Editing Pacific Scandal

{{Short description|Canadian political scandal in 1873}}
[[File:Whither are we drifting.png|thumb|right|Political cartoon by [[John Wilson Bengough]]  satirizing Prime Minister [[John A. Macdonald]] for the Pacific Scandal]]
The '''Pacific Scandal''' was a political scandal in [[Canada]] involving large sums of money paid by private interests to the [[Conservative Party of Canada (1867–1942)|Conservative Party]] to cover election expenses in the [[1872 Canadian federal election]] in order to influence the bidding for a national rail contract.<ref>{{cite encyclopedia| title=Pacific Scandal| url=http://www.thecanadianencyclopedia.com/articles/pacific-scandal| url-status=dead| archive-url=https://web.archive.org/web/20121017063810/http://www.thecanadianencyclopedia.com/articles/pacific-scandal| archive-date=October 17, 2012| encyclopedia=The Canadian Encyclopedia| access-date=23 September 2012}}</ref>  As part of [[British Columbia]]'s [[British Columbia Terms of Union|1871 agreement]] to join the [[Canadian Confederation]], the federal government had agreed to build a transcontinental railway linking the seaboard of British Columbia to the eastern provinces.<ref>{{cite web| title=Building the National Railways (1851 - 1885)| url=http://www.canadiana.ca/citm/themes/pioneers/pioneers9_e.html| work=Canada in the Making| access-date=23 September 2012| archive-url=https://web.archive.org/web/20120511070834/http://www.canadiana.ca/citm/themes/pioneers/pioneers9_e.html| archive-date=11 May 2012| url-status=dead}}</ref>

The scandal led to the resignation of Canada's first prime minister, [[John A. Macdonald]], and a transfer of power from his Conservative government to a [[Liberal Party of Canada|Liberal government]], led by [[Alexander Mackenzie (politician)|Alexander Mackenzie]].<ref>{{cite web| title=Canadian Pacific Scandal| url=http://faculty.marianopolis.edu/c.belanger/quebechistory/encyclopedia/CanadianPacificScandal.htm| work=Quebec History| publisher=Claude Bélanger, Marianopolis College| access-date=23 September 2012}}</ref> One of the new government's first measures was to introduce [[secret ballot]]s in an effort to improve the integrity of future elections. After the scandal broke, the railway plan collapsed, and the proposed line was not built. An entirely different operation later built the [[Canadian Pacific Railway]] to the Pacific.

== Background ==
For a young and loosely defined nation, the building of a national railway was an active attempt at state-making,{{sfn|Berton|1970|page=7}} as well as an aggressive capitalist venture. Canada, a nascent country with a population of 3.5 million in 1871,{{sfn|Berton|1970|p=6}} lacked the means to exercise meaningful ''[[de facto]]'' control within the ''[[de jure]]'' political boundaries of the recently acquired [[Rupert's Land]], and building a transcontinental railway was a national policy of high order to change that situation.{{sfn|Creighton|1955|page=120}} Moreover, after the [[American Civil War]], land-hungry settlers rapidly pushed the American frontier westward, exacerbating talk of [[annexation]]. Sentiments of [[Manifest Destiny]] were abuzz at the time: in 1867, the year of Canada's [[Confederation]], [[US Secretary of State]] [[William H. Seward]] surmised that the whole North American continent "shall be, sooner or later, within the magic circle of the American Union."{{sfn|Berton|1970|p=10}} Consequently, preventing American investment in the project was considered to be in Canada's national interest. Thus the federal government favoured an "all Canadian route" through the rugged [[Canadian Shield]] of northern [[Ontario]] and refused to consider a less-costly route passing south through [[Wisconsin]] and [[Minnesota]].

However, a route across the Canadian Shield was highly unpopular with potential investors in not only the United States but also Canada and especially Great Britain, the only other viable sources of financing. For would-be investors, the objections were primarily based not on politics or nationalism but on economics. At the time, national governments lacked the finances needed to undertake such large projects. For the [[first transcontinental railroad]], the [[United States government]] had made extensive grants of public land to the railway's builders, inducing private financiers to fund the railway on the understanding that they would acquire rich farmland along the route, which could then be sold for a large profit. However, the eastern terminus of the proposed Canadian Pacific route, unlike that of the first transcontinental, was not in rich [[Nebraska]]n farmland but deep within the Canadian Shield.  Copying the American financing model while insisting on an all-Canadian route would require the railway's backers to build hundreds of miles of track across rugged shield terrain, with little economic value, at considerable expense before they could access lucrative farmland in [[Manitoba]] and the newly created [[Northwest Territories]], which at that time included [[Alberta]] and [[Saskatchewan]]. Many financiers, who had expected to make a relatively quick profit, were not willing to make such a long-term commitment.

