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In the eleven years that he presided at the helm of the CPR (1888–99), Van Horne strove mightily to expand the company by both construction and acquisitions. A new railway had to grow, he argued, if it was to avoid being swallowed up by a competing railway or, worse, going bankrupt. This belief was reinforced by the experience he had acquired in managing American railways during a period of great consolidation. Unfortunately, when Van Horne served as the CPR’s president, Canada was gripped by a prolonged depression for most of the time. As a result, he was forced to tone down expansion and, when the depression reached its lowest point in 1894, he had to introduce stringent economy measures.

This growth was not always straightforward and painless, however, especially for the piecemeal assembly of the Short Line, which ran from Montreal through central Maine to Saint John, New Brunswick. George Stephen had earlier flirted with the idea of making Portland, Maine, a destination for the CPR because he wanted the railway to obtain an Atlantic steamship connection — and that required a port that was ice free in the winter. The choice of Portland raised such a storm of protest in New Brunswick and Nova Scotia, however, that the idea had to be abandoned in favour of a Canadian port. The distance from Montreal to the Atlantic coast could be reduced significantly, the Maritimers pointed out, if a railway were built eastward across the central part of Maine — and so it came to be called the Short Line. To encourage the construction of such a line, Parliament approved a cash subsidy for it in 1884. As an additional inducement, Macdonald assured Stephen that the government-owned Intercolonial Railway would provide running rights over its line from Saint John to Halifax. Moreover, through traffic between Montreal and Nova Scotia / New Brunswick would be routed over the Short Line, and the Intercolonial would be operated principally as a local railway. The CPR, therefore, faced mounting pressure to take over the project. Eventually it did, though Van Horne and George Stephen always insisted that the CPR did so only with great reluctance. Even before the line was completed in June 1889, these two men had cause to regret that the CPR ever became involved in the enterprise because of the heavy financial obligations it imposed. Moreover, once the new line opened for traffic, the Intercolonial Railway, instead of cooperating with the CPR, treated it as a competitor.

These problems caused Van Horne great distress. Frustrated beyond words, he deluged Prime Minister Macdonald with letters about the troublesome railway: “This is far from the treatment that the Company had reason to expect when it undertook the building of the ‘Short Line,’” he exploded in a letter to Sir John A. Macdonald in July 1889, only one month after the line began operating. “Nearly nine millions are now invested in that line which such an attitude on the part of the officers of the Intercolonial Railway will make absolutely valueless, or worse than valueless.” And in October of that same year, he declared, “The CPR has been grievously wronged.”

In Ontario, CPR expansion continued to rouse the ire of its long-time antagonist, the Grand Trunk Railway. In their attempts to harmonize their expansion plans and execute them smoothly, Van Horne and Joseph Hickson, the GTR’s forceful general manager, both had to make concessions. These compromises required them to meet face to face in sometimes gruelling negotiations. In one such session, two months before Van Horne assumed the CPR presidency, the two men begged, cajoled, bluffed, and argued for four hours. Another round so exasperated Van Horne that he forwarded a copy of a letter from Hickson to George Stephen, fuming: “It has been a repetition of the old story — carrying on the negotiations up to the very last minute and then raising a new point relating to an outside matter.”

Notwithstanding the prolonged depression, the CPR spent huge sums of money during Van Horne’s presidency to improve its main line and to build or acquire branch lines linking it to parts of Manitoba and the northern prairies. Thanks to these expenditures and to links forged in southwestern Ontario and the Atlantic, the basic system was complete by 1890.

Expansion in the United States led, not surprisingly, to a renewal of clashes with Van Horne’s old friend and railroading rival, James Jerome Hill. Their rivalry reached new heights after the CPR snapped up the Minneapolis, St. Paul & Sault Ste. Marie Railroad, commonly referred to as the Soo Line, along with another small railway, the Duluth, South Shore and Atlantic. Even before these acquisitions, Van Horne’s company was taking westbound freight in the American East and Midwest from American carriers bound for San Francisco. After the acquisition of these lines, the rivalry between the Great Northern, Hill’s celebrated railway, and the CPR increased. It became even more intense after Van Horne scooped up the Duluth and Winnipeg, which the CPR would later surrender to Hill. However, even after the CPR gave up this company, its Soo Line harassed the Great Northern mercilessly. This encroachment prompted Hill to turn his attention to the West. Soon he built Great Northern branch lines northward towards the British Columbia border, angling for the rich coal deposits in the Crows Nest Pass area. Van Horne was furious. Looking at a map of British Columbia that showed the approaching lines, he bellowed at an engineer, “Look at these … like hungry hounds ready to jump in!”

