Chapter IV

The Canadian Beginnings

From the beginning in Canada, to a much greater degree than in Great Britain or in the United States, the railway was designed to serve through traffic. But it was regarded at first as only a very minor link in the chain. River and canal were still considered the great highways of through traffic. Only where there were gaps to be bridged between the more important waterways was the railway at first thought profitable. In the phrase of one of the most distinguished of Canadian engineers, Thomas C. Keefer, the early roads were portage roads.

In 1832, two years after the completion of the Liverpool and Manchester Railway, a charter was granted by the legislature of Lower Canada to the Company of the Proprietors of the Champlain and St Lawrence Railroad, for a line from Laprairie on the St Lawrence to St Johns, sixteen miles distant on the Richelieu river, just above the rapids. From St Johns transportation to New York was easily effected, though the Richelieu to Lake Champlain and thence to the Hudson. This portage road promised to shorten materially the journey from Montreal to New York.

Construction was begun in 1835, and the road opened for traffic in July 1836. The rails were of wood, with thin flat bars of iron spiked on. These were apt to curl up on the slightest provocation, whence came their popular name of 'snake-rails.' At first horse power was used, but in 1837 the proprietors imported an engine and an engineer from England. Some premonition of trouble made the management decide to make the trial run by moonlight. In spite of all the efforts of engineer and officials, the Kitten would not budge an inch. Finally an engineer, borrowed from the Baltimore and Ohio Railroad, reported that all that was needed was 'more wood and water,' and given these the Kitten gambolled along at twenty miles an hour.

The Champlain and St Lawrence was at first operated only in the summer, when its services as a portage route were most needed. After a decade of moderately successful working, it was decided, significantly, to lengthen the rail and shorten the water section of the route. By 1852 the rails had been extended northward to St Lambert, opposite Montreal, and southward to Rouse's Point, on Lake Champlain. Twenty years later this pioneer road, after a period of leasing, was completely absorbed by the Grand Trunk Railway.

For ten years the sixteen-mile Champlain and St Lawrence was the sole steam railway in British North America, while by 1846 the United Kingdom had built over twenty-eight hundred miles, and the United States nearly five thousand. Political unrest, commercial depression, absorption of public funds in canals, hindered development in Canada. Many projects were formed and charters secured—for roads in the western peninsula of Upper Canada, between Cobourg and Rice Lake, on the Upper Ottawa, in the Eastern Townships, and elsewhere—but they all came to nothing. It was not until the railway mania broke out in England in the middle forties—when 'King' Hudson, first of the great promoters and speculators, turned all to gold; when ninety schemes were floated in a single week, calling for eighty million pounds; when companies capitalized at over seven hundred millions scrambled for charters and all England fought for their shares—that Canadian promoters found interest awakened and capitalists keen to listen. At the same time, the active competition of United States roads for the western traffic and the approaching completion of the St Lawrence canal system prompted further steps. A second stage in Canadian railway building had begun.

First may be noted three small lines, which were in their beginnings chiefly portage roads of the most limited type. The Montreal and Lachine, begun in 1846 and completed in 1847, was the second complete road built. Its track of eight miles took the place of the earlier stage route round the Lachine rapids. Five years later an extension, the Lake St Louis and Province Line, was built from Caughnawaga, on the opposite shore of the St Lawrence, to the boundary and beyond to Mooer's Junction, where it made connection with American roads, and thus offered a route from Montreal to New York rivalling the older Champlain and St Lawrence route. A steam ferry, which could carry a locomotive and three loaded cars, was used for crossing from Lachine to Caughnawaga. The enlarged line, known as the Montreal and New York Railroad, did not prosper, and was eventually absorbed by its rival, the Champlain and St Lawrence. The third completed road, the St Lawrence and Industry Village, was also built in Lower Canada, running from Lanoraie on the north bank of the St Lawrence twelve miles to the village of Industry, later Joliette. It was opened for traffic in 1850, and was a road for use in summer only. Meanwhile, the desirability of building a road to circumvent Niagara had not escaped attention. In 1835 the Erie and Ontario Railroad was chartered, and in 1839 the line was opened from Queenston to Chippawa. The grades near Queenston were too steep for the locomotives of the day, and the road was operated by horses; even so, it halted a hundred feet above the level of the river, and failed to make good its promise as an effective portage route. In 1852 the charter was amended, and two years later the road was rebuilt from Chippawa to Niagara-on-the-Lake, and operated by steam. It was later extended to Fort Erie and absorbed by the Canada Southern.

