The eloquent engineer concluded his report with a plea that the directors pursue what he considered their divine mission:
The Creator of the world has stretched out between Canada and the United States the most magnificent series of internal waters that anywhere adorn His footstool. From these waters he has, for ages, sent forth his dews, and his rains to clothe the vast interior with lavish fertility…. Can you doubt or hesitate as to the task assigned you? Were the richest bounties of the physical world designed to go forever unimproved and unenjoyed by him to whom dominion is given over all the world?
A variety of newspapers extolled the merits of the proposed route, as did travellers and visitors to Upper Canada. One of the most famous examples of the latter, Anna Jameson, considered this railway
One of the grandest and most useful undertakings in the world — in this world I mean. The want of a line of road, of an accessible market for agricultural produce, keeps this magnificent country poor and ignorant. Here all grain, all fruits which flourish in the south of Europe might be cultivated with success — the finest wheat and rice, and hemp and tobacco…. If there were but a railroad … there is no calculating the advantages that must arise from it.
The pressing need was for money, not enthusiasm. For this reason, the company approached the government for financial assistance. In 1837, with the aggressive support of Allan MacNab, and convinced that the colony, as a whole, would benefit from its construction, the legislature approved a loan of £200,000 ($975,000 U.S.) (Upper Canadian Statutes, 7 William IV, chapter 61, assent date March 4, 1837).
The money was never received nor was any attempt made to begin construction. The unsettled political and economic conditions in Upper Canada occasioned by the Rebellion of 1837 and the financial crisis (panic) of that year, combined with a continued interest in canals, brought any progress on the railway to an abrupt stop. With neither public nor private funds available, promoters of the London and Gore, and other railways in the colony, had no choice but to temporarily abandon the project. In the near term, prospects for the railway were bleak indeed. However, the dreams of those behind it lingered on.
In 1845 the London and Gore Railroad Company was revived with the incorporation of the Great Western Rail Road Company, which had an extended route (from some point on the Niagara River through Hamilton and London to Point Edward at the foot of Lake Huron and to the Detroit River). This was done in order to avoid a lapse in the act of 1834. Capital stock was increased to £1.5 million ($7.31 million U.S.) maximum. Construction had to begin within four years of passage of this act and had to be completed within twenty years of the passage (Province of Canada Statutes, 8 Victoria, chapter 86, assent date March 29, 1845).
The reasons for the reinvigorated enthusiasm and more ambitious plan embodied in the 1845 act was closely related to significant developments in Britain and the U.S. during this period.
The changing trade policy of the mother country between 1846 and 1849 had profound effects upon railway development in Canada West (Ontario). Colonial produce, formerly sheltered by Britain’s preferential tariff structure, became exposed to the competition of foreign traders as Britain removed the tariff structure. In addition, exports from the U.S. Midwest, which had used the St. Lawrence route in order to gain freer access to British markets, would now enjoy equal treatment even if exports left from U.S. ports on the east coast. Bitter resentment boiled up in Canada, especially among Montreal merchants and St. Lawrence shipping interests, due to the major disaster of the loss of British preferential tariffs. This resentment culminated in the famous “Annexation Manifesto.” However, farmers in Canada West continued to be prosperous as they increasingly looked southward, rather than overseas, for trading opportunities.
The reason for this southward “gaze” is readily apparent. In 1845 the U.S. government enacted legislation that allowed Canadian produce to be exported in bond (i.e., in sealed freight cars) to U.S. ports without paying U.S. import duties. As a result, by 1850 the volume of wheat from Canada West exported via U.S. east-coast ports was more than fifteen-fold that exported via the St. Lawrence route. Thus, with the removal of the British preference, both farmers of the U.S. Midwest and Canada West began to depend on American transportation facilities to move their produce to eastern seaports.
Between 1831 and 1842 a maze of short railways had been built in New York State between Buffalo and the eastern seaboard. Although originally built to serve only local interests, by 1843 these lines collectively provided a through route from Buffalo to Albany, from which additional lines were built to access Boston and New York City. This railway network was hampered by disunity of management and restrictions arbitrarily imposed by the state of New York. For example, one component road, a potential competitor for the state-owned Erie Canal, could not carry any freight! The others were required to pay the equivalent of canal tolls on all freight handled. Pressure was obviously being exerted upon the state legislature to lift these restrictions.
In 1846 a group of eastern-U.S. investors headed by John M. Forbes of Boston bought the partially completed Michigan Central Railroad from the state of Michigan. Running from Chicago to Detroit, this line was expected to capture a major share of traffic to/from the U.S. Midwest. The Forbes group realized that it shared a common problem with the New York system ending at Buffalo. It needed a linking railway running through Canada West from the Niagara River to the Detroit River, a route much shorter and more economical than any line south of Lake Erie.
This is the point at which the London and Gore Railroad, originally projected as a portage road and a road for local transportation needs, emerged as a vital link in a great railway chain stretching from Chicago to Boston.
A few weeks following passage of the 1845 Great Western Railroad Act, Sir Allan MacNab, the line’s first president, and James Belle Ewart sailed for England in high hopes of attracting the capital needed to start construction.
The new purpose of the line was clearly evident in the prospectus circulated in England:
The Great Western Rail Road is designed not only to facilitate the internal traffic of the Province of Canada, for which its route possesses eminent advantages, but also to form a connective link in the great chain of Railway from the city of Boston, on the Eastern coast of the United States, to the Mississippi River, thus drawing over it an immense and increasing foreign traffic.
Prospective shareholders were assured that no other route could compete with the Great Western. Navigation on Lake Erie was hindered by winter ice for several months each year and was dangerous at all times. Competing railways south of Lake Erie would be at least 125 miles longer while there was no competing railway north of Lake Erie. (The ruinous competition with the Grand Trunk and Canada Southern Railways could hardly have been anticipated at this early date!)
On December 16, 1845, a Hamilton newspaper announced that a public dinner would be given in one week in honour of MacNab and Belle Ewert “as a testimonial of congratulation upon the successful completion of the object of their mission.” There appeared to be good reason to celebrate: of the company’s authorized capital of £1.5 million ($7.31 million U.S.) (60,000 shares), MacNab and Belle Ewart had no difficulty selling the 55,000 shares reserved for British investors to eleven London financiers, including George Hudson, the celebrated English railway “king.” The remaining 5,000 shares were reserved for Canadian investors.
Unfortunately, the British railway boom collapsed before even the small first installments (5 percent down) had been paid on many of the reserved British shares. This financial panic caused the stock of Britain’s own London and Northwestern Railway, considered very solid, to fall 50 percent (£220 to £110) within one year. In addition, it proved impossible to sell the 5,000 “Canadian” shares. The provincial government resisted MacNab’s pressure to furnish the loan of £200,000 ($975,000 U.S.) promised in 1837, nor would it agree to provide one million acres of Crown land at