-mines in
Alberta and Vancouver Island, whaling and halibut fisheries on the
Pacific, and lumber-mills on the British Columbia coast--all bearing
some relation to the development of the railway system.

[Illustration: Canadian Northern Railway, 1914]

In 1896, a railway a hundred miles long, beginning and ending nowhere,
operated by thirteen men and a boy! In 1914, a great transcontinental
system practically completed, over ten thousand miles in length, and
covering seven of Canada's nine provinces! The impossible had been
achieved.

{196}

CHAPTER XI

THE EXPANSION OF THE GRAND TRUNK

The Darkest Days--New Men at the Helm--Expansion in the East--The Grand
Trunk

In the eighties, it will be recalled, the activity of the Canadian
Pacific in the eastern province had stirred the Grand Trunk to an
aggressive counter-campaign. Line after line had been absorbed,
extension after extension had been built. New life seemed to have been
injected into the old system. Holders of even ordinary shares began to
dream of dividends.

The activity was brief and prosperity briefer. Only in the golden days
from 1881 to 1883, when the West was enjoying its first 'boom' and
railway construction was at its height, did the policy of expansion
justify itself from the shareholder's point of view. The year 1883 saw
the high-water mark of prosperity for the Grand Trunk; for in that year
dividends were paid not only on guaranteed but on first, second, and
third preference stock. Not again until 1902 was even a {197} partial
payment made on the third preference; not until 1900, save for a
fraction in 1887, was anything paid on second preference; first
preference dividends were fractional and occasional, and even the
guaranteed stock dividends were passed time and again. The financial
position of this great system in the middle nineties may be briefly
summed up in the statement that securities of the par value of
L16,000,000, which in 1883 had a market value of L12,000,000, were
worth in 1894 only L3,500,000. The junior securities had become only
gambling counters on the stock exchange.

Where did the cause lie? There was not one; there were several. The
first was in capitalization. The line had been hopelessly
over-capitalized to begin with, and the new acquisitions doubled fixed
charges, while net receipts increased only ten per cent; feeders had
proved suckers.[1] Secondly, in the general commercial situation. Th