Chapter 2
The Grand Trunk Railway & International Park, 1858 - 1879
1850 – 1880
Point Edward: 1855
The Creation of the GTR: 1852 – 1853
Gzowski & Co. Land Purchases: 1853 – 1856
The Partners in Gzowski & Co,
Gzowski & Co. Land Sale Controversy: 1857 – 1861
1860 Railway Map
Construction of GTR Mainline: 1858 – 1859
GTR Point Edward Station Grounds: 1859
Thomas Blackwell and The Swing Ferry
Thomas Edison & the GTR: 1859 – 1864
Canatara Land Transfers: 1864 – 1866
Point Edward Bird’s Eye View Sketch: 1867
GTR Station Grounds: c1870
Wild Pigeon Shooting at Lake Chipican: 1876
Immigrates Along GTR Mainline: 1870’s
International Park: 1879
International park: 1880 – 1882
The Desire for a replacement for International Park: 1882 - 1891
Introduction to Chapter 2
This volume deals with the activities & issues concerning the Grand Trunk Railway (GTR) in the Point Edward – Canatara area during the 1853 – 1879 period.
In the 1850’s the four partners in Gzowski & Co., the contractors for the western section of the GTR, purchased over a thousand acres at Point Edward, including all the area that now comprises Canatara Park. In several controversial land transactions these partners who were prominent Canadian politicians, made a large profit from the sale of their Point Edward property to the GTR investors.
In 1858 the railway embankment & tracks of the GTR mainline were constructed through the Canatara area. In 1859 extensive railway facilities were built adjacent to the river at Point Edward and in November traffic began moving along the mainline. In the 1860 – 1880 period an increasing number of immigrants bound for the western regions of Canada and the States travelled west over this line, while grain, livestock and the freight moved east.
Other than this rail traffic passing through the future parkland, nothing significant occurred in the Canatara area until 1879. In that year a summer resort known as International Park was established on the GTR property around lake Chipican. Although it created a great deal of excitement in Point Edward and Sarnia, the resort was not financially viable and closed after just one year.
These issues and activities are recorded in more detail in the newspaper articles , registry documents, maps, photos, drawings and other material provided below
Canatara: Point Edward C1855
The 1997 Bird’s Eye View sketch above shows the Point Edward Canatara area in the 1853 –1856 period when Gzowski & Co., purchased the property. It is based on Map A4 in Volume 1 and shows the view looking west from where Christina Street is today. The woodlot now known as Tarzanland is at the bottom left and Lake Chipican, or Seward’s Pond as it was then called, is at the bottom right. A marsh of reeds and rushes (colored yellow-green) surrounds Lake Chipican as well as the small pond that then existed in the ballfield area of Canatara Park. The marsh extends southward in the large lagoon to the lee of the Point Edward spit. The recurved beach ridges of the spit, covered by oak groves, project like fingers into the lagoonal marsh. A wide belt of wind-swept dune grass is adjacent to the river. Near the top left is the grass covered beach ridge at the head of Sarnia Bay as well as the ridge that forms the western end of the spit.
As mentioned in Volume 1, very few settlers lived at Point Edward before the GTR arrived. In 1855 several individuals were engaged in fishing at both the head of the river and the foot of lake Huron. Their fishing shanties are shown as dots at these locations on the sketch. One of the fishermen, Henry Seward, had a house at Lake Chipican, possibly near the northwest corner. In addition, John Roberston is said to have cultivated a field of buckwheat and barley on a portion of the land where the Water Treatment Plant is today.
Note: A sketch showing the same view four years later when the GTR mainline was completed is provided below.
The Creation of the G.T.R.: 1850-1853
Since the Grand Truck Railway Co. was destined to play a prominent role in the history of the Canatara area, a summary of the various financial & political maneuvers accompanying its creation is given in the following pages from G.R. Stevens book The History of the C.N.R..
The main figures involved in these events were Francis Hincks, Morton Peto, Thomas Baring, George Carr Glyn (Mills), & Alexander Galt. Hinks, who is sometimes call the “father of the G.T.R.” was the Inspector General of the Province of Canada (1847-51) and then Premier (185154). Peto was the head of a British contracting firm which not only constructed railways all over the world but also built many of Britain’s most famous landmarks including the Houses of Parliament & Nelson’s Column. Baring was the head of Baring Brothers, a British bank which at this time was one of the most powerful financial institutions in the world. Glyn was the head of another British bank. Glyn Mills, which during the period was the financial agent of the Province of Canada. Galt was a Canadian railway promoter, land speculator & politician whose contracting firm, Gzowski & Co., became involved in a land controversy concerning the Point Edward Military Reserve, as described in more detail below. Galt, by the way, would later become one of the most important of the “Fathers of Confederation”. In fact, he even coined the word “confederation”. As the account below indicates, he was also an entrepreneur –some would say fast-buck artist – of the first order.
As a June 12, 1863, Observer article noted:
“Galt’s influence in the Department of Public Finance did not commence when he was sworn in as Inspector General of the Province of Canada in 1858. For years previous he had occupied the lucrative situations of Chief GTR Operator in Canada and of Suggester-in-chief to the Canadian Government of what it should do in everything affecting that corporation.”
G.R. Stevens History of the CNR (1973) pp 34-41
Grand Trunk:
Trail of the Comet
“Francis Hinks’ early essays in railway promotion, as already recorded, has been no more than trial gallops. This artful Irishman had placed himself in training for major occasions on which he hoped to help the British North American colonies (and himself) in even greater degree.
His Railway Guarantee Act of 1849 had brought him into intimate contact with Glyn Mills and Company, the London merchant bankers who were the financial agents of the Province of Canada and who occupied the same position toward that colony as the Bank of England toward the Chancellor of the Exchequer. During the Mania of the 1840’s, these bankers had let it be known that they would be interested in railway inquiries and that their incursions in this field would be shared with Baring Brothers, who had provided millions for United States railways and who on the whole had done well out of such financing.
This was right up Hinks’ alley. In casting about for a guideline to a railway policy, he remembered his history. The trunk road was an imperialistic device, a heritage of Rome. It sustained group interests in diverse and scattered communities; it buttressed a common citizenship, it fostered trade; but perhaps most important of all, it created on land something of the advantage that the Royal navy enjoyed on the seas. The Imperial authorities had learned a great deal from the twenty years struggle with Napoleon and no lesson better than that of mobility. The French had been prodigious marchers, covering great distances swiftly to strike at unwary foes. In the Spanish campaign they had met their match; Sir Arthur Wellesley, afterward the Duke of Wellington, a great quartermaster as well as battle commander, gave prime consideration to roads and waterways; he created the Army Service Corps and compelled his supply officers to think in terms of elapsed time in the movement of personnel and tonnage. When in due course the American invasions of Canada in the War of 1812 came under critical examination, the dearth of colonial communications was noted. There followed the building of canals that bypassed obstructions in the Canadian waterways, the slashing of snow roads through the hitherto unbroken forests, comprehensive surveys of the Canadian wilderness and the employment of British garrisons in roadmaking.
Then steam arrived, and it became obvious that while portage and other short railways were matters of local concern, the truck lines must reflect Imperial policy; and since it would be British and not Canadian money that would build them, the home government rather than provincial legislatures would call the tune. At first the British authorities were lukewarm toward encouraging such expensive ventures in such faraway places, but Joseph Howe had proved that it was possible to stampede the British training community and thus persuade Whitehall to change its mind. Francis Hinks therefore decided on a combined operation. He would sell the project of a trunk railway in the Canadian colonies to private interests, but he would endow it with the glamor of an imperial enterprise. The British government would scarcely fail to approve an
undertaking that was costing it nothing, and such support would provide the essential incentive to private investors to risk their money.
The Lure of Chicago
Canada West (Ontario) selected itself as the territory to be served by the First Canadian Mainline. The post-Waterloo immigration combined with the area’s fertile soil had led to a much higher rate of growth there than in either French or Maritime Canada; but even as it surpassed its sister colonies, so it in turn was outstripped by the phenomenal development of Michigan Territory, beyond its western boundary. By mid-century, the American occupation of the Middle West was in full swing; thousands of wagon trains had debouched from the Appalachian mountain spine, heading for the central plains. Chicago, at the foot of Lake Michigan, was the focal point of takeoff for the second stage of this trek, and this former frontier post already seemed destined to become one of the great cities of the New World. But even the most direct all-American line from the northern Atlantic seaboard to Chicago was several hundred miles longer than a route across Canada. There therefore emerged in Hinks’ mind the vision of a Canada Main Line that would begin at a New England port and end at Chicago. It would serve Canada, and at the same time it would wax fat on the transit traffic of the American Middle West.
Nor was this Chicago’s only allure, both for Hinks and for the English merchant bankers. Sooner or later the Canadians, like their American cousins, would occupy the western prairies. At the time (1850), no one contemplated such an audacious project as a railway across thousands of miles of empty wasteland to the north of the Great Lakes. It was taken for granted that the Canadian rote to the west must go through Michigan Territory. A railway to Chicago, therefore, would provide the first leg of the trans-Canadian trunk line of the future.
Thomas Baring, M.P., as the head of the great bank which bore his name, was on somewhat better than speaking terms with Sir Morton Peto, senior partner of Peto, Brassy, Jackson and Betts, the world’s leading railway contractors, who had built one-third of Britain’s total mileage as well as railways in France, Spain, Russia, Persia, Italy and India. Peto was thoroughly aware of the potential of a Canadian shortcut to Chicago, and it seems possible that he initiated the conversations that ensued. From Chicago to Portland, Maine, was 1,150 miles, of which 659 miles lay within the Province of Canada and hence would be eligible for government assistance under the Railway Guarantee Act. Yet with its principal sources of traffic in the United States, it would be immune to the parochial pressures and political flimflam that had hamstrung so many early Canadian railway ventures.
Hincks Sets the Stage
Both Baring and Peto realized that they must deal with some Canadian political figure. By reason of his earlier operations and his skill in maneuver, Hinks virtually nominated himself as their partner. In May 1852, he arrived in London, where, as aftermath to Howe’s campaign, the plan for a mainline from Halifax to the western extremity of Canada West still was on the Imperial agenda. Hinks immediately took steps to ditch this project by announcing that the Provinces of Canada was not interested in it any longer. It proposed to build its own trunk railway.
Hinks’ statement was bald and terse to the point of discourtesy, but it appealed to the upper echelons of the Colonial Office; rarely had a project which promised little, but trouble removed itself so easily into the closed files. That it constituted a betrayal of Nova Scotia and New Brunswick was regrettable, but Whitehall’s skirts were clean. It was the spokesman of the Province of Canada who had reneged on his compatriots. On May 20 the Imperial guarantee on the proposed intercolonial railway was withdrawn, and Hinks sat down to deal with Peto, Brassey, Jackson and Betts. His scheme was to persuade the contractors to buy existing railways or charters along the acceptable route from Portland to the Michigan boundary and thereafter to bridge the gaps. The mainline thus acquired by the Province of Canada would be named the Grand Truck Railway.
Viewed in retrospect, Hinks’ success in selling pigs in pokes to contractors of worldwide experience seems almost incredible. The only property of any value on the projected route was the Great Western Railway, then nearing completion from Niagara Falls to Windsor, opposite Detroit; and, as this line already has substantial American backing and the promise of an alliance with the Michigan Central into Chicago, it had no reason to be enthusiastic over Hinks’ proposals for it also had a charter for a line into the East, from Hamilton to Toronto (45 miles) that certainly would be more profitable to keep than to sell. Between Toronto and Montreal (345 miles) there was not a mile of track, but Alexander Tilloch Galt and his friends had sewed up this section by overlapping charters, leaving nothing to chance. They had opened the stock books of these incipient companies on the day of incorporation and within a matter of minutes had subscribed for all their shares. Between Montreal and Portland (292 miles) the contractors would also be dealing with Galt, who had assumed control of the two railways that John A. Poor had conceived, and which would be willing (for the poor consideration, of course) to become elements in the Canadian Main Line
Easy Money for Canadians
That the difficulties and expense of Hinks’ project did not weigh unduly with Peto, Brassey, Jackson and Betts can best be explained by their conviction that the cost of the Canadian section did not really matter in comparison with the rewards of an entry into Chicago. At the end of July, 1852, Hinks returned to Canada. He was accompanied by William Mather Jackson, a Peto partner, a jovial and easy-going Englishman whom the money thirsty Canadians found to be a walking oasis. He arranged the purchase of Galt’s ramshackle and partly built lines between Montreal and Portland for a reasonable figure, but he also took over their indebtednessa $400,000 loan from the city of Montreal; $2 million in city of Portland bonds; a stock investment of $100,000 by the Sulpician Order; and a long list of minor commitments ranging from Galt’s numerous notes of hand down to a pension of $40 a month for one Sarah Jenkins. He bought up the three essential charters between Montreal and Hamilton, paying quite enough to the Great Western for the Hamilton – Toronto rights, but through the nose – three times as much per mile – for Alexander Tilloch Galt’s charters. Jackson refused to commit himself, however, on the construction of a railway bridge two miles in length across the St. Lawrence at Montreal, and he got nowhere in his approaches to the Great Western Railway, whose directors undoubtedly reasoned that if he was prepared to pay such thumping sums for primitive and nonexistent lines, he should be willing to shell out in right royal fashion for a property that was within a few months of being in operation. The sum that the Great Western management has in mind appalled even the ebullient promoter, so Jackson passed the ball back to Thomas Baring,
who undertook to bring the Great Western’s London board to a more accommodating frame of mind. The Great Western directors, however, stood fast, for they felt that Hinks as promoter eventually would come to heel, since in the previous year as Inspector-General of the Province of Canada, had officially designated this railway as an element of the Main Line.