The problem of international railway relations in the Northwest could have been resolved by a contract that divided traffic equitably between Hill’s railway and the CPR. Neither side, though, was prepared to cooperate. As a result, the struggle between the two companies — and between Van Horne and Hill — continued throughout the 1890s. Ironically, Van Horne and Hill, by their own admission, admired each other. In their personal dealings, they would exchange passes, visit each other’s railways, call on each other in their homes, and swap news about their latest art purchases. But when it came to operating rival railway systems, the two dynamos engaged in fierce, bare-knuckled competition. Contemplating the looming struggle with the Great Northern, Van Horne remarked in 1892 to Thomas Skinner, a London financier and CPR director: “I think just as much of Mr. Hill personally as it is possible for me to think of anybody who is opposed to the Canadian Pacific, but I would rather see him hung, drawn and quartered rather than have the Canadian Pacific lose ten cents through his Great Northern Railway.” Given the tensions of bitter competition, it is a wonder that their mutual regard for each other managed to survive — but survive it did.

James Hill was not Van Horne’s only American foe in the ruthless railway expansion game. In pressing his competitive edge so fiercely, the CPR president also attracted the hostility of other American railways — those companies that felt threatened by the CPR’s success in forging strategic American connections. Van Horne’s acquisition of the Soo Line and the Duluth, South Shore and Atlantic crystallized much of this opposition. Indeed, it stirred up the agitation so effectively that, in 1889, the U.S. Senate’s Interstate Commerce Committee embarked on a study of Canadian railway operations in the United States.

In an effort to quell the opposition, Van Horne engaged an American lawyer to look after CPR interests in Washington, and he himself journeyed to the American capital to present his company’s case. Ultimately, the Senate committee made only one recommendation relating to railways. As a result, and because of the failure of the U.S. Congress to take decisive steps regarding Canadian competition, American agitation persisted for years. In the face of one particular storm, Van Horne even arranged for the Canadian Pacific’s case to be presented directly to President Benjamin Harrison, who had been threatening to issue a proclamation against Canadian railways. Fortunately, the president finally withdrew his threat. George Stephen was quick to commiserate with Van Horne, writing in January 1893: “It is very satisfactory to find that your record is so clear and clean. It is very annoying and trying to be obliged to suffer from grumbles and unfair interpretations.”

Railway competitors were not the only antagonists that Van Horne had to deal with in these years. He also had to confront the organizers of a railway strike that erupted in 1892 over wages. On this occasion, as in previous strikes, he revealed his antiunion prejudices. In the ensuing struggle, the CPR employed strike breakers, hired special police to guard its property, and had auxiliary police sworn in by cooperative police magistrates in almost every major centre the company served. On March 21, 1892, Van Horne and Thomas Shaughnessy — now vice-president of the CPR — raised the ante still further. They ordered company officials to administer a loyalty oath to workers in the CPR’s Eastern Division. This demand decided the issue for the men in northern Ontario, who, despite having no previous grievances against the company, voted to go out on strike. As a result, Van Horne and other CPR officials awoke on March 22 to the news that another seven hundred and fifty-two miles of track had been tied up. Faced with this setback, the company capitulated. On March 23, Van Horne ratified an agreement that represented an outstanding victory for the unionists. He had reluctantly, but pragmatically, concluded that further resistance would be drawn out and costly.

Van Horne was in the prime of life in 1894. Fifty-one years of age, he had put on weight over the years. The stocky body of youth had yielded to spreading girth, the result of too many hours at his desk, lack of exercise, and a gargantuan appetite. The receding hairline had long since been replaced by a bald pate, and his clipped beard was now flecked with grey. In fact, he bore a striking resemblance to the third Marquis of Salisbury, who was then Britain’s prime minister.

Notwithstanding the signs of middle age, Van Horne continued to be a high-voltage dynamo, driven by ambition and determination. He still toiled incredibly long hours, whether at his desk or rushing across the continent. But his body, which he had abused so often, had begun to register the occasional protest. In 1894 he experienced the first of them — a prolonged attack of bronchitis that threatened to take up “permanent quarters” if he did not escape to a warmer climate. In the hope of regaining his health, Van Horne left Montreal on December 5 for England and the Continent. He planned to be away for five or six weeks.

