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Expulsion of Luxton — editor was a constant irritant to the Canadian Pacific and prime minister
Mar 27, 2014
by Bruce Cherney (part 1)
On the prairies, the Canadian Pacific Railway (CPR) was omnipresent in the 1880s and 1890s. It held a virtual stranglehold on transportation of grain to market and freight from Eastern Canada to the West as well as bringing settlers to the plains. In fact, many of the settlers could also obtain farmland from the CPR, as it had been given a 25-million acre (10-million hectare) land grant in Western Canada by the federal government to build the nation’s first transcontinental railroad.
Arguably, the CPR was the single most intrusive institution in the lives of everyone living west of Ontario, and had been so since its arrival in Winnipeg in 1878 with the establishment of the Pembina Branch of the CPR that linked the city with the United States. The footprint of the CPR substantially increased with the establishment of the company’s western headquarters, rail yard and shops in the city. Many of the primary towns and cities across the prairies were founded by the CPR, including Brandon, Regina and Calgary. If the CPR was unable to buy land for a community at a river crossing or to establish a depot at what it felt to be a reasonable price, the company simply moved the location down the line to a site it owned. The CPR also used this tactic to thwart land speculators so that the company had the advantage in land sales.
In the hearts of CPR executives, what was good for their company was good for Canada, so they did everything in their power to ensure that the CPR was not handicapped by criticism of its business practices nor its dabbling in Canadian politics. In Manitoba, for example, it was the CPR’s George Stephen who asked Canadian Prime Minister John A. Macdonald to intervene on the company’s behalf and force Premier John Norquay to resign when he began promoting a link to the U.S. by a competitor, the Red River Valley Railway (RRVR), a company actually owned by the province. 
At the start of his premiership, Norquay was viewed favourably by Macdonald, but his support only lasted as long as the Manitoba premier toed the party line. By granting a provincial charter of incorporation to the RRVR, Norquay had gone too far. In addition, when Ottawa disallowed the RRVR using the CPR’s monopoly clause, Norquay persisted in going ahead with its construction. He said he would build the line “unless prevented from doing so by legal or military force.”
With the help of Macdonald, the CPR prevented the RRVR from obtaining a bond issue in London at the “last minute,” which “blackened the province’s reputation in Chicago and New York” (Manitoba Premiers of the 19th and 20th Centuries, edited by Barry Ferguson, Robert Wardhaugh).
Another result was that CPR stock began to fall in value, since the building of the RRVR had the potential to break the railway’s monopoly. Without the monopoly, CPR shares weren’t as attractive to foreign investors.
Macdonald concocted a financial crisis with the help of Stephen, which led to the collapse of the RRVR and forced the resignation of Norquay as premier.
But the CPR and Macdonald did have critics who could not be silenced. In Eastern Canada, both the Toronto Globe and Montreal Gazette were highly-critical of the Macdonald government’s railway policy. In Western Canada, among those who became an irritatant was William Fisher Luxton, a founder of the Manitoba Free Press along with John A. Kenny, with the assistance of Samuel Reid Marlatt and Alexander “Sandy” Macdonald. The newspaper, which cost $4,000 to begin operations, started publishing in Winnipeg on November 9, 1872. 
In the pages of the newspaper, Luxton, who came to Winnipeg in 1871 and was the city’s first public school teacher, riled against the political power the CPR held, the 20-year monopoly it had on rail transportation (no other rail company could build branch lines south of the CPR line to the U.S. — the monopoly clause in the railway’s charter only ended as a condition of the federal government providing additional funding to the railway in 1888), and the sway it held over politicians who ceded money to the company so that it could build more of a presence in Manitoba and the West. The CPR’s initial subsidy of $25 million came from the federal government, which was added to as the years progressed.
In the process, Luxton had gained the wrath of such influential men as Prime Minister Macdonald, CPR major shareholder Donald Smith and William Cornelius Van Horne, the president of the CPR. These men had enough of Luxton and devised a scheme to rid themselves of the ink-stained scribe, although it would take years before the plot against Luxton bore fruit.
Luxton was an unapologetic Liberal Party (initially labelled the Reform Party) advocate in a nation and province dominated by Conservative politicians. In the first Free Press issue, Luxton penned a scathing attack on Prime Minister Macdonald’s Conservative government in Ottawa.
“We expect to see John A. McDonald’s (sic) Ministry fall before the popular indignation created by its incapable, corrupt, defective and politically sinful practices,” he wrote.
One of Macdonald’s “sinful practices” was his “National Policy,” which favoured Eastern Canadian manufacturing interests and forced Western Canadian businesses and farmers to pay high tariffs for imported manufactured goods. For years, Luxton wrote editorial after editorial criticizing the Macdonald government’s National Policy.
To counter Luxton’s influence, the Conservatives had unsuccessfully tried to establish their own party organ in Manitoba. In fact, Winnipeg of the era became known as the “graveyard of journalism,” and of all the 20 newspapers established in Winnipeg between 1859 and 1890, only the Free Press has survived to this day.
Luxton’s newspaper thrived and quickly expanded from being a weekly to a daily publication — the first on the prairies, with its initial daily issue appearing on July 6, 1874 — that was widely read across the nation. The more successful Luxton became, the more frustrated the Conservatives and the CPR became.
The initial change in Luxton’s fortunes occurred in 1885. In order to finance the newspaper’s continued expansion, he was forced to raise more capital, which Luxton did through incorporation of the Free Press as a joint stock venture with a capitalization of $100,000 in stock.
“At the same time, John A. Macdonald talked the CPR’s Van Horne into buying the floundering Call for $33,500,” wrote Minko Sotiron in his 1997 book, From Politics to Profits: The Commercialization of Canadian Daily Newspapers, 1890-1920. “In turn, to reduce competition, Luxton purchased the Call in 1889 through the simple expedient of increasing his stock authorization to $133,350 and converted Van Horne’s Call ownership into 335 shares of Free Press stock. In 1890 Luxton borrowed a further $40,000 — probably from Smith — to buy out his last remaining rival, the Sun.”
The agreements with Van Horne and Smith marked the onset of Luxton’s future troubles, although it seemed at first to be a favourable arrangement, as the newspaper gained “exclusive access to Winnipeg to all the North American telegraphic news services through the CPR wire” (Sotiron).
“For their part, Van Horne and Smith were hoping that their link with the paper would help to deflect criticism of the CPR, please its political partners, and influence decisions on branch lines in Manitoba.”
Smith and Van Horne may have expected favourable treatment in the pages of the Free Press, as Luxton had been sympathetic to Smith’s political aspirations in the past. But promoting the interests of the CPR was another matter. Luxton could not be reined in and he continued to exert his independence from the CPR as a newspaper editor. In fact, he firmly believed that the financial arrangements reached with Van Horne and Smith had been contingent upon the Free Press’ independence from CPR interference. 
Since the founding of the Free Press, Luxton advocated the independence of the newspaper. In the very first issue on November 9, 1872, Luxton wrote: “The FREE PRESS (his capital letters) is thoroughly independent of every Government, corporation and individual, outside of those whose names appear as its publishers (‘Kenny & Luxton’).”
In a letter to the editor of the  Winnipeg Tribune, which was published on September 25, 1893,  Luxton wrote that  he “had the assurance that I was to be left absolutely to myself as to the policy of the paper. The deal with them was purely of a legitimate business character — so, at least, I understood it, or it would have not been consummated.”
(Next week: part 2)