sense of alienation from eastern Canada.
After the federal government disallowed three acts intended by the Manitoba government to encourage local railway construction, a storm of indignation swept across the province. Meetings were convened everywhere to protest against the perceived outrage and to draw up plans to prevent any repetition of it.
By 1887 Manitoba had become a hotbed of disallowance agitation and railway plotting. In the resulting turmoil, George Stephen and William Van Horne became, for Winnipeggers, the two most unpopular men in Canada. Van Horne retorted that, when the citizens decided to burn them in effigy, they would need one mattress for Sir George, but two to do justice to him! Finally, in April 1888, legislation was presented to the House of Commons to do away with the monopoly clause. But Van Horne still got his revenge — in the “Battle of Fort Whyte.”
In 1888 the Northern Pacific Railroad set out to lay its Portage la Prairie line, known as the Northern Pacific and Manitoba Railway. Some fifteen miles west of Winnipeg, its tracks were poised to cross those of a CPR branch line, deep in the heart of CPR territory. The Northern Pacific and Manitoba laid its track up to the CPR branch line, installed a diamond crossing, and then continued on its way — all in the dead of night. The next day, CPR men ripped out the crossing. An infuriated Van Horne instructed his western superintendent, William Whyte, to take appropriate action. In the middle of the following night, an old CPR engine was ditched at the crossing point and some two hundred and fifty men from the CPR’s Winnipeg shops were summoned to prevent its removal. Soon swarms of Northern Pacific workers showed up and, for five days, insults were traded back and forth. They did not cease until the Manitoba government called out the militia and had three hundred special constables sworn in specifically to lay the crossing, by force if necessary. With this action, bloodshed was averted.
The issue was finally left to the Supreme Court of Canada to decide. Its ruling, delivered that December, was in favour of the Northern Pacific and Manitoba. The combatants dispersed, the track was laid, and the diamond was reinstalled. The CPR had surrendered, but Van Horne’s reckless actions constituted a public relations disaster for the railway. Whatever meagre support it had left in Manitoba quickly vanished.
By this time, however, Van Horne was president of the Canadian Pacific Railway. On April 7, 1888, he was unanimously elected to the position at a meeting of the board of directors in Montreal. George Stephen, who had resigned from the position after seven years of almost constant anxiety and struggle, deemed it right that somebody experienced in railway administration should take his place.
Before leaving for a holiday in England in September 1889, Stephen went to great pains to smooth the way for Van Horne in his dealings with the prime minister. In a letter to Macdonald, he wrote:
You may be sure of one thing, Van Horne wants nothing from the Government that he is not on every ground justified in asking. You are quite “safe” in giving him your whole confidence. I know him better, perhaps, than anyone here and I am satisfied that I make no mistake when I ask you to trust him and to dismiss from your mind all suspicion that would lead you to look upon him as a sharper bound to take advantage of the Government every time he gets the chance.
Then, after Stephen retired in England, he dispatched a steady stream of letters to his successor. Van Horne in turn used him as a sounding board and the CPR’s direct link to the British financial markets. He took care to keep Stephen abreast of CPR developments in frequent telegrams and letters. Strangely, despite their long and close association, these communications were written in a surprisingly formal style. Stephen continued to serve as a CPR director and member of the executive committee until his resignation in 1893.
After he became president of the CPR, Van Horne had the continuing support of able and hard-working colleagues. The most important of these men was the assistant general manager, Thomas G. Shaughnessy. His love of minutiae, talent for administration, and acumen for business had been abundantly demonstrated over the years, and Van Horne would continue to depend on him. In fact, he appointed Shaughnessy assistant to the president in 1889.
George Stephen (later Lord Mount Stephen). The Scottish-born financier was the first president of the Canadian Pacific Railway, in which capacity he became a good friend of Van Horne.
Courtesy of Library and Archives Canada, PA207269.
As president, Van Horne received a substantial boost in salary — from $30,000 to $50,000 per annum, retroactive to the beginning of the year. His new title did not, however, increase his responsibilities in any way. He was already in full control of company operations — and had been for years. Still, the announcement of his new appointment must have filled him with pride. After all, at the comparatively young age of forty-five, he had become the president of a railway system that comprised over five thousand miles of line, owned 14 million acres of land, and boasted assets of $189 million. Moreover, because of the connections it had forged with American lines and with China, Japan, and the Maritime provinces (through the Short Line, which, when completed, would link Montreal with the Maritimes), the CPR was indeed a global transportation system. As such, it afforded unlimited challenges for the ever-ambitious and creative Van Horne, who now occupied the leading post in the Canadian railroading world.
7
Czar of the CPR
In the eleven years that he presided at the helm of the CPR (1888–99), Van Horne strove mightily to expand the company by both construction and acquisitions. A new railway had to grow, he argued, if it was to avoid being swallowed up by a competing railway or, worse, going bankrupt. This belief was reinforced by the experience he had acquired in managing American railways during a period of great consolidation. Unfortunately, when Van Horne served as the CPR’s president, Canada was gripped by a prolonged depression for most of the time. As a result, he was forced to tone down expansion and, when the depression reached its lowest point in 1894, he had to introduce stringent economy measures.
This growth was not always straightforward and painless, however, especially for the piecemeal assembly of the Short Line, which ran from Montreal through central Maine to Saint John, New Brunswick. George Stephen had earlier flirted with the idea of making Portland, Maine, a destination for the CPR because he wanted the railway to obtain an Atlantic steamship connection — and that required a port that was ice free in the winter. The choice of Portland raised such a storm of protest in New Brunswick and Nova Scotia, however, that the idea had to be abandoned in favour of a Canadian port. The distance from Montreal to the Atlantic coast could be reduced significantly, the Maritimers pointed out, if a railway were built eastward across the central part of Maine — and so it came to be called the Short Line. To encourage the construction of such a line, Parliament approved a cash subsidy for it in 1884. As an additional inducement, Macdonald assured Stephen that the government-owned Intercolonial Railway would provide running rights over its line from Saint John to Halifax. Moreover, through traffic between Montreal and Nova Scotia / New Brunswick would be routed over the Short Line, and the Intercolonial would be operated principally as a local railway. The CPR, therefore, faced mounting pressure to take over the project. Eventually it did, though Van Horne and George Stephen always insisted that the CPR did so only with great reluctance. Even before the line was completed in June 1889, these two men had cause to regret that the CPR ever became involved in the enterprise because of the heavy financial obligations it imposed. Moreover, once the new line opened for traffic, the Intercolonial Railway, instead of cooperating with the CPR, treated it as a competitor.
These problems caused Van Horne great distress. Frustrated beyond words, he deluged Prime Minister Macdonald with letters about the troublesome railway: “This is
