 The CPR was the cornerstone of the National Policy.  The west could not develop as a centre for agricultural goods until goods could be transported.

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Presentation transcript:

 The CPR was the cornerstone of the National Policy.  The west could not develop as a centre for agricultural goods until goods could be transported in and out of the region.  MacDonald thought that the CPR could be a part of the British Empire’s trading network by providing the means to ship goods to and from Asia.  The construction of the CPR became the government’s top priority, but between 1878 and 1880, the government searched in vain for a group of investors.

 George Stephen of the Bank of Montreal, Donald Smith of the Hudson’s Bay Company, and James J. Hill, an expatriate Canadian investing in the United States railways, had bought the St. Paul and Pacific railway in 1877 for just $ This group of investors came to be known as The CPR Syndicate.  Within just four years, they had turned the railway around and had made a profit of $17 million.  MacDonald and the government came to a deal with the CPR Syndicate giving them $25 million, along with a land grant of 25 million acres, most of it on the prairies. Also a monopoly on all rail traffic west of Lake Superior for the next 20 years, and an exemption from tax an all lands until they were sold. In return, the syndicate promised to complete the transcontinental railway within ten years. This contract was approved by parliament on February 1,  The CPR Syndicate changed the original route and moved the line about 300 miles south, into the southern prairies. But it was still unclear how they would pass through the Rocky Mountains.

 James Hill spent the early fall of 1881 looking for a new general manager for the railway. He knew he needed someone of exceptional energy and drive, his choice was William Van Horne, a 38 year old general manager of a smaller railway in the American Midwest.  With Van Horne in control, the CPR would be able to complete the railway line in the contracted period, as long as the money held out.  One problem for the CPR was that the government subsidy was paid out only as each section of work was completed. By the fall of 1883, the company was running out of money.  As funds dried up, so did the workers’ salaries, and they were forced to strike. The Canadian government reluctantly passed a bill that gave the CPR $22.5 million in order to finish the railway.  Van Horne cut down on expenses and decided to use temporary wooden trestles to carry the line over difficult terrain. In many cases the railway was twice as steep as safety allowed, but the CPR main line eventually crossed the Rockies at Kicking Horse Pass.

 In March 1885, the Northwest Rebellion broke out. Van Horne managed to transport the troops and the first soldiers arrived in Winnipeg in just five days.  Thanks to the CPR, it looked as though the federal government could react quickly to a crisis. This was also the main event that saved the CPR from financial ruin because many Canadians now understood why such a transportation link was necessary.  On July 10, 1885, within hours of running out of credit, the CPR received enough cash from Ottawa to finish the railway.  The transcontinental link was actually completed by the fall of 1885, five years ahead of its original schedule.