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Biography of Lord Strathcona and Mount Royal
Chapter XII. A Large Order

By the terms on which British Uolurubia was induced to enter the Dominion of Canada, it was stipulated that the Government should secure immediately "the commencement of the construction of a railway from the Pacific towards the Rocky Mountains, and from such point as may be selected cast of the Rocky Mountains towards the Pacific, to connect the seaboard of British Columbia with the railway system of Canada, and further o secure the completion of such railway within ten years from the date of union."

It was a large order, and by this agreement the Government of Canada was committed to the task- of constructing this railway. It was an easy timing to make an agreement, but the carrying of it out was a different and most difficult matter. It was felt that, though there were American capitalists who were willing to put money into the project, yet the road should be built by Canadians. If it was to be "Canada's National Highway," there must be no risk of it being controlled by the people to the south. As a result Canadian capitalists became interested. Sir Hugh Allan represented one company. the 'Canadian Pacific Railway Company," and Senator D. L. McPherson, the "Inter-Oceanic." The Government was to subscribe $30,000,000 and give a land grant of alternate blocks, twenty miles deep, along the line. The attempt to unite these two companies failed, and a new company was formed under the leadership of Sir Hugh Allan. This company received the charter. It was at this juncture that the "Pacific Scandal" charges were made, resulting, as we have said, in the overthrow of the Government and the retarding for an indefinite time the enterprise.

It was a severe blow to the Province of Manitoba. As yet it had no connection by rail, either to the South, or North and West. Mr. Smith now came to the front and proved himself in another capacity. He entered the world of finance and displayed remarkable ability. He cast his vote against Sir John, after making a powerful speech which closed with this pregnant sentence, "For the honor of the country, no Government should exist that has a shadow of suspicion resting upon it, and for that reason I cannot give it my support." Such a sentiment reveals the spirit of the man and what his ideal of Government was.

The people living south of the 49th parallel were not oblivious to the advent of great changes in the Canadian North-West, and they were anxious to construct a railway that would run parallel to the border and do the carrying trade for the communities soon to grow up in the northern country. It was realized, too, that an immense overland trade from Asia would he developed and that the road first on the ground would have a great advantage in securing that trade. Moreover, if an American road were established and the rich products of the prairies east of the Rockies and the Gold Country on the Fraser, Thompson and Kootenay Rivers, west of the mountain, had found in it a channel for transportation, it would make more difficult the building of a Canadian road. Once the trade routes were established, it would be difficult to divert the traffic. There was also a political inducement. It meant, according to the outspoken declaration of the U. S. Senate Committee on Pacific Railways, that the British Possessions west of the 91st meridian would become practically Americanized, separated from the Dominion in interests and sympathy, and annexation would follow in due course and an a natural consequence.

Attempts had been made to construct railways in Northern and Western States, but with little success. Charters had been given and lands granted. One of the roads was to extend from St. Paul to the head of the Red River and was known first as the Minnesota and Pacific Railway Company, and, afterwards, as the St. Paul and Pacific Company. This road had, after many years and against many obstacles been built 217 miles north from St. Paul. There it ceased. The Civil War had caused delay, hard times had a great deal to do with it. A wave of bankruptcy swept over the country, so that, with 56 miles of grading to be done and 241 miles of rails to be laid, the work stopped and the road became bankrupt.

It is an ill wind that blows nobody good." The failure of this railroad was an opportunity for Mr. Smith. He was bent on having railway connection with Winnipeg. He believed that if this abandoned road were completed to the border, the Dominion Government would build from there to Winnipeg. It was a great undertaking and would require vast capital, and it seemed a hopeless scheme. But the man who had lived a life of hardship and difficulty in the wilderness was not easily daunted. He secured the co-operation of three men—Mr. Kittson, manager of the steamship company which did business on the Red River; James J. Hill, and a relative, Mr. Geo. Stephen, who became later Lord Mount Stephen. These men undertook to buy out the bondholders, who were mainly burghers of Amsterdam. Negotiations were begun. They involved the purchase of more than $20,000,000 worth of bonds. The purchase was made, partly in cash and partly in shares of the company. In 1870 the new railway company was incorporated, the St. Paul, Minneapolis & Manitoba Railway Company, with Mr. Stephen as President; Mr. Hill, General Manager, and Mr. Smith, Principal Director, and the new company at once went to work. They issued bonds to the amount of $8,000,000, which they floated in the New York market. In time the road was completed and Manitoba for the first time had a railway connection. It has been said that "these four men, by their splendid audacity and courage in raising the project from the ditch into which it had been abandoned by its former promoters, furnished a lesson in finance to the United States and to the world, that generations of Canadians may point to with pride. The history of the achievement reads like a modern fairy tale; it is certainly worthy of being classed as a romance of railroading."

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