Hinks Deserts the Maritimes
They were soon to learn how little a pledge by Hinks in one capacity mattered to him in another role. Alexander Tilloch Galt, having done very well for himself on the eastern sections of the projected trunk line, now discerned a fresh opportunity. His engineering subsidiary, Gzowski and Company, had obtained a charter for a railway from Toronto to Guelph, fifty miles to the west of the Ontario capital. Its construction had begun in slow motion, while Galt roved the towns and counties along its route in search of cash, either from stock sales or from subsidies. An extension of this line for 122 miles beyond Guelph would bring it to the Michigan boundary at Sarnia; such a route would be fifty miles shorter to Chicago than the Great Western route by way of Hamilton. Moreover Sarnia, on the St. Clair River at the foot of Lake Huron, was in a better position than Windsor to intercept the outward-bound traffic of three of the five lakes. Finally, a railway was in course of construction from Port Huron, on the opposite bank of the St. Clair from Sarnia, into the southwest. At a pinch it might provide connections of a sort with Chicago.
Galt was quite willing to assist the Grand Truck to Chicago (or to the moon) as long as there was a profit in it. But only Hinks could disqualify the Great Western as the chosen instrument of the Main Line in western Ontario. There are no records of the conversations that ensued; all that is known is that Hinks came into possession of ₤25,000 of Grand Trunk stock that he assuredly had never bought on the open market. On the grounds that Great Western recalcitrance had imperiled the completion of a quasi-official project, he announced that the route of the Main Line would be altered, with its western terminal at Sarnia instead of Windsor. For Galt as a promoter this was one of the great coups of his career. For Hinks as a colonial official, it was a shady deal.
The Flotation
In the first months of 1853, the British Hotel on Jermyn Street in London in the chambers of Swift, Wagstaff and Company, Solicitors, in Great St. George Street of that city were the scenes of continuous activity. No one mentioned Chicago; all were dedicated to the launching of that Imperial structure, the Canadian Main Line. Its cost grew day by day. The bridge over the St. Lawrence was accepted as a matter of necessity, as was an extension along the river below Quebec City to a point of linkup with a railway from Halifax, if and when it should be built. Everywhere the colonials had a field day at the expense of their imperial associates. Alexander Tilloch Galt remembered just in time to include an additional ₤15.000 in his Montreal – Portland bill to cover interest charges to date on his two railways. The Province of Canada unloaded bonds to the value of ₤170,000 on the promoters; the bonds represented loans to the Ontario, Simcoe and Huron Union Railroad, which ran in the wrong direction to be of any immediate value to the Main Line. A host of new charters had been rushed through the Legislative Assembly by promoters who hoped to share in the pickings; one of the railways thus chartered, the Grand Junction Railroad, from Belleville to Peterborough, Thomas Storrow Brown, the rebel journalist wrote:
Someone from Peterboro’ timidly enquired how such a road would benefit that section. “Build you a loop line,” briskly replied Mr. Jackson, clapping his big hand over the map, thumb at Bellville, little finger at Port Hope, middle finger at Peterboro. People were charmed with this facility of construction. No one had ever heard of a loop line before.
This as yet unborn orphan was allotted ₤400,000 as a christening gift. The final tally revealed that the Grand Trunk prior to incorporation had acquired in all 1,112 miles of railways and charters, in being or yet to be, involving expenditures, actual and estimated, of something in excess of ₤7 million – a sum which would represent more than ₤100 million today.
Components of the Main Line
Montreal – Portland
Montreal – Toronto
Toronto – Guelph – Sarnia
St Lawrence Extension
Belleville Loop Line
292 miles
345 miles
172 miles
253 miles
50 miles
Bridge Allowance at Montreal 2 miles
On April 12, 1853, the English newspapers carried profuse details of the new comet in the railway sky. The purple passages of the prospectus writer were interlarded with assurances excerpted from the dispatch of the Earl of Elgin, Governor-General of the Province of Canada, to the Colonial Office. These assurances included statistical summaries that revealed the Canadian colonies to be pulsing with rude health. Meteorological reports were appended that proved that Canada had a climate in which Britons would thrive. Three days after the issue of the prospectus Alexander Tilloch Galt wrote exultantly to a friend. The Grand Trunk shares had been oversubscribed twenty times; they had already gone to a premium. Galt had every reason to be pleased. He and his friends were destined to make fortunes; the contractors and the English investors, to lose everything.
But this belonged to the morrow. For the moment the Grand Trunk’s first birthday teemed with happy auguries. It was spring in the land and in men’s hearts; the winter of dispute, of projects clashing with each other, seemed to be over. In London, then the financial capital of the world, the streets which held overseas interests buzzed with activity. British engineers were devising new installations, bankers were speculating on how they might venture, and still justify their risks, in the far parts of the earth. Commerce had taken on fresh dimensions. Of the score of opportunities that beckoned, none seemed more propitious than those from what had been the wilderness of Canada, and the hour was ripe for those who would make their way along the great rivers, who would plunge into the depths of the forests, who would clamber over the great mountains.
It was on such a shining project that the Grand Trunk project was launched. No star ever had burned more brightly in the railway firmament. Never did what looked like a great occasion turn out to be more of a flop. As one writer put it, it was as though a ballerina, after a dazzling open pirouette, had stubbed her toe and had fallen on her face. She might rise and limp through her performance, but the bruises of her mishap would remain.
Reams have been written and explanations by the score have been devised to account for this extraordinary reversal of fortune. The most common contention has little truth and less sense in it – that the fiasco occurred because the scheme had been formulated by those who knew little or nothing about Canada. For instance, O.D. Skelton, in his biography of Alexander Tilloch Galt, gives the impression that the misfortunes of Canadian railway promoters derived from the fact that the English investors took the projects out of their hands.2 This is quite untrue. Canadians had neither the money nor the technicians to build the Main Line, yet the sponsors of the Grand Trunk charters, twenty-two out of twenty-three were Canadians; they included the leading citizens of nine different Canadian communities. Twelve of the first twenty-six directors, including six cabinet ministers, were Canadians, although less than 2 per cent of the stock of the company was held in Canada. The first president was a Canadian. Until Peto, Brassey ,Jackson and Betts had completed the construction, a head office in London rather than in Canada constituted an advantage and not a handicap, since London was the end of a twelve days’ voyage from the favour-seekers who haunted the anterooms of the Canadian Legislative Assembly in search of handouts. Had Dean Skelton stated that the British promoters knew little about expatriate Britons like Hinks and Galt, who found in Canada a fertile field for their talents, he would have been nearer to the truth.”
The above map shows the GTR mainline when it was completed in 1859. It included:
1. The St. Lawrence and Atlantic Railway from Portland, Maine to Montreal, Quebec that Galt & his partners constructed.
2. The Montreal to Toronto section that the British contractors Peto et al, built.
3. The Toronto to Point Edward section that Gzowski & Co. constructed.
4. The Detroit & Canada Grand Trunk Junction Railroad from Port Huron to Detroit that Gzowski & Co. not only built but also owned. At Detroit this Junction Railroad connected to other lines that ran to Chicago, the great railway hub of the American midwest.
5.
Private Gardens, Public Gardens – and Whale Oil
“Casimir Gzowski, N. Sheffa – page 32”
“The success of the work on the St. Lawrence and Atlantic Railway impressed Galt. He worried that Gzowski might be snapped up by a rival line, and so he thought of a plan to retain Gzowski’s services. He persuaded David Macpherson and Luther Holten, who had been associated in the Montreal-to-Portland line, to join him and Gzowski in their own railway construction company under the name of Gzowski and Company. The partners were well matched in the strengths they could bring to the organization. Macpherson was an excellent manager, Holton looked after the financing of the firm, and Galt’s political contacts made him the ideal man to obtain assistance from government officials and politicians. Gzowski, of course, was the construction supervisor. They began their venture in 1852 with a handsome contract to build a line from Toronto through Brampton, Guelph, Goderich, and on to Sarnia. The line, known as the Toronto and Guelph Railway, later came under the control of the Gzowski, Macpherson group who wanted to extend it eastward from Toronto to Kingston and Montreal. However, they ran into stiff competition from English railway promoters who managed to get the licence for the Toronto-to-Montreal line.
The affairs of railway builders and railway lines in Canada now became very complicated. Promoters who dreamed of making vast profits entered the picture. Various lines were proposed; politicians and governments were besieged with requests for licenses to operate lines all over the map. Indeed, for almost the next fifty years in Canada, miles and miles of track would be laid in all directions. It was doubtful if many of these lines could prosper, or indeed ever rise much above bankruptcy in a country as vast as Canada. Galt and his English competitor came to terms and joined forces to form what came to be known as the Grand Trunk Railway – a venture that was designed to join the American Mid-West to the port of Montreal – and, via the St. Lawrence and Atlantic, which would become part of the Grand Trunk, to Portland, and from there by sea to Europe. It was a dreamer’s scheme. The costs of building so extensive a line were tremendous. Almost from the beginning there were financial difficulties – and the Grand Trunk was in and out of debt for the rest of its days.
The value of a line connecting up the far reaches of the colonies was so obvious that the government found it necessary to support the building of the Grand Trunk. The Ontario hinterland benefited from the railways. Settlement was moving fairly rapidly, and the interests of the people of the area were served by this link, which quickly took their farm products to market and brought them finished goods and news from the rest of the outside world.
As the railway was completed, section by section, as bridges were built and service between communities opened up from Guelph to Kitchener, and on to Stratford and Sarnia, more celebrations were held. There were speeches and bands, and politicians and railway officials congratulating each other and the townsfolk over the completion of one more link in the great scheme of the Grand Trunk Railway. Gzowski, as the presiding engineer, came in for many deserved congratulations. The bridges that he built were models of design for that day, and the roadbed was laid with his usual careful attention to solid construction. Gzowski was genuinely pained at some of the cheap, shoddy construction that went into the lines of his competitors. He would have nothing to do with that kind of workmanship.
By the late 1950’s, Gzowski and Company had completed their work on the Grand Trunk. The company had become prosperous from its construction activities, even if the railway, when it began operations, did not do so well. In fact, the railway had a history of financial unhappiness almost from the day it started. Gzowski and Macpherson, however, made great personal fortunes. “
Brief Summary of the Gzowski & Co. Affair
In the 1840’s & 50’s large amounts of British capital flowed into Canada to build railways. Prominent among the businessman – politicians who took advantage of the railway boom were A.T. Galt, D.L. MacPherson & L.H. Holton. In the late 1840’s, these three joined with a noted Toronto civil engineer, Casimir Gzowski, to build the St. Lawrence & Atlantic Railway in Lower Canada. In 1852 they formed their own construction company under the name of Gzowski & Co..
“The partners were all matched in their strengths. MacPherson was an excellent manager, Holton looked after the financing of the firm, and Galt’s political contacts made him the ideal man to obtain assistance from government officials and politicians. Gzowski, of course, was the construction supervisor (1).”
In 1852 the company received a contract to construct a line from Toronto to Guelph. The next year, the G.T.R. took over the charter of the railway with the understanding that Gzowski’s Co. would build the G.T.R. line from Toronto to Guelph & the on to Point Edward at £8,000 per mile. Knowing that Point Edward was the planned terminal of the G.T.R., Luther Holton bought 440 acres adjacent to the Military Reserve for £5,200 in 1853.
