[shortt] CONSTRUCTION AND NATIONAL PROSPERITY. 307 



ed to 1653, with 344 miles still under construction. This meant that 

 within eight years Canada had constructed nearly two thousand 

 miles of railway at a cost of nearly one hundred millions. Up to this 

 time only the Great Western Railway, between Niagara Falls and 

 Detroit, and the Champlain and St. Lawrence Railway, a short road 

 of 44 miles, had paid any dividends out of earnings. It was now 

 pretty fully realized that the profits, so confidently promised in the 

 name of the Canadain Railroads, would not be forthcoming. It was 

 doubtful even whether a number of them would be able to meet their 

 bonded indebtedness. As the Globe stated in July 1857, in reviewing 

 the railroad situation, "There was a time when the faith of Canada 

 was held in high esteem both at home and abroad; but unless good 

 heed is taken a very different estimate will soon attach to it." This 

 prophesy was unfortunately destined to be amply fulfilled. Already 

 the London Times and other British papers in their financial sections 

 were beginning to print very disparaging reports regarding the 

 Canadian situation. 



After the crises of 1857-8 there was a slight recovery in the early 

 sixties, but the burden of debt assumed from '50 to '56, the collapse 

 in numerous real estate booms, and the virtual bankruptcies of quite 

 a list of municipalities, had a very depressing effect upon the country 

 preventing any real recovery. After 1863 the long deferred liquida- 

 tion began in earnest, involving the collapse of the two great banks 

 of Western Canada, the Bank of Upper Canada and the Commercial 

 Bank, together with several smaller institutions. The Bank of Mont- 

 real also lost heavily on its western business. As the Government 

 had found it necessary, through its implied partnership, to come to the 

 rescue of the Grand Trunk Railway and of the municipalities, its 

 credit correspondingly suffered. In 1866 the Government found 

 itself unable to raise more than half of a moderate loan, even when 

 offering 8 per cent interest. The financial agents in Britain frankly 

 stated to the Finance Minister that the result was due to the disastrous 

 effect on Canadian credit of the experiences of British investors. It 

 required nearly two generations to remove that impression from the 

 British financial mind. This was finaly accomplished, however, about 

 fifteen years ago. Since then Canada has once more free access to the 

 British capital market, with the result that we have recently ex- 

 perienced the first real period of national prosperity, of great railroad 

 construction, city building, real estate speculation, high wages, high 

 profits, high prices and excessive imports since the decade with 

 which we have been dealing. Unfortunately we are also witnessing 

 similar calls upon the Government to come to the rescue of stranded 

 railroads, and extravagant provincial governments, in lieu of the muni- 



