forth in general parlance, ali«e forming part of
the system of subsidiary lines connected with the ma^n line. The
words added are evidently meant to be explanatory of the term
branch lines, written by one who did not understand what he was
writing about. 'I he meaning evidently is, that the branch line ao
called, must be directly worked in connection with the main railway,
and that a line not connected with it could not be called a branch.
The crossing, as we have shewn, has no bearing upon the case, an'^
any attempt to .nlerfere with anindependent line, crossing one of the
ten lines uamtd in a legally approved nuinner is a wanton exercise of
tyranny at variance with railway necessities, opposed to comuion
sense, totally exceeding the powers given to the Dominion by the
IJritish North American Act, in no way warranted by any provisions
of railway oconomy, and in itself covertly striking at the Provincial
auconomy; so strongly and so generally entertained, that no publij
man would have the courage to avow opposition to it for to do so. It
the would drive him from political life. We put it to any one having
least knowledge of political life, if anyone dare present himself before
a constituency avowing contradictory opinions to those we express.
Nevertheless it is precisely in the spirit of c/i?ca«e that the
Canadian Pacific has attempted to regain the privileges which the
company ceded at the last session of *-*arliar t. Can any other
language be applied to this proceeding than tuat it is a deliberate
attempt to violate a soIcmuii engagement ?
It is not necessary to enter into the <letail of the events which
took place at Headiugly, the point at wiiich the Canadian Pacific
em[)loyes torcibly prevented the crossing plate being put in position
by the Provincial line. A large force of men were gat\*^red to resist
at all hazirdsthe attempt. A locomotive was placed at the spot
selected. At one time events looked threatening, as if there would be
bloodshed. They have little weight on the argument, more than they
show the determination of tiie Canadiaii Pacific Railway to defend its
position by physical force. Better counsels, however, ultimately
prevailed, and the dispute found its way into the courts.
We consider that in this emergency the duty of the Dominion
Government was perfectly plain. They should have in no way re-
cognizfid the Canadian Pacific Railway in the case as differently to
other railways. If the railway had offered reasonable objections to
the mode of crossing, they should have been listened to; but if the
plan proposed was satisfactory, it should have been accepted. Every
now and then the railway committee is appealed too for similar
crosaii g permissions. 'J he one duty imposed is to see that every
possible condition to insure public safety is observed, and that no
injury be doue to the property of the railway to bii crossed. We have
stated the grounds on which we consider any other consideration as
extra, judicial and un\ arrantable. We trust our proposition may be
2
10
disputed, so that tho point will be thoroughly argued out, and
defli.itely settled It must appear astounding that the Canadian
Pacific Railway should have been permitted to object under the
special provisions of the Kaihvay Act to .my crossing of its line. If
tlie objection had to bo urged, it should have been solely advanced by
the Government on Dominion reasons. 'The Canadian Pacific had no
contention of any kind soever, and yet the question has been
submitted to the ^'uprenie Court at the instance of counsel for the
Canadian Pacific Railway, a company without a shred of privilege.
Ihis conduct of the Canadian Government has caused mucxx
adverse criticism. The Week, of Toronto, of the 29th of November,
a purely literary paper in no way committed to political opinions or
party views, and certainly not unfavourable to the present adminis-
tration, thus powerfully exposes the conditioQ of public feeling on the
subject : —
"There is, however, one aspect of the controversy which possesses
an interest of its own, independently of the legal issue,. Did the
Canadian Pacific Railway Company have in view the present conten-
tion \\hen they were negotiating with the Dominion Government
for the surrender of their monopoly ? Did the Dominion Govern-
ment have that contention distinctiv in view 1 Assuming that thev
did — and the contrary assumption would not be complimentary to
their astuteness— how is the fact to be reconciled with good faith,
not only to the Manitoba Government, but to the Dominion Parlia-
ment ? Or, if we give the company the benefit of the President's
plea and admit that as their transactioti was exclusively with the
Dominion Government they were under no obligation to show their
hand to the Manitobans or to Parliament, how can Sir John xi.
Macdonald and his colleagues free themselves Irom the imputation of
want of frankness to the Manitoba commissioners on the one hand
and to Parliament on the other ? It would be absurd to d^ny that
the arrangement made with the company for the extinction of the
monopoly was made at the urgent instance of Manitoba, or that the
consent of Parliament to the guarantee of the Company's bonds was
given simply and solely in view of the necessity of redressing the
grievances and complying with the demands of that Province. In
other words the one motive of Parliament was to secure for Manitoba
the right to the tree construction of railways within its own borders.
If the Dominion Government knew or believed, as it is now tolerably
certain they must have known or believed, that both the Government
of Manitoba and the people's representatives in Parliament were being
deceived, or were deceiving themselves in the matter, and that the
consideration in return for which the iruarantee was voted would
mm
n
actually be withheld ffom Manitoba under the operation of the General
Rail\v;iy Act, was the transaction characterized by the frankness and
good faith which are to be expected from those entrusted with the
control of Canadian Legislation ? Equity is surely as worthy of being
considered in such a matter as law. We should like to iiear the
course of the Canadian Government defended on the side of equity."
The question submitted to the Supreme Court denuded of
technical verbiage was whether the statute of the Province of Mani-
toba authorized a railway to cross the Canadian Pacific Pwailway in
face of the provisions of the Dominion Railway Act.
'ihe case came before the iSupreme Court in Ottawa on the 21st,
2'2nd and 23rd November last. Mr. Blake and Mr. C. Robinhon
addressed the Court on the part of the C.madian Pacific Railway, Mr.
Mowat and Mr. Daltou McCarthy on the part of Manitob.i. The report
of the argument fortunately has been published. A perpetual memo-
rial of the contention. The counsel for Manitobi took purely the
legal view that the railways and its branches has been brought by
Parliament, which was omnipotent, within the control of the Domi-
nion, and that Manitoba could not give authority to croc, o Dominion
railway totally setting out of view that the crossing is unimportant
and without influence on the railway policy of the Government in
any way. Mr. Mowat argued that the powers of the Province to
charter railways were iully admitted, and even it ever considered
doubtful had been legalized by Parliament and that they would be
negatived if a railway could be stopped at any point of its course.
That there was no power given by the North Americaji Act to
negative any work of the character. " That it is utterly inconceivable
that there was the slightest intention on the part of the Dominion
Parliament to prevent any Province building the road " Mr. Mowat
wa8 desirous of adducing instances of the Railway Committee having
permitted Provincial Railways to cross railway lines declared to be
'• for the advantage of Canada." But the Bench would not entertain the
argument. It was remarked that if the railway knew all about it
what was the use of asking their opinion? If their former decisions
(lid not bind the railway Committee, could the Bench be expected to
respect them ? The fact of such things being done had no bearing on
the subject. It was evident that the Bench determined on first
principles to face the question in its uirect bearing and import, and
the country owes the[n a debt of gratitude that they have had, the
courage and patriotism t) do so. The decision of the Court is an
epoch in our constitutional legislature. 'Ihe judgment was given by
Chief Justice ISir William Ritchie. The Court declares itself
unanimously of the opinion that the said statute of Manitoba was and
is valid and effectual^ conferring authority upon the Railway
12
Commission in the statute of Manitoba to construct such a railway as
the Portage extension of the Red River Valley crossing the Canadian
Pacific Railway, the Railway Conimittes first approving the crossing,
etc., etc.
fcuch a decision sets fully at rest the cruestion. It is said that the
Car.^c^'an Pacific Roilway talk of taking further proceedings. We
learn that an appeal as such is not possible against the answer given.
