Two companies were organized with a view to
securing the contract, one a Montreal company under Sir Hugh
Allan, the foremost Canadian man of business and the head of the
Allan steamship fleet, and the other a Toronto company under D.
L. Macpherson, who had been concerned in the building of the
Grand Trunk. Their rivalry was intense. After the election of
1872 a strong compromise company was formed, with Allan at the
head, and to this company the contract was awarded.
When Parliament met in 1872, a Liberal member, L. S. Huntington,
made the charge that Allan had really been acting on behalf of
certain American capitalists and that he had made lavish
contributions to the Government campaign fund in the recent
election. In the course of the summer these charges were fully
substantiated. Allan was proved by his own correspondence, stolen
from his solicitor's office, to have spent over $350,000, largely
advanced by his American allies, in buying the favor of
newspapers and politicians. Nearly half of this amount had been
contributed to the Conservative campaign fund, with the knowledge
and at the instance of Cartier and Macdonald. Macdonald, while
unable to disprove the charges, urged that there was no
connection between the contributions and the granting of the
charter. But his defense was not heeded. A wave of indignation
swept the country; his own supporters in Parliament fell away;
and in November, 1873, he resigned.
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