LITMIR.BIZ

      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 far from the treatment that the Company had reason to expect when it undertook the building of the ‘Short Line,’” he exploded in a letter to Sir John A. Macdonald in July 1889, only one month after the line began operating. “Nearly nine millions are now invested in that line which such an attitude on the part of the officers of the Intercolonial Railway will make absolutely valueless, or worse than valueless.” And in October of that same year, he declared, “The CPR has been grievously wronged.”

      In Ontario, CPR expansion continued to rouse the ire of its long-time antagonist, the Grand Trunk Railway. In their attempts to harmonize their expansion plans and execute them smoothly, Van Horne and Joseph Hickson, the GTR’s forceful general manager, both had to make concessions. These compromises required them to meet face to face in sometimes gruelling negotiations. In one such session, two months before Van Horne assumed the CPR presidency, the two men begged, cajoled, bluffed, and argued for four hours. Another round so exasperated Van Horne that he forwarded a copy of a letter from Hickson to George Stephen, fuming: “It has been a repetition of the old story — carrying on the negotiations up to the very last minute and then raising a new point relating to an outside matter.”

      Notwithstanding the prolonged depression, the CPR spent huge sums of money during Van Horne’s presidency to improve its main line and to build or acquire branch lines linking it to parts of Manitoba and the northern prairies. Thanks to these expenditures and to links forged in southwestern Ontario and the Atlantic, the basic system was complete by 1890.

      Expansion in the United States led, not surprisingly, to a renewal of clashes with Van Horne’s old friend and railroading rival, James Jerome Hill. Their rivalry reached new heights after the CPR snapped up the Minneapolis, St. Paul & Sault Ste. Marie Railroad, commonly referred to as the Soo Line, along with another small railway, the Duluth, South Shore and Atlantic. Even before these acquisitions, Van Horne’s company was taking westbound freight in the American East and Midwest from American carriers bound for San Francisco. After the acquisition of these lines, the rivalry between the Great Northern, Hill’s celebrated railway, and the CPR increased. It became even more intense after Van Horne scooped up the Duluth and Winnipeg, which the CPR would later surrender to Hill. However, even after the CPR gave up this company, its Soo Line harassed the Great Northern mercilessly. This encroachment prompted Hill to turn his attention to the West. Soon he built Great Northern branch lines northward towards the British Columbia border, angling for the rich coal deposits in the Crows Nest Pass area. Van Horne was furious. Looking at a map of British Columbia that showed the approaching lines, he bellowed at an engineer, “Look at these … like hungry hounds ready to jump in!”

      The problem of international railway relations in the Northwest could have been resolved by a contract that divided traffic equitably between Hill’s railway and the CPR. Neither side, though, was prepared to cooperate. As a result, the struggle between the two companies — and between Van Horne and Hill — continued throughout the 1890s. Ironically, Van Horne and Hill, by their own admission, admired each other. In their personal dealings, they would exchange passes, visit each other’s railways, call on each other in their homes, and swap news about their latest art purchases. But when it came to operating rival railway systems, the two dynamos engaged in fierce, bare-knuckled competition. Contemplating the looming struggle with the Great Northern, Van Horne remarked in 1892 to Thomas Skinner, a London financier and CPR director: “I think just as much of Mr. Hill personally as it is possible for me to think of anybody who is opposed to the Canadian Pacific, but I would rather see him hung, drawn and quartered rather than have the Canadian Pacific lose ten cents through his Great Northern Railway.” Given the tensions of bitter competition, it is a wonder that their mutual regard for each other managed to survive — but survive it did.

      James Hill was not Van Horne’s only American foe in the ruthless railway expansion game. In pressing his competitive edge so fiercely, the CPR president also attracted the hostility of other American railways — those companies that felt threatened by the CPR’s success in forging strategic American connections. Van Horne’s acquisition of the Soo Line and the Duluth, South Shore and Atlantic crystallized much of this opposition. Indeed, it stirred up the agitation so effectively that, in 1889, the U.S. Senate’s Interstate Commerce Committee embarked on a study of Canadian railway operations in the United States.

      In an effort to quell the opposition, Van Horne engaged an American lawyer to look after CPR interests in Washington, and he himself journeyed to the American capital to present his company’s case. Ultimately, the Senate committee made only one recommendation relating to railways. As a result, and because of the failure of the U.S. Congress to take decisive steps regarding Canadian competition, American agitation persisted for years. In the face of one particular storm, Van Horne even arranged for the Canadian Pacific’s case to be presented directly to President Benjamin Harrison, who had been threatening to issue a proclamation against Canadian railways. Fortunately, the president finally withdrew his threat. George Stephen was quick to commiserate with Van Horne, writing in January 1893: “It is very satisfactory to find that your record is so clear and clean. It is very annoying and trying to be obliged to suffer from grumbles and unfair interpretations.”

      Railway competitors were not the only antagonists that Van Horne had to deal with in these years. He also had to confront the organizers of a railway strike that erupted in 1892 over

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