More ambitious schemes were under way—the planning of the St Lawrence and Atlantic in Canada East, and of the Great Western and later the Northern in Canada West. These roads were all designed to secure for Canadian routes and Canadian ports a share of the through traffic of the West. They were all links in longer chains; the time of independent through roads had not yet come. The St Lawrence and Atlantic was built to secure the supremacy of the upper St Lawrence route by giving Montreal a winter outlet at Portland. The Northern, running from Lake Ontario at Toronto to Georgian Bay at Collingwood, was a magnified portage road, shortening by hundreds of miles the distance between Chicago and the upper lakes to the St Lawrence ports. The Great Western, connecting Buffalo and Detroit, was the central link in the shortest route between New York and Chicago. Not only were these roads important in themselves, but the experience acquired in the endeavour to finance and construct them largely determined the policy of the great era of railway construction which began with the chartering of the Grand Trunk.

The St Lawrence and Atlantic was the Canadian half of the first international railway ever built. At the outset much more than half of the enterprise and activity was centred in the United States, for the Canadas were still apprentices in railway promotion and construction. The ambition of an American seaport prompted the planning of the line, the untiring energy of an American promoter made it possible, and American contractors built the greater part.

The little city of Portland possessed the most northerly harbour on the Atlantic coast of the United States. Mr John A Poor, whose lifetime was devoted to the extension of railways in northern New England, dreamed of making it, by a road to Montreal, the outlet of the trade of the West, at least so far as freight traffic went. Passengers and mails, he conceived, could best be carried to Europe from Halifax, nearly six hundred miles nearer than New York to Liverpool, but the railway connecting Halifax with the large American cities should pass through Portland, and thus make it an important divisional point, if not a terminus. His enthusiasm fired his fellow-citizens: the city subscribed for stock in the proposed road to Montreal, and guaranteed bonds, while private subscriptions mounted still higher, at least on paper. More difficulty was experienced in inducing allies of Montreal to undertake the Canadian half of the road. Before 1845, however, Montreal business men were convinced that a railway to Portland or Boston offered them the best means of recovering from the blow inflicted by the repeal of the British preference on Canadian wheat and flour. If Montreal could not be the New York of Canada, it might at least occupy the position which Buffalo was now achieving, gathering all the trade of the interior to forward it in summer and especially in winter over the new road. The advantage of such a line in the development of the Eastern Townships was also evident.

The only question in dispute in Canada was as to the relative merits of the Boston and the Portland route. The superior energy of the Portland promoters weighed down the scale in favour of their city. In February 1845 Poor struggled five days through a north-east blizzard, and reached Montreal just in time to turn the vote of the Board of Trade against Boston. He organized a spectacular race of express sleighs to disprove the claim that, though the British packet called at Portland before going on to Boston, the route by Boston would prove speedier. Relays of teams were provided all along the rival roads from Boston and from Portland, five to fifteen miles apart; evergreen bushes were set up in the snow to mark the road, part of the Montreal mail was taken off at Portland, and part at Boston, and dispatched by the rival couriers. The Portland relay covered the distance, nearly three hundred miles, in twenty hours, and dashed into Montreal, with all colours flying, twelve hours ahead of the Boston contingent. The cheers that greeted the victors marked the definite turn of popular favour toward the Portland route. Two allied companies were incorporated—the Atlantic and St Lawrence to build the United States section of the railway, and the St Lawrence and Atlantic to build from Montreal to the border.

The St Lawrence and Atlantic was a valuable medium of experience, if not of traffic. In its management were found the leading business men of Montreal, such as Moffat, M'Gill, Molson, Stayner, and Torrance. At first all was fair. Subscriptions came in freely from Montreal and the Eastern Townships. One of the youngest of the directors, Alexander T. Galt, then commissioner of the British-American Land Company, succeeded in floating a large quantity of stock in England—the first of countless railway appeals to the London market—only to have the subscriptions withdrawn in 1846 when the Hudson bubble burst. The Canadian stockholders put up what money they could. The city of Montreal took £125,000 stock. The British-American Land Company and the Montreal Seminary each lent £25,000. Country subscribers were permitted to make payments in pork or eggs for the use of the construction gang, though one director resigned because not allowed to turn in his farm. The contractors, Black, Wood, and Company, as was customary in the United States at the time, took a large portion of their payment in stock. Still, funds were lacking. Internal difficulties developed; directors did not direct; and in 1849 the finances were found to be in a hopelessly tangled state. Galt then took charge as president, with John Young—forwarder and born promoter, active in all transportation schemes, whether for canal, railway, or bridge—as vice-president. Under their skilful financing the work went on, but scarcely forty miles could be opened in 1849. To complete the road to the border, in the depression which prevailed, seemed utterly beyond the unaided resources of private capitalists, and the directors turned to the government for aid.

Meanwhile, Upper Canada lagged in action, although schemes were many. Omitting merely local projects, the roads most in the public eye were those leading west and north from Lake Ontario. The Great Western project had been longest under way, and showed a significant evolution. In 1834 the legislature of Upper Canada had granted a charter to the London and Gore Railroad Company. This road was designed to carry the products of the rich western peninsula to the bordering lakes, and chiefly to Lake Ontario. The main line was to run in the direction of Governor Simcoe's great highway, Dundas Street, from Burlington Bay to London, while power was taken to extend the road to Lake Huron and the navigable waters of the Thames. Nothing was done under this charter. When it was renewed by an Act of 1845, the name was changed to the Great Western, and, more important, the route was altered to extend from the Niagara river via Hamilton to Windsor and Sarnia. For meanwhile the New York Central had reached Buffalo, and the Michigan Central was being pushed westward from Detroit through Chicago. A road through Canada would provide a shorter link than one south of Lake Erie, and the Great Western was designed to fill this gap.