Nevertheless, the Montreal capitalist [[Hugh Allan]], with his [[syndicate]] Canada Pacific Railway Company, sought the potentially lucrative charter for the project. The problem lay in that Allan and Macdonald were secretly in cahoots with American financiers such as George W. McMullen and [[Jay Cooke]], who were deeply interested in the rival American undertaking, the [[Northern Pacific Railroad]].{{sfn|Creighton|1955|p=120}}

== Scandal ==
Two groups competed for the contract to build the railway, Hugh Allan's Canada Pacific Railway Company and [[David Lewis Macpherson]]'s [[Inter-Oceanic Railway Company]]. On April 2, 1873, [[Lucius Seth Huntington]], a Liberal Member of Parliament, created an uproar in the House of Commons. He announced he had uncovered evidence that Allan and his associates had been granted the Canadian Pacific Railway contract in return for political donations of $360,000.{{sfn|Berton|1970|page=97}}

In 1873, it became known that Allan had contributed a large sum of money to the Conservative government's re-election campaign of 1872; some sources quote a sum over $360,000. Allan had promised to keep American capital out of the railway deal but had lied to Macdonald over this vital point, as Macdonald later discovered.{{sfn|Hutchison|1964|page=42}} The [[Liberal Party of Canada|Liberal Party]], the opposition party in Parliament, accused the Conservatives of having made a tacit agreement to give the contract to Hugh Allan in exchange for money.<ref>{{cite encyclopedia| title=Pacific Scandal| url=http://www.britannica.com/EBchecked/topic/437764/Pacific-Scandal| encyclopedia=Encyclopædia Britannica| publisher=[[Encyclopædia Britannica, Inc.]]| access-date=23 September 2012}}</ref>

In making such allegations, the Liberals and their allies in the press (particularly [[George Brown (Canadian politician)|George Brown]]'s newspaper ''[[The Globe (Toronto newspaper)|The Globe]]'') presumed that most of the money had been used to bribe voters in the 1872 election. The secret ballot, which was then considered a novelty, had not yet been introduced in Canada. Although it was illegal to offer, solicit, or accept bribes in exchange for votes, effective enforcement of the prohibition proved impossible.

Despite Macdonald's claims of innocence, evidence came to light showing transfers of money from Allan to Macdonald and some of his political colleagues. Perhaps even more damaging to Macdonald was the Liberals' discovery of a telegram through a former employee of Allan, which was thought to have been stolen from the safe of Allan's lawyer, [[John Abbott]].{{sfn|Hutchison|1964|page=43}}

The scandal proved fatal to [[First Canadian Ministry|Macdonald's government]]. Macdonald's control of Parliament had already been tenuous since the 1872 election. Since [[party discipline]] was not as strong as it is today, once Macdonald's culpability in the scandal became known, he could no longer expect to retain the confidence of the House of Commons.

Macdonald resigned as prime minister on November 5, 1873. He also offered his resignation as the head of the Conservative Party, but it was not accepted, and he was convinced to stay. Perhaps as a direct result of this scandal, the Conservatives fell in the eyes of the public and were relegated to the Official Opposition status in the federal [[1874 Canadian federal election|election of 1874]], in which secret ballots were used for the first time. The election gave [[Alexander Mackenzie (politician)|Alexander Mackenzie]] a firm mandate to succeed Macdonald as Canada's new prime minister.{{sfn|Hutchison|1964|page=54}}

Despite the short-term defeat, the scandal was not a mortal wound to Macdonald, the Conservative Party, or the construction of the Canadian Pacific Railway. The [[Long Depression]] gripped [[Canada]] shortly after Macdonald left office, and although the causes of the depression were largely external to Canada, many Canadians blamed Mackenzie for the ensuing hard times. Macdonald returned as prime minister in the [[1878 Canadian federal election|1878 election]] thanks to his [[National Policy]]. He held the office until his death in 1891, and the Canadian Pacific was completed in 1885 while he was still in office, although by a completely different corporation.<ref>{{cite web| title=Completing the Design, Railroad to the Pacific| url=http://www.countriesquest.com/north_america/canada/history/building_the_nation_1867-1929/completing_the_design/railroad_to_the_pacific.htm| work=Countries Quest| access-date=23 September 2012}}</ref>