“That same year Walter Shanley, of London & Thorndale, a civil engineer with the G.T.R., on behalf of the railway, applied to the Board of Ordnance for the lease of 30 acres of land in the Military Reserve for a railroad right-of-way. This application went through the hands of one J.S. Elliot, the Ordnance officer responsible for the Canadian negotiations. By the time the application was received by the Imperial authorities it had somehow been altered to represent an offer to buy 644 acres of the site at “a fair and reasonable price, fixed at two pounds per acre.”(2).
In 1856 Gzowski & Co. bought these 644 acres for £322 and in 1857 Galt & Holton sold their interest in the Point Edward land for £10,000. Two years later MacPherson and Gzowski sold all their land “excepting the station ground and right-of-way of the G.T.R. amounting to 41 acres” to Thomas Blackwell, General Manager of the G.T.R., for £30,000.
The following questions arise from these transactions.
1. Why was Gzowski & Co. able to buy almost the entire Military Reserve – 644 acres – when the G.T.R. only needed 40 to 60 acres?
2. Why did the Canadian government recommend that the Imperial authorities sell all this land to Gzowski & Co. for the nominal price of only £322?
3. What role, if any, did John A. MacDonald, the Attorney General of Canada at the time, play in this affair?
4. Why did Blackwell & the English investors he represented – Thomas Baring & Edward Carr Glynn pay £30,000 for an additional 1043 acres at Point Edward when Gzowski & Co., as stipulated in the contracting agreement, had already provided free of charge the 41 acres needed for the G.T.R. station grounds & right-of-way?
5. What role did Galt play in this affair after he became Inspector General (ie: Finance Minister) of Canada in 1858?
In Nov. 1860, an English shareholder in the G.T.R. Mr. H. Chapman, after making an inspection of the company’s management, concluded that “jobbery & corruption were the rule, honesty & integrity the exception” (3).In particular, he claimed that the G.T.R. had paid Gzowski & Co. £24,000 for the Military Reserve at Point Edward even though the contractors had originally agreed to supply the land free of charge. In Canada, Chapman’s accusations initiated a heated controversy over the Gzowski & Co. affair which continued throughout much of 1861. Blackwell painted a rosy picture of the G.T.R.’s prospects and President John Ross defied anyone to prove that the G.T.R. had been the victim of political jobbery & speculation.
(1) N. Sheffe Casimir Gzowski P32
(2) O. Miller The Point P26
(Note: actually, the price of the Military Reserve Land was 10 shillings or ½ pound or $2 per acre)
(3) Observer “The Point Edward Purchase” Jan. 4, 1861, P2
The following items relating to the Gzowski & Co. affair are included in the next pages:
(1) A summary of all land transactions involving the partners of Gzowski & Co. in the Point Edward area from 1853 – 1859.
(2) A brief biography of each of the four partners in Gzowski & Co – Holton, Galt, Gzowski, & MacPherson.
(3) A copy of the indenture made in July 24, 1856 Between Lord Panmure & Gzowski & Co. whereby 644 acres of the Ordnance Reserve were sold to Gzowski & Co. for £322.
(4) The Parliamentary Records of March, 1857, when the first accusations concerning the Ordnance sale was made.
(5) The Observer’s comments on the accusations.
(6) The Parliamentary Records of April, 1857, when a committee to investigate the Ordnance sale was called for.
(7) The Observer’s editorial concerning the Ordnance sale.
(8) A copy of the Indenture made July 31, 1857, whereby Galt & Holton sold their interest in the Ordnance lands for £2,500.
(9) A summary of the events surrounding the G.T.R. in the 1858 to 1861 period.
(10) A summary of the Indenture made Nov. 16, 1859 whereby Gzowski & Macpherson sold a 1043 acre tract in Point Edward to Blackwell for £30,000.
(11) A discussion of Chapman’s accusations & the possible role played by MacDonald & Galt in the Ordnance sale.
(12) A March 4, 1861, letter sent by MacDonald to Blackwell.
(13) Two discussions of MacDonald’s role in the Ordnance sale.
(14) A discussion of the 1861 shareholder meeting where the accusation concerning the Ordnance sale were denied.
Notes relating to Map B: Land Assembly, Gzowski & Co.
94 – June 29, 1853, George Durand sold Luther Holton 193 2/3 acres of lots 67 & 68, IX concession for £400 (green)
93 – June 30, 1853, Malcom Cameron & Alexzander Vidal sold Luther Holton 133.5 acres for £3,700 (pink)
71 - May 2, 1853, William Stocks sold Luther Holton 9.9 acres (Park Lot #4) for £400 (blue)
147 - August 16, 1853, Abraham Slocum sold Luther Holton 11.1 acres (Park Lot #5) for £400 (blue)
121 - Sept. 3,1853 George Durand sold Luther Holton 92 acres of Lot 69, IX concession for £575 (green)
640 - July 24, 1856 Crown sold Casimir Gzowski, David Macpherson, Luther Holton, & Alexander Galt “that portion of the Military Reserve not required for defensive purposes ..... containing 644 acres” for £322 (yellow)
747 - July 31, 1857, Luther Holton sold Casimir Gzowski & David Macpherson 440.17 acres for £7,500 (ie; all the property Holton purchased in 1853)
745 - July 31, 1857, Luther Holton & Alexander Galt sold Casimir Gzowski & David Macpherson 644 acres for £2,500. (ie; Holton & Galt each sold their interest in the Military Reserve property for £1,250)
Thus, on July 31, 1857 Gzowski & Macpherson purchased a total of 1084.17 acres in the Point Edward area for £10,000.
Note on Profits Made by Gzowski & Partner’s
If we assume that the partners involved in each of the land transactions shared their gains equally, the following calculations can be made regarding how much each of the partners gained.
1. Regarding the two sales on July 31, 1857:
a) Holton had purchased 440 acres in 1853 for a total of £5,200 and sold them in 1857 for £7,500 for a gain of £2,300.
b) Assuming that each of the four partners had calculated ¼ of the £322 paid for the Military Reserve property, then Holton & Galt each paid £80.5 & received £1,250 for a gain of £1,169.5
2. Concerning Gzowski & Macpherson they had paid:
£7,500 to Holton for the 440 acres & £161 for their share of the original cost of the Military Reserve.
£2,500 to Holton & Galt for the Military Reserve
Therefore, they paid a total of £10,161 for the Point Edward land and sold it to Blackwell for £30,000, so each gained £9,919.50.
Therefore, the gain for each partner was:
Galt
Holton
Gzowski
Macpherson
£1,169.50
£3,469.50
£9,919.50
£9.919.50
Most of these gains resulted from the Military Reserve property which they had obtained at a very low price.
Of course, the profits they actually made were less than these overall gains when all the expenses involved in these land transactions were accounted for. Not the least of these expenses was the amount paid to their solicitor – John A. MacDonald – who according to several newspaper accounts was a “silent partner” , who indirectly also made a handsome profit in this affair. The fact that he was also the Attorney General in the Canadian legislature during the 1855 – 1859 period when all these land transactions occurred, led to accusations that he had used his position to benefit both himself and his friends.
Pierre Burton, in his book, “The National Dream”, noted on pages 15 & 16: “Three powerful politicians, Alexander Galt, David Macpherson and Luther Holton, all made fortunes out of the Grand Trunk construction contracts.”
“Between 1854 & 1857 an estimated one hundred million dollars in foreign capital was pumped into Canada for the purposes of building railways. Much of it found its way into the pockets of promoters and contractors. The usual scheme was to form a company, keep control of it, float as much stock as possible and then award lush construction contracts to men on the inside.”
Note: on Large Variation of Land Prices
Notice that Cameron and Vidal obtained a much higher price for their 133.5 acres (£27.7 or $110 per acre) than Durand got for his two parcels – 193 2/3 acres (£2.1 or $8 per acre) and 92 acres (£6.25 or $25 per acre). This is due, at least in part, to the fact that Cameron and Vidal’s property consisted of well-drained land while Durand’s was largely wetland – both marsh and swamp. The low price of the Military Reserve property (£0.5 or $2 per acre) was also partly due to the fact that much of it consisted of either open water (Sarnia Bay) or wetland (refer to Map B3 below).
Luther Hamilton Holton (1817 – 1880)
He was born in Leeds County, Upper Canada. He was one of the incorporators of the G.T.R.; from 1852 to 1857 he was one of the government directors of the railway; and he was a member of the firm of contractors, Gzowski & Co., which built the Toronto – Sarnia section of the railway. From 1854 – 1857 he represented Montreal in the Legislative Assembly of Canada and in 1862 he was elected to the Legislative Council of Canada for the Victoria division, but he resigned in 1863 from the council and was elected to the Assembly for Chateauguay. He
continued to represent the constituency in the Assembly until Confederation, and then in the House of Commons until his death. He was twice a member of the government. In the short-lived Brown government of August 1958, he was Commissioner of Public Works, and he was Minister of Finance in the S. MacDonald – Dorion government of 1863-4. In 1873 he declined to join the Mackenzie administration, though he gave it loyal support, and he died at Ottawa on March 14, 1880.
(From The Encyclopedia of Canada, W.S. Wallace Fd. University Associate of Canada Lmt, Toronto, 1936)
Sir Alexander Tilloch Galt (1817 – 1893)
He was born in London but emigrated to Canada at the age of 18. He entered the Canadian Assembly in 1849 as Liberal member for Sherbrooke County, Quebec. From 1858 to 1862 and again from 1864 to 1867 as Minister of Finance he did much to reduce the chaotic finances of Canada to order. To him are due the introduction of the decimal system of currency & the system of protection to Canadian manufacturers. He became Minister of Finance in the first Dominion Ministry but resigned after a few months. He was Canadian high commissioner to Great Britain, 1880 –1883.
From “The Dominion Educator” Vol. III 1928
A.T. Galt came to Canada when his father became commissioner of the Canada Land Co. in what is now Ontario. A land speculator and railway & mining promotor, he was first elected to the legislature in 1849. An early exponent of the idea of colonial union, he was responsible for working out the provincial arrangements that made confederation possible.
From “Horizon Canada” Centre for the Study of Teaching Canada, Laval University p1180
Galt, Sir Alexander Tilloch – (1817 – 1893)
Encyclopedia of Canada W.S. Wallace Ed Vol III University Associate of Canada 1936
Sir Alexander Tilloch Galt, Canadian Minister of Finance (1858-62 and 1864 - 1868, and Canadian high commissioner in London (1880 – 83), was born in Chelsea, London, on September 6, 1917, the youngest son of John Galt (q.v.), the Scottish novelist. He came to Canada in 1835 as a clerk in the office of the British American Land Company at Sherbrooke, Lower Canada, and from 1844 to 1855 he was commissioner of the company. He became interested in railway development; he was one of the Canadian promoters of the Grand Trunk Railway. In 1849 he was elected to the Legislative Assembly of Canada for Sherbrooke County as an independent member; but he resigned in1850. He was returned to Sherbrooke town in 1853; and he continued to represent this constituency in the Assembly until 1867, and in the House od Commons until 1872. He came to be regarded as the leader of the English-speaking members from Lower Canada; and in 1858 he became Minister of Finance in the CartierMacDonald administration, joining the government on the condition that the federation of British North America was to be a plank in its platform. With George E. Cartier (q.v.), he went to England to urge Confederation on the British Government, but without success. In 1862 he
resigned office with his colleagues; but in 1864 he became again minister of finance, and he continued in this office until 1866. He was a delegate to the Charlottetown and Quebec Conferences of 1864 and to the Westminster Conference of 1866; and he was one of the chief architects of the British North American Act. In 1867 he became the first finance minister of the Dominion; but in 1868 he retired from office because of a disagreement with Sir John MacDonald (q.v.).
Galt never again held cabinet office. He severed his connection with political parties, pronounced himself a believer in the future of independence of Canada, and in 1872 retired from parliament. In 1875 he was appointed a member of the Halifax Fisheries Commission, under the Treaty of Washington; and the next few years of his life were mainly devoted to diplomatic or semi-diplomatic work. In 1880 he was appointed the first Canadian high commissioner in London; and he held this post until 1883. His last ten years were devoted to the development of various enterprises he had launched in the Canadian North West; but after 1890 his health rapidly failed, and he died at Montreal on September 19, 1893.
