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The Background of the Battle of Fort Whyte

by James A. Jackson

MHS Transactions, Series 3, 1945-46 season

MHS Transactions were originally published by the Manitoba Historical Society on the above date. We make online versions available as a free, public service. As an historical document, Transactions may contain language that is no longer in common use and which may offend some readers. They should not be construed to represent the views of today’s Manitoba Historical Society.

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Much has been written on the subject of the Fort Whyte incident. The Society has in the past heard several accounts of the event. Very little, however has been set down on the background of the near-violence arising out of the attempt of the Canadian Pacific Railway to resist the crossing of its line by the Red River Valley Railway at what is now Fort Whyte. The object of this paper is to outline the long agitation over railways in the Manitoba of the '80s and to give some detail on the solution of the problem a solution to which Fort Whyte is in the nature of an anti-climax. Much of the material used is drawn from the Greenway Papers which are in the possession of the Society and which give us a living record of Manitoba's victory over the railway policy of the Macdonald Government.

When the Dominion of Canada purchased the great territories of the Hudson's Bay Company it was faced with the dual problems of settlement and transportation. The Dominion Government was determined to be the arbiter of western destiny in these fields and for that reason refused Manitoba control of her crown lands when the province was created in 1870. It was for the same reason that the Dominion early asserted its pre-eminence in the field of railway construction in the West.

Early in 1879, John Norquay, on his first visit to Ottawa as premier of Manitoba, was informed by the newly-returned government of Sir John A. Macdonald that: "The Government think it very desirable that all railway legislation shall originate here, and that no charter for a line exclusively within the Province of Manitoba, should be granted by its Legislature without the Dominion Government first assenting thereto."

Norquay and his Government accepted this position since they had no desire to embark upon an expensive railway programme which the province could ill afford, and because they were apparently promised the early construction of a transcontinental line with adequate branches to serve the rapidly-filling southern and western parts of the province.

As settlement increased in Manitoba so did the cry for rail facilities grow in volume. True, Manitoba had an outlet to eastern markets by way of the St. Paul, Minneapolis and Manitoba line into St. Boniface from the United States, but by 1880 there were few other lines running out into settled territory to tap the grain resources of those areas. In many cases a wagon haul of some fifty miles had to be undertaken by the settler in order that his grain might reach the rail-head. The concentration of settlement south of the Assiniboine and west of the Red rivers made the construction of feeder lines into that area imperative. The announcement in October, 1880, that a contract to construct the Canadian Pacific Railway had been signed and that construction would begin as soon as Parliament ratified the contract, was greeted with jubilation in Manitoba.

This contract, however, contained the seeds of the agitation that was to rock Manitoba for the next eight years and which would finally end in the unseating of the Norquay government. In order to hold to its principle that the West was a Canadian preserve and that its trade should not be diverted to the United States, the Dominion Government included in the contract a provision whereby it was hoped to prevent any such tapping of western trade by American lines. This was the famous "Monopoly Clause," clause 15 of the Canadian Pacific Railway Company's charter, which stated:

"For twenty years from the date hereof, no line of railway shall be authorized by the Dominion Parliament to be constructed South of the Canadian Pacific Railway, except such lines as shall run South-West or to the Westward of South West; nor to within fifteen miles of Latitude 49. And in the establishment of any new Province in the North West Territories, provision shall be made for continuing such prohibition after such establishment until the expiration of the same period." (S. of C. 1881, 44 Vic. C.I.)

This monopoly clause was attacked in Parliament as giving an unfair advantage to the C.P.R., and as limiting competition in rails in the West. These objections went unheeded and the clause passed. In Manitoba there was little or no agitation against the clause until after the C.P.R. main line had been built through the province. At this juncture it became apparent that the railway company was interested primarily in pushing its way across the continent and that the construction of much-needed branch lines in Manitoba would be delayed. Also Manitobans began to complain of the high rates of the C.P.R. and sought relief. There was only one solution to both problems. Additional railway lines must be constructed; within the province to serve its isolated settlements, and outside to connect Manitoba with competitive lines to the South. The province began to charter railways itself.

In the Legislative session of the summer of 1881, Manitoba's Legislators approved several railway charters whose terms were in contravention of the provisions of the monopoly clause. The Winnipeg South Eastern Railway Company was empowered to build a line of railway from Winnipeg southwesterly to the international boundary. The Emerson North Western Railway Company was chartered to build a line westward from Emerson to Mountain City and thence to any point on the western boundary of the province. A Manitoba Tramway Company was chartered with power to build tramways along any provincial highway. There was no discussion at the time that these charters might not meet with federal approval. The only dissenting voice in the Legislature was that of C. P. Brown, the minister of Public Works, who pointed out that the Dominion had settled on a policy of not permitting tapping to the United States.