The greatest enemy of the Canadian Pacific Railway could desire to
see them perform no greater act of fatuity. We repeat in our humble
judgment they have no lonis standi in any court with regard to the
crossing of their line by any provincial line, "i'hey have no ground
to make an application of any character whatever, legal ingenuity for
the hour may suggest. It must be the Dominion Government only
■who can take exception to any such proceedings. And there is we
repeat nothing negative in the powers of the Dominion. The only
course open in order to stop the construction of any Provincial line,
would be a parliamentary declaration that the iron plate with its
special provisions for public eafety in some special case, is for the ad-
vantage of the Dominion, so that the Provincial line can be stayed in
accordance with Dominion caprice or from some other cause. What
a memesis would follow such an act of madness !
All lovers of good Government, all who desire to live under con-
stitutional rule, all who are opposed to injustice and to the exercise
of executive partizanship, all honest thinking raei: must rejoice that
this difficulty has been created, and that its complications have been
solved by the first court in the Dominion. Those who may have
hitherto hesitated to understand the necessity of a highly constituted
bench summarily to decide such disputes, may now understand the
useful functions it can perform. It may be remarked that during the
three days the case was being tried, the court was crowded. Its
generally empty benches could scarcely accomodate those who were
present. By no one among this varied attendance could the leaning
of the court be traced. Many felt that it was not in favor of Provin-
cial rights. Mr. Mowat may be said to bear the palm in the argument.
His address was wider less technical, and more statesmanlike, and in
accordance with equity, and tthe homely Everyday doctrine, that an
engagement is binding on those who make it. He has the greater
satislaction that his argument has prevailed. Not simply for an hour,
to pass away when the seat of the struggle is furgotten. 1 he
contention must remain on record as a caufse celehre and the memorable
judgment of the court, will hereafter become inseparably entursed
with the provisions of our constitution to form an unimpeachable
commentary on Provincial powers and rights, and the limit imposed
to executive pretension.
13
Letter No. III.
The events described liave had the effect of attracting attention
to the Canadian Pacific Railway in the view of penetrating the power
and influence which the Company has endeavoured to exercise. That
pretension wa3 to rise superior to the legislation of a province : to
set a clear demarcation on its enterprise : to limit its efl'ort in tbe
development of its resources. So long as the contract with the railway
gave a monopoly of traffic, it could only be looked for that the condi-
tions would be enforced. But when by the clearest agreement, that
monopoly had been abandoned for full consideration, that it should
have been persevered in, can only hi regarded as a violation of
decency. It has been shown on what ridiculous pretension the effort
lias been made to impede a province of the Dominion, in a legally
conceived railway policy. That it should have been permitted an
hour by the Dominion Government shows a failure to understand the
true issues involved. Was there equal ignorance on the part of the
executive managers of the Canadian Pacific, in this attempt with an
attorney's smartness to enforce a principle which once asserted, it was
confidently hoped however vicious in its essence, there was ,i power
behind to_sustaln ?
One of the remarkable facts connected with the Canadian Pacific
is the ignorance in which the public have been kept, regarding the
'laracter ot the railway, its engineering features and its condition
,jid economy. In Mr. Fleming's day we had long elaborate reports.
He found betore him a wilderness of which little was known more
tfiaii mere generalities; and concerning which there was everything
to learn. For many previous years the Hudson's Bay Company had
been chary of information in order to retain in their grasp this
preserve for the fur bearing animals in connection with their monopoly
of trade with the Indians. The general belief was that it was a
valueless uninhabitable territory, where the winters reduced human
existence to the hybernation of the bear or the beaver. By degrees
this theory passed away, and in the end the masters'ip of the territory
was transferred to the"Dominion. The geography however remained
unknown. Accordingly when the proposed railway was discussed
there arose different views as to the route to be followed and with
regard to the terminus on the Pacific. It is not our object lo revise
any of these disputes and allubion to them is only made to show that
the record of them exist, in Mr. Fleming's full and lucid reports. Any
one with some hour's study can there learn all the arguments in favor
of Burrard's Inlet and Bute Inlet, the impossibility of a railway
connection over Nunez Island to Vancouver Island j also the
wsama
14
II.
1 1
unanswerable argiment in fav^oiir of tl'.e route selected by Mr. Fleming
by Yellow Head Pass. Indeed during the wliole period 01' Iuh holding
office as chief engineer, we had lull reports of what was being done,
and the public had nothing to learn.
Since his retirement we are entirely without information. No
special report, has been made by the Railway Department, or if made
it has not been published, and nothing more supijrficial than the
statements in the departmental reports can be possible No sitisfac-
tory reasons have ever been given for the change from the low pass
and the easy grades with the fieedoni from snow obtainable by the
route by the Yellow Head Pass to the extremely heavy grades at
Kicking Horse I'ass. of wliat is called "the temporary line," and the
dangers of the Selkirk range from mud and snow slides, the monument
of the dread, which remains in the series of massive snow sheds
constructed to escape these avalanches. H any one lact of British
Columbian geography was known it was the low level of the Y'ellow
Head Pass as the gate of the Province. It Avas the mode of entrance
by which the territory was approached and its interior penetrated.
Not simply from the east, but alike from the west, canoes ascended
the Kiver Columbia to the northern bend, known as the boat
encampment, and ascending the tributary stream, they found their
way to iellow Head Pass to obtain access to the Jb'raser and other
parts of the territory.
There has never been any valid reason given in accordance with
common sense and sound engineering principles, as they are understood
by laymtn, for the abandonment of this pass, and the route leading to
it. 'ihe grades throughout, were limited one in one hundred 53 leet
to the mile, with curves of a large radius none being less than about
a quarter oi a mile.
On the Kicking Horse route the grades were immediately made
more than double in elevation, being raised to IIC feet to the mile.
What the curves are limited to, has never been stated. No table of
grades and curves have ever been publisiied. The knowledge of their
character is that of an unknown land. Mr. Blake endeavored in vain
to obtain the information. H has been said that he had the sections
sent him to the Committee room. That was not the form in which
the information should have been given. A proper descriptive table
should have been made m the way such detail is set forth, so that it,
can be understood, grades and curves being clattsitied- It has been
publicly stated that throughout the whole line the curves are very
sharp, some as low as 450 and 500 feet are admitted. Through the
mountains they are confessedly of small radius, and the grades of the
temporary track are in some eases 3 feet to the 100. The report goes
15
that the curves become sharjjer as the railway ])aH!Jes west, till the
TnountaitiH are reached, and then comes tlie miniminn .of curvature
and a formidable maximum of grade.
