by Bruce Cherney (part 1 of 2)
In 1883, the Canadian Pacific Railway was in deep financial trouble. The company was in dire need of an injection of cash if it was to continue building its rail link across the nation.
The crippled financial position of the CPR was mirrored in the deteriorating health and depression of normally optimistic company president George Stephen of Montreal.
Whatever schemes Stephen proposed, he could not gain the confidence of investors in the United States and Great Britain. In fact, CPR stock dropped significantly on the New York Stock Exchange towards the end of 1883.
“Things in New York are simply disgusting,” complained Stephen when unable to raise more funds without making spectacular concessions that made the CPR’s financial position even less stable, “every fellow there and in London too is ready to cut our throats if he could be sure of robbing us.”
It didn’t help that North America was in the midst of a depression with investors on both sides of the Atlantic discouraged by the performance of North American railway stock. Investors had reason to be pessimistic, as the CPR’s plight was not unique. In the United States, the Northern Pacific was on the verge of bankruptcy and other railways were experiencing similar financial woes.
Even ex-pat Canadian James Jerome Hill, an original member of the board and an underwriter for the CPR from St. Paul, Minnesota, had divested himself of almost all his stock in the railway and quit as a board of director on May 3, 1883. Hill, along with Stephen, Donald Smith and Norman Kittson (also an ex-pat Canadian living in St. Paul), had bought the St. Paul and
Pacific Railway with the help of New York banker John S. Kennedy, which they reorganized as the St. Paul, Minneapolis and Manitoba Railway.
Once the Pembina branch line of the CPR was completed and linked up with the St. Paul, Minneapolis and Manitoba Railway at Emerson in November 1878, Winnipeg had its first rail link to the outside world. All four men were the driving force behind the CPR in the initial years of the 1880s.
Hill later became one of the original “robber barons” of American history, making a fortune by controlling the Great Northern Railway. By driving his railway westward across the northern U.S. to the Pacific, Hill was in competition with the CPR for immigrants willing to settle the northern plains — something he had wanted to avoid by having the eastern section of the CPR link up with the rail empire he was building in the United States. The decision to build an all-Canadian route enraged Hill and led to his decision to quit the company and sell his CPR stock.
As Stephen struggled to pull off a
financial miracle, employees were feeling the effects of the company’s woes up and down the line.
In Brandon, 80 men employed in the CPR’s freight office had not been paid for three months, with consequences for the community as a whole. Storekeepers gave goods on credit to CPR employees, since, as one storekeeper said: “We’ve got to carry them. If the CPR goes bust, we will all have to pack up and go back to Bruce County, Ontario.”
The CPR was fully integrated into the economic lifeblood of communities in the West, especially towns such as Brandon, Moose Jaw, Swift Current and Medicine Hat which owed their very existence to the CPR.
The founding of Winnipeg, Regina and Calgary may have pre-dated the CPR, but they were no less dependent on the railway for their future growth and prosperity. This reality was fully recognized by Winnipeg business leaders and politicians, who bribed the company by building the Louise Bridge, handing over $200,000 in cash as well as land for a station and granting tax-free status in perpetuity, provided the CPR ran its mainline through the community. After the CPR received these incentives, any thought of running the mainline through Selkirk, which had originally been surveyed as the preferred site of the line’s passage over the Red River en route to the Rockies, was abandoned.
On December 13, 1881, William Cornelius Van Horne, charged with completing the CPR to the Pacific, arrived in Winnipeg. Ironically, Van Horne, a railway man from Chicago, had been recommended by Hill. Called by the Railway Journal, “a man of wonderful power and shrewdness,” it was Van Horne who decided on the all-Canadian route.
Following Van Horne’s arrival in Winnipeg, he began to organize the drive to the Pacific. The new general manager was a dynamo, who through his exceptional organizational skills made things happen. When he told railway executives in Montreal that he would lay 500 miles (800 kilometres) of track across the prairies in the summer of 1882 and have trains running across the tracks in the fall, his boast was greeted with skepticism. It was a task never before performed in the annals of railway history, but Van Horne was undeterred. He failed to achieve 500 miles of track, but 417 miles (666 kilometres) of completed railroad was built and another 100 miles (160 kilometres) of the Southwestern branch of the CPR was built in Manitoba, so technically Van Horne had reached his target.
“The history of the world offers no such evidence of push as the work of this year has done,” declared R.B. Conkey, the general manager of the American company Langdon and Shepard, which held the major CPR contract to lay tracks over the prairie. “Sherman’s march to the sea (during the American Civil War) was nothing
One of Van Horne’s first acts was to replace Alpheus B. Stickney, whom Stephen forced to resign as general
superintendent of the CPR’s western division due to allegations he used his position to profit from land sales. Van Horne appointed John M. Egan, another American railway man, as Stickney’s replacement.