In Ottawa the government was warned by the C.P.R. that these charters were a violation of its agreement with the Dominion, that they would permit tapping of western trade to the United States, and that therefore the Dominion should exercise its constitutional privilege of vetoing the offending acts. The Department of justice reported that these charters were indeed a violation of the C.P.R. charter and were contrary to the settled policy of the Dominion. Disallowance was recommended. The Manitoba South Eastern was disallowed in January, 1882, the other two being vetoed in November of the same year.

These first acts of disallowance were used as a political weapon by Manitoba's rapidly developing Liberal party and its leader, Thomas Greenway, of Crystal City. John Norquay and his cabinet supported the right of the Dominion to exercise its disallowance power in the case of lines intended to connect with American rails, since the province had no right under the British North America Act to charter a line intended to run beyond the borders of the province. Norquay clung to this stand firmly until the fall of 1886 in spite of a rising tide of public opinion against C.P.. monopoly and high rates. He felt that Manitoba would obtain a better deal in subsidies, grants and crown lands if he maintained a friendly alliance with the Macdonald administration. In the provincial election of 1886, however, Norquay saw that the people were determined to break the C.P.R. monopoly in spite of the disallowance of a round dozen of Manitoba's railway statutes. He and his party turned on the federal Conservatives and campaigned on a platform calling for a competing border connection at any cost. This reversal saved his political hide at the polls though he did lose ground, moving from a majority of ten in a house of thirty members to one of seven in a house of thirty-five.

Public opinion had been inflamed against the C.P.R. because of a variety of causes, not the least of which was the failure of the Manitoba Boom in 1882 with its resultant depression. People, then as now, tended to lay the blame for their economic ills on any vulnerable agency, so the C.P.R. was a natural target for vilification. The railway raised its rates in 1884, which gained it few friends. Also its promises of branch lines to be built in the south and west of the province were not fulfilled. (The C.P.R. was in financial difficulties throughout all the period, and was a yearly supplicant at Ottawa for additional funds to stave off bankruptcy). These factors, along with a well-conducted campaign against the C.P.R. and the monopoly principle, on the part of the Liberal party and the Manitoba Free Press, brought on a strong and determined opposition within Manitoba to any further interference with "Manitoba's Rights".

So it was that in 1887 Norquay piloted a new border railway bill through the Legislature, one that was adopted immediately and unanimously. The province proposed to build the so-called Red River Valley Railway from Winnipeg to West Lynne as a public work of the province and to continue with its construction in spite of disallowance. The R.R.V. was to be connected with the Northern Pacific at Pembina, providing a competing link with American lines. Provision was also made for an appeal directly to the Queen if the Dominion should attempt to interfere. Norquay's firm stand was applauded on all sides.

In due course the R.R.V. Act was disallowed by Ottawa, but its construction went on apace. The C.P.R. attempted to stop it with injunctions but the officers of the line were strangely unavailable to have the papers served on them. It appeared that Manitoba might get away with her defiance of the Dominion. Then the money ran out. Attempts to borrow in London and New York were cleverly blocked by Macdonald. The work had to be abandoned. As a direct result, Norquay was driven from office in December, 1887, and his successor, Harrison, survived only until January, 1888, when two by-elections went against the Conservatives. Greenway was called to form a government and did so. His chief plank was the immediate construction of the R.R.V. line and in this he had the full backing of the people of Manitoba.

With this as a background we will now proceed to a discussion of the final settlement of the disallowance question, beginning with a review of the stand taken by the C.P.R. and the Dominion as the agitation came to a head.

As the Manitoba Government changed, so did the opinions of Dominion and C.P.R. leaders slowly come round to a realization that a change of policy was necessary. As early as May, 1887, after his return from the West, Thomas White, Macdonald's Minister of the Interior, wrote Stephen to the effect that the policy of maintaining the monopoly was a mistake. In November of the same year, Stephen informed Macdonald and Tupper that the C.P.R. had come to be regarded as an unpopular monopoly, that it could not remain in that position and would have to relinquish the protection afforded by clause 15. A solution was offered by Stephen in the same letter. He stated that the company was desperately in need of cash: "... $15,000,000 will be required within the year 1888 ... If the capital cannot he secured the company must collapse and go into bankruptcy ..."