With all the possibilities of through and local traffic, and of comparatively good grades and few curves, the road was long in starting. An eminent American engineer, Charles B. Stuart, reported glowingly on the prospects. Two citizens of Hamilton, Allan MacNab, fiery politician and calculating lobbyist, and Isaac Buchanan, untiring advocate of railways, protection, and paper money, threw themselves into the campaign. Samuel Zimmermann, the best known contractor of the period, a Pennsylvanian who had come to Canada to take a Welland Canal contract, and stayed to be the power behind the scenes in the provincial legislature, was prepared to build the road. Hudson gave the scheme his approval. All to no immediate purpose. The contracts were let, ground was broken at London in 1843, but the money to build was not forthcoming. In consequence the Great Western also turned to parliament for aid.

The Toronto, Simcoe and Huron Union Railroad Company—later known as the Northern—the first road in Upper Canada on which steam locomotives were used, was still slower in emerging from the promotion stage. The idea of building a great portage road between Lake Huron and Lake Ontario was an obvious one, and proposals for its construction were frequent. It was not until the scheme was taken up by Frederick Chase Capreol, a sanguine and ingenious Englishman many years resident in Toronto, that any real progress was made. Capreol conceived the brilliant idea of combining the lure of a lottery and the increment of land values to finance a road from Toronto to Georgian Bay. His proposal was to raise funds by a lottery for the purchase of 100,000 acres of land along the route of the railroad, and to pay for the road out of the increase in the value of the land. Objections moral and financial were urged, and Capreol modified his scheme. In 1849 an Act was passed granting a charter and permitting the raising of money either by subscription or by lottery, but it was reserved by the governor-general for royal assent, on account of the lottery clause. Capreol, nothing daunted, sailed for England, and in seven weeks was back with royal assent assured. The lottery, for all its alluring promises, fell flat. Then the Northern, too, clamoured for public aid.

With these local roads under way or actively promoted, still larger projects loomed up. A line from Montreal to Toronto, paralleling the St Lawrence, and thus for the first time competing with water transport instead of merely supplementing it, began to be talked of as possible. The need of bringing the Maritime Provinces into closer touch with the Canadas lent support to plans of a road from Halifax to Quebec. But for these extensive schemes public aid was even more indispensable.

Hitherto the government of British North America had framed no definite or continuous railway policy. There had been general agreement that railway building should be left to private enterprise. In 1832, when the charter of the Champlain and St Lawrence was under discussion in the legislature of Lower Canada, some members advocated government ownership, but Papineau, the French-Canadian leader, protested against the jobbery that would follow. In the forties the government of Canada was selling its highways to toll-companies, and was not likely to embark on railway construction. In several later charters provision was made for state purchase, after a term of years, at cost plus twenty or twenty-five per cent. Control of private companies in the interest of the shipper was sometimes sought. In the charter of the Champlain and St Lawrence a maximum rate was prescribed at 3d. a mile for passengers and 9¾d. a mile per ton of freight, subject to reduction when profits exceeded twelve per cent. In Upper Canada the earlier charters set no maximum, though the governor in council was given power to approve rates. It appeared to be held that different forwarding companies would make use of the iron way, and afford sufficient competition to protect shippers and passengers against extortion. New Brunswick in 1836 revealed the not modest expectations of profit which prevailed. It provided, in the St Andrews and Quebec charter, that after ten years tolls, if excessive, might be reduced to yield only twenty-five per cent profit. The same sanguine expectations were reflected in the provision made in eight charters issued by Lower Canada between 1845 and 1850, that half the profits over a minimum varying from ten to twenty-four per cent were to go to the government.

The prevalent belief in the great profits to be obtained influenced public opinion against any grant of government aid, except during a brief period before the Rebellion of 1837, when the lavish policy of state construction and state bonuses adopted by the neighbouring republic proved contagious in Upper Canada. Under the influence of that example the Cobourg Railroad was to be granted a loan of £10,000 as soon as an equal sum was privately subscribed and one third was paid up. The Toronto and Lake Huron was promised £3 for every £1 of private capital expended, up to £100,000, while the London and Gore was offered a loan of twice that sum; in both these cases the loan was to be secured not only by a lien on the road, but by the liability of the communities benefited to a special tax. None of these generous offers was taken up, and they were not renewed. But a growing realization of the importance of railways and of the evident difficulty of building them in Canada solely by private hands compelled the formation of a new policy of state assistance. This new policy ushered in the first great period of railway construction.