The Last Spike: The Great Railway, 1881-1885 by Pierre Berton

1878. “The policy of the Government in disallowing all extensions into Manitoba of Yankee lines is nothing more or less than the N.P. [National Policy] in Railways, and is defensible on precisely the same grounds.”
    There is no doubt that Macdonald intended to back Stephen up but there is also no doubt that the Monopoly Clause was already causing him grave political uneasiness. To ride roughshod over the legitimate desire of Manitoba settlers for more railways to service their communities was to alienate politically an entire province. From the beginning he had seen the railway as a device to unite the nation – to tie the settled East to the new country beyond the Shield. Now in the very first year of its construction the railway had become a divisive force, antagonizing the very people it was supposed to link together. The Prime Minister gave vent to his viewin the presence of some of Stephen’s colleagues on the subject of the “cussed” Manitoba charters and Stephen wrote to him in alarm that “they have all come back more or less full of misgivings and fears lest in some way the 15 mile Yankee barrier will not be maintained.”
    There was another threat on the horizon. The ubiquitous Northern Pacific was about to purchase the railway owned by the Quebec government – or so the Premier, J. A. Chapleau, kept insisting. This was the Quebec, Montreal, Ottawa and Occidental and its eastern section, familiarly termed “the North Shore Line.” Quebec had been trying to unload this white elephant – it had eaten up fourteen million dollars and was steadily losing money – ever since the days of Sir George Etienne Cartier, who had promised to make it part of the CPR . The previous winter, Chapleau had made the purchase of the partially completed railway a condition of French-Canadian support for the CPR contract.
    Macdonald had managed to evade such an out-and-out promise. But now he was again facing the same kind of political blackmail. If the aggressive Henry Villard came to the rescue of Quebec by buying up the railway, it would give him a threefold advantage in his drive to tap Canada for the Northern Pacific’s profit. With one stroke he would occupy a key position between the government-owned Intercolonial on the east and the Canadian Pacific on the west. Secondly, it was clear that he meant to link the Quebec line with the Northern Pacific at Sault Ste Marie; thus the country faced the possibility of a Yankee transcontinental railway mainly on Canadian soil. But there was more: By taking the faltering railway off the hands of the Quebec government, Villard would be buying considerable political leverage in that province and, consequently, in Ottawa. Macdonald feared that he would use this new political strength to persuade the Quebec members to vote in a bloc against federal disallowance of the Manitoba railways. If Villard’s gambit succeeded, he would have a through line from Quebec City to Winnipeg by way of Sault Ste Marie and Duluth; and Macdonald’s dream of an all-Canadian route would be shattered, perhaps forever.
    The Prime Minister confessed to Stephen that he was “very uneasy.” If the rumours were true, “it means danger ahead.” A Quebec election was coming up. The president of one of the Manitoba lines, the Manitoba and Southwestern, had taken a house in Ottawa and was tactlessly predicting that the Northern Pacific would be a factor in that election. No doubt Chapleau, in his election speeches, would magnify the Villard offer, but if Stephen was to act at all, Macdonald urged, then he must act at once. The CPR president had been reluctant to buy the Quebec railway, but now he changed his mind and decided he must make an offer for the sectionrunning west to Ottawa from Montreal in order to head off the American attempt to control Canada’s transcontinental transportation system.
    Stephen, who had once thought the idea of building the line north of Lake Superior “great folly,” was