During his brief sojourn in England, he visited his friend Robert Horne-Payne, a financial genius who was frequently called upon to handle loans for Canadian railways. Before leaving rain-soaked London for the Continent, Van Horne also met with his old colleague and friend George Stephen. Unfortunately, the former CPR president was worried by this meeting, and he later wrote an alarming letter to Shaughnessy:

It is quite evident that Sir William, either from failing health or from allowing other things to occupy his mind, is no longer able to give the affairs of the company his undivided attention. His want of grasp and knowledge of the true position of the Company was, painfully, twice shown at our conference on Tuesday last, and can only be explained on the assumption that he had never given his mind to the matter…. His actions gave me the impression that he felt like a man who knew he was in a mess and had not the usual courage to look his position in the face. His apparent indifference and inability to realize the gravity of the position I can account for in no other way.

From what I have thus said, you will see that all my confidence in the ability of Sir William to save the Company has gone, and it is to you alone that I look, if disaster is to be avoided.

In Paris, the weather may have been raw and wet, but at least Van Horne could visit the Louvre, hobnob with art dealers, and dine with friends at the famous restaurant Joseph’s. There, “the most famous cook in the world” attended to him and his party in person. The weather continued to disappoint in Italy. In a desperate search for warmth, Van Horne persevered through a snowstorm to Naples and travelled on to Sorrento, the seaside resort across the bay from Naples. Notwithstanding the bitter cold, Van Horne was so captivated by Sorrento’s picturesque charm that he admitted in a letter to Addie that he liked Italy and its people. “Both are better than I expected,” he wrote.

Addie, meanwhile, was holding the fort in frigid Montreal. There she had to contend with Governor General Lord Aberdeen and his entourage, who arrived on her doorstep shortly after her husband’s departure for Europe. Although accustomed to orchestrating countless dinners and weekends for all manner of guests, Addie at times rebelled openly against the role of dutiful wife. And this was one such occasion. In a letter to Van Horne, she let her pent-up frustration boil over. “I am sorry that you could not see more of London. How I wish you could go once & not be obliged to meet ‘High Commissioners’ & others on business. Let us plan to enjoy life a little before we get too old or infirm. We are always waiting on other people & I am tired of it.”

In May 1894, Lord Aberdeen informed Van Horne that an honorary knighthood could be his for the taking — the third time he had been offered this honour. Previously, in 1891 and 1892, he had turned down Queen Victoria’s proposal. Explaining his refusal in 1892, Van Horne told Prime Minister Sir John Abbott that he felt it would be a great mistake for him to accept a knighthood in the near future. He had reached this conclusion after considering several factors, “the chief one being the probability of renewed attacks on the CPR in the United States.” He would not, he said, countenance any honour that might cost the CPR “an ounce of advantage.” Nevertheless, when the offer was made the third time, almost six years after he had become a naturalized British subject, Van Horne accepted it. As a result, the Queen’s birthday list of honours in May 1894 announced his appointment as an Honorary Knight Commander of the order of St. Michael and St. George.

Van Horne was at first uncomfortable with his new title. Walking to his Windsor Station office on the morning his knighthood was announced, he was repeatedly accosted by friends and acquaintances offering hearty congratulations. When his elderly office attendant, who for years had greeted him with a friendly salute, now made a servile bow and intoned, “Good morning, Sir William!” Van Horne could only mutter, “Oh Hell,” and beat a hasty retreat.

Not surprisingly, Van Horne’s acceptance of a knighthood buttressed a widely held belief that he had lost all love for his native country, the United States, and had become one of its most intractable opponents. This attitude riled the railway magnate, and he went to great lengths to squelch the idea and make it clear that, when he acted against American interests, it was simply because of his loyalty to the CPR. When the vehemently anti-CPR New York Sun described him as “originally an American but now a fierce Tory hater of all things American,” he dispatched a bristling letter of protest to the editor.