Glazebrook adds that: "Lack of revenue made the need acute." Thus as Greenway assumes power in Manitoba, we find that the Dominion and the C.P.R. realize the need for the removal of the offending clause and that Stephen is ready to negotiate for its removal on the basis of further federal aid for the C.P.R. Belief that a settlement was in the wind had filtered down into the Manitoba press. The Commercial noted, in December, 1887, that everything pointed to a new agreement with the C.P.R. being made at the next session of Parliament, the agreement to include the elimination of clause 15.

Greenway wasted no time in forming his ministry. Joseph Martin became Attorney-General, Lyman Jones, Provincial Treasurer, and James A. Smart, Commissioner of Public Works. The new government pledged itself to build the R.R.V. in spite of all obstacles which had been placed in its path hitherto, or which might be raised in the future. This policy received high praise from the Free Press: "... if the Dominion Government think they have no sterner stuff than Mr. Norquay and his colleagues to deal with on this occasion, they will be afflicted with violent sudden surprise ... The men now in power will sound no retreat."

No effort was made to explain how the railway would be built. The ways and means were to be revealed at the proper time. The business of the House was suspended to permit the new members of the government to seek reelection. The necessary by-elections were to be held on February 16, the Legislature being adjourned on January 26, until March 1. Greenway and his colleagues fared better in their effort at gaining the approval of the electorate than did Harrison's government. Greenway and Smart were returned unopposed, while Martin and Jones received substantial majorities.

Before the House met on March 1, events in Winnipeg showed that public opinion was still active against the maintenance of monopoly. A meeting of the Winnipeg Liberal-Conservative Association was held on February 21, at which Sir John A. Macdonald was roundly denounced by unanimous resolution of the members present. This resolution, moved by H. J. Clarke, a former premier of the Province, and forwarded to Macdonald, read as follows:

"Resolved, that the Conservative Association of Winnipeg earnestly draws the attention of the Right Honorable Sir John A. Macdonald, Premier, and the Government of Canada, to the self-evident fact that the time has passed when mere personal or political friendship, or party sentiment, can cover, or smother, the real state of public feeling in Manitoba and the Northwest in respect to the power, assumed or otherwise, exercised by the Governor General-in-Council of disallowing railway charters granted by the Legislature of the Province. We declare we will not submit to struggle any longer under the burden that is crushing the country to death; we therefore demand the discontinuance of disallowance, and that this Province of Manitoba be placed in the same position with regard to railways as are all other provinces forming the Dominion of Canada."

A subsidiary resolution asked all the parliamentary representatives of Manitoba and the Northwest Territories to use every influence to secure an end to disallowance. This condemnatory resolution was not made by unanimous consent of the executive of the Conservative organization. The Call, on the date of the meeting, carried an advertisement over the signatures of F. I. Clarke, secretary, and Stewart Mulvaney, first vice-president, denying that Hespeler, the president, who called the meeting, was legally elected, and advising all good Conservatives to stay away. The Call reported the meeting but remained loyal to Macdonald, reiterating the claim of the secretary of the association that Hespeler owed his election as president to a packed meeting. Though the meeting was well attended and every effort made to make sure that only bonafide members of the party gained admission, according to the Free Press, none of the local Conservative M.P.'s or M.P.P.'s attended. In spite of some doubt as to the credentials of those who conducted the meeting, the fact that so strong a resolution could be passed by a gathering of Macdonald's own party indicates that the anti-monopoly feeling had definitely cut across party lines in Manitoba.

On the same day as Macdonald received this rebuff from Winnipeg's Conservatives he was closeted in Ottawa with the retiring Lieutenant-Governor, Aikins. Both Begg and Martin attach considerable importance to this visit of Aikins as a factor in the attaining of a settlement; Begg states: "Lieutenant-Governor Aikins visited the Capital just at the critical period and his counsel could not have failed to carry weight with the Cabinet of which he had been a valued member."

Martin makes the statement that: "Early in 1888, Lieutenant-Governor Aikins went to Ottawa with a purpose." But he fails to clarify the exact nature of that purpose. It is apparent that Aikins did warn Macdonald of the state of opinion in Manitoba, a fact that should have been obvious to the prime minister, since it had already caused the fall of his party from office in the province. Later, the Free Press carried an Ottawa dispatch to the effect that: "It is strongly suspected here that Governor Aikins laid the plain facts of the case before Sir John and that he was influenced by his statements."

Aikin's report to the government may well have had considerable weight in swinging its policy to one favoring the abrogation of monopoly.