Wealth has always had and always will have its influence and
the Canadian Pacilic from the patronage it possesses is enabled to
wield extraorcfinary power in all directions. Where does this power
not penetrate, when it is desirable it should be exerted ? The line has
become to be a dangerous question for politicians whose policy is not
to disturb matters which sleep, and. we can hope to-day to get no
more information through the House of Comn-ons than we did years
ago. 'J'he reason assigned for abandoning Mr. Fleming's line, is that
a route one hundred miles shorter has been found. It has been
however only proved to be about twenty-live or thirty miles less,
making allowances for the improvements which could have been
obtained on the first location of Air Fleming. But from the increase
of grades, and the consequent demand for increased power of traction
and expense of working, relatively speaking, the present route is
equal to a longer line tlian Mr. Fleming's location, which in this
respect had everything in its favour.
It aiay be said that this is the refurnishing of the rusty arms
with which the railway was attacked five years ago. The point of
their origin is of little consideration. If they are to ba remembered
to-day, it is owing to the aggressive attitude of the railway and the
indifference shown by its managers to all public opinion. They act
as if irresponsible- In their late difficulty they organized a mass of
men and placed them on the ground lo prevent by force the simple
introduction of the ordinary iron crossing plate in their line, as if the
whole welfare of the Company was at stake on this simple proceeding,
examples of which are to be found all over the continent within
every ten ijiiles.
The country desires a much fuller report of the condition of the
Canadian Pa.ilic Railway from Calgary to Fort William, and from
Selkirk to Kaiuloops, than at present it possesses. The portion
executed by the Government is known in all its characteri.>tics.
Indeed the company received a large sum of money to complete tUe
embankments east of ^elkirk, and the information possessed on this
subject needs little addition.
It is not the case with the Canadian Pacific proper. To obtain
the information which the public have the right to expect, it is
necessary for statements to- be made of the grades ascending and
descending, of the number and radius of ♦' curves, the iron bridges
permanently constructed, the wooden bric^is, which cannot b^ held
to be permanent, the trestle work, where introduced, the length, the
;
16
1 1
height, the for;u of constrnction, the date of constiuction, the steps
taken to bring these localities to the condition of permanency, in the
way of embankiucnt, the extent of siding in each station, what works
are required for the completion of the line, and wliat steps are being
taken to remedy the condition of the " temporary track." There ought
to be no nndiie desire to press upon any railway the full completion
of its obligations. All railways require time and expenditure to
bring them to a satisfactory working condition, and it is an injustice
to exact undue rapidity in the perfection of ihe work. But a country
which largely subsidises a railway has a right to exact that the
agreements entered into l.e fully fulfilled and to be informed truly of
the condition of the enterprizp.
In the next we will consider the right Canada has to make such
demand on general principles. It may be argued that every contract
must be f-atisf'actorily lulfilled. The Canadian Pacific Railway has
been constructed on the principle that it will compare favorably with
other lines to the Pacilio coast, a vague unsatisfactory standard the
reverse of elevated. With the advantages we possess of an assured
•route by the Yellow Head Pass 3,270 feet above tide water, that we
should have abandoned it, can only be regarded as a national misfor-
tune. With many disadvantages to contend against, the other Pacific
lines have done their best to remedy these extreme grades. The
Mullen tunnel and the Bozjman tunnel on the Northern Pacific have
been constructed to do away with the extreme grades over the
mountains, throu^jh the first summit from the Pacific and the
Yellowstone tipur. All that we can learn is now being done on the
Canadian Pacific in this direction, is the one effort, the construction
of snow sheds over the Selkirk range.
We have no official statement if any delay has occured from the
mud and snow slides on the mountains. No report has been made by
the Government, even if any has been demanded and been received
in the Railway Department. No one can blame the railway company
for not volunteering information on such a subject. The managers
command the telegraph and the whole place is under their control.
No one can remain in the neighbourhood, if opposed to their policy.
The small population is at their mercy. There is nothing to bring
any irregularity to public attention. Jf at Winnipeg there is reason
to believe that there is difficulty in passing this locality, the mail
to Victoria, can at once be transferred to the North Pacific Raihray,
and reaches its destination with some hours delay. The whole country
west of Winnipeg, is involved in the prosperity of the Canadian Pacific,
accordingly the ordinary public learns nothing of what happens in
this respect. Stories, however, reached the outer world of the railway
17
being enciimbored at thfi Selkirks, of loss of life and of delay of some
days, ill 'nstances extctiding over three weeks. The public liave a
right to know if there is truth or not in these reports. The simple
way of giving inforuuitionon the subject is to set out the delays, their
date and the length of time they lasted. There may have been no
delays. 'J hen the railway has been calumniated and no objection
niay be urged ngiinst the route over the Selkirks. It would follow
then that the fear of snow and mud slides was illusory, and that the
sheds Jconstructed were simply as a wise precaution taken in view of
public safety in all respects perfectly successful.
Public attention has been directed in a slight degree to the
subject. The line has been running nearly three years and nothing
is ever heard of anything being wrong, and it is not anticipated that
difficulty may arise in any form. There are those however, who
study e resources of the country, and do not accept the fool's
])aradise of considering that all before them is right on the railway,
on the contrary who turn +heir attention to the future and give some
examination to prospective consecjuences. It ought clearly to b^^
established, if the Selkirk range is what it has been as.serted to be, in
all respects safe and unobjecticnnble. The tomporary grade of the
Kicking Horse may be relieved in some form by an expenditure of
money, at least so it is confidently t-iatcd. But there are objections
and risks which no money can remove. The Canadian Pacific owe it
to themselves as well as the public, clearly to establish the character
if this is or not the case in the Selkirks, and to set speculation on
the subject beyond a doubt. •. .
The contract of the Canadian Pacific Railway is to complete the
work of the railway and thereafter forever efficiently maintain work
and run the railway.
There has been no indication that the company desire to depart
from these conditions. But is there anything to prevent them giving
.the line over to the Govefninent under circumstances which may
occur? Can any one picture the consequences in such a case? What
then would be the obligations of the Ooriiinion, its duties, its respon-
sibilities, in accepting the ofler ?
These are very serious questions to be temperately asked. It
cannot be denied that our knowledge of the condition of the railway
is of a superficial character. From the time ot the contract being
passed on the 21st October, 18fc0, the information given to the public
has been slight. We do know what consideration the company
received. We do know that the company changed the location troul
the Yellow Head Pass. We know the line was opened in July, 1886,
nearly five years in advance of the time agreed, on 1st May, 1891,
18
Wc have receivod accounts of the receipts of expenditure in the
reports to shareholders and bondholders.
The stake of Canada in the Pacific Rail way is great ; the situation
of tlie lii^e of paratuoiint iinpoitance to the Jioniinion, In the next
section, 1 will proceed to examine th-e extent of this interest and what
the policy of the railway has beea in other respects, for althoufrh
bearing the ranie of the Canadiati Pacific Railway, it hiis extended its
interests and connections to such an extent as to put out of view the
purposes for which it was incorporated,
Letter No. IV.
1 1
i I
I !