Canada was still in the grip of the depression when Van Horne returned to Montreal from his Mediterranean vacation in January 1895. Although relieved to be cured of his bronchitis, he felt only dismay and anxiety as he contemplated the trials now confronting him. The economic climate was so grim that, in February, Stephen dispatched a coded cablegram to Van Horne suggesting that the CPR suspend payment on its proposed dividend.

For some reason — perhaps because he had lost all faith in Van Horne’s management or because he wanted to advance the interests of the Great Northern, with which he was still associated, or for both — Stephen also began advising CPR shareholders to sell their shares. He was joined in undermining confidence in the railway by Thomas Skinner, who was also supposedly a friend of Van Horne. Their comments seemed to support wild rumours that were circulating about certain actions by company directors, and, as a result, CPR shares plummeted to an all-time low. They would have skidded even lower but for some German capitalists, who, advised by Van Horne’s friend Adolph Boissevain, a Dutch financier, purchased a large number of shares. Fortunately, by the fall of 1895, business had recovered. The following year, gross and net earnings had almost returned to their 1892 levels. The CPR had reeled under the weight of hard times, but it had not collapsed. It had weathered the storm and, just as Van Horne had foreseen, would soon return to profitability.

The return of the CPR to financial prosperity helped to improve Van Horne’s outlook on life. So, surprisingly, did the federal Liberal Party’s accession to power in 1896. Given his past performance, Van Horne might have been expected to intervene directly in this campaign, but he did not. In the 1891 federal campaign, when reciprocity with the United States was the Liberal Party’s central plank, Van Horne had vehemently denounced this policy to end the protection of Canadian industries and introduce free trade. Unrestricted reciprocity would bring “prostration and ruin” to Canada, he wrote to Conservative Senator G.A. Dandurand. Much to Van Horne’s horror, the letter was later printed in the Montreal Gazette. The CPR president considered damage control, but Shaughnessy immediately shot down this suggestion. The company had already been tarred with a political brush, he argued, and it should now give all the assistance it could to the Conservatives, who opposed reciprocity. In his own personal politics, Van Horne had always leaned towards the Conservatives, and he and Shaughnessy now set about throwing the massive weight of the CPR and its purse behind the party.

In the 1896 contest, by contrast, Van Horne and the CPR remained on the sidelines. Nevertheless, observers found it difficult to believe his repeated denials of CPR intervention. Van Horne told a Globe reporter, “We were somewhat in the position of a girl who had once been whoring, but who had reformed and was trying to lead a correct life — it was difficult to make everybody believe it.” As it turned out, the railway’s reform was not complete: in Winnipeg, CPR personnel actively supported the Conservative candidate.

Although he was not directly involved in the 1896 election, Van Horne was still vitally interested in the outcome and what it would mean for several issues that were important to him. Immigration was one of them. He dismissed the Conservative government’s work in this area as “hardly visible” and, as seen in chapter 6, he devised an ambitious settlement scheme of his own. Regrettably, the government never adopted it. He expected the new Liberal government led by Wilfrid Laurier to give immigration the same short shrift, but the dynamic Clifford Sifton, the new minister in charge of immigration, worked tirelessly to revamp the lacklustre immigration service he had inherited and to fill the empty prairies with suitable agriculturalists.

As much as he respected Sifton, however, Van Horne took strong exception to his choice of immigrants, many of whom came from eastern and central Europe. In typically blunt fashion, Van Horne outlined his concerns to newspaper editors. One of these was Sir John Willison, the long-time editor of the Globe. Van Horne bombarded him with letters about the growing anti-Chinese agitation sweeping the Pacific coast which, he feared, would culminate in increasingly restrictive legislation against Chinese immigration. Like other Canadian industrialists, he wanted access to a plentiful supply of cheap, hardworking labour, and the Chinese filled the bill admirably. “We must have in British Columbia a good supply of digging machines which, unlike steam shovels, can climb hills and go down into mines. These can be most cheaply and readily had from China,” he informed Willison.

From time to time in these years, Van Horne was asked to serve in a semi-diplomatic role because of his friendship with leading American political figures. He became a quasiambassador to Washington for the new Laurier government, which frequently asked him to probe the Yankee frame of mind during a period of tension between Canada and the United States. Tariffs and the dispute over the Bering Sea near Alaska ranked high on the list of irritants poisoning the relationship between the two countries. It was the tariff question, however, that directly involved Van Horne in his new role. After introducing the two-tiered Fielding tariff in 1897, the government asked him to find out whether the American government would institute reprisals or admit Canadian goods at a rate equivalent to the minimum Canadian tariff. His mission completed, Van Horne informed Ottawa that the United States would certainly not accept any reciprocity proposals.