There were, however, other persons at work in Ottawa attempting to arrange a settlement on behalf of Manitoba. Greenway's friend and advisor, W. F. Alloway, was in the capital before Aikins and apparently had found the ear of the government. Alloway was head of the Winnipeg banking firm of Alloway & Champion, and actively interested in the promotion of local railways. On February 17, 1888, he wired Greenway in code from Ottawa, that: "Had hour pleasant conversation to be continued Monday." On the 28th, he wired Greenway again: "Final interview to take place tomorrow. Can't venture An opinion as to result."

Though these messages do not indicate whom Alloway was dealing with, or what he was discussing, an extensive message - again encoded - was sent on the 29th, which explains the above messages. It might also be noted that Alloway was very free in his advice to Greenway. The wire, in full, is as follows:

Private
Ottawa, Feb. 29/88 16:20 hrs.

Hon. Thomas Greenway, Winnipeg,

Private. I have just received the following letter from Sir John Macdonald. With reference to our conversation of this morning I desire to repeat that the Government here is desirous of having all matters between the Dominion and Manitoba, including the disallowance question, discussed and, if possible, arranged. As verbal communication is more likely to produce satisfactory results than lengthened correspondence, I would suggest that Mr. Greenway should visit Ottawa at an early date. I shall take care that a representative of the C.P.R. shall be in Ottawa at the time of Mr. Greenway's visit. Think it advisable you should act upon the suggestion made. By doing so you will show that every effort has been exhausted to secure the rights of the province before taking other action. An adjournment of the house for fifteen days should suffice. Better bring Martin and another colleague. Answer immediately. W. F. Alloway.

A further wire of the same date informed Greenway that Stephen had been sent for to come to Ottawa and further advising a moderate course in Manitoba. It would be interesting to know just what Alloway meant by "other action", but unfortunately there is no hint either in the press or in Greenway's papers as to what was contemplated in case of failure to secure an amicable settlement. At any event, it is clear that Alloway had been dealing with the government at Ottawa before the arrival of Aikins, though he did not get definite encouragement until after Macdonald had seen Aikins.

Greenway acted on Alloway's advice. When the House met on March 1st, it was only to adjourn again until the 16th, on the motion of Premier Greenway. In moving adjournment, Greenway informed the House that he was asking adjournment: "... for the reason that the government entertain hopes that in the meantime, the differences that exist between the Federal Government and the Government of Manitoba, including the vital question of disallowance will be arranged."

He also informed the House that he and other members of the government were proceeding to Ottawa at once, by invitation of the Dominion Government. This new Ottawa mission was greeted with enthusiasm in Manitoba. The Commercial stated that all eyes were focussed on Greenway at the capital, noting that: "The Government which would accept any arrangement, not including the removal of monopoly, could not live in Manitoba."

Begg is inclined to the belief that the settlement was as good as made before Greenway ever left Winnipeg. He states: "... altogether, Mr. Greenway had his road paved for him, and had but to use his native tact and good sense to secure a victory where his predecessor had failed." Subsequent events in, dicated that the paving had not been complete and that Manitoba was yet to spend some uneasy hours before a settlement was reached. Alloway and Aikins had done a considerable amount in the way of preparation for a settlement, but much remained to be done.

Greenway and Joseph Martin arrived in Ottawa on March 6 and immediately informed the government that they were ready to begin discussions. They told the press on their arrival that: "... they would accept nothing less than an absolute surrender to the Manitoba Government of the right to charter roads in any part of the Province."

The sequence of events can be read in the headlines of the Free Press for the ensuing two weeks. On March 8, they wrote, "Sir John Too Busy," on the 9th, "He Asks for Time". On the 8th, the two Manitobans were received by the cabinet, stated their case in the form of a memorandum, and were assured by Macdonald that a solution was in sight but that he needed time to negotiate with the C.P.R. officials. They did not meet with Macdonald again until the 14th, when they were again informed they would have to await the arrival of the C.P.R. officials. In the meantime, Greenway had been to see the Governor General, Lord Lansdowne, at his invitation, and came away with the impression that Lansdowne would, "... exercise an influence in favor of Manitoba's case." Greenway's patience was already becoming exhausted at the delay. On the 12th, he was quoted to the effect that, "... He is getting tired of waiting, and unless Sir John sends for him speedily, he will come home." On the 16th, he sent a further memorandum to Macdonald balking at the delay, stating he has to meet the Legislature and noting evidence of Sir John's lack of faith. Apparently Macdonald had seen Stephen and then had spoken to Greenway to the effect that things were coming along favorably. Greenway subsequently met Stephen, who assured him that the problem of Manitoba had not yet been discussed. The only reply received to this new memorandum was the formal acknowledgment by the Department of the Secretary of State that the matter was to receive consideration.