It is pertinent to examine into the relations between the Cana-
dian Pacific Railway and the Dominion, in order that the relative
obligations between them may be understood and examined. The
contract was signed the 21st Octobei, 1880. Setting aside the detail
of the agreement, the Company is bound to construct a railway
from Callander station nefir the east end of Lake Nipissing along the
north shore of Lake Superior to the constructed line at Lake Superior,
and from Selkirk to Kamloops : the ciiaracter of the railway and the
materials used in its construction, with the equipment ot the railway
to ha regulated by the Union Pacific Railway *'when first constructed."
No more extraordinary words were ever introduced into a contrt.ct
for nothing more vague can be imagined. At what date, and in what
condition was the Union Pacific Railwiy accepted as satisfactory ?
The clause places the. country to a great extent at the mercy of the
contractors. Any excessive grades and objectionable curves, any
abnormal expedient, any vicious principle wiiich has crept into the
construction of the United States railway named, by these words,
become justified, accepted and unchangeable on Canadian soil. If
railway construction had been in the infancy of the art, then some
excuse might be found for the acceptance of vague and general
obligations. At the present day there is neither ground nor excuse
for any such departure from the wise policy exacted by sense and
called for by experience. There should have been a specification
attached to the contract clearly setting forth all the requirements
which prudence should lay down in railway construction. It was an
arrangement on which no mystery should have been permitted, the
character of the road, the width of its cuts and embank'tnents, the
limits of its curvature and grades, the form of tie and the weight of
rail, the nature of its bridging and culverts, the conditions under
19
in the
t^ituation
tlie next
:ind Avluit
althoufrh
LMided its
view tlio
he Cana-
relative
I The
he detail
.1 railway
ilong the
Superior,
' and the
? railway
tructed.""
. contrt.ct
. in what
^factory ?
.y of the
which trcstling wouhl bo permitted, and the step^ to be taken to
make them nndiitibly Hiil'e ; all tlieao rec[niyiteH shouhl have
ht'cn uniniHtakeably .specified. 'J'ho record of tliis contract must
(!ver remain a disirredit not to those who dratted the agreement in
the interest of the coiiipany, for the cunning of these few words is
dimply unfathomabhi, hut to those who represented the Dominion in
ihe transaction and nppeared in tlie House of Commons to defend the
agreement and effect its consummation. Of the majority in tlie
House vif Commons sustaining the Government, fuw could understand
tlie technicality involved in the latitude permitted. On that subject
they trusted to the txecutivo. The specious argument that the
matter miuht safely be left to a company who were assuming obliga-
^tions for ever, had weight to bear down all opposition. Nearly nine
years have passed since the acceptance of the conditions. Looking
iiI)on the event as a matter of history, the Dxtent to which tlie
Dominion has placed itself in the power of the company is apparent,
by the clause that whatsoever can be proved to have been admitted
on.the Union Pacific, however objectionable, however discordant with
true principles of construction is representative of what the Canadian
Pacific is held to i)erform.
No argument in favour of the Dominion can be advanced that
subsequent improvements have been introduced to sustain an objection
to what is inexpedient. However necessary and indispensable such
changes in themselves may have been, it cannot be argued that they
are required on the Canadian Ptailway. The answer to the Dominion
by the directors is plain, they have complied with their contract,
they distinctly accepted the condition of the Union Pacific at a certain
(late, as that by which they should be regulated." Is the demand of
the Dominion ii excess of that requirement ? If it be so, and its
execution be desirable the directors will demand payment for carrying
out the views of the Government.
Is the Dominion no entirely at the mercy of the Canadian Pacific
in this respect? 'J'he que.'^tion is worthy of examination. On one
poin. the Dominion are not responsible : The change of route. The
executive managers of the railway abandoned the northern route of
Mr. Fletning, selected by the Government, established to be feasible,
with every advantage of grade and curvature. On their OAvn impulse
and in accordance with their own policy, they entirely changed ihe
location. It follows then all the responsibility attributable to this
proceeding falls upon the Canadian Pacific Railway. J f they be called
upun for instance immediately to amend what is called the " temporary
grade " down the Kicking Horse pass, and should it be held to be
necessary to place the railway beyond the influences of the mud and
20
i I
\\
enow nlides, which are paid to be threatened on the location ncrosa tl\o
Selkirk range, the country surely cannot bo relerrod to tlie Union
Pacific in justification ol'thifi condition, on the plea that at the dute
mentioned there were grades fully equal to those the company have
introduced and that on that line there is the sair.o danger from nnow.
Tije managers cannot tell us that they have fulfilled their contract
with the CO jntry, and that if it be determined that the objections
specified are to be removed they must demand [)ayment lor the cjst.
The reply to any such pretence is plain and unanswerable,
country Ibund the contractors for the railway a lino on which nont ...
these objections presented themselves. On that line they based their
contract with the railway managers. On the vague clause which
Parliament accepted the company by its own desire and it is a matter
of history, without proper previous investigation, made this change.
On the company only the responsibility of the measure rests. Tho
change of location, throws on the ccntiactors all rcf-ponsibility for
any deterioration of work incident to the physical geography of the
country jiassed through by the new location. The Dominion accept
no responsibility on this point Indeed it distinctly repudiates it.
If the country exacts the removal of these extreme gritdes, it must be
at the cost of the company. If public safety demands that the lino
over the irelkirks be departed from, it is not the Dominion of Canada
which can be called uj on to meet the expenses, for the country was
purely passive as to location being made there. Moreover the repre-
sentation on which the change of line was permitted has not come to
pass. It was represented that the railway would be shortened one
hundred miles, whereas the saving of length is little more than a
quarter of that distance and relative to the lirst line selected owing
to increased curvature and grades, it is longer in t'le view of the
railway power exacted its traction and the time taken to make thj
journey.
The obligations incurred by the Government will be best shown
by what has been paid.
A bonus in casli of $25,000,000
Lands granted, 25,000,000 acres. Of tliis (ixtent of territory
10,065.70:; acres have been sold, fetcliiiig •. 18,614,693
14,934,237 remain unsold, value per acre S2 29,868,474
§48,483,107
Government fines given over to the Canadian Pacific, viz., from Lake
Superior to Selkirk, and from Kamloop.s to Fort Moody, set
forth in Government balance sheet, 1887 30,760,785
8110,243,952
21
Thus the tlio company has $7.j, 48;i,107 as a bonus towards the
the coniplotion (>!' tho nuiuber oi' miles it has conMtructod, viz., I'roni
Callondar to Fort William, G5G ; IVotn Selkirk to Kanilo )ps, l,'i77.
Total, 1,93;) miles, at the rate of $38,015 per mile.
The oporationH ot the Governuient furnish an examiile of cost,
which we niiiy profitably consider. It is as follows: '1 hu poitions of
line completed by Government are— From Lake Superior to Selkirk,
108 miles ; from Kamloops to Fort Moody, 215. Total, G2.'>.
Thislieavy work may compare with anything which the company
had to .nidcrtake, including all charges, all niiscellaneous matter, all
the contint^encies alfecting work and chargeable to it on all (ccasions,
a considerable item, and especioUy on the part of a Government.
The cost was ^oO, 700,785, a trille under $G9,U00 per mile, including
-ome imperfect equipment.
Those figures- may be profitably applied to the Canadian Pacitic .
Railway.
