History of the Canadian Pacific Railway
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The history of the Canadian Pacific Railway dates back to 1873. Together with the Canadian Confederation, the creation of the Canadian Pacific Railway was a task originally undertaken as the "National Dream" by the Conservative government of Prime Minister John A. Macdonald (1st Canadian Ministry).[1] A key component of his National Policy, Macdonald was helped by Alexander Tilloch Galt, who was the owner of the North Western Coal and Navigation Company.[2] British Columbia, a four-month sea voyage away from the East Coast, had insisted upon a land transport link to the East as a condition for joining Confederation, after initially requesting a wagon road.[3]
In 1873, John A. Macdonald and other high-ranking politicians, bribed in the Pacific Scandal, granted federal contracts to Hugh Allan's Canada Pacific Railway Company (unrelated to the current company) rather than to David Lewis Macpherson's Inter-Ocean Railway Company which was thought to have connections to the American Northern Pacific Railway Company. Because of this scandal, the Conservative Party was removed from office in 1873. The new Liberal prime minister, Alexander Mackenzie, ordered construction of segments of the railway as a public enterprise under the supervision of the Department of Public Works led by Sandford Fleming. Surveying was carried out during the first years of a number of alternative routes in this virgin territory followed by the construction of a telegraph along the lines that had been agreed upon.[4] The Thunder Bay section linking Lake Superior to Winnipeg was commenced in 1875. By 1880, around 1,000 kilometres (700 mi) was nearly complete, mainly across the troublesome Canadian Shield terrain, with trains running on only 500 kilometres (300 mi) of track.[5]
With Macdonald's return to power on 16 October 1878, a more aggressive construction policy was adopted. Macdonald confirmed that Port Moody would be the terminus of the transcontinental railway, and announced that the company would follow the Fraser and Thompson rivers between Port Moody and Kamloops. In 1879, the federal government floated bonds in London and called for tenders to construct the 206 km (128 mi) section of the railway from Yale, British Columbia, to Savona's Ferry, on Kamloops Lake. The contract was awarded to Andrew Onderdonk, whose men started work on 15 May 1880. After the completion of that section, Onderdonk received contracts to build between Yale and Port Moody, and between Savona's Ferry and Eagle Pass.[6]
On 21 October 1880, a new syndicate, unrelated to Hugh Allan's, signed a contract with the Macdonald government. Fleming was dismissed and replaced with Collingwood Schreiber as chief engineer and general manager of all government railways. They agreed to build the railway in exchange for $25 million (approximately $625 million in modern Canadian dollars) in credit from the Canadian government and a grant of 25 million acres (100,000 km2) of land. The government transferred to the new company those sections of the railway it had constructed under government ownership, on which it had already spent at least $25 million. But its estimates of the cost of the Rocky Mountain section alone was over $60 million.[7] The government also defrayed surveying costs and exempted the railway from property taxes for 20 years. The Montreal-based syndicate officially comprised five men: George Stephen, James J. Hill, Duncan McIntyre, Richard B. Angus and John Stewart Kennedy. Donald A. Smith[8] and Norman Kittson were unofficial silent partners with a significant financial interest. On 15 February 1881, legislation confirming the contract received royal assent, and the Canadian Pacific Railway Company was formally incorporated the next day.[9] Critics claimed that the government gave too large a subsidy for the proposed project but this was to incorporate uncertainties of risk and irreversibility of insurance. The large subsidy also needed to compensate the CPR for not constructing the line in the future, but rather right away even though demand would not cover operational costs.[10]
A beaver was chosen as the railway's logo in honour of Donald Smith, 1st Baron Strathcona and Mount Royal, who had risen from factor to governor of the Hudson's Bay Company over a lengthy career in the beaver fur trade. Smith was a principal financier of the CPR.[8] staking much of his personal wealth to the venture. In 1885, he drove the last spike to complete the transcontinental line.[8]