Rise to Greatness

by Conrad Black

  The plans for the Canadian Pacific Railway were altered to go just north of Lake Superior, rather than farther north into the interior, and through the Rockies on a more southerly route, from what is now Calgary rather than Edmonton. Further economies and advances on the construction timetable were achieved by George Stephen’s engagement of William Cornelius Van Horne (1843–1915) as general manager of the railway, who knew all aspects of railroading (including how to operate a locomotive). He added a telegraph line, a freight delivery service, and eventually a steamship company at the terminals of the rail line to connect across the Atlantic and Pacific, and a trans-Canada chain of luxury hotels. These changes in the plan of the railroad reduced the costs and protected the anticipated Canadian markets better from the Americans’ Northern Pacific Railway, but carried the transcontinental competition directly to the Americans in a way that had not been foreseen on either side of the border. The equation was complicated by the desire of Joseph-Adolphe Chapleau’s Quebec government to sell its Quebec, Montreal, Ottawa and Occidental Railway, which the Northern Pacific was expressing an interest in buying, and by Northern Pacific’s effort to buy some small branch lines in Manitoba. Such arrangements would put the Northern Pacific Railway on a path intercepting the Canadian transcontinental line at two points, and would enable it to buy the goodwill of the government of Quebec and even of Macdonald’s Quebec federal caucus, and Macdonald moved pre-emptively to stop the threat. Tupper reported against the Northern Pacific initiative in Manitoba in November, and early in 1882 the application of the company that would bring the Northern Pacific into Manitoba, the Manitoba and Southeastern Railway, was disallowed. Macdonald was going to face off against the forces of decentralization in railways, as he had over distribution of powers when the British North America Act was being debated and hammered out.

  The provinces were instantly addicted to steam, and the most pugnacious was Ontario, led by Macdonald’s old law clerk, Oliver Mowat, now finishing the first decade of his twenty-five-year term as premier of the province. They had crossed jurisdictional swords already, with the northern boundary of Ontario, which Macdonald had referred to the Judicial Committee of the Privy Council in London, and over liquor sales, where they had competing bills. Macdonald contended that Mowat was taking on too many powers with the provincial licensing of establishments and abusing the concurrent jurisdiction over direct taxes, and the federal government was upheld as acting within its rights. But the greatest confrontation was arising as 1881 ended, over Ontario’s Rivers and Streams Bill, which was debated in the federal Parliament in the context of whether the federal government would exercise its right of disavowal of this Ontario measure as ultra vires to the province. The bill was overturned by Ottawa in 1882. Macdonald was for a strong federal government in all matters.

  The pre-electoral jockeying reached its most abrasive with Macdonald’s Representation Bill, which translated the decennial census into one extra MP for Manitoba and five for Ontario. In his usual bare-knuckled manner, Macdonald made as much of a gerrymander as he could of the new electoral map, squeezing Liberal votes into as few districts as possible.* There was a broad policy difference between the main parties: Edward Blake attacked Macdonald’s transcontinental railway and proposed a north-south rail integration with the United States and virtual free trade with that country, though his opposition to Macdonald’s tariffs had softened in the light of economic and political realities. Mowat wanted greater provincial prerogatives than had been agreed, and he threatened Macdonald’s entire idea of a Great Dominion. It was a bruising election campaign, but Macdonald won his twelfth consecutive term in Parliament, sitting for Lennox, Ontario, near Kingston. In his ninth election as party leader or co-leader, he was victorious for the seventh time, bringing in 134 MPs to 73 Liberals and 4 others. The popular vote was 53.4 per cent Conservative to 46.6 per cent Liberal. Macdonald won in Ontario, though he lost a few MPs, and carried all provinces except Manitoba. It was the clear-cut victory he had sought. Joseph-Adolphe Chapleau (1840–1898), the able premier of Quebec, was elected in a federal by-election a month later and became the leader of the French-Canadian members of the government as secretary of state of Canada. Macdonald met the 1883 parliamentary session in good spirits and continued his tussle with Mowat, who in February 1883 was narrowly re-elected in Ontario; the federal government introduced and passed the Intoxicating Liquors Bill, to establish a uniform regime for the sale of alcoholic beverages.

  Galt was an incorrigible controversialist, giving speeches around Britain commenting on domestic British affairs. When he was rebuked in the British press and again offered his resignation to Macdonald in 1883, the prime minister accepted it and appointed Tupper to replace him. On May 11, Stephen, who had been in London drumming up support for a public offering of Canadian Pacific stock and lobbying the British government on the immigration question, telegraphed Macdonald that Gladstone had finally agreed to invest a million pounds in the company Stephen proposed setting up to coordinate the immigration efforts of Canadian Pacific and the Hudson’s Bay Company. The British government’s change of heart was undoubtedly due to increasing levels of violence in Ireland, and Macdonald had some misgivings about accepting support for Stephen’s immigration company if it meant that the government of Canada would be construed as guarantying all Stephen’s railway loans and stock issues. The issue was still being considered when the Marquess of Lorne and Princess Louisa departed, successful and well-regarded, and Lorne was replaced as governor general by Lord Lansdowne, a prominent Anglo-Irish peer and landowner.