The delay continued and with each day the ire of the Manitoba delegates increased. On the 14th, Greenway was quoted as having said that if no settlement is reached he would not be responsible. He indicated that Manitoba's public opinion was fully aroused. At the same time the Free Press congratulated Greenway and Martin editorially for their staunch support of Manitoba's rights. On the 15th, a further reference is made to Lansdowne, the Free Press reporter states that from a hint he had received, Lord Lansdowne was said to be Manitoba's friend in need. On the 18th, the reporter interviewed Sir John, who stated that no decision had been reached. On the 19th, Greenway and Martin despatched a "final memorandum" to the government. They deplored the fact that they had been kept waiting since the 16th with no official recognition. Greenway declared that he was not "... suppliant for favours at the hands of the Government of the Dominion," that he merely was there to secure for Manitoba the rights guaranteed her by Imperial Statute. Both he and Martin assert their loyalty to Canada, but state they can remain in Ottawa no longer. They will seek justice in London from the Queen-in-Council in accordance with the appeal made by Norquay's government in 1887. They concluded with the statement that they had tried to secure a solution and could not be blamed if there should be trouble in Manitoba as a result of the Dominion's uncompromising attitude. The only reply to this memorandum was the usual statement that it would receive consideration.

Having delivered themselves of this final statement, Greenway and Martin left Ottawa for Winnipeg via Toronto and Chicago. In Manitoba the Free Press viewed the situation with alarm. They regretted the inability of Green way and Martin to make a settlement, but did not blame them or Manitoba:

"What is coming next it is as yet impossible to say ... . In any event, the railway will be built, and if the near future is pregnant with disaster, Manitoba cannot be reproached with not having done all in her power to procure a peaceful arrangement of her difficulties."

In Ottawa, what Greenway had been unable to gain by his presence was made possible by his absence. A full account of events following Greenway's announcement of his departure was written him by Col. Thomas C. Scoble, vice-president and managing director of the Manitoba Central Railway, a border railway whose charter had been disallowed and who had apparently been in Ottawa attempting to aid the settlement of the disallowance question. Scoble notes that Greenway's departure caused some furor in the government ranks, but most important, he brings the Governor General definitely into the picture as aiding in the reaching of a settlement. We have noted above that Lansdowne's name had twice been linked with Greenway's visit in a light favourable to Manitoba's chances of a favourable settlement. George Bryce in his, A History of Manitoba, makes the only other reference obtainable to the interference of the Governor-General: "Lord Lansdowne, it was understood, brought great pressure to bear on Sir John Macdonald for settlement ..."

Scoble's letter is as follows:

Private
Ottawa, March 20 88.

My dear Mr. Greenway,

Your letter and memorandum to the Government was mailed last night as Chapleau [the Secretary of State] was not in the House. It must have produced some effect, as Chapleau went at once to Sir John with it this a.m., and they were closeted at Ernescliffe [sic] till afternoon. A cabinet council was called immediately after, and the question must have been considered, as I have received the following note from His Excellency at about 3.30 p.m. in answer to a note I wrote him this a.m., saying that it was a matter of personal regret to you that you were forced to leave before there was any settlement, and that if he wished to see me before my departure, I would hold myself at his disposal.

Private
Government House, Ottawa, 20th March, 1888.

Dear Colonel Scoble,

I have been so busy this morning that I have been unable to give myself the pleasure of asking you to come to my office for a few moments.

I regret to hear that Mr. Greenway has found it necessary to leave Ottawa without concluding the negociations [sic] which I understand are still in progress with regard to the question of the Manitoba Railway system.

Would it not be as well, under these circumstances, that you should defer your own departure for a time.

The interests which are affected are so important, and extend so far beyond the limits of your Province, that it is scarcely reasonable to expect the question to be disposed of as if it were a mere departmental or local detail and capable of adjustment without the fullest consideration. I am, dear Col. Scoble, yours truly, Lansdowne.

I at once consulted Watson [Liberal M.P. for Marquette], and he advised me to telegraph me [sic] to Toronto, which I did as follows: "Am desired by highest authority to remain a few days, as action is being taken to settle matters. Will write explanatory letter to Grand Pacific, Chicago. Answer that you received and understand this message." I repeat this, in case you should have left Toronto before my telegram is received.

Wainwright [Assistant General Manager of the Grand Trunk] came up this morning and saw Chapleau this p.m. Chapleau told him that nothing was finally settled, owing to the excessive demands of the C.P.R., but that the matter must be finally settled in a few days.