Sir Casimir Stanislaus Gzowski (1813 – 1898)
He was born in St. Petersburg, Russia, the son of Count Gzowski. He studied military engineering in Russia & entered the Russian army, but in Nov. 1830, he joined the Poles in expulsion of Constantine from Warsaw. He was wounded, captured, and exiled. In 1833 he arrived in New York and the next 8 years he spent in the U.S.. In 1841 he came to Toronto & received employment as an engineer with the Canadian Department of Public Works. In 1848 he left the government service and in 1853 he organized the firm of Gzowski & Co. which obtained the contract for building the G.T.R. from Toronto to Sarnia. At a later date (1871-3) he built the international bridge at Niagara. He died at Toronto on Aug. 24, 1893. He was the first President of the Canadian Society of Civil Engineers.
(From The Encyclopedia of Canada, W.S. Wallace Fd. University Associate of Canada Lmt, Toronto, 1936)
Sir David Lewis Macpherson (1818 – 1896)
He was born at Castle Leathers, near Inverness, Scotland. After a successful start in his brother’s transportation firm, he combined his administrative skills with the engineering expertise of Casimi Gzowski in the early 1850’s on a number of key construction projects, including the G.T.R. west of Toronto & the International Bridge across the Niagara River. Macpherson was elected to the legislative council in 1864 & appointed to the newly created Senate in 1867. He was a valuable Conservative organizer & fundraiser in Ontario. He was appointed Speaker of the Senate in 1880 & Minister of the Interior in 1883. His simple-minded obsession with reducing costs & increasing revenues made him an excessively rigid administrator of the politically sensitive land policies in the North West. The outbreak of the North West Rebellion in 1885 demonstrated his weakness & worsened his failing health & led to his resignation from public life.
(From The Canadian Encyclopedia 2nd Ed. Hurtig Publisher, Edmonton, 1988)
From “Letters of John A. MacDonald” Vol. 1
To The Crown Ordance Department
Gentlemen, Kingston 5 June 1853
The contractors for the construction of the Toronto and Sarnia railway find it necessary for their purposes to obtain control of the marsh and shoal at Point Edward in Sarnia.
They are aware that this shoal as well as the Point belong to the military government and have therefore instructed me to apply for the right of occupancy. It is important that a title should be given them for as much of the point and bay as is not absolutely required for military purposes: and for whatever may be reserved for these purposes, they desire to obtain a licence of occupation on the usual terms.
As the place applied for is of little value, and as dredging and filling up the marsh will increase the salubrity of the vicinity, and thus preserve the health of any garrison that may be stationed there, they trust there will be no difficulty in obtaining their object.
The contractors are desirous of pressing their works with all speed, and therefore be much obliged by your taking their application into your favorable consideration as early as may conveniently be. 1
Solicitor for C.S. Gzowski & Co., Contractors for the Western section of the Grand Trunk Railway
I have the honor to be gentlemen, The Respective Officers, &c. &c. Your very obedient servant Montreal John A. Macdonald2
The Globe (Toronto)
To Henry C.R. Becher1
My dear Becher
Kingston 22 Mar. 1854
I have communicated with my friends about the land at Sarnia wanted for the G.W. Railway,2 and all that I can say is , that until we know how you propose crossing the land and see how the lots will be affected, we cannot name a price. When in possession of the information we are disposed to deal liberally, but we must get the value of our land.
HCR Becher Esq
Yours faithfully London John A. Macdonald
In the possession of Mrs. A Becher London, Ontario
Becher was connected with the Great Western Railway and became one of its Directors in November 1857. The land wanted was in the process of being sold by the Ordnance Department of the military establishment in Canada to John A. MacDonald and to S. Gzowski and Co. who wanted it for speculative purposes as both the Great Western and the Great Trunk Railways intended to build on it. The sale was approved by the Imperial War Office in London, but at this time no terms of sale had been arrived at with the Ordnance officers in Montreal. See also MacDonald to the Ordnance Department, June 5, 1853.
This streamlined locomotive, Canada’s first, was put into service in 1936 and marks the centenary of Canada’s first railway, opened on July 21st, 1836. With four others of the same design, it will be used in fast passenger train service between Montreal, Toronto and Sarnia, on the route of The International Limited. The engine and tender together are more than 94-ft. in length, while the total weight exceeds 290 tons. It is interesting to compare the new color scheme with that of The International Limited. Gallaher Ltd, Virginia House, London & Belfast
For over a third of a century The International Limited, the crack train of the Canadian National Railways, has been in service between Montreal, Toronto, and Chicago, on the only double-track route connecting these cities. The train, which is variously composed of coaches, diners, parlour cars and sleepers, covers the westward journey of 849 miles in 17 ¾ hours, including stops. Through the tunnel under the St. Clair River joining Lakes Huron and Erie it is hauled by electric locomotives, but on the remainder of the journey steam locomotives are used. Gallaher Ltd, Virginia House, London & Belfast
AMemorial(to be Registered pursuant to the Acts of Parliament in that behalf) of an Indenture , made the twenty-fifth day of July in the year of our Lord, one thousand eight hundred and fiftysix.
By and between Her Majesty's Principal Secretary of State for War Department of the first part and between Casimir Stanislaus Gzowski of the City of Toronto, County of York, and Province of Canada, Esquire; David Lewis Macpherson of the same place, Esquire; S. Hamilton Halton of the City of Montreal in Lower Canada, Esquire; andAlexander Tilloch Galt of Montreal aforesaid of the Second Part.
Whereby it was Witnessed, that Whereas the several parties thereto of the second part had agreed with the Respective Officers of Her Majesty's Ordnance in Canada for the purchase of the transfer to them, the said parties of the Second Part, of certain lands held and known as the Military Reserve at Sarnia in the Township of Sarnia and the County of Lambton and Province of Canada, at and for the sum of ten shillings currency per acre, to be paid by them therefore, subject to certain conditions hereafter contained and according to what appears on a certain plan (See Map B1) and shown or tinted in yellow colour thereon, containing about six hundred and forty-four acres and one road; the Reservation of the Military Reserve, the copy reserved thereof, being also shown on the said Plan in Pink colour.
And whereas also it was hereby agreed by and between at all times several parties thereto,
that there should also be reserved at all times thereafter in over and upon and across the said Lands hereinafter described a right of way from any of the lands adjacent to the Military Reserve to the said portion shown in pink and aforesaid on the said Plan, for and on behalf of Her Majesty Queen Victoria, her heirs or successors, or for any Officer or Officers, person or persons representing her in any department of the Public Service, for persons, troops, horses, carts Carriages, guns or anything whatsoever in any way appertaining to the Public Service. The said right of way to be the width of at least sixty-six feet and to be located and set apart on over and across that portion of the said Reserve thereby conveyed in such place or location thereof as might be required by the Military authorities of the Province for the time being, or by their officer or officers named or appointed thereon, such right of way to be wholly clear of all or any obstructions or interruptions of any nature and kind whatsoever.
And one said Indenture further witnessed that the said party thereto of the first part, for and in consideration of the Sum of Three hundred and seventy-two pounds, lawful money of Canada, by the said parties thereto of the second part, will and truly pay to the said party of the first part, or to the Respective Officers of Her Majesty's Ordnance in Canada, the receipt whereof if thereby acknowledged, did convey unto the said parties thereto of the second part, certain tracts of land and premises situated lying and being in the Township of Sarnia in the County of Lambton and province of Canada as part of the Military Reserve at Sarnia and shown and tinted on the said map or plan before referred to as yellow, and may be further known and described as follows, that is to say, comprising all that certain tract or parcel of land Water and Beach at Port Sarnia, tinted yellow on the plan thereunto annexed, being that portion of the Military Reserve not required for defensive purposes situated and lying in the Township of Sarnia, County of Lambton, Canada West and bounded to the east by a line running from a certain picket (at the South East angle of the Reserve), North one degree fifty-five minutes East, one hundred and twelve chains more or less to Lake Huron: bounded to the Southwood by the prolongation of concession line VI and VII (from the same picket).
Running south, eighty-eight degrees, seven minutes west, fifty-nine chains more or less to the River St. Clair and bounded on the other sides to the northward and westward by the waters of the said Lake Huron and River St. Clair, and by that portion of the reserve which was still retained for Military Purposes, all as show on the said plan.
The part to be surrendered contains six hundred and forty-four acres, one road, be the same more or less. To have and to hold the same to said parties thereto of the second part, their heirs and assigns for ever, as Tenants in Common and not as Joint Tenants, saving, excepting and assuming, however, and Subject to the right of way of the extent and for the purposes above therein mentioned; and which said way or right of way the said parties thereto of the second part thereby for themselves, their executors and their administrators, and agrees to and with the said party thereto of the first part, his heirs, executors, and administrators, as also with Queen Victoria, her heirs, and successors that they would permit and allow and be retained in the manner and such time and place for such purposes as above therein for that behalf. Specified without any trouble, hindrance, or interruption whatsoever by them or any of them.
Which said indenture is witnessed by Honourable John Richard Gaskoi and Robert Henry Forneau.
And this Memorial thereof is hereby required to be registered by me, the said Principal Secretary of State or the War Department therein mentioned.
As witness, my hand and seal, this twenty-ninth day of July 1856.
Lord Panmure
Signed and sealed in the presence of J. R. Gaskoi, Private Secretary
Robert H. Forneau, War Department, Pall Mall
Note: Lord Panmure was the Secretary of War from 1855 to 1858 in Prime Minister Palmerston’s Liberal Government. The main event during this period was the Crimean war, which was fought between 1854 & 1856. The Observer had numerous articles concerning the war during these years, many of which mentioned Lord Panmure. The peace treaty that ended the war was signed in March 1856 and in July when Panmure signed this deed transferring most of the Military Reserve to Gzowski & co., the British and French troops had just evacuated the Crimean Peninsula.
Indenture – July 31, 1857
The indenture above records the fact that on July 31, 1857, Holton & Galt sold their interest in the Military Reserve property to Gzowski & Macpherson for £2,500.
It describes the property at issue as:
“Comprising all that certain tract or parcel of said Water & Beach at Port Sarnia tinted yellow on the plan here-to annexed being that portion of the Military Reserve not required for defensive purposes. “
“The parcel so described containing by admeasurement 644 acres.” (as shown on Map B1).
Note onAccuracy of 1857 – 1861 NewspaperAccounts of The Gzowski & Co.Affair
Reference to the registry office documents recorded above indicates that the newspaper accounts provided below from the 1857 – 1861 period contain many inaccurate statements concerning the Gzowski & Co. affair, Unfortunately, more recent authors of books and newspaper articles have often quoted these 1857 - 1861 accounts without checking their accuracy. Consequently, there is considerable misinformation about this episode in these history books and newspaper items.
As an example, in Jean Elford’s 1982 book entitled, “Canada West’s Last Frontier, page 114”, she gives the details of the Gzowski & Co. affair in the following paragraph:
“The editor of the Sarnia paper gave his version of the affair in an issue of his paper dated January 4, 1861.According to him the government sold 664 acres of the ordnance land at $2 an acre with the understanding it was needed for the railway. The railway got 60 acres and 504 acres fell into the hands of Gzowski & Co., a company for whom Sir JohnA. MacDonald was the attorney. MacDonald bought 900 acres adjacent to the ordnance lands from Malcom Cameron at $9 an acre and added them to the company’s holdings.All land purchases were made for £8,000 and sold to the Grand Trunk for £30,000.”
Based on registry office documents, an accurate version of the paragraph would read:
“…the government sold 644 acres of the Military Reserve at $2 an acre with the understanding it was needed for the railway. The railway got 36.7 acres and 607.3 acres fell into the hands of Gzowski & Co., a company for who JohnA. MacDonald was attorney. Luther Holton bought 440 acres adjacent to the Military Reserve, 133.5 acres of which were purchased from Malcom Cameron &Alexander Vidal at $110 an acre. The 440 acres were added to the company’s holdings in the Military Reserve.All land purchases were made for £5,522 and sold to the Grand Trunk for £30,000.”
Parliamentary Summary
Canadian Observer,April 2, 1857, Page 2
“Mr. Billingham moved an address to his Excellency for copies of the contract entered into by Gzowski & Co. for the construction of the Toronto to Sarnia railway . . . and the quantity of Ordnance land situated at Sarnia and acquired by the firm of Gzowski & Co. in their name and the price paid by them for the same place.”
“As to the Ordnance lands at Sarnia, they were obtained by the Hon. Malcolm Cameron in 1837, under a lease of occupation. Sometime ago, they passed into the hands of Gzowski & Co. Their contract limited them to acquiring lands for railroad purposes, but he (Billingham) was prepared to show that they were not acquired for this purpose. Gzowski & Co. obtained 40 acres of the village Reserve; for the other 520 acres obtained from the Ordnance Board, they paid only 10 shillings an acre, while for the 320 acres farther back, bought from Hon. Malcolm Cameron, they paid £12.10 shillings an acre. They had leased at $600 per annum the fishing privileges of the lands bought from the Ordnance Board. He held that the purchase of these lands was illegal, because they belonged to the Government of Canada.”