The work may .be divided into three classes : Erom Callondar
by Lake Nippissing, popssing north of Lake Huron and north of Lake
("superior, to K'^'^t William, 05(1 miles; from Selkirk towards Calgarry,
.-;iy 800 miles ;, inence to Kamloops, 477. Tota^, 1,033.
In one of i^is communications to the Government, Sir George
cjtephens stated that 1,131 miles of railway had been- constructed at
a cost of $23,078,020, the average cost per mil . being $20,400,
conseiiuentlv of the Dominion bonus there remained to be expended ,
on the remiuning 8u2 miles $40,405,238, being $50,380 per mile.
With these figures the liberality of the grant of the Dominion
may be estimated.
The directors of the company issued shares to the amount of
$05,000,000, on which during construction five per cent interest was
to be paid.
In tlio balance slicet of 1885 the cost of the road is set out at... S107.2i~l,4C8.87
I'.qiiipment 9,344,207.41 ' '
Oiiistniction, plant, tools and outfit , • 130,812.38
heal estate : 415,581.64
Total $117,141,100.30
Dtidiicted Governmuiit bonus 73,483,167.00
rhf balance » $43,657,993.00
remains to represent the cost of the railway and equipment to the
company as the additional money expended, represented by the
56 5,000,000 shares.
I'^^U
22,
The cost per mile average of the whole line has been about $55,778
The equipment nearly 4,859
$G0,G37
being in access of the cost of the work of the Government at the
terminal point of the Pacific coast, and across the rough and broken
country west of the Lake of the woods. At both places the work was
exceedingly hoavy and at the time more expensive from its difficulty
of acfoss, a disadvantage not experienced to the name formidable
extent during the operations of the company, For the work in their
case could be approached from both ends.
'J he figures given by the Canadian Pacific show the important
fact that the country iias constructed the greater part of the cost of
the line.
Expended Ijv the Government of Canada at the westevn terminal
points..' $36,700,785
Total expenditure of Canadian Pacific Kaihvay as set forth in balance
sheet 31st December, 1885.. 117,141,100
Total cost of construction and C(|uipment of line 8153, 'JOl, 945
Bonus in money and land jiaid l»y tlie Dominion (Tovcrnmcnt 110,242, 952
Total disbursements of the Canadian Pacific Eailway » $43,657,993
Consequently the (jovernmont of Canada has borne five-sevenths
of the total cost (110-151) the company two-sevenths (44-154) the
fee simple of the railway remaining in the hands of the company.
No mention is made here of the loans and the other money
assistance given by the Government to the company.
Having stated the actual cost of the Railway $55,778 per mile, on
the whole length constructed by the company, I revert to the report of
Mr. Van Home, Kith fc'epteraber, lb84, and that of a Mr. Peid, of
Illinois, dtited Oth September. 'I he one published in the Montreal
Herald, the 27th September, 18S4. The letter of Mr. Van Home
vouches lor the accuracy of Mr. Reid's statements.
Mr. Reid's estimate for the heaviest portion of the work is as
follows : —
West Kamloops Lake to Griffin Lake 138 miles, average cost $21,265.. $2,975,970
From summit of gold range to summit of rocky range 150 miles,
average cost ^33,000 4,950,000
$7,925,970
Being an average of estiraited cost lor the distance of 288 miles
of$27,.':.2U
'J here is one point in connection with construction which has
puzzled railway managers. H there be a subject vrhich has commanded
23
attention without difference of opinion, it is tliat of mainteninco, and
there is a common accord with reji^ard to the principle of carrying it out.
'I here is no dispute in this matter as in that of freifrhts, no antagonism
as to prospective possible advantage, no struggle for supremacy over
a given distiict. There is a common desire to reduce expenses, to
bring this necessary outlay within the narrowest limits and to practice
the most severe economy. It is, evident that the Canadian Pacific
have discovered a new method of carrying on this duty.
Their public accounts show in the last three years the cost to
have been per mile, 3885, $240; 1886, $293; 1887, $401. The
indispensable expenditure established by the operations of other
companies ranges from $8>]0 to $1200. Taking fourteen of the piincipal
lines on this continent, during the last three years the largest annual
expenditure has been that of the Boston and Providenca in 1885,
^p250 per mile j the lowest the Chicago, Milwaukee and iSt. Paul are
$520 per mile. The Union Pacific averages about $853. The Grand
Trunk about $850. The Illinois Central $671. This is the lowest
oust per mile reporfed. As a rule it i? al^^ove ratlier than below $1000
a mile in instances reaching $Lo(JO a mile.
With such returns as the Canadian Pacific Railway shew in this
respect, the managers must have been the envy of the whole railway
interests of the C3ntinent.' It may be inferred that they will be able
to realize a handsome douceur by communicating the princi[)!e on
which they effect the saving, of course assuming that their answer
will be satisfactory.
We have to-day only dwelt on tne relations with the Canadian
Pacific proper, with the country. The additional lines engrafted on
the company are in no way involved in the original contract, and
cannot properly be brought int) relation with it. 1 v/ill attempt in
the next paper tlie examination into these obligations, their character,
extent and cost, the outlay they have exacted, and the responsibilities
tl 7 entail. My purpose in this paper has been to show the relation
of tlie Canadian Pacific Railway proper to the Dominion, in the sense
of the reciprocal obligations which have arisen, and under what
circumstances they have been contriicted. As has been set forth the
contract was to construct the line from Callend ir to Port Moody, less
the parts undertaken by the Government viz ,023 miles west of Lake
Superior and east of Port Moody, leaving the company to execute
J 933 miles, for which the subsidy in cash and lands of $73,483,167
has been paid. This was the one contract which alone has to be
considered by the Government in any negotiations wit i the Canadian
Pacific Kailway, a fact jealously to bi borne in view, never to be
departed from.
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Letter No. V.
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"We have now to turn to the several additional connections of
"which the Canadian Pacific Railway has obtained control or has
constructed since ils charter was granted, so as to bring its system
within a few miles short ot 5,000 miles.
Tiifcse lines and branches are as follows :
Miles.
The Canada Central Hallway extending from Brockville to Callendar 243
Quebec & St. Martin's Junction and Jiranclies 208
Montreal to Ottawa cl- ]5ranclie.s 133
Ottawa to Carleton .Junction 28
Montreal to Toronto 347
The Credit Valley system
'Foronto, Grey & Bruce system 192
St. Lawrence Bridge & St. John's Atlantic ct North Western llailway system
Prescott to Ottawa 53
Algoma Branch to St. Mary
Manitoba & South Western Kailway
Tt would be of fid van tare if it were possible to consider the trullic
returns of the Canadian Pacific Railway apart from the other connec-
tions so that its true character coi be known and estimated, as is
the case of that of the InteicoloniK ailway. From the circumstance
that the company regard the line to the Pacific only as a part of their
system, and the results of their operations are given as a whole, the
precise inlluence of the Pacific Railway on the commerce of the
country can only be imperfectly known.
We have before us the annual reports of the company, which
throw such liglit on its position as we may obtain.
]t has been said that the Canadian Pacific railway stock consists
of shares amounting to ^05,000,000, on which the sum of three per
cent , annual interest, is allowed. This dividend has never been paid
out of revenue : $1,950,000. ]n the circular of the 29th December.
