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Battle of Fort Whyte — Manitobans pressured provincial government to end CPR monopoly
Jul 10, 2009

by Bruce Cherney (part 1)

Up to Their Old Tricks was the headline in the Manitoba Free Press, with the accompanying article describing how the Canadian Pacific Railway was attempting to block the laying of tracks for a new rail line from Portage la Prairie to Winnipeg.

“At the point where the Portage branch of the NP & MR (Northern Pacific and Manitoba Railway) crosses the CPR Southwestern about five miles from the city, the Canadian Pacific have laid down a temporary siding across the dump of the Portage line; and have ‘killed’ an old engine directly in the line of the road,” reported the October 18, 1888, Free Press. “The track-layers will reach the point in a day or so; and they will then either suspend operations indefinitely pending removal of the engine or go on and build the road by main force over the Canadian Pacific track.”

In the annals of history, the ensuing conflict between the CPR and the NP & MR would become known as the Battle of Whyte, but the incident was just one of a series of noteworthy skirmishes between the CPR and the Manitoba government.

Years before the Battle of Fort Whyte, the coming of the CPR to Winnipeg, connecting the city with Eastern Canada  in 1881 was hailed with great enthusiasm. 

To prevent the railway from crossing the Red River at Selkirk as had initially been planned, city officials bribed the CPR with free land, a $300,000 bridge, $200,000 in cash, and tax relief into perpetuity. The arrival of the railway brought unbridled economic prosperity to the city and province, creating a short-lived land boom.

“Winnipeg was the centre of the boom, from which the evil radiated in all directions,” wrote early Winnipeg historian Alexander Begg in his book the History of the North-West. “Towns were surveyed all over the province and Territories, and lots in them were disposed of at auction at fabulous prices.

“The town-site mania was aptly described by a railway conductor who had taken a trip to the end of the track, on his return east. Asked how the country was progressing, he said: ‘Well it’s the greatest country I ever struck ... there’s a new town about every three miles from Winnipeg to Moose Jaw. Where there’s a siding, that’s a town, and where there’s a tank and a siding, that’s a city.”

Mythical paper cities sprung up across Manitoba where lots were sold at a significant profit by speculators in anticipation of the arrival of the railway. The names of these “cities” reflected the silver-tongued oratory of the speculators: Crystal City, “the featured great city of Manitoba;” Mountain City, “the embryo city;” Dobbyn City, “the future great manufacturing city of the Souris District;” and Rapid City, “the Minneapolis of the North West.”

Who remembers Pomeroy? Auctioneer Joseph Wolf advertised in the Free Press on November 15, 1881, that he would be selling 100 lots in this “golden opportunity” town.

Dobbyn City does not exist on present-day maps, and the others mentioned are mere hamlets or at best small-sized towns. But while the boom lasted, some like Jim Coolican, “Winnipeg’s Real Estate King,” who strode down Main Street in a $5,000 sealskin coat and matching hat, became quite wealthy. But wealth built on speculation can just as quickly vanish, and that’s what happened when the market turned sour in the spring of 1882.

When sanity returned, the speculators left Winnipeg, replaced by settlers, who eagerly sought out 160-acres of land offered by the federal government for just $10 and the promise they would build a home and clear a portion of the land within three years. Up and down the CPR line, settlers purchased land from the railway company at relatively good rates, although not as cheaply as government property.

There was only one game in town and the CPR did everything in its power to ensure its monopoly was maintained. Farmers began to resent the implications of the monopoly enjoyed by the CPR with Ottawa’s approval, which resulted in exorbitant freight costs for bringing their grain to market. For farmers, sending their production to Fort William (now Thunder Bay) became their biggest single expense. And this cost increased in 1884 when the CPR again raised its rates.

Local businessmen also came to detest the premium prices they paid for tariff-protected goods from Eastern Canada and to ship their goods to market.

Farmers and businessmen hoping to create thriving communities, continually pursued branch lines to serve their new towns. But, their aspirations were frequently misplaced, as the CPR was not in the business of promoting anything beyond its own self-interest.

Besides the 25-acres of land promised to the CPR by the federal government, the CPR contract contained a “monopoly clause,” 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, except such lines as shall run South-West or to the westward of the South-West; nor within 15 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 established until the expiration of the same period.”

Manitobans wanted branch lines, but the CPR did not want competition and the clause prevented the creation of other railways in the province not built by the CPR. As a result, whenever the provincial government passed an act establishing a new railway, it was disallowed by Ottawa under the terms of its contract with the CPR.

Manitoba Premier John Norquay gave his approval for the continued disallowance of competing lines running to the United States demanded by Manitobans. A Conservative, he was a strong supporter of Prime Minister Sir John A. Macdonald’s vision of nation-building through the CPR. 

In fact, when Norquay first visited Ottawa in 1879 as premier, he was told by Macdonald: “The Government think it very desirable that all railway legislation should originate here, and that no charter from a line exclusively within the Province of Manitoba, should be granted by its Legislature without the Dominion Government first assenting thereto.”