Mr. Halton said that the Hon. Member, before making these statements, should have waited until the papers were brought down. Had he done so, he never would have made these statements.
Observer Comments on Billingham'sAccusations
“Some time ago, we mentioned a rumor which was in circulation here, to the effect that Messrs. Gzowski & Co. had got a grant of the Ordnance Lands at Point Edward, a short distance above this place, at $2 per acre and let the fishing stations thereon, at $600 per year. By the statement of Mr. Billingham made in the House one evening last week, it appears there is some truth in the rumor, that gentleman asserting that the firm alluded to had purchased 520 acres of said lands at $2 per acre, whereas they had paid $50 per acre to Hon. M. Cameron, for lands further back from the lake. Mr. Halton, it is true, calls into question Mr. Billingham's statement, but does not positively deny that part of the job. We may expect to get a full revelation in a few days when certain papers relating to the transaction have been ordered to be produced. The transaction in the meantime wears the aspect of a nefarious job and, it is to be hoped, will be sifted thoroughly.
Note: as the notes relating to map B state, Cameron and Vidal sold their 133.5-acre parcel to Halton for 3,700 pounds, which was about £ 12.7 per acre (document 93, lot 67 IX concession, Sarnia Township at Lambton Registry Office).
Provincial Parliament, House ofAssembly
Canadian ObserverApril 30, 1857, P2
“Mr. Billingham moved for a Committee to invest time into the causes which have prevented the fulfillment of the contract to build the Toronto to Sarnia Railroad by the contractor, Messrs. Gzowski & Company . . . and what quantity of land known as the Sarnia Military Reserve they acquired from the Ordnance Department or Board of Respective Officers; what price they paid for same; by whose recommendation the Board of Respective Officers gave a title to Gzowski & Co.; and generally to collect any information bearing upon the described transaction. He denied the competency of railway contractors to acquire such a large portion of land as these 560 acres of Ordnance Lands from the ImperialAuthorities for railway purposes. This land they acquired at 10 shillings an acre and its real value might be known by the fact that for adjoining land they paid £12 and 10 shillings an acre.”
“Mr. Larwell was desirous of knowing what the honourable member means when he alluded to land near Sarnia; such a word, he was of the opinion, means soil, but there was nothing but marsh and sand in that locality.”
“Mr. Halton arose and said it would have been discreet if the honourable member for Argentuil(?) had waited until the papers on this subject had been produced, as they would show that the statements made by that gentleman were at variance with the facts….”
Canadian Observer - April 30, 1857 P2:
The Point Edward Ordnance Sale - We lately alluded to a rumor which was in circulation in this neighbourhood to the effect that the Ordnance Lands at Point Edward had been sold to Gzowski & Co. at the rate of 10 shillings per acres. The truth of the report is now beyond doubt. We learn that a Deed of this property to the extent of 640 acres has been granted to the firm named, by Lord Panmure, Secretary of War, upon the recommendation of the Ordnance Department in Canada at the rate aforementioned. When we referred to the matter formerly, we characterized it as a job, and it certainly is nothing less. Had the land been sold at public sale, it would have brought twenty times, nay possibly thirty or forty times what it was sold for and why such a sacrifice should have been shown it is impossible to conjecture. This property, merely as a fishing station, has been leased for two years at £150 a year the two years lease amounting to nearly the whole of the purchase money.
Only 40 acres of the Reservation have been retained by the Department. This matter will likely be brought before the House soon along with other Grand Trunk mysteries and strange revelations may be expected.
G.R. Stevens – History of the GTR (1973) pp 54-55
History of the Canadian National Railways (1973)
The Blackwell Investigation
“Confronted with this emergency, the Grand Trunk shareholders dispatched one of their number, E. T. Blackwell, with plenary powers and with the description of managing director. In September 1858, his report portrayed a tottering enterprise. Eleven million pounds had been spent, two-thirds of which had been found by British banks and shareholders; the company owed roughly the same amount in borrowings, interest, rentals, and miscellaneous indebtedness. One thousand fifty-seven miles of tracks were in operation, and since the opening of the Montreal=Toronto section, the traffic had doubled, but rising costs had kept pace with every increase in earnings and the operating ratio stood at a hazardous 91.4 percent. The MontrealPortland line still was costing much more than it earned; on the whole, shippers along Lake Ontario had remained faithful to the slower but cheaper water routes. Owing to shortage of funds, the Grand Trunk had not been able to maintain construction up to their vaunted English standards.
Galt Does ItAgain
Blackwell, however, remained optimistic. Canada surely must grow, and the Grand Trunk would grow with it. He, therefore, saw the present problems as temporary, and in such terms, he discussed them withAndrew Tilloch Galt, who above all others had waxed fat on the original flotations and who now, by a quirk of politics, was Inspector-General of the Province and thus a man of political consequence. Once again this shrewd Scot's acquisitive instincts did not fail him. He pointed out that the Great Western was doing very well out of Chicago transit traffic. Would it not be possible to siphon off some of the Michigan Territory eastbound freights, diverting them to Portland and thus sustaining the fag end of the Grand Trunk, which chronically had cost more to operate than it earned?
How could this be arranged asked Blackwell? Very simply, according to Galt. Build an extension from Port Huron, on the opposite site of the river from Sarnia, southward to Detroit and thereafter offer cut rates on eastbound exports. And what shall be used for construction funds, was the next query. Try the English bankers was Galt's advice. They were first to recognize the potential of Michigan Territory. And who will build the line? All of Galt's advice had been designed to lead up to this key question.
In the spring of 1859, construction began on the Chicago, Detroit and Canada Grant Trunk Junction Railroad from Port Huron to Detroit. Gzowski and Company Alexander Tilloch under another name had been given the contract; Baring Brothers had advanced a little more than half the cost estimated at £450,000; and the Grand Trunk had found the remainder. The contractors had agreed to accept a substantial portion of their payment in stock of the new line. In November 1859, this railway, sixty miles in length, was open for traffic. Then and only then was it revealed that Gzowski and Company owned the railway. It had paid off a sufficient portion of the Baring advance to acquire a controlling interest. It was quite willing to lease the
line to the Grand Trunk, but at the thumping figure of 50 percent of the gross receipts, with the railway company providing the rolling stock.
Alexander Tilloch Galt, the old master, had done it again. But by now the politicians, particularly those who comprised Her Majesty's Loyal Opposition, to say nothing of the English shareholders, were sniffing on his trail. Could it be possible that as Inspector-General he had diverted public funds into Grand Trunk coffers in order to pay that company's share of the costs and incidentally to make a profit out of it for himself? There was no more than circumstantial evidence to support this speculation, but men have been hanged on less. What made the transaction so infuriating to the politicians was that this railway prospered from the start. By January 1860, it was booking substantial volumes of beef, pork, and lard from Chicago to Liverpool at twelve cents a hundred weight, less than the standing rates from Chicago to New York City. In the first five years of operation, its earnings increased four times more rapidly than those of the Grand Trunk as a whole. At times, there was a queue of several hundred cars awaiting passage across the St. Clair River. Flour freights swiftly built up to thirty thousand barrels a week. In addition to the inadequate ferry service, the shortage of Grand Trunk rolling stock and the inconvenience of the change in gauge at the Michigan boundary retarded the growth of the traffic.”
Notes Relating to Map B2
Summary of Gzowski & Co.'s Sale to Blackwell, 1859:
Amemorial to be registered, of an Indenture made on November 16, 1859, between Gzowski and D. Macpherson of the 1st part; their wives of the 2nd part; and Thomas E. Blackwell of the 3rd part.
Whereby the parties of the 1st part, in consideration of £30,000 paid by the party of the 3rd part do grant unto the said party of the 3rd part:
1) 644 acres composed of part of the Military Reserve as shown in Indenture of July 24, 1856. (yellow)
2) 124 8/10 acres composed of Lot 22, VII Concession and those parts of Lot 23, VII Concession and lots 65, 66, and 67 of the IX Concession lying southeast of Errol Road. (pink)
3) 8 7/10 acres compose of Park Lot #3. (pink)
4) 92 acres composed of part of Lot 69, IX Concession. (green)
5) 193 2/3 acres composed of part of Lots 67 and 68, IX Concession. (green)
6) 9 9/10 acres composed of Park Lot #4. (purple)
7) 11 1/10 acres composed of Park Lot #5. (blue)
Excepting the station ground and right of way of the GTR amounting to 41 acres now in the occupation of the company. (orange)
To have and to hold to said party of the 3rd part for his sole and only use. Subject to reservations, provisions, and conditions in original grant from Crown and subject to the reservations contained in the Indenture of July 24 mentioned before. 16 Nov. 1859.
Map B3
Military Reserve Landscape: c1855
Note: Regarding the 41 acres that went directly to the GTR:
Notice on Map B2 that 4.3 acres of the GTR right-of-way was in the former Durand property. The right-of-way and station grounds in the former Military Reserve property amounted to 36.7 acres. Thus Gzowski had retained 607.3 acres of the former Reserve, although much of this”
land” was either open water or marsh.As shown on Map B3 , this wetland area included Sarnia Bay as well as a portion of the large marsh that stretched from Lake Chipican to the southeast side of the bay. Of course, over the last 150 years most of Sarnia Bay and virtually all of the marsh within the Reserve has been filled with sand, clay and various types of refuse.
The Daily Globe, Toronto – February 14, 1861 P2
The following is a statement of Mr. Blackwell himself in regard to the purchase of land at Port Sarnia from JohnA. Macdonald & Co., and the reasons why, and the purposes for which it was purchased:
Charge 6: - For having purchased an estate at Sarnia from the contractors, Messrs. Gzowski, Macpherson & Co., for £24,600, while by the evidence of Mr. Galt before the Parliamentary Committee of 1857, it was proved that his partners, Messrs. Gzowski and Macpherson, were bound under their contract to furnish the requisite extent of land for station accommodation whenever required to do so.
Answer 6: - In reference to this charge, I may say before I arrived in Canada, the Sarnia and Stratford works were suspended, but the extent of land for right of way and station accommodation had been fixed and settled between the contractors and the company. The land at Sarnia was fixed at 400 feet of river frontage and some 16 or 17 acres of land. When the works were resumed and the extension to Detroit determined upon, it was necessary to provide accommodation for the ferry arrangements and for the inter-change of traffic at Sarnia the Canadian terminus of a line 1,000 miles in length and Port Huron, the terminus of the American lines to the west and the south-west. These requirements demanded an additional river frontage of 1,600 or 1,880 feet and an increase from 60 to 100 acres. For this the company had no claim whatever on the contractors. Negotiations were opened with the owners of this additional land and frontage, Messrs. Gzowski & Co. The sum they asked for it was £16,488 pounds sterling and they offered to leave it to arbitration, although in law not obliged to do so; at the same time, they gave the alternative of purchasing the whole of their property, which consisted of about 500 acres more, lying between the former 500 acres and the town of Sarnia, for the sum of £24,627 sterling, payment to be secured by an easy mortgage. On carefully investigating the value, by local and other testimony, of such property and having ascertained the cost to the parties, which is shown to be £18,972 pounds sterling, I did not consider the sum for the whole unreasonable, but the difficulty arising from the company's inability legally to purchase so large an extent of property at once appeared. I, therefore, corresponded with Mr. Baring, and he, for the company's benefit, authorized me to draw on Messrs. Baring, Brothers & Co., for the amount of the necessary deposit and I here transcribe his letter of authority:
Extract of a letter from Thomas Baring, Esq. to Thomas E. Blackwell, Esq., London, 4th June, 1858
Re: Purchase of Land at Port Huron and Sarnia
I presume the company, as such, cannot buy, otherwise, it would be advantageous for it to do so; but at any rate a large amount of space ought to be reserved for the terminus, so as to have plenty of room. It might be objectionable for a director or an official to be a purchaser or a speculator, but on talking over the matter with some of my co-directors, it is thought advisable to make sure of option of what is valuable, saleable, and eligible at either of the above-mentioned terminal by paying a deposit on the purchase, if required. Perhaps the new junction to Detroit may have the power of holding land, which would add to the temptation of its shares.At any rate, relying on your discretion, you are authorized to secure what you think fit, and to draw for a moderate deposit on Baring, Brothers & Co.