1883, the President, Sir George Stephen, estimated that an additional
two per cent, would be paid during construction, bringing the rate of
percentage to five per ctnt. There is nothing ia the accounts to show
how much has baen so paid. bo lar as the reports are a guide to us
the dividend is a charge upon capital: if the 5 per cent, be paid
annually of $3,250,000.
The returns of the Canadian Pacific for the years 1886 and 1887
arc as fcJlows :
1S80— KarningH, $10,081,803.59— Expenses, $6,378,317.05 -Net
revenue, j|3, 703,480.54— Fixed charges, $3,068,041.84.
1887— Farnings, $11,606,412.80— Expenses, $8,102,294.64- Net
revenue, $5,504,118.16— Fixed charges, $3,250,263.81.
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These returns give a net profit •
188G S635,444 70
1887 253,854 55
It is proper in view ot the public interest and the rehition of the
Government to the llailvvay to analyse these fixed charges :—
Capital Liabilities. . Amount. lutercst.
First Movtgago I'.onds, Canadian Pacific Railway $35,000,000 81.750,000
(Janada Central Itailway... l,82o,3;33 109,500
I'rovince of Quebec, Quebec, IMontreal, Ottawa &
Occidental liailway ; 3,500,000 175,000
Algoma Brancli 3,650,000 182,500
$43,973,333 82,217,000
Leased Lines —
Ontario & Quebec Ttaihvay Debentures 9,890,000 494,50C
ordinary stock 2,000,000 120,000
1 .'ebentures issued on —
•Smith's Falls and Montreal Short Line, Western Ontario ,.',.■
racific Line, St. Lawrence Bridge 5,304,667 265,233
Atlantic and JVorth-Westeni Railivaii —
St. Lavrence Bridge to St. John's, 1st mortgage......./... 430,000 21,500
St. John's to Faruham, 1st mortgage , 288,900 14,445-
Manitoba South- Western liailway 2,544,000 . 127,'20O
-North Sliore Kailway, Quebec to Montreal Junction 3,936,053 196,802
St. Lawrence and Ottawa Kailway 973,333 38,933
Tinnnto, Grey and Bruce Kental 140,000
interest on $15,000,000, 3} i)er cent Bonds guaranteed iJominion
Covernmeutin 1888, on security of lands... 525,000
>"y Total $4,100,613
Query —
As to interest on Bonds yet to be issued on account of Expensive
Montreal Entrance, say $100,000.
Also —
Interest on Expenditure on the Short Line to Lower provinces,
in excess of Government guarantee of interest, say : $150,0UC.
Towards the and of last year, an article appeared in the
"Buliionist" of London which attracted great attention in money
circles. It set forth ten months of the year's traffic of 1888, was
known, and estimating the wiiole year's return on this basis, the total
amount for the year was get down at $11,600,412. The working
expenses similarly 'ilculated, gave the amount as $7,925,000. The
fixed charges were returned at $3,680,138.
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On this basis the estimated surplus was twelve hundred and
seventy-four dollars ($1274), when we come to, estimated figures of
this extent, giving such a small result, it is by no means certain that
the surplus may not be a deficiency.
Nothing has been said in the above statement of the guaranteed
interest on the 65,000,000 of capital shares. It is a well known fact
that the sum of §15,942,645 was deposited by the Company with the
Canadian Government as the fund for the payment of interest, for
ten years from August, 1883. Such shares are described in the oflicial
list ot the Stock Exchange, London, as guaranteed by the Dominion
Government to 1893. From that date no guarantee is extended.
1 here is accordingly no ground for applying to the shares the character
of a guarantee more than this limited recognition. Is it likely that
it will be renewed ? We do not believe any Government could bring
such a proposal before Parliament.
Last year the Canadian Pacific again appealed to the Government
for help. In the fact of the figures we have given of the munificent
aid granted by the Dominion, it may be well nsk-ed under what
circumstances such an application could have been mule.
If the emergency had been one affecting the Canadian Pacific
Line, there might have been some recognition to the call for syrfl^thy
and help. The figures given in these papers shew that the Dominion
has actually paid live-sevenths of the r/hole cost of the construction of
the Pacific line proper. There are many who consider that the Dominion
subsidy was sufficient to build the entire Railway, and certainly not
without apparent reason. The published accounts o^'the company, set
forth the total disbursements ^o have been under $44,000,000 against
$65,000,000 of nominal stock, and $3o,000,000 of bonds. It was not
then from any embarrassment in connection with the Pacific Railway
that aid was asked. Nevertheless the assistance was given in the
form of a guarantee of $15,000,000, 3|- per cent land grant bondi^.
This consideration was however only obtained by the removal of the
restrictions contained in clause 15, of their original contract, by
which the monopoly of traffic to the west of Red River was sacrificed ;
a concession which admitted the construction of lines, in connection
with other systems, by which the traffic ot the territory will be more
or less obtained.
It was in the face of this clear, well considered and thoroughly
understood agreement that the Company endeavoured to oppose the
introduction of an ordinary crosf*ing plate, in its South Western branch,
so as to prevent the construction of the Northern Pacific branch to
Brandon, endeavouring to twist and pervert the clause of a badly
written railway act to its own profit. Had it succeeded in the. attempt,
27
the legislation of the last session of Parliament would have been of
no accQunt. Although receiving consideration to abandon its monopoly,
the Company Avould have been able to retain it by a contemptible
technicality, and it was not from want of effort that the attempt
failed. ' - ^.'..i-'i-'" :.' -<:,.• ;:/ ^'y^<: v:^/-^^-: -/-n v;.,. ■
For what purpose was this fifteen millions required ? Not for any
work in connection with the Pacific Railway, from Winnipeg to
liritish Columbia. Large disbursements are undoubtedly required to
coiuplete much which is defective in the existing line. All such
requirements however, at least for the time are laid aside. The whole
energy of the Company is given in endeavouring to complete its
system to Chicago • running a line side by side, with the Grand
Trunk from London to Windsor, in order to be able to reach Detroit,
on a branch of its system, a distance of 110 miles. There is a propo-
sition to run a line from Toronto to Niagara, 83 miles, and paragraphs
have appeared within the last few days, in the newspapers that the
Pacific Company has determined to bridge that river as it has done
the Saint-Lawrence at Lichine That it appears the " construction
account " is never to be closed, always to be .available and open, as
such accounts are. '
What claim can this policy make with the Canadian Government ?
What is there at stake that Parliament should intervene ? Why
should the country come to the rescue again of a company which his
lavished its resources in lines having no connection with the scheme
for which the company received its charter, was created and was
.subsidized. Not one scheme o" the Company but has been subjected
to unfavourable criticism. Not one has supplied a national want.
'I'lie railway from Toronto to Smith's Falls, from within six miles of
llie latter town to within a short distance from Peterborough for up-
wards of a hundred miles, passes through a rough broken country,
dreary with rock and stunted timber, the land unfit for settlement.
When the railway approached Toronto it could enter neither by the
east nor west except by the favour of other lines: The consequence
wais the acquisition of the Toronto, Grey and Bruce system, but that
has been found insufficient and hence the necessity is suggested of
carrying on important works to enter Toronto by the Don River.