I am sorry that the message from His Excellency has disturbed our plans, but I am sure you will wish me to remain.

Wainwright writes Hickson [Manager of the Grand Trunk] to see Allan [President of the Manitoba Northwestern], tonight to make sure he does nothing about the M. & N.W. without further consultation with us. Alloway has been sent for twice today to Department of the Interior. Between us, you should be well posted.

Yours truly,
Thos. C. Scoble.

This document indicates that Lansdowne, if he did not directly interfere in the interests of a settlement, at least attempted to pour oil on the troubled waters. The fact that Scoble notes the participation of officials of the Grand Trunk Railway Company, as well as those of the Manitoba and Northwestern Railway, would seem to indicate a tie-up between these lines and the effort of Manitoba to secure an independent outlet to eastern markets. It may indicate an abortive attempt on the part of the Grand Trunk to get into the west through linking the M. & N.W. and the R.R.V. with its eastern lines by means of running rights on American lines from Chicago to the Manitoba border.

Though it cannot be definitely stated that Lansdowne or Scoble had any definite share in events, it is at least certain that Greenway's leaving Ottawa had the desired effect. At 4.10 on the afternoon of the 20th, Macdonald wired Greenway at Toronto: "I regret your hasty departure. Matters making as rapid progress as possible. I hope you will return and stay for a few days. Please answer."

Being now the pursued, Greenway became wary. He wired that he would only return if assured of a definite settlement. Macdonald had to give in. He wired Greenway, now at Exeter, that the main question would still take time, but that he believed, "... the principle of adjustment can be agreed on in a few days." Greenway agreed to return and when he notified Sir John of his arrival, Sir John wrote that he would see him without delay. Conferences were held and Greenway was assured that a settlement, involving the abrogation of monopoly, had been made with the C.P.R. The Free Press stated that Greenway was promised, "... an official document that monopoly was wiped out..." Actually, he did not receive such a wide assurance. The abrogation of clause 15 required an Act of Parliament amending the C.P.R. charter. What Greenway received was a personal letter from Sir John, stating that it was entirely possible that legislation would be passed at that Session removing, "... almost if not entirely ..." the causes for the disallowance of Manitoba's railway legislation. Macdonald was cautious enough to avoid a definite refutation of the power of disallowance, even over local railway legislation. The letter goes on to explain that disallowance was merely a temporary policy necessary to the development of "... the traffic resources of Manitoba and the territories ..." The greatly increased harvest of 1887 and the general prosperity of the West made added rail facilities necessary, so that: "... the administration will not advise the disallowance of a bill similar in principle to the Act for the Construction of the Red River Valley Railway."

Manitoba had gained the right to charter and build a border railway. The local press was jubilant. The Free Press wrote a long editorial lauding Greenway and the Liberals for having made the success possible. The Call was equally Insistent that real credit belonged to the Conservative party, that Greenway had only registered a decision already agreed on by Ottawa's wise rulers. The Commercial is inclined to place little faith in the curative powers of either party. They state that the victory is due entirely to: " ... the people of Manitoba, irrespective of party, (who) have shown clearly that the Province was determined to get rid of monopoly ... Briefly, the credit for the removal of monopoly is due to the persistency and determination of the united people of Manitoba."

The Commercial was probably the most nearly correct. The people had shown their dissatisfaction with the Conservative administration which had failed to secure an end to monopoly, by turning it out of office in spite of its pledges to build the R.R.V. They also showed their approval of the Liberal Government which had secured the desired result, by returning Greenway triumphantly in the election of July, 1888, with twenty-eight of the thirty-eight seats.

There still remained the necessity for Macdonald to come to a satisfactory settlement with the C.P.R. They expected to be reimbursed for the loss of their monopoly privilege. Stephen wrote Macdonald in late February that the C.P.R. was suffering as a result of the anti-monopoly agitation:

"... our own credit and financial standing are seriously weakened by the wicked and suicidal agitation. I am, therefore, ready to recommend that we should join the Government in any arrangement for the cancellation of these obnoxious monopoly clauses of our contract, if it can be done without inflicting on our company a loss greater than it can bear."

Stephen again suggested a sum of fifteen to twenty millions as being necessary to build the C.P.R. to that point of efficiency where it could meet American competition. He later suggested, while Greenway was in Ottawa, that the Manitoba Government should buy or lease the Pembina branch of the C.P.R. as part of a general settlement. This proposition was also made directly to Greenway by Van Horne, who asked $1,000,000 for the line. Greenway refused, stating that his government were determined to build the R.R.V. Apparently he was suspicious that the C.P.R. might still maintain some measure of control. Manitoba was not averse to the project that the monopoly be purchased from the C.P.R. perhaps since her funds were not directly concerned. As early as April, 1887, the Commercial urged the granting of compensation to the company if it gave up its monopoly in the West. During the negotiations at Ottawa, the Free Press urged editorially that the monopoly be bought out. They felt, however, that the money should be used for branch line construction in the West.

