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A Great Turn of the Tide

by A. L. Burt
Emeritus Professor, University of Minnesota
Visiting Professor, University of Manitoba

Manitoba Pageant, April 1961, Volume 6, Number 3

This article was published originally in Manitoba Pageant by the Manitoba Historical Society on the above date. We make it available here as a free, public service.

Please direct inquiries to webmaster@mhs.mb.ca.

A great turn in the tide of Canada's fortunes, particularly in the West, came in 1896, when the Liberals returned to power in Ottawa and launched a vigorous campaign to draw immigrants from the United States and the Old World. Then began a period of prosperity greater than Canada had ever known, for which the victorious politicians naturally claimed the credit. Actually they had little to do with the splendid tide except to ride high upon it. The real cause was a remarkable combination of changes that occurred in the outside world.

The Dominion was formed in 1867 with an eager eye to acquire the huge empty lands of the Hudson's Bay Company in order to get room to grow, and when the federal government took them over it did everything in its power to people the prairie. By creating the North West Mounted Police, it guaranteed law and order where there had been none; by treaties with the various Indian tribes, it persuaded them to settle on reserves and to surrender their rights to all the other lands over which they had roamed; by heavy subsidies it got the C.P.R. to build the railway that opened the country; and it offered free home-steads to attract a flood of immigrants. The result was for long years very disappointing. The Canadian West remained almost empty while people were pouring into the American West from the Eastern States, from across the seas, and from Canada itself. Those were the years of a world depression, which lasted from 1873 to 1896 and dragged down prices by 40 per cent. For a number of reasons, including the much bigger size of the American market, the fall in prices hit Canada much harder than it did the United States. Indeed the Dominion was losing more people by emigration to the United States than it was gaining by immigration from across the sea. In the early 1890s the size of the Canadian population was virtually stationary, while the American population was being swollen by heavy immigration from the Old World. The contrast was tragic for the Dominion. Then something important happened across the line.

In the United States the last free homestead that was good for ordinary farming was taken, and the price of farm land began to rise rapidly. Then the human flood that had been filling the American West commenced to spill over into the Canadian West where there was an abundance of free homesteads. At the same time important changes in world economic conditions operated powerfully in Canada's favour. The long depression passed in 1896, largely as a result of the new and enormous expansion of gold production in South Africa. This caused a general rise in world prices. Moreover the rise was not even, some climbing faster than others and some continuing to fall, and even these differences cooperated to benefit Canada. Manufactured goods lagged behind raw materials in the general rise, which meant that the price of wheat in the world market of Liverpool rose faster than Canadian production costs, including the building of a whole new society in the West. More important still as a source of Canadian profit was the continued drop in ocean freight rates for another dozen years. As the general level of prices was determined in the Old World, Canadian trade had to bear the cost of transportation both ways across the Atlantic, the decline of freight rates meant a double saving in carriage charges. To complete the tale of how the tide of Canada's fortune turned, we should note that interest rates had never been so low, and capital was as plentiful as it was cheap. Britain was bursting with it, and Canada was now a highly preferred field for investment, thanks to the other conditions mentioned above.

When these various factors are added together it is small wonder that the settlement of the West gathered a tremendous momentum as the movement passed from the American to the Canadian side of the line, and that the occupation of the Canadian prairie occurred with an explosive boom such as the American prairie had never seen, nor any other land.

Page revised: 1 July 2009

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