Another consequence of the project, is to carry the Toronto Esplanade
an additional width into the Bay to admit of the Canadian Pacfic
obtaining a right of way, the expense to be divided in proportions
between the railway and the Corporation. All this efiort, this labour,
this expense is explained in the one fact, of the necessity of obtaining
a direct connection with Chicago. As has been remarked it is
difficult to see with what end in view this policy is perserved in more
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than to reduce the already low price of freight, to what extent a
connection with Chicago can be appealed to ns incident to and as a
necessary part of the subsidized Canadian Pacific Railway to tho
Pacific in tho interest of the Pominion is certiiinly a hiud matter
satisfactorily to explain. Ihere lias been likewise the cll'oit to obtain
a connection with tau t Paul with the bridge over the Fault Saint
Mary — the line through Canada was constructed at the expense of tho
Canadian Pacific, and to make its position in this respect unassailable,
it had to obtain a controlling interest in the line through thoJJnited
States at a great expenditure.
We take no account of the lines to the Esist through the State of
Maine to Saint John and to connect with lines proposed to run to
Louisburg and Sydney, in Cape Breton. They have hitluu'to b^en
kept distinct in name from the Canadian Pacific, although the interest
which controls them is said to be the same that of the Canadian
Pacific. ,
The stock of the Canadian Pacific has four years guaranteed
interest of three per cent. The value of such a security is aljout
eleven and a halt per cent of the shares it represents, so far as the
interest alone is concex'ned. The shares otherwise have to stand
upon their merit, ' ,
The history of this enterprize suggests that with prudence and
skill it might have been in tho hands of able, conscientious men.
Few schemes have been started with more favourable auspices, few
promised more assured success. The true policy of the managers of
the Canadian Pacific was to have limited its operations to the work
before them, and to have identified its existence with Railway
performing the service required in the localities ol' their construction
and not to have embarked in a dangerous, reckless, imperfectly
considered policy of aggression. By means of the Canada tenUMl the
Pacific Railway obtained a connection with the Saint Lawrence, with
the Grand Trunk and tho main arteries of the country. It was con-
nected at Ottawa with the Quebec line. These were its assured and
certain feeders of the trade of which it possessed the monopoly. The
Company had only to wait for other connection to come to it, as was
certain to be the case at Callendar from Toronto, and all other
enterprize truly in relation with itself, it had the |3ower of control-
ling. 'J'here is however, a potency in the magic words " capital
account " difficult to resist. Who can penetrate their intricacies ?
Who can fathom the turns and twists, the side issues, the indirect
gains and all the " potentiability of wealth " involved in their
working, give time only to such operations and the mystery connected
with them becomes unfathomable. Those who have watched the
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operations of the Canadian Pacific can eaf^ily perceive that ilie opening
ot' another capital account means another issue of bonds and obligations.
But to all things an end must come. Money cannot be found ior ever
and the settlement day, not un frequently arrives sooner than it is
looked for. It is often precipitated when least expected. Some slight
event awakens public attention, which in its character may promise
no remarkabla consequence. There is an old proverb, great events
spring from small causes, and who can say were the nttem|it of the
Canadian Pacific to prevent by force, the introduction of the crossing
plate at Headingly to stay the construction of the branc'i of the
Northern Pacific and Manitoba, with the Manitoba and North Western
' at Brandon may not lead. No prophesies can penetrate the future.
■ f h
LETTER NO. VI.
A claim has been advanced on the part of the Canadian Pacific
Railway Company to which it is necessary to refer ; and the subject
requires delicacy and judgment in Us consideration. I allude to the
objections raised on the part of the Company against the condition
and character of the Western Sections executed by the Government
and given over to the Company : A protest involving either a money
demand for the expenses inevitably to be entailed on working and.
maintaining the line; or the claim that the shortcomings set forth are
to be remedied. The precise tium involved has not been stated, but
it is said to reach a very high figure; an opinion warranted by the
great expenses already incurred, in the prosecution of the claim. The
matter has been referred to arbitration, and for yome monthi,
examinations have been made by engineers on one side to prove the
allegations advanced by the Canadian Pacific Railway , on the other
to sustain the cause of the Department of Railways. Any attempt to
influence the decision of the arbitrators would be indecent in the
extreme. The case at this date is not open to criticism : indeed the
evidence given has not been published, so the merits of the claim can
in no way be discussed. In every dispute at law, there are, however,
certain preliminary considerations, which are public property and it
cmnot be held to be an interference with the course of justice, if an
attempt be made to examine into the grounds on which the claim has
been preferred. Consequently in the common interest of all concerned,
1 propose impartially to examine into the nature of the dispute and
the principles which it involves.
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It is to be hoped that a careful record ot the proceedings will be
kept ; it is certain that whatever the decision, it will be closely
scanned and weighed.
As no official documents have been laid before Parliament, we are
without precJHo information as to the nature of the Company's demand.
We are able only to deal with generalities; even in this form there
is sufficient to awaken strong public attention. In accordance with
the contract the Department ot Railvvayr constructed the heavy work
of the most western 215 miles, from Savouna to Port Moody. 1 he
contract was carried out bv Messrs. Onderdonk & Co. ; on the com-
*' 1
pletion of the work, it was finally accepted, and the railway transferred
to the Company as complete fulfilment of the Government obligation.
The managers of the Canadian Pacilio, so far as their claim can be
understood, contend that such is far from being the case, that the line
given over to them is inferior in character to what they have aright
to expect. When the documents are published, we shall clearly
know on what ground the pretension has been advanced. We may
then look for the specification in each inatouce of the deterioration
of the work represented as apparent and it is to be presumed, in
order for the claim to be considered, each item in dispute will set
forth the amount of money necessary to repair the imperfection in
itself specially detailed.
The first serious of contracts under which the works wero
executed are set forth in Mr. Fleming's report dated 8th April, 1S80,
p. p. 318, o24. The first of these contracts was given out on the 16th
December, 1879, the last on the 15th of March, 1880. They embraced
127 miles from Emory Bay Tale to JSavouna Ferry. When the matter
came before Parliament on the 15th April, 1880, Mr. Blake moved as
an amendment to bir Charles Tupper's motion, to go into Committee
of supply that the work should not be proceeded with. Sir Charles
Tupper stated that the amount of the contract was $9,107,000, of this
amount, one million of dollars was for contingencies, but he considered
that the amount might be reduced by limiting the curvature and
increasing the grades, and during the Debate, the proposal was
generally accepted that the work should not be to expensively
constructed, as at first designed, economy being desirable. The
character of the railway was consequently established, at this date,
before there was any proposition for a transfer of the Eailvvay to a
Company : a clearly defined policy on the part of the Government
widely published. The Debate was continued until the 20th of April,
when the amendment was negatived by 131 to 49.
The contract for the continuation of the line 86| miles from Yale
to Port Moody, was given out the 15th February, 1882.