These negotiations with the C.P.R., as to terms for the relinquishing of monopoly, probably indicate the reason for the protracted delay in settling with Greenway. In its brief career the C.P.R. had been forced, almost yearly, to appeal to Ottawa for financial aid, in order that work on the line might be carried on. The patience of both Parliament and Government was soon strained by these demands and each new bid for aid met increased resistance. In early 1885, before the completion of the main line, Macdonald wrote Tupper on the subject of these difficulties: "I myself fear that the Week (Goldwin Smith's publication), is right when it says that however docile our majority, we dare not ask for another loan."

Gibbon, in his Steel of Empire, notes dissension in the Macdonald cabinet over the granting of any further aid to the railway. He wrote: "... Sir John ... found strong opposition in his own Cabinet to any further aid being given to this importunate, however well-deserving, beggar."

This aversion of the government to new commitments with the C.P.R. was carried to the point where the Cabinet deliberately avoided discussion with the company's officials. We have then a background of continued C.P.R. demands, continually greater difficulty in getting them past an unwilling Cabinet and through a House not overly impressed by the prospects of the railway or the country it crossed. It was then, probably with great difficulty, that Macdonald secured the assent of his ministers to a settlement requiring a substantial financial outlay. When Macdonald wired Greenway that, "Complete settlement of the great question will take time ..." he no doubt had in mind the difficulties within his own party.

The fact that the C.P.R. was to get $15,000,000 for giving up the monopoly privilege, became known before the settlement with Manitoba was completed. In an Ottawa despatch of March 22nd, 1888, the Free Press noted that the C.P.R. wanted that sum. The full settlement was brought down in the House of Commons on April 26th. Sir Hector Langevin moved, on behalf of Tupper, who was ill, that in consideration of the C.P.R. giving up its rights under clause 15: the Dominion would guarantee interest at 3% on $15,000,000 in C.P.R. bonds, the bonds to be secured by the unsold lands of the company; all proceeds from land sales would go to the Dominion to guarantee the principal of the bonds, the Dominion to pay the railway 3% on all such moneys; and finally, provision was made for the sale or lease of the Pembina branch to Manitoba, any funds from this sale to be held by the Dominion in a general fund to pay off the principal of the bonds.

In the ensuing debate all the old charges of the past years were hauled out and aired for the last time. Laurier accused the government of paying the C.P.R. for the loss of a monopoly they could not hold because of the determination of the people of Manitoba. He denied the principle of compensation, blaming the ills of the West on monopoly and the National Policy. He moved an amendment to the agreement implementing his statements above, and was supported by Robert Watson, who was at last able to say, "I told you so" to the government. Credit for the settlement was also taken by Manitoba's Conservative members. T. M. Daly spoke in favor of the proposed settlement, pointing out that all Greenway had received was a letter promising that a line similar to the R.R.V. would be allowed to go through. On the other hand, he, Ross, Royal and Scarth wanted an end to the whole policy of disallowance, with the result that this bill was now before the House. It was apparent that Daly merely spoke as a gesture to help save the waning prestige of the Conservative party in Manitoba. He said, in the course of his remarks: "... I trust that the people of Manitoba will ... appreciate the efforts of myself and my colleagues on this side of the House in connection with this matter ..."

Tupper spoke on the Agreement in moving the House into Committee of the Whole to discuss its terms. He defended the monopoly clause, chiefly on the ground that the Liberals would have included it in his place. He explained his stand in 1884, where he had promised an end to disallowance on completion of the main line, on the ground that bad seasons and unsettled conditions had forced both the Government and the railway to stand by the monopoly provisions. Now the railway was willing to give it up and asked this loan to help it expand to meet the threat of competition. The vote on the agreement was a forgone conclusion, 112 in favour of accepting the Agreement, with 62 against. Watson voted with the majority, as did Manitoba's four other members.

In Manitoba the victory of Greenway and Martin was cheered on all sides. They were accorded an enthusiastic welcome at both Emerson and Winnipeg, replete with bonfires, bands and torch-light parades. Greenway reported to the Legislature on his success and put through a bill providing for the construction of the R.R.V. as a public work. The Manitoba Government assumed, by this Act, the right to sell or lease the line as it saw fit. He thereupon went to the country and on the strength of the broken monopoly, was returned with a substantial majority.

