style="font-size:15px;"> The seventy-six promoters of the London and Gore Railroad Company, chartered in 1834, were headed by Allan N. MacNab and comprised a large contingent of politicians at all levels of government. This line ultimately became the Great Western Railway, the subject of this book, and was headed by MacNab as president. Although an obscure name today, in his time MacNab was a conspicuous individual — member of Parliament for many years, speaker of that body, knighted, becoming the equivalent of prime minister in 1854, and raised to a baronetcy in 1856. His was a commanding presence to be sure. As further evidence of his importance in pre-Confederation Canada, his daughters married into British titled aristocracy.
The Great Western was not unique in this regard. The directorate of the Grand Trunk Railway was a “who’s who” of some of Canada’s most illustrious individuals. These included John Ross, member and speaker of the Legislative Council, solicitor general of Upper Canada, and stockholder in the Grand Trunk. He became the road’s president through the all-powerful influence of the English contractors controlling the stock (Peto, Brassey, Jackson, and Betts) and remained so until 1862. Francis Hincks, Grand Trunk incorporator and promoter, became inspector general (analogous to finance minister), the equivalent of prime minister, and was knighted. In fact, of the nine Canadian directors, four were cabinet ministers and eight of nine were, in truth, nominees of the all-powerful English contractors. Most of these individuals were also stockholders.
Politicians, whether or not they were also railway officials, would not hesitate to use their political clout to assist “their” railways. For example, in 1852 MacNab attempted to press legislation banning all railway competition of the Great Western in southern Ontario west of Toronto. He failed because, by that time, Grand Trunk forces had become dominant in the legislature. Francis Hincks materially assisted the Grand Trunk by shepherding successful passage of the Guarantee Act in 1849 and then, in 1851, modifying the act to limit its application to trunk lines like the Grand Trunk (see chapter 1).
Lines were granted government loans and in some cases paid off neither interest nor principal. Between November 1852 and June 1855 the Canadian government loaned the Great Western a total of £770,000 ($3.75 million U.S.). In 1868–69 Finance Minister Rose accused the Great Western of using $1.225 million in a totally illegal way — to construct a railway in the United States (i.e., the Detroit and Milwaukee Railway). He further asserted that fully $4 million was eventually used to complete the road, build other lines, and run a cross-lake steamship service from Grand Haven, Michigan, to Milwaukee, Wisconsin. In contrast to the Grand Trunk, almost all of the government loans were paid back by the Great Western.
From 1853 through 1858 the Grand Trunk benefitted from the “relief” granted it by the Canadian government as it lay “destitute,” to the tune of £3.115 million ($15.17 million U.S.), fourfold that of the Great Western. Relief was in the form of guaranteed provincial (Canada) debentures under the Guarantee Act. Despite this “cash infusion,” the financial position of the Grand Trunk worsened and the interest and principal of these loans were forgiven. And, in another half century, the Grand Trunk would again appear before the government asking for “relief”! The only difference would be the amount requested, which would be astronomical.
Even bribery was an accepted method for influencing decisions. Isaac Buchanan, wealthy Hamilton merchant and legislator, assumed control of the Woodstock and Lake Erie Railway (a component of the planned Great Western competitor known as the Great Southern Railway) by issuing a $100,000 bribe to obtain the removal of three opposing directors of the company. Mr. Buchanan then sought to gain control of the other component of the Great Southern (i.e., Amherstburg and St. Thomas Railway) by another $100,000 bribe. At this time, he also approached the Great Western and sought to force it to buy the Great Southern at an exorbitant price. Fortunately, he was caught and a select committee of the legislature investigated the incident. Although it thoroughly castigated Buchanan, other cases of corruption were not exposed in the committee’s report despite clear proof being disclosed in the evidence itself and in legislative debates.
In an era rife with bitter competition between individuals and firms for privileges, power, subsidies, and traffic, railway companies had “sturdy representatives in Parliament” (i.e., lobbyists who were politicians) who sought to cripple or destroy their opponents. If one line was felt to be unduly favoured with government loans, grants, subsidies, mail contracts, or favourable legislation, aggrieved parties sounded the battle cry. The same politics were noted at the provincial and municipal government levels. At these two levels, competing companies used every available means, whether honourable or ethical or otherwise, to deny letters of incorporation or grants-in-aid.
The two most bitter foes in the 1850s through 1870s were the Grand Trunk Railway Company of Canada and the Great Western Railway Company of Canada, as will be discussed in chapter 2.
Early organizers of Canadian railways had an astonishing record of extracting money from municipalities in the form of bylaws providing bonuses. From the town of Port Hope (population 3,000), a bonus of $740,000 was obtained. The towns of Niagara, Brockville, and Cobourg, with respective populations of only 2,500; 4,000; and 4,000, were influenced to give corresponding bonuses of $280,000; $400,000; and $500,000. The cities of Ottawa and London, each having a population of below 10,000, were coerced into providing bonuses of $200,000 and $375,000, respectively. Brantford, with a population of not more than 6,000, handed over $500,000. These are just a few examples of small and poor municipalities being corrupted or compelled to mortgage future generations to line the pockets of railway contractors and owners. Even on the smaller scale seen in Canada, the moniker of “robber baron” could readily be applied. However, the railway contractors and owners were not the sole perpetrators of these legal, though unethical, methods. All bylaws involving the granting of municipal bonuses had to be approved (“made legitimate”) by the governor-in-council as required under the Railway Loan Act. It is difficult to fathom how a responsible individual could allow municipalities to beggar themselves in the “railway lottery” process. There was even one village allowed by the governor-in-council to provide a bonus to the extent of $300 per town resident!
Samuel Zimmerman: “One Bold Operator”
Samuel Zimmerman was a true Canadian enigma. Described as “one bold operator,” his occupations included railway contractor, financier, manipulator, showman, philanthropist, and scamp (i.e., scoundrel). He lived life on a grand scale and was able to balance the cut-throat tactics of business and extravagant hospitality. As a railway contractor, he routinely subcontracted the work and never took pride in a job well done, unlike the great civil engineering firms of the period, such as Grand Trunk builders Peto, Brassey, Jackson, and Betts. There were few his equal in “railway morality” — the unsavoury ethics characterizing transportation politics of the era. Unfortunately, the Great Western Railway would interact frequently with Zimmerman, much to the detriment of the railway.
Zimmerman was involved with the Great Western Railway from early in its existence. His sale of the remaining block of his land holdings in Clifton (Niagara Falls, Canada) to a partnership that included Roswell Gardiner Benedict was to pay dividends that he could scarcely believe years later. Benedict, being the same age as Zimmerman, arrived in Canada about 1847, after employment as a civil engineer on several U.S. railways in New York and Ohio. The two met during the Welland Canal project. Benedict’s appointment as assistant to the chief engineer of the Great Western Railway resulted in Zimmerman’s firm securing lucrative contracts for building the eastern section of the road. Later, when Benedict became the chief engineer, he certified the shoddy work of Zimmerman’s firm, approved dubious claims for cost overruns, and arranged early work completion bonuses on work completed considerably late! The Benedict-Zimmerman collaboration was a synergistic one that was to have a substantial negative impact on the Great Western Railway for years to come.
The Great Western, having witnessed firsthand the Zimmerman business “technique,” tried to distance itself from further dealings with him. The company certainly tried to shy away from him. When the railway proposed the Hamilton-to-Toronto extension, the