The sum of £10,000 sterling has just been paid and appears in the company's accounts.
It was subsequently arranged that I should take a deed for the contacts and give the usual mortgage and that I should execute a deed declaring that I held a deed in trust for other parties for the benefit of the company. These are the only sums that the Grand Trunk has paid on account of these lands the balance of the purchase money being spread over several years; and I assert that the money which has already been paid does not exceed one half of what they would have had to pay in cash for the quantity of land and frontage which the company actually required and took at the time the line was opened to Sarnia. I, therefore, still consider the purchase to have been a good one; and in this opinion I am borne out by many others who are well qualified to express an opinion. Recent purchases have fully confirmed the view I took.
THOMAS E. BLACKWELL
According to Blackwell's version, the following sequence of events can be reconstructed:
1. In anticipation of the Pt. Edward area becoming a major rail center at the Canadian terminus of the projected GTR mainline, the partners in Gzowski & Co. purchased 1084 acres, including 644 acres of the Military Reserve from 1853 to 1856.
2. In 1856, Gzowski & Co. made an agreement with the GTR which stipulated that only the 16 -17acres required for railway facilities had to be handed over to the GTR.
3. In 1858, Galt convinced Blackwell that an extension from Port Huron to Detroit was essential to tap the vast U.S. market; however, this would require additional railroad facilities at Point Edward and, therefore, the GTR would need an additional 60 – 100 acres of land. Now Galt pulled the old “squeeze play.” He told Blackwell that Gzowski & Co. would gladly supply the additional acreage, but only at the outrageous price of £16 43 shillings per acre. Or the GTR could buy the whole 1084 acres for “only” £30,000.
4. Caught between “a rock and a hard place,” Blackwell, with money supplied directly from Baring Brothers Bank, chose the “best” offer and bought the whole parcel thus acquiring far more land than the GTR would ever need at Point Edward. He tried to rationalize this deal to the English investors by claiming it was a good investment. Some of these investors, particularly HC Chapman, didn't buy his “rationalizations.”
Note: Another angle Galt could have used to get the GTR to purchase the whole parcel was the threat to sell some of it to the GWR (Great Western Railway), thus allowing the GTR's rival access to the best crossing point across the St. Clair River to Michigan. The 1854 letter from Macdonald to Becker (see above) clearly shows that the GWR was interested in acquiring some of Gzowski and Co.'s Point Edward property. The original right of way of the GTR came down what is now Exmouth Street and then proceeded up the ridge of land on the NE side of Sarnia Bay to the narrowest part of the St. Clair River. (See MapA). It's possible that Gzowski & Co. moved the GTR's right of way north to the Canatara area to provide for a possible route of a GWR right of way up from Sarnia to the river head. (See Map B).
Such a scheme would have allowed Galt to play one railway company off against the other and, thereby, making a big profit from the sale of Point Edward property. Indeed, to eliminate any possibility of the GWR obtaining part of this strategic land, Blackwell et al may well have been willing to buy the whole parcel for £30,000.
MapA
Observer Reaction to Blackwell Testimony
The following reaction to Blackwell’s testimony appeared in the Sarnia Observer on February 14, 1861, page 2.
“ The manner in which Mr. MacDonald and his partners took advantage of the unfortunate company , first buying the land in their name at $2 per acre and then demanding $82,190 for 1,660 feet of river frontage and 40 acres of land, as set forth by Mr. Blackwell is certainly one of the coolest as well as the blackest swindles ever brought to light in this or any other country. Rather than submit to this exaction, Mr. Blackwell. on behalf of the company, bought the whole of the Ordnance Land, which had cost Gzowski & Co. £322 and some 500 acres more for the sum of £30,000. This was certainly doing pretty well at the expense of the people of Canada & the proprietors of the GTR.”
Note: In evaluating the accuracy of the Observer’s account of the Gzowski and Co. affair one should keep in mind that the Sarnia newspaper was closely associated with the Toronto Globe and its editor George Brown.As G.R. Stevens notes in “The History of the CNR”, Brown was extremely critical of his political opponent - John A. MacDonald and the GTR. Concerning Brown’s editorials in the Globe about the GTR Stevens states:
“As a parochial demagogue, he seldom took the trouble either to be accurate in his facts or fair in his conclusions.Aleading Canadian historian has written:
Resistance to the Grand Trunk and its financial exactions became an integral part of the new liberalism which Brown & his associates were building up in Canada West. The railway was represented to the edified populace of Upper Canada as a malign creation of Montreal finance, which robbed the public treasurery, debauched the country with the bribery of jobs & contracts, and impoverished the poor patient farmers of Canada West with its exorbitant freight rates.”
Of course, in the case of the Point Edward Military Reserve, it certainly appears that the partners in Gzowski company used some rather devious methods to obtain a very handsome profit.
G. R. Stevens History of the CNR (1973) (pages 56, 57)
“As far as Canadian politicians were concerned, the coincidence of the roles ofAlexander Tilloch Galt as government official and as railway promoter soon was forgotten; it was a circumstance of comparatively common occurrence. The British shareholders were less amenable and their wrath fell on Blackwell, who had been so neatly and openly gulled. In the summer of 1860, H. C. Chapman, a tough Lancashire man and substantial shareholder, invited himself to examine the affairs of the company on the spot. He returned to Britain in a snarling mood, and at the November meeting he accused Blackwell of connivance in the matter of the Gzowski contract and Walter Shanley, general manager and chief engineer of the company, of being the associate of a Canadian politician in the outright swindle. He gave chapter and verse for the latter accusation. In a Sarnia land deal, the Canadian government had authorized the sale of a certain property for £165.10.0. In a series of sleight-of-hand transactions, the property eventually arrived in the possession of the Grand Trunk at a round cost of £24,000. In Chapman's opinion, the colonists were altogether too quick on the uptake for the virtuous railway officials, who kept their promises and treated their customers and suppliers as though they were all as decent and as honest as themselves. Whereas if you saw the Canadian colonists without rose-tinted spectacles (and particularly cast eyes on their politicians), you could only decide that they were a breed that required watching, for one and all they deemed it not only their privilege but their duty to bilk the English inventor.
Chapman's views, expressed in such language, were as good as meat and drink to George Brown and his Reform Party, now as always in a mortal feud with the Macdonald administration. Out of rude and bad-tempered exchanges in the LegislativeAssembly there emerged a Committee of Enquiry. Its report, tabled in the spring of 1861, carefully skirted the points at issue and could be summarized in the not very original conclusion that the Grand Trunk would be a better railway if it offered better facilities. In other words, if money grew on trees, all would be well. It elicited a stinging reply from Walter Shanley, who, in a defence eighty pages in length, denied everything, ending with a masterpiece of Victorian circumlocution: “The Commissioners have used figures in a strikingly negligent manner to arrive at erroneous conclusions derived from false facts; arithmetical blunders are stupidly added until imposinglooking tabulations contentiously prefaced can be shewn to contain little except dross.”
The impact of Chapman's violent denunciation of his fellow shareholders, however, led to a petition by the Grand Trunk management, to the Canadian government, admitting a sorry state of affairs. The company, said its statement, was overwhelmed with debt, wholly destitute of credit and in ultimate danger of lapsing into utter insolvency and confusion. It acknowledged that it had no claim for public assistance except that its shareholders had sunk £11 million in it and now stood to lose everything. Its plea, therefore, was compassionate and its impact on the Macdonald administration negligible; a company that consistently provided the Opposition with ammunition was a poor candidate for official philanthropy. The party in power saw little reason to mourn its threatened dissolution.”
Notes Regarding JohnA. MacDonald & The Gzowski & Co.Affair
The following notes are from Richard Gwyn’s biography of MacDonald, Volume 1.
P133: MacDonald entered the Canadian legislature in 1844 and in 1854 became Attorney General
P147: By mid-1856 he was conservative leader as well asAttorney General. He also continued to practice law and land speculation.
P191: The years from the late 1850’s to mid-1860’s were boom times for the Canadian economy, known as the “Age of Railways”.
P195: “Railways gave politicians a whole new range of power: they could decide who would win a charter to build and operate a company and where it’s line should go. It could also give them personal profits”.
P196: MacDonald never seems to have benefitted personally from the railway boom. (This is despite what the newspapers – such as the Sarnia Observer – that supported George Brown & the Reform Party opposition claimed).
P220: Galt, a politician, businessman and partner in Gzowski & Co., joined the cabinet in 1858 as Finance Minister.
From the Canadian Observer - January 4, 1861 P2
“Mr. Chapman's charge was to the effect that a piece of property at Point Edward, containing 644 acres, which belonged to the Ordnance Department, had been sold by the government at a nominal price of $2 per acre, upon the ground that it was required for the use of the GTR, but had, with the exception of 60 acres, fallen into the hand of Gzowski & Co., who had subsequently sold the remaining 584 acres for the enormous sum of £24,000.”
“Indeed, it is distinctly alleged that the Imperial Government, in consenting to the sale, did so only on the understanding that the property was to be given to the GTR and this accounts for the low price at which it was sold; but the government certainly never contemplated that it should first fall into the hands of Gzowski & Co., at this nominal price and then pass from them to the GTR at 70 or 80 times the amount at which it was originally sold to them. The deed, when presented to the Ordnance Department for signature, indicated the conveyance of the whole 644 acres to Gzowski & Co. and it is
said Lord Panmure refused to execute it until he was assured by the Hon. John Ross (the President of the GTR) that they only stood in the relation of representatives of the GTR.”
“But why connect the government with the job? To this we reply that the Hon. JohnA. Macdonald, theAttorney General, and the Hon.A. T. Galt, the Inspector General, were members of the firm of Gzowski & Company in this and some other kindred transactions, and that the former, at all events, is charged with having used his official position as a member of the government in furthering his own private, pecuniary interests the order for the sale of the property having been given in 1855 and the transaction completed in 1856, Mr. Macdonald having held his position as a member of the Cabinet, during the whole time the negotiations were pending. The charge, therefore, in more explicit terms is that theAttorney General recommended the sale of the land to himself and fellow partners and thus was guilty of a breach of trust as a Canadian Minister.”
“Now in order to be able to form an opinion as to Mr. Macdonald's complicity in this affair, we must recollect that the first proposition made in reference to the Point Edward Ordnance property was by Mr. Shanley in 1853, who made an effort to procure a lease of a portion of it, on behalf of the Toronto & Guelph Company, as a terminus. This application was not entertained, and it was not until after the amalgamation of that line with the GTR that the department consented to sell any part of it, that the order authorizing the sale was not passed until 1855, nor the sale was not definitely closed until 1856. He says he made “a joint purchase” of it and then sold out to his partner. His connection with the transaction is thus admitted and having taken office in 1854, he was a Minister of the Crown during the whole progression of the negotiations, so that the statement he made that “the property was sold long before he was a Minister” is in direct contradiction of the facts. If, therefore, there was anything wrong if any deception was practised in getting Lord Pannure to deed the Point Edward Ordnance property to Gzowski & Co., in order that the firm of which Mr. Macdonald was one by his own acknowledgment, might make a good thing out of it, as they admit having done, it will be difficult for him to shake himself clear of a share of the responsibility, seeing he admits having received a share of the plunder and having done well by it to boot.”
“The cost of the whole property purchased by the firm; Mr. Macdonald estimates at £8,000 (actually it was £5,522). The Ordnance property included the whole was sold to Mr. Blackwell early in 1859 for £30,000. Mr. Macdonald sometime after, received from one of his partners, Wm. D. Macpherson, property in Toronto to the value of £10,500 and some cash besides, as his 1/6 of an investment, which according to his own showing cost altogether £8,000.”
“Mr. Galt's position in somewhat different from that of Mr. Macdonald, in as much as he did not occupy the position of a Minister of the Crown until 1858, and if a party for the speculation before that time, was only so as private individual, or simply as a member of the Legislature. Mr. Galt denies that that the lands referred to were obtained through misrepresentation of himself or his partner. He also denies any complicity on the part of Mr. Elliott, the Ordnance Storekeeper, who is charged with having represented that “a speculative price, based on the increased value of the land by the expenditure of the GTR,
ought not to be placed upon it” and that his opinion was the cause of the price being fixed at $2 per acre.”
“As to the sale to Mr. Blackwell, Mr. Galt alleges that as he retired from the firm of Gzowski & Co. in July 1857, at which time he gave up his interest in the Sarnia land to them, he had no interest in the subsequent sale or disposal thereof. He adds, that “at the time, Mr. Holton and he retired from the firm of Gzowski and Co., no idea existed of a sale of the Sarnia lands to the GTR or anyone connected with it.”
