of American influence. Macdonald’s nationalistic fervour and instinctive distrust of the American neighbour would be matched in intensity by only one subsequent Conservative prime minister, John George Diefenbaker.
Meanwhile, the other great National Policy initiative, the transcontinental railroad, was beginning to take shape. The challenge was to assemble a Canadian-led team with the ingenuity, experience, and, most important, the financial capacity to do the job. No single company was capable of assuming so huge an undertaking, so Macdonald encouraged the creation of a public–private partnership on a scale not contemplated before or since.
The second Canadian federal election that took place in 1872, when the Macdonald government was in its fifth year, included British Columbia and Manitoba. Macdonald’s justification for seeking a second term was clear: the work of building the nation, he wrote to his minister of finance, was far from complete. “Confederation is only yet in the gristle, and it will require five years more before it hardens into bone.”
But victory for Macdonald was far from certain. His Québec lieutenant, Georges Étienne Cartier, was unwell and his popularity in his Montréal East riding was substantially diminished, partly due to a powerful consortium of railroad interests opposed to Macdonald’s plans. Macdonald then sought support from the trade unions, a group he thought should be aligned with the Conservative cause. Macdonald believed in legislation to create better working conditions for workers and supported, with some humour, strengthening the role of trade unions: “I have a special interest in (unions) because I’m a working man myself. . . . If you look at the Confederation act, in the framing of which I had some hand, you will admit that I’m a pretty good joiner; and as for Cabinet making, I’ve had much experience.”
Macdonald and Cartier were in a fight for their political lives. They feared the railroad project under the Liberals would flounder and with it, their vision for Canada. Sir Hugh Allan, who represented the Canadian Pacific Railway Company, was lobbying heavily to become president of a much larger railway consortium. In the heat of negotiations, Allan offered “financial assistance” to the Conservatives. Cartier initially set the “immediate requirements” as $60,000, to be split between Macdonald, Cartier, and Hector Langevin.
The sum of $25,000 was deposited into the Merchant Bank for Macdonald’s use. None of it was used for his own election, instead being allocated to other Ontario constituencies. But it was not enough to meet Macdonald’s campaign needs. In desperation, he pressed Allan’s solicitor, John Abbott, for more. On August 26, Macdonald cabled Abbott: “I must have another $10,000.Will be the last time of calling. Do not fail me. Answer today.” Hugh Allan delivered. In the end, Macdonald accepted $45,000; Cartier and Langevin received $117,000, worth over $3 million in current value. But the donations came with strings attached, unspecified conditions that Allan and his company thought would be addressed over the course of negotiations concerning the railway. It also left Macdonald and his colleagues beholden to an unsavoury character with whom they would have substantial business dealings. It was a disaster in the making. Macdonald, however, arrogantly believed he could avoid scandal. Because the funds helped to advance the cause of Canada, he believed he was justified in accepting them.
Conservatives won the 1872 election, but just barely. The 99 Conservatives would need to rely on a few of the six independents to maintain power in the 200seat legislature. The Tories won with substantial strength in the West, and took 37 of 65 seats in Quebec. They nearly swept Nova Scotia and New Brunswick. But the Liberals, with 95 seats, emerged a much stronger opposition force than in 1867. Ontario was solidly in Liberal hands. Unusual by today’s standards, 52 of the 200 seats were won by acclamation, including 29 Conservative seats. Cartier was defeated, however, despite Allan’s timely infusion of funds. It was no secret that Cartier was unwell, but it was still a shock when he died in 1873. Distraught, Macdonald once again turned to drink for solace. Governor General Lord Dufferin wrote of Macdonald’s heartache over Cartier’s death: “It is really tragical to see so superior a man subject to such a purely physical infirmity, against which he struggles with desperate courage, until fairly prostrated and broken down.”
Not long after the election results were confirmed, rumours began to swirl that huge cash contributions from the railways had found their way into Conservative Party coffers. On April 2, 1873, Lucius Seth Huntington, the Liberal member from Shefford Québec, rose in Parliament to demand an inquiry into the granting of the charter to the Canadian Pacific Railway Company. The mandate for the inquiry was twofold: explore possible American involvement and review financial contributions to the Conservative party from Sir Hugh Allan sourced in Canada and the United States. The Conservative forces defeated the Liberal motion, but proposed in its place a five-member committee of Parliament to look into the matter. With the government holding three positions on the committee, the out come of a majority report was assured.
The press picked up the story, dubbing it the “Pacific Scandal.” On July 18, the Toronto Globe and the Montréal Herald reported the contents of Macdonald’s telegram to Abbott. Macdonald was dumbfounded: How did these telegrams find their way into the hands of the press? “It is one of those overwhelming misfortunes that they say every man must meet once in his life. At first it fairly staggered me,” he said.
In fact, the telegrams had been stolen from Abbott’s office, and sold to Montréal Liberals. The identity of the thief was not confirmed, but was believed to be a law clerk in Abbott’s office named George Norris. As much as Macdonald wanted to draw attention to the skullduggery of the theft, such attention would only have heightened interest and given rise to accusations of a conspiracy. A depressed and despairing Macdonald once again turned to the bottle and when he disappeared for a few days to collect him self, rumours again swirled, this time that he had committed suicide. Macdonald reassured his friends in telegram messages that the rumours were greatly exaggerated. “It is an infamous falsehood,” he wrote. “I never was better in my life.”
Macdonald steadfastly maintained his innocence. Raising funds from companies that conducted business with the government was nothing new. The Canadian Pacific Railway had been promised nothing in the way of government contracts, he was certain, only that Sir Hugh Allan was slotted to become company president. He told his friends not to worry too much about Allan getting rich because, “where he is going his gold coins would melt.” Macdonald did not see the brewing scandal as a matter of concern to the taxpaying public since they would not be paying Allan’s salary. And, ultimately, the government quashed whatever plans it had in the works with Canadian Pacific, including any financial links with the Americans. But to Macdonald’s horror, it turned out that American financiers had been the supporters of Allan’s scheme. The Opposition did not accept the government’s diminishment of the scandal and it refused to attend the Parliamentary committee.
Fearing the loss of a confidence vote, Macdonald secured a temporary suspension of the House of Commons from Governor General Lord Dufferin (a tactic Stephen Harper used in late 2008 to counter a coalition of opposition parties intent on taking over the government). Months later, just as Parliament was about to reconvene, Lord Dufferin wrote to Macdonald, in tone and language the prime minister had not expected: “In acting as you have, I am all convinced that you have only followed a traditional practice and that probably your political opponents have resorted with equal free dom to the same expedients, but as Minister of Justice and the official guardian and protector of the laws, your responsibilities are exceptional and your personal connection with what has passed cannot but fatally affect your position as minister.”
Unclear whether the letter was a dismissal or a warning, Macdonald was stunned by the tone. The word “fatal” leapt off the page. Macdonald met Dufferin the following day, when it was made clear that the governor general was reserving for himself the ability to intervene “. . . to prevent the conscience of Parliament and of the country from being forced by the mere brute strength of party spirit.”
The next day Macdonald met his Cabinet to discuss the controversy and consider the question of resignation. Although some of his
