Details regarding this and other affiliated lines are provided in chapter 3.
The Grand Trunk had originally intended to use the Great Western as its western section. Why it abandoned this proposed mutually beneficial strategy is a complicated question.
Certainly there was little economic justification for constructing another through line west of Toronto. Negotiations for the amalgamation of the two companies failed, however, perhaps partly because of the influence of New York capital in the management of the Great Western … partly because the Grand Trunk directors had convinced themselves that they required their own independent connection with Detroit. The influence of Canadian contractors also may have been important.
— W.T. Easterbrook and H.G.J. Aitken, Canadian Economic History (Toronto: 1958).
The Great Western’s efforts to convince the government that the Grand Trunk was guilty of a breach of faith were to no avail.
Although the directors of the Great Western made many attempts to come to some sort of understanding with the directors of the Grand Trunk, the latter never showed any willingness to co-operate and adopted an aggressive attitude toward the Great Western that was maintained until amalgamation of the two lines in 1882.
By this time, it was clear that the Great Western would probably be challenged by rivals to the south. This was largely attributed to an unwise decision made by the Legislature of the Province of Canada regarding the five-foot-six-inch (or broad) gauge to be used by provincial railways. The American railways with which the Great Western would connect at both ends used a four-foot eight-and-a-half-inch (or standard) gauge (exception: Erie Railroad at the Niagara River used a gauge of six feet). It was natural that the Great Western should plan to use the same standard gauge and, indeed, all plans were drawn up with this in mind. Corning and Forbes had warned the company of the consequence of using a different gauge.
It is certain that the New York Railroad Companies, who are authorized by law to subscribe to your stock, and who at best will require urging on our part to induce them to do so, will positively refuse their aid if you cut them off from the western connection they are seeking, by adopting a different gauge.
— Letter to R.W. Harris, GWR president, dated June 26, 1851
In what proved to have a painfully negative impact on British North American railways and the Canadian economy, broad gauge was imposed upon the Province of Canada by selfish commercial interests and a provincial government duped by “glib talk.” The Great Western Railway of Canada, which had developed all of its plans with the standard gauge in mind, was forced to scrap these when it was forced against its will by the government to abandon this gauge. In addition, for a line designed as a “bridge line” for east-west continental U.S. traffic between the two dominantly standard-gauged transition points of Detroit and Niagara Falls/Buffalo, forced use of the broad gauge was a recipe for potential disaster. The slow, uneconomical break-bulk transshipments necessitated by the change in gauge proved almost fatal to the Great Western. The bitterness engendered in its allied American railways would, in a few years, take the form of transfer of their traffic and financial support to the standard gauge Canada Southern in Ontario and the standard gauge Lake Shore and Michigan Southern Railway south of Lake Erie. In any case, the use of the broad gauge and eventual conversion to standard gauge led to economic pressures which severely weakened the Great Western and probably hastened amalgamation with the Grand Trunk.
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Great Western Labour Pool
When the Great Western commenced operations in the 1850s there was no pool of experienced railway workers in Ontario. The company had to either import a labour force or create one. It did both. Managers, superintendents, and foremen were recruited from U.K. railways as were skilled tradesmen such as engineers (engine drivers), fitters, boiler-makers, and other shop crafts. Central office clerks were also recruited from the U.K. as were several of the original stationmasters.
Innovation by the Great Western in locomotive and rolling stock development was due, in large part, to the importation, from the U.K., of gifted and skilled men such as Richard Eaton, Samuel Sharp, foreman Joe Marks, and many of the mechanics. This set the stage for numerous improvements and modifications in engine building and fuel economy.
Jobs requiring commercial skills or local knowledge without technical expertise — conductors, baggagemen, and freight clerks — were more often filled locally. Less-skilled manual workers and trainees for skilled jobs were also hired locally: brakemen, yardmen, engine cleaners/wipers, car repairers, switchmen, watchmen, porters, trackmen, shop helpers, and apprentices. Although the Great Western would look more locally during the 1860s and 1870s, it would still look to U.K. railways for some of its skilled mechanics. For example, in 1873 the London Board sent out five locomotive fitters from the North Eastern Railway and recruited a new assistant mechanical superintendent, John Ortton, from the London and South Western.
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In addition to the antagonistic Grand Trunk, other problems began to surface in the late 1850s. The prosperity of the early 1850s was abruptly shattered in 1857 by a general commercial depression (panic). During the upswing in the business cycle, the Great Western had suffered from rapidly rising costs of construction and locomotives/rolling stock. In the succeeding depression, it suffered from a steady decline in freight and passenger traffic. As the depression deepened in the U.S., through-freight traffic almost ceased. The demand for North American wheat fell with the end of the Crimean War. A poor harvest, followed by an especially severe winter, further reduced traffic. The earnings of the company for the first half of four successive years illustrates the degree to which traffic declined: 1856 ($1,169,592), 1857 ($1,065,720), 1858 ($854,608), and 1859 ($725,904). Anxious shareholders, alarmed by falling prices, declining traffic, and widespread pessimism regarding investments, were pleasantly surprised by the 5.75 percent dividend paid in 1857. However, despite dramatic reductions in expenses, the dividend fell to 3.5 percent in 1858 and no dividend at all was paid in 1859. Although the depression was relatively short-lived, dividends would be very modest or non-existent during the remainder of the railway’s independent existence.
The presence of railway management on different continents was a distinct disadvantage: directors and the majority (92 percent) of shareholders in England and management and the minority (8 percent) of shareholders in Canada. Obviously, the British directors and shareholders had no idea about the climatic and economic conditions in Canada or how business was conducted between Canada and the U.S. A great deal of angst may have been avoided had they been more in touch with these issues. For instance, they knew nothing about the possibility of a light, improperly ballasted track being practically raised out of the ground by a period of severely cold weather. Nor could they understand the North American practices of liberally issuing free passes for travel or payment of royalties to agents selling tickets (including Great Western employees who sold tickets on their own railway).
Examples of Great Western passes for free travel. Unlike most Canadian roads, the Great Western was very conservative in issuing passes, due in part to the control of the British board of directors, since such passes were rare in the U.K.
Author’s collection.
Early in the railway’s existence semi-annual meetings took place in Canada with a Canadian board of directors, which sent a report to the shareholder meeting in London, U.K. However, the English shareholders were really the financial backbone of the company (owning 92 percent of shares) and finally became so restive about what they considered to be the extravagant spending of the Canadian executive that they decided to take back more control into their own