“Mr. Macdonald admitted, however, that at the time he retired from the firm, they had a prospect of selling, though it would be years before they would realize it. People will naturally ask “To whom could they have a prospect of selling except to Mr. Blackwell or the GTR? And as no other party has ever been named in connection with the affair and seeing the sale has taken place, people will be apt to conclude that the whole transaction was a deeply laid scheme from beginning to end.”
From:
“Letters of Sir John A. MacDonald – 1858 – 1861”
TO THOMAS E. BLACKWELL
My dear Sir, Quebec 4 Mar. 1861
With reference to the purchase of the Point Edward Property at Sarnia, from Gzowski & Co.,1 through your agency you will oblige me by answering the following questions:
1. Did I ask you, directly or indirectly, verbally or in writing, to purchase this property or any part of it?
2. Had I, at any time, any communication, directly or indirectly, with you on the subject of this property or any part of it?
3. Were you aware at the time of the negotiation with or purchase from Gzowski & Co., that I had any interest in the property?
You, of course, understand that I desire your letter for the purpose of using it for my own justification.2
Yours very truthfully
T. E. Blackwell Esq., Montreal John A. Macdonald3
Note: MacDonald wanted to show Parliament & the public that he had no interest in the sale & had not used his public position for the advancement of his friends.
The Globe (Toronto), May 25, 1861
THE POINT EDWARD JOB
Canadian Observer – May 3, 1861, P1
Mr. McDonald has endeavored to establish before his parliamentary colleagues his innocence of all that is evil in connection with the purchase and sale of the Sarnia lands. So far as we can judge by the telegraph report, Mr. McDonald furnished no new facts throwing light upon the case, but contended himself with tricky evasions and contradictions of certain questions put by this journal in last December. We asked:
1. Did Mr. Macdonald, as a minister of the Crown, recommend a sale of public lands in the purchase of which he was himself personally interested?
Mr. Macdonald answers that he did not; that the case was not referred to him. We dare say it is true that he was not called upon as Attorney General to advise, but he, as a member of the Executive Council did, with his colleagues, recommend the sale of the land actually to himself and his partners, nominally to the Grand Truck Railway. We derived our information on the point from the editor of a Montreal Ministerial journal, who had access to the entire correspondence and documents connected with the case-a privilege which Parliament has not enjoyed. The papers were moved for, but they were refused. Mr. Macdonald evades the question by a trick of language.
The next question was:-
2. Were these lands actually sold to himself and his partners at a merely nominal price? He says the Ordnance fixed the price itself, and there was no bantering or bargaining about it. Perhaps, but did not the Ordnance think they were giving the land for a public purpose, and not to Mr. Macdonald, and consequently made the price a nominal one? If there could be any doubt about the fact, Mr. Macdonald would have denied it.
3. Did Mr. Macdonald and his partners afterwards sell these lands to a bankrupt Railway Company at an enormous advance?
Mr. Macdonald says he did not sell the lands to the Company; he sold his share to his partners, and they sold to friends of Mr. Blackwell. At his St. Catherine’s dinner, Mr. Macdonald admitted that Gzowski & Co. told him, when they were purchasing from him, “that they had a prospect of selling, but that it would be years yet before they could realize.” Mr. Macdonald would have us believe that he had not the curiosity to enquire to whom Gzowski & Co. had a prospect of selling, that he troubled himself no more about it, although his share was worth £10,000! The sale was made to the Company because the Company paid the money. In answer to our fourth question, Mr. Macdonald says he used no influence to bring about the sale. Our fifth question was: -
5 Did Mr. Macdonald, at a public dinner given to him by his constituents, allege that the purchase of the lands was made while he was out of office, when the truth was that he was Attorney General at the time, and, as such, recommended the sale?
Mr. Macdonald is reported to have said that he was not in office when the purchase was made. If he said this he must have spoken falsely, because he took office in September 1854;
the order in council sanctioning the sale was issued in 1855, and the deed was signed in 1856! Mr. Macdonald was in office at all the latter stages of the sale.
The facts stand as they did yesterday morning. We shall, however, review the case at further length when we have received the full report of Mr. Macdonald’s speech. His attempts at mystification were promptly met by Mr. Mackenzie and other members of the Opposition.
Globe, Mar 18
QUEBEC CORRESPONDENCE
The Sarnia Land Purchase John A. Macdonald fails to convince Parliament of his innocence Rumors of proceedings in the Courts The Governor-General An Opposition Reform Bill thrown out at the instance of Cartier.
Quebec, May 20th, 1861.
The Sarnia Land Purchase was under discussion on Friday night last, and the member for Lambton acquitted himself very well in the connection with the matter. John A. Macdonald made a long speech, a very weak one, however, falling coldly on the House, and certainly not convincing even his own friends. He dwelt mainly on the circumstance that negotiating had commenced prior to his entering the Government, for the purchase of the Ordnance Lands at Point Edward, by Gzowski & Co. as Grand Truck Contractors. It must be borne in mind, however, that the real consummation did not take place till he was a member of the Government. That the Ordnance people imagined the purchase was for the Grand Truck, there is no doubt. John A. Macdonald as a member of the Government should not have connived in a scheme to throw the Grand Trunk out of a large sum in order that it might be divided between him and his co-partners, who were obligated to find the right of way, and who by a trick put a sum into their own pockets that was legitimately the due to the Grand Trunk. The lawyers, I see, now think that an action in the Courts would compel all those parties to refund to the Grand Trunk the difference between the first price and that which was obtained from the Grand Truck. J. A. Macdonald left the contracting Firm in 1858. This is a truly Hinksite idea, for the first Law officer of the Crown to be a silent partner in a great contracting Firm. How valuable may not a friend at Court prove, under such circumstances? That the Attorney General was a valuable silent partner of the Firm few will doubt; and the Sarnia Land purchase demonstrates it to a certainty. It is said that one of the Judgment Creditors of the G. Trunk will proceed against John A. and the other members of the Firm, and the point of Equity will then be decided, whether it really was a breach of trust or not. If some of the Grand Trunk gentlemen were put into the box, things of a very unpleasant character would doubtless be brought to light. No doubt matters have been managed very adroitly, but by all means let us have the matter ventilated in the Law Courts.
SARNIA, FRIDAY MORNING, JUNE 7, 1861.
THE SARNIA LAND AFFAIR.
We promised to return to the explanations given at the London meeting of the Grand Trunk Railway Company touching the Sarnia land affair. A perusal of these impressed us with the conviction that further enquiry is necessary. The Hon. President of the Company was apparently both ready and kind in affording explanations.
He said he was much obliged to Mr. H. C. Chapman, of Liverpool, who had brought the original charge, for affording him an opportunity to speak of that matter.
He stated that Mr. Chapman had been quite misinformed, or he would no doubt have told the whole truth.
We are satisfied that Mr. Rose has been so too, in important particulars, or he spoke very carelessly or without regard for truth. The whole of Mr. Ross’ speech was very general and was calculated to convey impressions tending to mislead
In the first place, with respect to the quantity required for Station purposes at Sarnia, he said it was 16, 20 or 30 acres he could not recollect exactly how much was reserved by the Company. Now, in view of the main purport of his explanations, this point was of the greatest importance, and it does appear very singular that when Mr. Ross knew that the land cost Messrs. Gzowski & Co. about £21,000 ey., including loss of interest, at the time of the sale to Mr. Blackwell (which statement of value would have been much more interesting if it had shown how much it had been made up), he did not know that the Company had actually reserved at Sarnia between 50 and 60 acres as much , it was stated sometime ago on excellent, if not the best authority in these columns, as the company would require at that point for Station purposes for all time.
We say it was very singular that Mr. Ross should be ignorant of this material fact, and that he should give it to be understood that only a small quantity of land was actually reserved, while he justified the £30,000 purchase by trying to make his hearers believe that it was necessary for the accommodation of the Port Huron Railway!
Mr. Ross said that when a small portion of land was reserved, it was not known that that Railway was going to be made, it was not known that Mr. Blackwell was coming to the company.
But it was known there was great speculation at Sarnia. Delusive expectations as to what Sarnia would become, expectations which will never be realized in this generation of men, were then formed and fostered by those who had expected to profit largely by the draughts upon public credulity. The railway terminus was taken to a point of the river where it would best be bridged, and the unusually large reserve of 60 acres made in view of Sarnia becoming an important point for the western trade.
Otherwise, such a reservation of land would have been ridiculous.
Such being the fact, and a speculative reservation of land having been made, it does seem very disingenuous on the part of Mr. Ross to say that they did not know at that time that the Port Huron Railway was going to be made.
We doubt if Mr. Ross would tell in Canada that sixty acres of land were not enough for station purposes for the interchange of traffic by the road at Sarnia, and that it became necessary for the Grand Trunk Company to buy six hundred acres more at that point, at a cost of $120,000.
The proprietors may estimate the fidelity of Mr. Ross to their interests by the light of an expenditure of this kind at Sarnia, and another scarcely more urgent, and almost, if not quite, as
great at the town of Kingston, while not a cent could be found for Montreal, where proper station accommodation is absolutely necessary for the success of the road, and for want of which the Company did last fall lose many thousand pounds.
And not only did the company lose those thousands of pounds from sheer inability to bring more produce down, but growers in Upper Canada actually lost five cents a bushel on their grain, sunk in the pit, as it were, at Point St. Charles.
We come next to the explanations given by Mr. Ross touching the purchase from the Ordinance Department by Messrs. Gzowski & Co., in the name of the Company.
Mr. Ross said the contractors were by their contract allowed to use the name of the company and the powers conferred upon it by the Railway Clauses Consolidation Act, for the purchase of any lands required for railway purposes, just as all other contractors of the company were.
We have no doubt that this explanation is good for all lands required for railway purposes, and it was manifestly convenient that the contractors should have such powers transferred to them.
Had they not been the Company would, it is clear, in some cases have been obliged to obtain land for the contractors.
But it is equally clear, on the other hand, that the company would not transfer to contractors the powers conferred upon them by the Railway Clauses Consolidation Act for the purchase of land for speculation.
Any purchase of lands under those powers, for any other purposes then the requirements of the railway, would, upon its face, be illegal and null.
When the law confers extraordinary powers, upon any corporation for particular purposes, they are held strictly to apply to those purposes solely, not to any other of course it is competent for contractors to make any speculation and lands they please in their own name and upon their own responsibility, but it is not competent for them, and they ought not to be allowed to make any speculation in the name of the Company.
It is especially wrong, and the thing to be looked at with great care and jealousy by the proprietors, or the directors of the company to buy back from contractors, at a very great advance, lands which they had bought in the company’s name.
But if the lands bought by Mr. Blackwell, in 1859, for $120,000, cost Messrs. Gzowski and Co. $96,000 they must have included others than those purchased from the Ordinance department at $2 an acre, and quite likely Mr. Ross remarks about the transferred powers to the contractors might not apply to the other purchases.
This shows that there is need for further explanations, as the transferred powers explanation was made with reference to the purchase from the Ordnance Department alone. There are other particulars in Mr. Ross’ explanations which are not satisfactory, and which do not accord with information which has reached us from other sources, but we do not care now to dwell on them, as we are satisfied that further investigation must be made, and think it sufficient to indicate the main objections which lie on the surface.
We are quite satisfied that the Company had no business to buy $120,000 worth of land at Sarnia, in addition to the sixty acres they already held, and that the sale ought to be cancelled in the interest of the proprietors, by a Chancery suit, if it cannot be done by any other means. Mr. Ross’ opinion, that the land is worth the money, we believe to be a very gross delusion It will never be worth the money. The accumulation of interest on a totally unproductive purchase will be almost infinitely beyond any possible increase of growth of value in Sarnia.
This must be known to Mr. Ross.
No business man in this country would ever have dreamt of making such an investment of his money at the time, Messrs., Ross and Blackwell made this foolish bargain for the company and this naturally leads to the question, what could have been the unseen reasons which induced them, without the knowledge of other directors, to enter into a speculation of such doubtful legality? Montreal Gazette.
[Note This is the transaction in which Attorney-General Macdonald was concerned, and which some of the organs are very anxious to make out to have been O.K. It is refreshing to know that there is at least one of their number who is honest enough to speak out the truth. Hamilton Times.
POINT EDWARD: “CAPITOL OF THE WORLD”!!
Although the following item was written by the Point Edward correspondent for the Observer some 20 years after the Point Edward land purchase, it gives some idea as to why Blackwell and the English investors he represented were willing to pay £30,000 for a large tract of land which consisted mostly of sand dunes, swamps and marsh.