It was a position Norquay at first accepted, so when Ottawa disallowed rail lines, Norquay commented that “the people of Manitoba would soon get over it.”

In quick succession, the federal government disallowed the Winnipeg South Eastern Railway Company (a line from Winnipeg southwest to the international border), and the Emerson North Western Railway (a line from Emerson to Mountain City and then westward).

But it was Macdonald’s presence and political organization that helped sustain Norquay as premier of Manitoba. An 1886 visit by Macdonald to Manitoba “rekindled local Tory enthusiasm and rescued Norquay from certain defeat in the general election,” wrote Manitoba historian Gerald Friessen, citing a comment made by Manitoba Lieutenant-Governor James Cox Aikins.

In an Ottawa speech, Charles Tupper, the minister of railways and canals in the Macdonald government, asked, “Are the interests of Manitoba and the North-West to be sacrificed to the policy of Canada?”

He replied to his own rhetorical question, “I say, if necessary — Yes.”

Norquay eventually became a proponent of new rails to serve Manitobans, but his conversion to the cause came too late to restore his political fortunes among Manitobans. 

Norquay attempted to regain political support by issuing a charter for the Red River Valley Railway, but the federal government stepped in and disallowed the charter. A bill was then passed by the Manitoba government calling for the building of the line as a public work within provincial jurisdiction.

The CPR blocked the path of the new railway by putting up a track in front of the RRVR, allowing Ottawa to obtain a court injunction against the new railway crossing a CPR track.

Macdonald was a continual thorn for Manitoba interests, eventually disallowing a dozen pieces of provincial legislation for new rail lines.

When Norquay pushed forward with a 70-kilometre stretch of track, Macdonald refused to transfer to the Manitoba government 256,000 acres of land which the railway builder was entitled to under his provincial  charter. On the strength of the land transfer, the provincial government had issued bonds to pay for the construction of the RRVR. Without collateral for the bonds, Norquay and the provincial treasurer were forced to resign in late 1887. He was replaced as premier by fellow Conservative David Harrison, but he too resigned after failing to muster sufficient support in the legislature to maintain his hold on power. As a result, in January 1888 Manitoba Lieutentant-Governor Cox turned to Thomas Greenway and the Liberals to form the government. The Greenway Liberals subsequently defeated the Conservatives — again with Norquay at the helm — in the July 11, 1888, provincial election.

Cries of foul against the CPR monopoly and Macdonald led to the split in provincial politics along party lines, the first true differentiation between Conservatives and Liberals in Manitoba’s history. As well, a growing new party, the Farmers’ Union, began to support the Manitoba Liberals’ railway policy.

Prior to the Norquay-Greenway era, opposing factions in the legislature were loosely identified as either “for” the government or “against” the government. Originally Greenway ran as a Provincial Rights candidate in 1883, and became the leader of the Opposition to the Norquay Conservatives. By 1888, he was the leader of the Liberals in Manitoba, who promised to get tough with Ottawa and approve new railways.

By the time Greenway was in office, the mood of Macdonald and the CPR was undergoing a transformation. Macdonald came to realize that the monopoly was a ticking political time bomb, doing his government little good on the public relations front. The CPR was also timing a second look at its monopoly clause and began to see it as a mistake.

The CPR was in dire need of money. “If the capital cannot be secured the company must collapse and go into bankruptcy,” George Stephen, the CPR president, told Macdonald. He said the CPR’s financial position had been “seriously weakened by the wicked and suicidal agitation. I am, therefore, ready to recommend ... the cancellation of these obnoxious monopoly clauses of our contract ..”

Of course, Stephen wanted a loan of $15 million guaranteed by the federal government in order to cancel the CPR’s monopoly.

The financial woes of the CPR and the political backlash against Macdonald and his Conservative government was welcome news for Greenway, who promised to begin construction of the RRVR without Ottawa’s approval.

The Free Press, a Liberal-leaning newspaper, applauded Greenway, saying, “If the Dominion Government think they have no sterner stuff than Mr. Norquay and colleagues to deal with on this occasion, they will be afllicted with violent sudden surprise ... The men now in power will sound no defeat.”

A meeting of the Winnipeg Liberal-Conservative Association — despite its name it was a Tory association — on February 21, 1888, denounced Macdonald and passed a resolution stating the province “will not submit to struggle any longer under the burden (of the monopoly clause) that is crushing the country to death.”

Greenway then went to Ottawa in an attempt to have the contentious clause revoked and uphold the rights of the province to create its own railways. But Greenway encountered delaying tactics in Ottawa and a lack of progress on the issue, so he returned to Winnipeg after only a few days.

“I regret your hasty departure,” Macdonald telegraphed Greenway on March 20. “Matters making as rapid progress as possible. I hope you will return and stay for a few days. Please answer.”

Greenway returned to Ottawa accompanied by Attorney-General Joseph Martin and received an agreement to end the monopoly clause as well as permission to build “a border railway.”

The Commercial wrote that all Manitobans had focused on Greenway’s visit to Ottawa, and noted that they had to come home with an agreement or not be able to live in Manitoba.