Meanwhile rumors had been current that the C.P.R. intended to gain control over the new border line by whatever means they could find. Greenway received letters of warning from prominent men in his party, including the following message from Sir Richard Cartwright: "I have had information from a quarter deserving regard, that the C.P.R. are plotting with Hill to get control of your Red River Road ..."

This letter was followed by one from Robert Watson along the same lines: "I might state to you in strict confidence that I have heard that there is a proposition working between the C.P.R. and St. Paul M. & M. to get control of the R.R.V.

As a result of these warnings Greenway sought a means of securing the new line from such interference. If the C.P.R. was dealing with the St. Paul, Minneapolis and Manitoba Railway, the property of J. J. Hill, then what better security could be found than to turn the R.R.V. over to the Northern Pacific. the sworn enemy of Hill in the American Northwest? With this thought in mind, Greenway and Martin left for New York soon after the election with the avowed purpose of discussing the R.R.V. with Northern Pacific officials. Their mission was successful. On August 3rd, the terms of the agreement with the Northern Pacific were announced. By agreement between Martin on the one hand and Oakes, of the Northern Pacific, on the other, a new company was to be chartered in Manitoba under the title of the "Northern Pacific and Manitoba Railway Company". Martin, Manitoba's Railway Commissioner, was to be Vice-President; the new company would purchase the R.R.V. on its completion by the Manitoba Government; Manitoba would build a branch to Portage la Prairie from Winnipeg; two of five directors were to be appointed by the Government of Manitoba; the rate-fixing power was to be in the hands of the Provincial Executive; and under no circumstances was the new company to sell stock to the C.P.R. or the St. P.M. & M. or their agents.

This move cost the Greenway Government the support of the Free Press. This journal objected to the contract on the grounds that it gave a monopoly of the R.R.V. to the Northern Pacific, a condition which lead the paper to believe that the province was to be saddled with two monopolies instead of one. They wished running rights to be accorded the St. Paul, Minneapolis and Manitoba as well as the Northern Pacific. This agitation against the deal with the N.P. was carried on throughout the first session of the seventh legislature, called to deal with its acceptance. This objection did not mean that the Free Press was carrying a brief for the St. P.M. & M. In fact they stated that, "Both railways will take every cent they can get." The Free Press believed that this agreement would not give Manitoba the free competition in rails desired and so continued to oppose the agreement until its acceptance by the legislature. In spite of the Free Press's agitation against the measure, it received legislative assent by a vote of twenty-five to nine, the government losing only three of their regular supporters.

The competing border connection was, however, not yet obtained for Manitoba. The C.P.R. having failed in their efforts to lease or sell the Pembina branch to Manitoba, or to get control of the R.R.V. through the St.P.M. & M., made a last effort to prevent Manitoba gaining what she had so long striven for. They sought an injunction against the Portage la Prairie branch of the R.R.V. to prevent it crossing their line. They based their appeal on the grounds that the act providing for the Northern Pacific & Manitoba Railway was ultra vires of the province, since it provided for a connection with American lines; and that the province had not obtained consent of the Railway Committee of the House of Commons for effecting crossings of the C.P.R. line. The provincial government was not inclined to accept this new stoppage. Martin called for volunteer police to protect construction crews in their work of putting in a crossing of the C.P.R. southwest of Winnipeg. The crossing was laid at night only to he torn out on the morning by the C.P.R. crews. A miniature civil war threatened. The Portage la Prairie historian, R. B. Hill, with his usual enthusiasm, stated: "Hundreds would have flocked to the assistance of the Government even if it had meant the support of their measures at the point of a bayonet."

Fortunately, bloodshed was avoided and the matter left for the courts to decide. The issue was followed with great interest in the local press. The matter of the injunction was referred to the railway committee by the Manitoba courts and by the committee to the Supreme Court. A decision in favour of Manitoba was rendered in December. The N.P. & M. Act was declared to be valid and a crossing of the C.P.R. equally valid, providing the permission of the railway committee was obtained.

With this decision the C.P.R. abandoned its obstructive tactics. Manitoba was henceforth free to charter and build lines of railway when and where the government of the province pleased. This last manoeuvre was an anti-climax, serving only to arouse once more the opinion of Manitobans against the C.P.R. They regarded this move as merely the same monopoly in a new disguise. It was a clear victory for Manitoba, both in the so-called "Fort Whyte" crossing case and the larger issue of federal disallowance of local railway legislation.

Page revised: 23 July 2010

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