August 29, 1879 P8, Point Edward “The First Managing Director of the GTR, Mr. Blackwell was a gentleman of great experience in railway matters. It was he who issued the original prospects, promising 10 per cent to the shareholders. He predicted with wonderful foresight the immense traffic which would within 20 years pass over the road, and these predictions are now being verified.”
“Now the Point should be up and doing. We hold the key of the great lakes and by right of our position should have a population of 20,000 by this time instead of a few hundred. We hold the same position in America that Constantinople does in Europe, and Napoleon called that place the Capitol of the World. Now is the time to move.”
CONCLUSIONS AND THE SIGNIFICANCE
FOR THE CANATARA AREA.
From the previous items the following conclusion can be drawn:
1. Galt – who by most accounts was the master mind behind this affair- and his partners bought the Ordnance land at the low price using rather questionable methods.
2. Galt then convinced Blackwell that Point Edward by reason of its strategic location, was destined to become a major center for manufacturing, ship building, food industries, etc.
3. Blackwell, in turn, then convinced the English investors that the Point Edward property was a good investment and well worth the £30,000 price tag Gzowski & Co. had placed on it.
These investors, of course, expected to reap huge profits by selling or leasing parcels of the large tract to the individuals and companies which would flock to the new GTR terminus at “the finest spot on the Great Lakes.” For a variety of geographic and economic reasons this “second Constantinople” never materialized.
However, the sleight-of-hand transactions of Gzowski & Co. the over-optimistic predictions of Galt, and the financial fantasies of the English investors did have a profound effect on the future of the Canatara area. For 65 years, the trustees of the investors, and then after 1888, the GTR itself, retained all the Canatara area and much of the remaining property, hoping perhaps that the original dreams would eventually become reality. Thus right up into the 1920’s, the Canatara area remained a single parcel of land under one ownership, largely in its natural state and for the most part free of cottages and other human encroachments. In short, it offered an ideal site for a large lakeshore park. In fact, as described below, this park idea occurred to at least some people long before the 1920’s.
THE G.T.R. PERIOD 1859-1923
1858 GTR main line tracks laid through Canatara area.
1859 GTR traffic begins.
1864-66 Elliot land transfers
1879 International Park
1872-85
Heavy immigrant traffic on GTR 1882 The GTR car shops proposal
1882-83 Connecting track between GTR and GWR laid.
1882-? Quarantine grounds and station 1895 Provincial park proposal
? - 1931 Sand mining operation in the dune area
1901-27
CSSM log salvaging operation in the beach
1902-31 Iron ore shipments in rail lines through Canatara
1917-31 Stone shipments on rail lines through Canatara
1915 Lake Chipican water supply proposal
C1910 Hunting license at Lake Chipican
1920 Sarnia Cement Products Co.’s lease of 18.8 acres
Map – 1860 Railway Map
1860 Railway Map
The 1860 map above is a portion of G. Woodworth Colton’s series of Railway Maps, No. 3. It shows the following three sections of the GTR mainline that Gzowski & Co. built between 1853 & 1859.
1. The Toronto – Guelph – Stratford / St. Mary’s section - coloured blue – that was constructed between 1853 & 1857. A branch line from St. Mary’s to London was also built during this time – coloured green.
2. The St. Mary’s – Point Edward section - coloured orange – that was built in the 1858 –1859 period.
3. The Detroit / Canada Grand Trunk Junction Railway – coloured red – that was also constructed in the 1858 – 1859 period.
Note: The Toronto – St. Mary’s – London line is still used by the CNR. However, the St. Mary’s – Point Edward line no longer exists. The Howard Watson trail from Modeland Road to Camlachie is now located along the former line in the Sarnia area.
From Feeney, ME et al The Rapids (1980)
Note: The pictures on this page show the second, larger passenger station, which was built after the first station burned down in 1871.
GRAND TRUNK RAILWAY
“The Great Western Railroad opened from London to Sarnia in 1858. This meant an increase in population and greater business for the lumber yards and elevators. One year later the Grand Trunk Railroad opened its terminal in Point Edward. The station stood partly under where the Bluewater Bridge now stands, and the tracks ran through an area of land that is now known as Canatara Park and along Cathcart Blvd.
One of the Finest Depots
The depot was considered to be one of the finest dining establishments this side of Toronto in the 1860’s. Among the famous people who stayed there were Edward the VII, Prince of Wales, Lord Monk, Governor General of Canada and Ulysses S. Grant who stopped in Pt. Edward with his family following his triumph in the Civil War. On the river side of the depot a shed was built for overseas immigrants to provide a place for bathing and washing their clothes.
On September 9th , 1871, the station’s hotel burned down and the only building saved, a red brick one, was used as the ticket office. In 1874 a tunnel under the St. Clair River was proposed by the Grand Trunk General Manager, Sir Joseph Hickson to speed up traffic across the river from Sarnia to Port Huron. The construction began in 1889 and the tunnel opened in 1891. It brought rail traffic into Port Sarnia and cut off passenger trains to Pt. Edward.”
This 1880 Map is from Beldons Illustrated Historical Atlas of Lambton County and shows the route coloured in orange, taken by the GTR across the northern part of the county.
The GTR tracks were laid during the 1858 period. The last section to be completed was the 4 mile stretch between Widder Station and the Sable River (see below for details).
St. Mary’s and Sarnia Extension OF THE GRAND TRUNK RAILWAY OF CANADA
Notice is hereby given that the plans and books of reference for so much of the lands required for the construction of the St. Marys and Sarnia Extension of the Grand Trunk Railway of Canada, as are situated in the County of Lambton, as deposited, as required by law in the Office of the Commissioner of the Crown Lands, in that of the Provincial Secretary, in that of the Grand Trunk Railway, at Montreal, and also in the Office of the Clerk of the Peace for the County of Lambton.
Toronto, June 14th, 1858.
Construction of the GTR Mainline to Point Edward
Despite the economic depression of 1857-58 and the company’s financial difficulties, the GTR annual report of Dec 1857 stated that the St. Mary’s to Sarnia Extension would be built without delay. In June 1858, the land banking notice in the previous page appeared in the Observer. During the summer of 1858 Gzowski was in the area both supervising the construction of the line and making plans for the building of the Port Huron to Detroit line, which was begun in early September.
In July, an article in the Detroit Advisor, quoted in the Observer (July 15, 1858, p4) noted that “THE GTR have located their depot ground at Port Sarnia and are actively engaged completing the branch to the point where it will be completely useless without a connection to this city (ie Detroit). The GTR is one of the grandest enterprises in the continent. It involves a heavier capital than any other railway and more miles of track. The bridges are all to be built of iron and stone. The track will be mostly gravel and raised up four feet but above the surface of the county – where the county is level – to prevent any difficulty with drifting snow. The whole line of the GTR from its eastern terminal is built in the same substantial manner, of gravel, iron and stone.”
In Oct 1858, Henry J Jones, the son of the original Henry Jones, noted in his diary that he walked to Maxwell on the new GTR tracks. (C Phelps, History of Blackwell p 16-17)
Grand Trunk Railway OPENING BETWEEN ST. MARYS AND DETROIT!
Winter Arrangement
ON AND AFTER MONDAY THE 21st NOVEMBER,
The through Express Train for London, Toronto, Montreal, Quebec, Portland and Boston will leave Sarnia at 10:10 A.M
Accommodation Train, going East will leave Sarnia at 6:00 A.M
Company’s Ferry Steamer will leave for Port Huron, to connect with Through Train for Detroit, Chicago, and all points West at 6:20 P.M
Through Freight Train each way daily, No Transhipment through to Montreal or Portland.
Sleeping Cars on Night Trains between Toronto and Montreal.
W. Shanley General Manger Montreal
C.R Christie Superintendent, Toronto
November 15, 1859.
On April 22, 1859, an article on the Toronto Leader stated that “A locomotive and some gravel cars were unloaded at Point Edward last week for the GTR. This train made an experimental trip a short distance down the line. The iron for the Perch bridge also came up on the car. There is no doubt that in a short time we should be able to go as far as the Sable on the GTR road.
By early July the GTR docks, flour shed, passenger house, freight house, engine shop and elevator at Point Edward were nearly finished.
On October 14, 1859, The Observer reported that “we learned that, from the progress on the works on the line of the GTR between this place and St Marys, there is no doubt that the road will be open for travel about the beginning of November. Some days ago, the track was all laid except about 4 miles between Widder and the River Sable. The ballasting of the road is also nearly completed so the laying of the tracks on the space referred to and completion of the Sable bridge may be said to be the only obstacles in the way of the opening now.
On November 18, 1859, The Observer carried the advertisement on the previous page. The eastward train leaving at 10:00 AM arrived at Toronto at 5:15 PM and the fare to Toronto was $5.00. The westward train arrived at Detroit at 11:45am and cost $1.75.
On Monday, Nov 21, 1859, the GTR line between Detroit and St. Marys officially opened and the regular traffic through the Canatara area began.
This Observer article describes the events at Point Edward & Sarnia on November 21st, 1859, when the passengers’ trains started to travel on the GTR main line constructed by Gzowski & Co. in 1858 – 1859 between Detroit & St. Mary’s.
By John L. Pettit:
As we pursue our journey into the past, we find that two years stand out as the utmost importance to the future of the community. Prior to the year 1858, Sarnia and Point Edward were dependent on the water highway for shipment of produce to the outside world. This resulted in both communities being isolated during the winter months.
In December 1858, railway transportation was inaugurated by the Great Western Railway which partly solved the problem. This, however, was only a branch line ending at Cromwell Street, with no connections to American lines.
While this was taking place, the Grand Trunk was gradually pushing their lines through, aiming at the border and American trade. Plans included a through trunk line providing a direct route from Detroit, Michigan to Portland, Maine.
Connections with the Michigan Central could be made at Detroit, thus establishing railroad communications as far west as Chicago.
Service had been established as far west as London, and the construction of a line between St. Mary’s and Pt. Edward was being rushed to completion. Construction was also progressing favourably on the American side between Detroit and Port Huron with plans for the opening scheduled for November 1859.
The Grand Trunk began accepting freight for shipment after November 7, 1859, and published a Time Table for passenger traffic to take effect November 21st, 1859. Service was to be inaugurated from Detroit, the initial trip starting from there, proceeding to Port Huron, transferring to Point Edward and then proceeding east.
Monday, Nov. 21st, was a rather forbidding day, but nevertheless a large crowd was on hand for the historic event. The Sarnia delegation was headed by the Honorable Malcom Cameron and the Mayor, who were there to greet the Detroiters (who were not travelling east) and take them on a grand tour of the community, entertaining them during their stay and returning them to Pt. Edward in time for the afternoon train.
The train finally steamed in an hour late, with about two hundred passengers aboard, all seeming to enjoy the trip regardless of the delay. It consisted of three passenger coaches and a number of freight cars. After a warm greeting the passengers were transferred to the waiting ferry “Ottawa” where they were quickly transported to the eastbound train on the Canadian side.
Between 60 & 80 had only intended coming as far as Sarnia, and after watching the train depart, they headed for the town bent on making a day of it. After enjoying themselves thoroughly they were returned to Point Edward in time for the afternoon train for their trip back to Detroit. Many were surprised and remarked at the progress being made by the community.
The afternoon train from the east arrived with a large number of passengers from Toronto and other places along the route, who were taking the first opportunity of visiting Detroit via the new mode of transportation.
The fare from here to Detroit was quoted at $1.75 and arrangements were such that a person could leave Pt. Huron at 8:00 a.m. and arrive in Detroit at 11:45 a.m.: returning leaving Detroit at 3:00 p.m. and arriving back at 6:55 p.m. This would allow anyone having about three hours business in Detroit to accomplish it the same day at less cost and greater economy than the river route.
Going eastward the fare to Toronto was quoted at $5. The eastbound train left Pt. Edward at 10:10 a.m. arriving at Toronto at 5:15 p.m., and Portland at 08:00 p.m. of the following evening, the time consumed between Detroit and Portland being 37 ½ hours: coming west the train left Portland at 9 a.m. arriving at Montreal 9 p.m., and Toronto 11:10 a.m. of the following day arriving Pt. Edward 6:20 p.m. and Detroit 10 p.m. in time to connect with the night express train going west on the Michigan Central.
This was to prove a more modern and comfortable way of travelling, as all night Express Trains on the Grand Trunk were provided with sleeping cars.
Grand Trunk Station – 1859 - 1871