But they had succeeded and the people of Manitoba were grateful. When the Greenway and Martin train stopped in Emerson and then arrived in Winnipeg, the two men were enthusiastically cheered and were greeted with bonfires, bands and torch-light parades. 

Following the deal, Ottawa agreed to guarantee the three per cent interest on $15-million in CPR bonds to be secured by the unsold lands the company held, and all proceeds from the sale of land was to go to Ottawa to guarantee the principle of the bonds. The Canadian government added a provision for the sale of the lease of the Pembina branch of the St. Paul, Minneapolis and Manitoba Railway (completed in 1878 and running from St. Boniface to St. Paul) to the Manitoba government.

The Greenway government then introduced a bill to build the RRVR as a public work. 

Meanwhile, the CPR was working behind the scenes with the American backers of the St. PM & MR — the CPR’s Stephen and Donald Smith were the major shareholders in the railway with Americans James J. Hill and Norman Kittson — both of whom were ex-Canadians — to regain control of the RRVR.

To counter this move and give the province a stronger position, the Manitoba government formed a partnership with the Northern Pacific, another American-based railway. A new company was then chartered in Manitoba called the Northern Pacific and Manitoba Railway. The new company was to purchase the RRVR once the line was completed and the Manitoba government would build a new line from Portage la Prairie to Winnipeg which would also be turned over to the NP&MR.

Under the provincial act, the NP&MR was authorized “to acquire, complete, lay out, locate, contract, furnish, maintain, operate and enjoy railway lines in the Province of Manitoba, viz, the railway known as the Red River Valley Railway located between the international boundary line and the city of Winnipeg to the town of Portage la Prairie.”

The Manitoba government forged ahead with its line and didn’t consider it necessary to lease or buy the Pembina branch from the CPR, as the Northern Pacific possessed tracks near the province’s border with the U.S. 

Attorney-General Martin knew it would take time for the Railway Committee of the Privy Council to give its approval to a crossing of the CPR line  west of Winnipeg, so he wrote William Cornelius Van Horne on September 20, 1888, asking for the CPR president’s permission to proceed. 

Van Horne’s reply was less than satisfactory to Martin. “While I should be glad personally to oblige you,” wrote Van Horne, “I am constrained by the interest of this company to withhold my assent and am therefore unable to comply with your wishes.”

This reply indictated to Martin that the CPR was not about to give up its strong position in Manitoba without a fight.

For its part, the CPR decided to take its objections to the courts, claiming the NP&MR was connecting to American lines and the province hadn't obtained the necessary permission from the Railway Committee of the Privy Council to cross the CPR line. The CPR sought an injunction against the Portage extension, which had yet to be heard in the courts.

The Manitoba government was incensed and Joseph “Fighting Joe” Martin, who besides being Manitoba’s attorney-general was the province’s railway commissioner, called for a volunteer police force to protect workers installing the crossing southwest of Winnipeg.

The government then wired Ottawa expressing “their disapprobation of the conduct of the Canadian Pacific Railway, and asserting the rights of the province. To this as yet no reply has been received” (Free Press, October 19, 1888).

“On Saturday afternoon two opposing forces faced one another at the crossing of the Portage line with the Canadian Pacific,” reported the Free Press on Monday, October 22. “and nothing but the non-arrival of the track-layers at the point where the trouble exists, prevented a collision which might have been fatal to some in the immediate effects, and would certainly have led to very disastrous results in the future. But this difficulty still remains unresolved; both sides appear equally determined; and only time will tell whether a peaceable resolution to the imbroglio will be reached.”

Manitoba Provincial Police Chief J.M. Clark at one o’clock in the afternoon had entered the provincial police station, 496 Main St. near William Avenue, to swear in 53 special constables, many of whom were prominent Winnipeg citizens, according to the Free Press, which listed their names. The constables, as well as others who wanted to see the “fun” and take part in the action if necessary, were loaded on to four rail cars. By the time the train left the NP&MR Water Avenue station, there were 300 people aboard heading for the junction of the CPR and main line of the Northern Pacific where the train switched to the newly-laid track.

“After proceeding about a mile the train stopped, order having been given that the cars should not be taken within a mile of the scene of the trouble; and the construction train, which was down the line about three-quarters of a mile, was whistled to come and take the warriors bold to the scene. The crowd poured out of the cars. A mile or so off the derailed engine blocking the line could be seen; and on either side of it two wreaths of smoke curling up over the  scrub bushes along the track, made known the presence on the track of two live engines.”

The NP construction train was rather slow in reaching the “scene” so about 100 people decided to walk up the line to the crossing.

Meanwhile, four cars of CPR workers  armed with pick axes were on the Southwestern line followed by William Whyte’s private car. All the CPR workers had been sworn in as special constables by justices of the peace, T. Nixon and G.H. Campbell, using the provisions of the Dominion Railway Act. Under the act, any prominent official of a railway — in this case Whyte, the general superintendent of the CPR’s western lines — believing the company’s possessions and property were endangered, could request the swearing in of special constables by magistrates to provide protection. It helped that the local magistrates were all employees of the CPR.

(Next week: part 2)