Canada shared in the recovery and
gave the credit to the well-advertised political patent medicine
taken just before the turn for the better came. For years the
National Policy or "N.P.," as its supporters termed it, had all
the vogue of a popular tonic.
The next task of the Government was to carry through in earnest
the building of the railway to the Pacific. For over a year
Macdonald persisted in Mackenzie's policy of government
construction but with the same slow and unsatisfactory results.
Then an opportunity came to enlist the services of a private
syndicate. Four Canadians, Donald A. Smith, a former Hudson's Bay
Company factor, George Stephen, a leading merchant and banker of
Montreal, James J. Hill and Norman W. Kittson, owners of a small
line of boats on the Red River, had joined forces to revive a
bankrupt Minnesota railway.* They had succeeded beyond all
parallel, and the reconstructed road, which later developed into
the Great Northern, made them all rich overnight. This success
whetted their appetite for further western railway building and
further millions of rich western acres in subsidies. They met
Macdonald and Tupper half way. By the bargain completed in 1881
the Canadian Pacific Railway Company undertook to build and
operate the road from the Ottawa Valley to the Pacific coast, in
return for the gift of the completed portions of the road (on
which the Government spent over $37,000,000), a subsidy of
$25,000,000 in cash, 25,000,000 selected acres of prairie land,
exemption from taxes, exemption from regulation of rates until
ten per cent was earned, and a promise on the part of the
Dominion to charter no western lines connecting with the United
States for twenty years.
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