Van Horne’s services were also enlisted in the potentially dangerous Alaska boundary dispute, a dispute between Canada and the United States over the boundary of the Alaskan panhandle running south off British Columbia’s coast. The dispute smouldered for decades before coming to a head in 1897, when the Klondike Gold Rush was under way and both the Canadians and the Americans sought control of the trade it produced. After the storm signals went up, Van Horne made another trip to Washington and, in his report, alerted the government to potentially dangerous conditions in the Klondike mining community. In a letter to the leader of the Opposition, he warned that even a trivial ill-advised move by Ottawa could trigger another Boston Tea Party, only this time in the Yukon.

In the 1890s, discerning friends and colleagues realized that Van Horne’s enthusiasm for his job was waning. His loss of interest was due to several setbacks, such as his failure to establish a fast Atlantic steamship service — a fallout from the financial panic of 1893 — and the mortifying surrender of the Duluth and Winnipeg Railroad to James Hill. There was also his deteriorating health, brought on by years of overwork, smoking, and self-indulgence in food. More than anything else, though, it was probably the lack of scope for his creativity that robbed Van Horne of his enthusiasm for the presidency. He was essentially a “constructor,” a man who loved building for its own sake. Once the CPR was nearing completion, he began to lose interest in it and to find management details more and more distasteful.

In the final years of his presidency, Van Horne talked increasingly of retiring, only to be thwarted by Shaughnessy, who was “anxious to see our affairs in fairly good shape during his Presidency.” By 1899, when the CPR was paying substantial dividends, Van Horne believed that condition had been met. Before resigning, however, he decided to take an extended vacation trip. Japan was one possible destination. He had many friends there and the inauguration of the Pacific steamship service had earned him the gratitude of the emperor and government officials alike in Japan. Van Horne, however, had qualms about being on the receiving end of lavish attention and hospitality. He disliked ostentation of any kind and cringed at the thought of the ceremonial observances that would mark a visit to that country. He therefore decided to postpone a trip to that far-distant land and to travel instead to southern California, hoping that the heat there would “burn out” his chronic bronchitis.

With a party of friends, he set off in the Saskatchewan, his private rail car, in April 1899 for San Francisco. There, John Mackay, the Dublin-born head of the Commercial Cable Company, booked the best rooms for them in the luxurious Palace Hotel, stocked them with the finest cigars, and refused to allow anybody to pay for anything. After a week of festivities in the city, Van Horne’s friends returned to the East, and Van Horne, along with Mackay and the manager of the Southern Pacific Railroad, took the train to Monterey, stopping first at Palo Alto. While in Monterey, Van Horne decided he had been away long enough. He immediately telephoned for his car to be hitched to the next train and, in a few days, he was back in Montreal.

After he had returned home, Van Horne took the bold step he had been contemplating for months: he resigned from the CPR presidency. Many outside observers had been expecting it for some time. Their suspicions had earlier been confirmed when a newspaper reporter, acting in response to rumours, had inveigled an admission from Van Horne that he intended to resign. No date had been provided, but the published account of the interview precipitated a selloff of Canadian Pacific stock. In both London and New York, the price of the company’s shares dropped several points. Confidence in the CPR was only restored when its officers issued a denial of the newspaper story. On June 12, however, Van Horne presented his formal resignation at the company’s regular board meeting. The directors chose Thomas Shaughnessy to replace him, but Van Horne was kept on as a director and was immediately appointed to the newly created office of board chairman. As chairman, he was an ex officio member of the CPR executive committee, so he continued to play a significant role in deciding company policy.

Van Horne could regard the legacy he had turned over to Shaughnessy with justifiable pride and satisfaction. In spite of the prolonged depression that had gripped Canada during most of his term as president, he had managed to improve and expand the system significantly. In fact, by the end of 1899, the extent of the railway’s lines totalled seven thousand miles. If the American lines the company owned were included, the increase in the eleven years of his presidency after 1888 exceeded thirty-five hundred miles, or 65 percent. Despite competing interests and his deteriorating health, Van Horne had succeeded admirably in making the CPR a powerful force in the Canadian economy.