Egan would play an integral role in the events of late 1883 which led to the first major labour dispute in Winnipeg’s and Western Canada’s history.
The collapse of the wildly speculative land boom of 1881-82 — brought on by the arrival of the CPR and the expectation that great fortunes were to be made as tracks were laid in the West — had been a blow to the confidence of Winnipeggers. Subsequently, 1883 was called “the year of trial.”
Winnipeg and the West survived “the fire of depression and reaction consequent upon the collapse of an unnatural and unhealthy real estate boom, and came out of the struggle, purer, better, and more solid than ever,” according to a year-end summary of the events of 1883 in the Sun.
By 1883, Winnipeg was home to nearly 2,000 of the CPR’s 3,500 employees in Western Canada. In the first part of May, new shops and an engine house were built at a cost of $207,000, and a new station and general offices were completed at a cost of $100,000. The construct of other facilities and stockyards in 1883 brought the total investment by the CPR in the city to $248,651. From 1881 to 1883, it was estimated that the railway company had invested over three-quarters of a million dollars in Winnipeg.
“The CPR brought promise of a
lucrative future to the city in the 1880s ...,” wrote David Bercuson in his book Confrontation in Winnipeg, but “in its path it also brought unions. The organizations which grew across the prairies in the trail of the CPR were not the product of a half-formed industrial ideology, they were combinations forged by the practical men who repaired locomotives, maintained the right of way, and manned passenger and freight trains. The railway unions, shop craft and running trades, formed the substantive core upon which the Winnipeg labour movement was built.”
At the top of the railway worker hierarchy were the engineers, firemen and conductors, whom Doug Smith in his book Let Us Rise! A History of the Manitoba Labour Movement, termed “the aristocracy of the labour movement.” Next came the skilled shop workers such as machinists, boilermakers, blacksmiths and car men. At the bottom rung were the mostly immigrant unskilled labourers and trackmen who built and repaired the lines and were excluded from membership in the craft unions.
The first railway labour movement formed in Winnipeg was the Boiler Makers’ Union in 1883, consisting of machinists, fitters and foundry men. That same year a Conducters’ Union was formed, as well as a Winnipeg branch of the powerful U.S.-based Brotherhood of Locomotive Engineers.
The Boiler Makers’ Union struck on March 2, 1883, due to perceived injustices relating to punching time-cards, as well as the outsourcing of work to shops in St. Paul, Minnesota.
The Manitoba Free Press wrote, “The men chafed under the strict watch put upon their beginning and quitting work, and finally rebelled against it ...”
Egan told the Free Press, he saw no reason for the strike, since the men were well paid and received time-and-a-half for overtime.
According to the March 3, 1883, article, Egan told a reporter; “A few of the leading spirits in the strike are young men who have made large wages; being hasty and reckless, have seized upon this as the most favourable opportunity for distinguishing themselves.”
He said many of the men were willing to go back to work, but feared the ridicule of their peers.
Twelve Chicago strike-breakers were brought in, but the railway eventually came to an amicable understanding with its employees and the strike was over within days. The strike involved relatively few workers and had little impact on the company’s operations other than the inconvenience.
By the late fall, the financial situation of the CPR was so desperate that at the instigation of Van Horne, Egan announced a series of wage cuts. The engineers were confronted with a $6 a month reduction in their wage.
“The CPR paid its engineers $3.50 a day,” wrote Smith, “of which $1.50 was deducted for meals. The men worked 12-hour shifts, often back-to-back, and had to settle for whatever sleeping quarters the company provided. In Calgary the ‘bunkhouse’ was an empty boxcar.”
In recounting the events of 1883, the Free Press on March 19, 1892, said: “Those days were stirring times in railway circles. The great corporation was steadily pushing on the line across the great Canadian prairie land, making records in track-laying ...”
To instill the men to even greater enterprise, Van Horne in April 1883 had actually increased wages — engineers and freight conductors received a $12 a month increase, firemen and freight conductors $7 per month.
But by December, trade had slackened on the line and the company’s troubled financial position had intensified.
“The company resolved upon a policy of economy and retrenchment,” wrote the newspaper.
Under the new policy, labourers were released and the salaries of all permanent employees were decreased.
In addition to the wage cuts, the CPR demanded its employees sign a form declaring: “We hereby agree to accept employment from the Canadian Pacific Railway Company at the rate of wages offered by the company, in our present capacities.”
The objective of the pay cuts and employee agreement was to reassure potential investors that the CPR was addressing its business problems, making the company stock a sound investment.
The financial constraints backfired when it came to labour relations as the Brotherhood of Locomotive Engineers resolved to oppose their pay cut.
(Next week: part 2)