  The combination of the onset of a recession in 1883 and the breakneck pace with which Van Horne was thrusting the railroad out across the country was running Stephen out of money, and he called on Macdonald on October 24, 1883. Stephen believed he could go back to the capital markets and obtain the working capital he needed if the Canadian government would provide 3 of the 5 per cent he was paying on the railway’s stock, a guaranty for which he would pay twenty-five million dollars, fifteen million of it at once. It was an imaginative proposal that was immediately accepted, and Macdonald also determined to end the Grand Trunk Railway’s ceaseless and insidious campaign of media disparagement of Canadian Pacific in New York and London by threatening to call the federal government’s loans to that company, which he had the legal right to do.

  Stephen was not successful in raising the money he sought in New York to pay the federal government for its support, and modified his plan downward, but, as happens in corporate financial crises, the company came under great pressure, and he told Macdonald that if Canadian Pacific was not refinanced with government assistance, the government would have to take over its operations or shut it down and allow its assets to rust. Macdonald regarded Canadian Pacific as symbolically intertwined with Canada and an essential enterprise to salvage for the credibility of the country as a whole, as well as of his government and himself. He summoned Charles Tupper back from London, where, although he was the high commissioner now, he continued as minister of railways and canals. Tupper signed a comfort letter to the Bank of Montreal at the very end of 1883, and this stabilized the railway briefly, but Stephen was back in the middle of January asking for a loan of $22.5 million secured by a first mortgage on the railway and all its unencumbered assets. Here, again, suddenly, Macdonald faced a supreme crisis that challenged the viability of Canada itself. As Donald Creighton wrote,

  Blake, the Grits, the Grand Trunk ‘scribblers,’ the speculators in New York, the correspondents of Reuters and the great American press associations – the whole great watching ring of [Macdonald’s] enemies – would do everything in their power to misrepresent, belittle, and defame the plan which he would have to sponsor. Every trumpery, criticism, every local protest, every sign of provincial or regional discontent – anything and everything which could be used to injure his scheme through the very destruction of Canada’s credit – would be picked up, magnified, exaggerated, twisted out of all recognition of th
e truth.50

  Everything John A. Macdonald had worked for, hoped for, and believed in throughout his public career of forty years was now at stake, and the complexity of managing the problem was aggravated by a crisis among the native people and Métis of the North-West Territories. Their crop had failed, and they were being moved by treaty onto new reservations, in part to make way for the railway. In one sense, the collapse of the railway would alleviate the condition of the Métis, but in fact the whole Confederation project was now on the line, and Macdonald steeled himself, in his seventieth year, to address the greatest crisis of his life. In December, a large convention in Winnipeg had created the Manitoba and North-West Farmers’ Union to protest high freight rates and demand relief. The settlers were not only angry and economically strapped themselves, but also their increasing, surging numbers had irritated the always volatile condition of the Métis. Already, the discontented settlers and Métis were making the familiar reflexive noises about looking to Washington, and while Gladstone was moved to comparative amicability toward Canada as a receptacle for violent and impoverished Irish peasants, there was no reason to believe that he would do much to deter American responses to widespread annexationist noises in Western Canada, were they to arise. Macdonald would address the problems in the order of their imminence, and on February 1, 1884, Tupper rose in the House of Commons and introduced a comprehensive eleven-clause bill for the relief of the Canadian Pacific Railway.

  The ensuing debate was predictably acrimonious and protracted, and the atmosphere further confused by the government of Quebec asking for financial relief with the approval of almost all of Macdonald’s Quebec caucus, which, if it defected en bloc, would bring down the government. The fractious John Costigan, who had brought the wrath of Gladstone down on Canada with his resolution supporting Home Rule two years before, purported to resign, and rumours were rife and fanned by the media, which panicked London and New York investors, and even Canadian lenders. The Bank of Montreal declined Tupper’s request for a short bridge loan for Canadian Pacific, and Stephen wrote Macdonald on February 17 that he was seeking in New York “$300,000 which we think will keep us out of the sheriff’s hands until Tuesday or Wednesday.”51 The railway and the government, and in many respects the country, had all abruptly reached the final extremity. Macdonald talked Costigan out of resigning, personally stabilized the Québécois, who, he told Lansdowne, were “guilty of a rather ignoble plot” which he had stopped with promises of “large pecuniary aid … but this combination of the French to force the hand of the government of the day is a standing menace to Confederation.”52 So it was.

