To add to its misfortune, the CPR’s enemies made vicious attempts to discredit it, thereby undermining the company’s reputation in British and American financial circles. Foremost among the CPR’s rivals was Van Horne’s bête noire, the Grand Trunk Railway (GTR), a largely British-owned and -directed railway, whose main line ran from Sarnia and Toronto to Montreal. As early as 1873, Grand Trunk management tried to frustrate Sir Hugh Allan’s attempts to generate loans in London, and, in the 1880s, they attacked the CPR on several fronts.
To raise much-needed funds, the CPR agreed to sell a huge chunk of its lands to an Anglo-Canadian consortium, the Northwest Land Company. This company was charged with managing town-site sales in several major western communities.
Still, the CPR edged ever closer to the financial abyss. In the fall of 1883, when the situation was critical, George Stephen decided to petition the federal government for relief. Previously Van Horne had left Stephen to scramble for money, but in November of that year he journeyed to Ottawa with Stephen and other CPR luminaries to make their case for additional funds. After arriving in the nation’s capital, the mendicants went directly to Earnscliffe, the prime minister’s home, to outline the situation to Macdonald and stress the absolute necessity of immediate government assistance.
Initially Macdonald turned them down. But he reversed his position after he heard John Henry Pope, the acting minister of railways and canals, declare, “The day the Canadian Pacific busts, the Conservative Party busts the day after.” In other words, the fate of the Conservative Party was inextricably linked to that of the Canadian Pacific.
To provide the generous assistance demanded by Stephen, the Conservatives had to push a bill through Parliament that would grant the railway relief. For that to happen, however, they first had to examine the CPR’s finances. Following a searching inquiry, the government engineer Collingwood Schreiber and the deputy minister of inland revenue reported that they were completely satisfied with the railway’s accounts and integrity. Van Horne was then summoned to a Cabinet meeting to explain his company’s progress and needs.
Meanwhile, the government took steps to provide immediate assistance to the CPR. Before the House of Commons met in January 1884, the Conservatives supported Stephen’s application for an extension of a current loan from the Bank of Montreal, which had refused to grant one unless it had written assurance from the government that it stood by the Canadian Pacific for repayment of the loan. In addition, Stephen and the government also agreed at this time on the terms of aid sought by the CPR. For the company the stakes were enormous. As security for a huge loan, Stephen agreed to mortgage the entire railway, including land-grant bonds and outstanding stock. At Van Horne’s instigation, Stephen also promised to have the main line completed in half the time stipulated in the original contract.
Late in the winter of 1883–84, Van Horne made another trip to Ottawa, this time to see history in the making. Here he watched the prelude to what would turn out to be one of the longest and most acrimonious debates in the history of the Canadian transcontinental railway. When the relief bill was presented to the House of Commons, it seemed that every agency and individual who opposed the CPR was given the opportunity to unite against it. Despite threatened defections within his own Cabinet and blistering attacks from outside, Macdonald nevertheless managed to push the relief bill through Parliament. He succeeded in doing so, however, only by resorting to considerable cajoling in caucus and behind the scenes and by awarding concessions to Quebec and the Maritimes. The bill finally became law on March 6, 1884. A week later the Bank of Montreal debt was retired.
Van Horne was taken aback and dismayed by all the frantic horse-trading and other political machinations required to keep the CPR afloat. To one Cabinet minister, he wrote, “It has always been a matter of principle with me never to enquire into a man’s politics in transacting business, but I must say that our past winter’s experience in Ottawa has somewhat staggered me.” Hitherto, he had remained aloof from politics, whether in the United States or in Canada. He did not belong to any political party, and he repeatedly resisted the common Canadian practice of hiring staff on the basis of their political affiliation (to say nothing of religion). The only thing that mattered to Van Horne was individual ability. Nevertheless, he was prepared to play the political game if that was necessary to safeguard or further the CPR’s interests. One such occasion arose during the 1883 Ontario provincial election, when Macdonald and the federal government asked for political assistance from the CPR. Acutely conscious of the railway’s dependence on the government, Van Horne was quick to provide that support.
Regrettably, the government’s generous loan did not spell an end to the railway’s financial difficulties. In early 1885 Stephen found himself once again making frequent pilgrimages to Ottawa in the hope of obtaining even more financial assistance. While he haunted the anterooms of Cabinet members, Van Horne focused on cost-cutting, and Shaughnessy tried valiantly to stave off creditors. With bankruptcy once again a real possibility, what was needed was a dramatic event that would focus attention on the CPR’s plight and underscore the vital role that could be played by a completed transcontinental railway. Fortunately, there was such an event — the North-West Rebellion, the second revolt led by Louis Riel, which broke out in March 1885.
For the first time in their history, Canadians were confronted by an armed uprising on their own soil with nothing but their own resources to defend themselves. Macdonald could have requested the assistance of imperial troops, but he rejected this option. Instead, he said, the government would use citizen soldiers — who, in all parts of the country, clamoured to enlist. Van Horne, recognizing a golden opportunity, lost no time in offering the use of the CPR to transport troops from eastern Canada to the Northwest. He insisted on but three conditions from the government; that they raise the troops, provide the CPR vice-president with a week’s notice of their departure, and allow him free rein in making arrangements for their provisioning and transport.
In making his offer, Van Horne was fully aware of the good publicity that such a move would bring the railway. Indeed, he impressed on his subordinates that not only the CPR’s reputation but perhaps its very existence would depend on the speed and efficiency with which it could transport men and equipment to the site of the uprising. He knew that there were still four breaks in the line north of Lake Superior, but he figured that sleighs could take the men over two of the gaps on the desolate frozen lake and that the troops could march over the other two. Regardless, even he must have felt somewhat apprehensive as he contemplated the challenge of shuttling men and military and artillery supplies over primitive, incomplete roads stretching across frozen, forested wasteland. Horrendous as the obstacles were, however, Van Horne, aided by Donald Smith and Joseph Wrigley, the Hudson’s Bay Company trade commissioner, successfully resolved the problems associated with provisioning more than three thousand soldiers and transporting them, their horses, and their equipment over such distances.
In transporting troops quickly to the site of the insurrection, Fort Qu’Appelle, the CPR demonstrated its worth. No longer could the railway be regarded as a leech repeatedly sucking money from the federal treasury. Finally it was recognized as a real asset to the country, a steel rail binding the infant nation together. Van Horne soon detected the “very great change” in public opinion with respect to the need for the CPR, and he confidently predicted on April 4 that, “in the light of the present difficulty, Parliament will deal fairly with us before adjournment.”
Parliament did eventually come to the company’s aid, but not before the railway was almost pushed into bankruptcy by escalating costs and the chronic shortage of funds. The situation became especially critical in July 1885, when Van Horne was driving construction forward