31
The first notice of the policy of the Government, to asaign the
construction of the Pacific Railway to a Company, in preference to
authorizing the Railway Department to give out the work by contract,
took place at a political Pic-nic on the 29th of June at Bath, in
Ontario, when Sir Jolm Macdonald, the first Minister, stated that
negotiations were being carried on at Ottawa with Capitalists to
arrange the terms by wiiich the Railway would be completed
The meeting of Parliament took place on the 9th of December,
1880. Ar*or the speech from the throne had been answered the first
Minister laid on the table a message from the Governor General,
including the contract entered into with a Syndicate for the con-
btiuction of the line. The contract was dated 21st October, 18b0. It
did not however receive the assent of Parliament until the 15th of
February, 1881.
The ultimalte transfer of the sections of railway then under
contract is set forth in section 8 in these words, " 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."
Thus prior to the determination of the Government to transfer to
a company the construction of the railway, the sections named had
been placed under contract, and the work was in progress.
The presentation of this claim involves the charge that the
sections, constructed by the Government, are inferior in many respects
to the character of the railway the Company had the right to expect,
atid that the Department of Railways has executed the work at a
lower standard than the debates in Parliament, and the engagements
of the Minister suggested. Tliere does not appear to have been any
positive agreement on the subject. Doubtless the Department has
exacted a specification of the deficiencies complained of A vague
general tone of depreciation is valueless. In a dispute at law, each
Item of special damage must be proved, sustained by fiict, and
t^stablished by evidence, a deficiency cannot be imaginary. It must be
positive, palpable and perceptibly. Any injury either of aggression
or neglect, or through inferiority of execution of a contract, admits of
clear specification so it can be made known, and be understood, and if
established, the value of the remedy may be applied. The wrong
must be clearly made known.
How is the fact of such wrong to be established ? We conceive
without injustice this query may be asked. It appears to us that
the standard must be sought in the contract between the Government
and the Company. The words used there may be profitibly repeated j
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were tlipy are taken from section throe, *' in order to establish an
approximate standard whereby the quality and character of the railway
and the materials used in the construction thereof, and the equipment
thereof, may be regulated .the Union, Pad/ic llaihnoy of the IJnital
Sioic.'i as fJic Sit me ivas wJien firnl constructed w hcrchjj selected and fixed
as such standard.
Have we or have we not in these words the standard by which
the Government work ought to be judged ? Is it to be said that in
these last 215 miles, appeal is to be made to lines of the character of
the New York Central, the Grand Trunk or .«onie Kfiilway in an old
Sitthnl part of the Continent, while for the 2oU miles of the
remainder of the line, from Callendar to Savouna, the work fvpcuted
by the Company is to be in accordance with the Union Pacific
Railway, when first constructed. In short may not an appeal be
made to the condition of the Canadian Pacific Railway itself, through-
out its extent as representative of the work which the Company has
the right to exact on the sections executed by the Government? It
is plain that wherever sought for this standard isindispensible to the
correct determination of what the condition of the section under
discussion should be. The work can only be judged by some known
and established example. It is not possible to avoid the enquiry
according lo what principle its character must be considered, from
what i^ource these principles are deduced, and by what argument
they may obtain recognition.
There ought to be and can be no desire to wrong the ('anadian
Pacific in any respect. The subsidy given to the railway luis been
gencious in the extreme. It may be said to be unprecedented in
amount. During the progress of construction every concession has
been made and every assistance given to the Company. The country,
however, has the right on its side to exact that the agreement into
which it has entered be not interpreted, so as to include obligations,
unsustainvd by clearly expressed conditions, and that the whole
circumstances, under which the engagement has been made, be takeu
into full account with the facts, the evidence, and the evident purpose
of the contract : and that there be no strained rights claimed, on
abstract general principles, A further remark may be mide on this
point. Whatever that decision may be arrived at, it should not be
placed ' n a money equivalent. No money should be permitted to be
paid to the Canadian Pacific, and no compromise listened to, involving
a cash settlement. If the complaint that the work accepted be of an
inferior ch.iracter, is decided in favour of the Company, the Depart-
ment should be held to make good what has been pronounced to be
defective. It is not a question of injury or damage committed. The
: in
88
pretention is that the work is not equal to the standard agreed on.
If the decision be that the factw justify the Haoifio Rnilway looking'
for a higher ehiss of roadway, the work must be brought to the
aduiitted standard. If it be held expedient that the new work should
be executed by ih« company, money only should be paid on the
Engineer's estimates as the work proceeds. No sum of money sliould
be transferred to tlie coffers (if the railway f*>r future disljursenients ;
the payments made should be directly applied to bring the permanent
way to the condition in whicti it has been declared the Government
was bound to surrender it t • the Compa?iy
No event in connection with the history of the Pacific Railway
has been looked up(Mi with more general interest than the prosecution
of this claim we have avoided passing the slighest opinion regarding
it and have con lined our narratives to facts and dates. 'he decision
once known, then the contention is public property, and with fairness
the whole matter may be subjected to criticism, as any other public
event We have t'elt, however, ourselves justified in laying down
two important principles : one, that it is indispeiisible, previous t >
the investigation of the facts, and perfectly independent of them, to
establish the standard of the chiracter of the work which the country
undertook to perform. Secondly when the report has been m uie il,
should be distinctly understood, that if "n favour of the company, no
payment of money should be made as an indemnity but that a sum
being named to repair the deficiency, that Uie Department of railways,
either by the Pacific Railway Company or otherwise shonld take
st"ps to make good what is wanting, and the money be only paid in
accordance as the work is executed.
If the Pacific Company has the imperfections of which it com-
plains fully remedied, it will receive full justice, 'tiis rectificttion
may be little or much ; but be the award what it may it must alone
be governed by this principle. .»As any such money has to be voted
by Parliament, care must be taken, that it be distinctly set forth in
the estimates, how this expenditure is to be made, so thit payment of
it be made in accordance with the vote given.
For the time, we have completed our examination on this
subject. It is to be hoped that public attention may be directed to
what appears in these papers, so that the situation of the Canadian
Pacific, its duties to the Government, its obligations to the Dominion
may obtain full attention. Likewise the position in which the
Dominion stands towards the Company. It is plain that no further
claims for assistance can be fairly made on the country, on the ground
of the original contract into which the Ci)mpany entered. The
Company has continued its operations in directions which place its
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financial position out of all connection with the Government. The
branch from Sudbarv Tiinntion to connect with the railway to 8t.
^'aul, has relitionnhip only to ninety-five miles of the Canadian
Pacific, and ace )rdiri;i;ly can neither be called a branch nor a feeder
to it. On the contrary it is a distinct route to St. Paul, without
Dominion control, and can in no waj' bo legitimately included in the
system of the miin line to the Pacific, west of Sudbury. The
Montreal and Toronto Railway, the '•"redit Valley system, the con-
nection with Chicago, the two lines now being constructed from
London to Windhor, and from Toronto to Niagara, each of them side
by side with the Grand Trunk ; with the prospect cf a new Bridge
at Niagara. None of these extension subjects to come before Parlia-
ment, with a demand tor aid No one can look on this reckless
construction without pain and misgiving, as injuriously affecting the
real resources of the country The Canadian Parliament cannot be
called to countenance them, by additional subsidies or extraordinary
Legislative loans. What capital account is required for their
furtherance must come from other quarters if their projects are to be
persevered in.
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