  Putting first things first, Macdonald rammed through the Canadian Pacific legislation 136 to 63. The House gave final approval on February 28, and it was approved by the Senate on March 5 and received immediate royal assent, not more than one whole day before the national and transcontinental railway would be insolvent. The financial crisis abated quickly, but the future of the railway was still cloudy, and beyond that was the question of whether Canada itself, now in an economic recession with no end in sight, could endure this sudden doubling of its commitment to this very ambitious project. Macdonald thought so, but there was no precedent for such an ambitious cobbling together of so vast a territory, and, as always, the American behemoth loomed, aggrandizing and grudging, though not so much hostile to Canadians, who had been inoffensive, as skeptical about Canada as a concept.

  On March 7, the Judicial Committee of the Privy Council found for Ontario in the Rivers and Streams Bill, thinking that lumbering was the chief industry of the country, so ignorant of the country from which the case was evoked were their lordships. The “comically disreputable controversy”53 over the sale of alcoholic beverages couldn’t go on forever. The Manitoba and North-West Farmers’ Union met again later in March and warned incoming settlers to stay away, threatening revolt and secession. Macdonald was at first not too concerned, as the premier of Manitoba, John Norquay, was a federalist. Norquay came to Ottawa, and Macdonald made some palliative concessions, but Norquay took the concessions back to Manitoba, reneged, and led a bipartisan attack on the federal government in his Legislature. Macdonald kept cool and withdrew his offer without any suggestion that anything would replace it. Finance Minister Tilley, in London in June, warned Macdonald that there was a widespread media campaign in progress to discredit Canada, and the financial markets there were not receptive to any Canadian securities, public or private sector. It was agreed to take just a small bond issue, and that at a higher rate than was expected or objectively justifiable. Macdonald, again strained physically, took his holiday near Rivière-du-Loup in late June, just before the completely unforeseen return to the Saskatchewan River country, after an absence of over ten years, of Louis Riel.

  Rumours persisted of armed revolt, but Macdonald was quite collected, as always, and told the lieutenant-governor of Manitoba that “the Fenian business has taught me that one should never disbelieve the evidence of plots or intended raids merely because they are foolish and certain to fail.”54 The substantive claim of the Métis was that they shared fully in the rights of the native people and that this had been implicitly recognized in the Manitoba Act. It was not clear whether the Métis were seeking grants of land, alternative compensation, or a second round of compensation, having, in many cases, squandered the first. They had been accorded a settlement, and their concerns were taken very seriously, but it was suspected that the ranks of the agitators were swollen with scoundrels coming back for a double dip. At least, in the early months of his return, Riel was counselling moderation and behaving cautiously. Macdonald returned from a rainy holiday not greatly refreshed or invigorated, and to be greeted with the unwelcome news that Mowat had been upheld again by the Judicial Committee of the Privy Council in the question of the northern border of Ontario and that the federal government had to yield a large part of what had been Rupert’s Land. Macdonald departed for England on October 8, taking George Stephen with him, for what proved an immensely satisfying trip. The weather was good, and Macdonald was treated with extravagant respect; Gladstone had Macdonald awarded the Grand Cross of the Bath, and he dined privately with Queen Victoria and was feted with all the flattery and pomp the British can lay on. As Germany became more powerful, even the somewhat pacifistic Gladstone began to reconsider Britain’s strategic assets, and the Canadian association was certainly one. And Macdonald himself, after nearly thirty years in frequent government in Canada, was becoming a personal institution.

  Uplifting and salubrious though London was, Macdonald’s problems pursued him. Riel had met with Bishop Grandin and Amédée-Emmanuel Forget, clerk of the North-West Territories, who went to Riel as emissaries of Macdonald and Lansdowne, and had given them his demands, which included two million acres for Métis schools and hospitals, special land grants which would be renewed in favour of newborn Métis as they came of age, and interest on the entire value of the western lands on the division of forty cents an acre, twenty-five to the Métis and fifteen to the entirely native people. Of course, this was nonsense, but Riel also hinted that he could scale back his demands if well taken care of personally. After 1875, Macdonald publicly claimed to want to bring Riel to justice in Canada, but in fact bribed him to stay away. Riel indicated that for a few thousand dollars he would de-escalate the crisis and stay away at least for a while. But Macdonald, who generally had no problem deferring issues, did nothing as demands became more shrill and violence loomed.55

  In addition, as Macdonald’s travelling companion, Stephen told him Canadian Pacific was at the end of its resources again. The government support it was receiving could keep the construction of the railroad going, but the commitments to interest on loans and dividends could not be funded much longer. Stephen and Donald Smith showed the way with a personal loan to the railway of fifty thousand pounds, and Macdonald promised that he would try to do it one more time with the Canadian Parliament, though Tupper could not desert his high commissioner post a
gain and would have to remain in London.

  Macdonald was back in Canada at the start of 1885, just in time for his seventieth birthday, which was an authentic national celebration. The United States exercised its right, at the first opportunity, to abrogate the Treaty of Washington, because of its irritation at the $5.5 million it was forced to pay Canada for access to its fisheries, but also so outgoing President Chester A. Arthur could hand an embarrassment to his successor, Grover Cleveland (the first Democratic president elected since James Buchanan seven presidents and twenty-eight years before).