==Notes==
{{reflist}}

==Bibliography==
* {{cite book |first=Pierre |last=Berton |author-link1=Pierre Berton |title=The National Dream: The Great Railway, 1871-1881 |publisher=McClelland and Stewart Limited |location=Toronto |year=1970 |isbn=978-0-7710-1326-3 |url=https://archive.org/details/nationaldreamg00bert |url-access=registration}}
* {{cite book |last = Creighton |first = Donald |author-link1=Donald Creighton |year = 1955 |title = John A. Macdonald: The Old Chieftain, Vol 2: 1867–1891 |publisher = The Macmillan Company of Canada Limited |location = Toronto |url = https://archive.org/details/johnamacdonaldol0000unse |url-access = registration |oclc=1865227}}
* {{cite book |title=Mr. Prime Minister 1867-1964 |author-link1=Bruce Hutchison |first=Bruce |last=Hutchison |year=1964 |publisher=Longmans Canada |location=Don Mills |url=https://archive.org/details/mrprimeministe100hutc |url-access=registration}}

==Further reading==
{{refbegin}}
* {{cite journal| last=Den Otter| first=A.A.| title=Nationalism and the Pacific Scandal| journal=[[Canadian Historical Review]]| volume=69| issue=3| date=1988| pages=315–339 |issn=0008-3755 |doi=10.3138/9781442678460-008}} downplays role of Americans
* {{cite book| last=Irwin| first=Leonard Bertram| title=Pacific Railways and Nationalism in the Canadian-American Northwest, 1845–1873| year=1939 | publisher=University of Pennsylvania |oclc=218372}}
* {{cite book| last=Morton| first=W.L. |author-link1=W. L. Morton | title=The Critical Years: The Union of British North America, 1857–1873| year=1977|origyear=1964 |publisher=McClelland and Stewart |location=Toronto | pages=245–277 |url=https://archive.org/details/criticalyearsuni0000mort_p2t3 |url-access=registration |isbn=978-0-7710-6561-3}}
* {{cite book| last=Swainson| first=Donald| title=John A. Macdonald: The Man and the Politician| publisher=Quarry Press | year=1989 |edition=2nd |url=https://archive.org/details/sirjohnamacdonal00swai |url-access=registration |isbn=978-0-919627-29-1}}
* {{cite book |last = Waite |first = P. B. |author-link1=P. B. Waite |year = 1975 |title = Macdonald: His Life and World |publisher = McGraw-Hill Ryerson Limited |location = Toronto |isbn = 978-0-07-082301-3 |url-access = registration |url = https://archive.org/details/macdonald00pete }}
{{refend}}

;Primary sources
{{refbegin}}
* {{cite book |author1=Canada. Royal Commission Relating to Canadian Pacific Railway |title=Report of the Royal Commissioners appointed by commission, addressed to them under the Great Seal of Canada, bearing date the fourteenth day of August, A.D. 1873 |date=1873 |publisher=The Commissioner |location=Ottawa |url=https://archive.org/details/P000661 |id=[https://www.publications.gc.ca/pub?id=9.826326&sl=0 Z1-1873/1E-PDF] — Via Government of Canada}}
{{refend}}

==External links==
*[https://web.archive.org/web/20060526134120/http://ms.radio-canada.ca/archives/2005/en/wmv/political_scandals20010128et1.wmv Canada's first political scandal], CBC Video
*Sauvé, Todd D. ''Manifest Destiny and Western Canada: Book One: Sitting Bull, the Little Bighorn and the North-West Mounted Police Revisited'' (an alternative view of the Pacific Scandal and the overall binational political context at the time)
**[http://www.dickshovel.com/two.html Chapter I – A Tale of Two Countries]
**[http://www.dickshovel.com/two2.html Chapter II – A Tale of Two Railroads]

{{John A. Macdonald}}

[[Category:John Abbott]]
[[Category:Political scandals in Canada]]
[[Category:Canadian Pacific Railway]]
[[Category:First premiership of John A. Macdonald]]
[[Category:History of transport in Canada]]
[[Category:Political funding]]
[[Category:Political history of Canada]]