CP 1941 Annual Report & Flags Which Fall

Press release:

CPKC becomes the first and only single-line railway connecting Canada, the U.S. and Mexico

CALGARY, AB, April 14, 2023 /CNW/ - Canadian Pacific ("CP") and Kansas City Southern ("KCS") today combined to create Canadian Pacific Kansas City (TSX: CP) (NYSE: CP) ("CPKC"), as authorized by the U.S. Surface Transportation Board's ("STB") March 15, 2023 final decision, creating the first single-line railway connecting Canada, the U.S., and Mexico.

*  *  *

'In 1885, our railroad connected a new country.'

from: The final (2022) annual report of the Canadian Pacific Railway.

*  *  * 

'A start at documenting recently departed railroads was made by David P Morgan and J David Ingles in a series of articles titled 'Fallen Flags' in Trains Magazine. Those articles reviewed the major railroads that had vanished since World War Two, and their theme was the genesis of this book.'

from: The Historical Guide to North American Railroads; George H Drury; 1985; Kalmbach.

*  *  *

Detail from: Battle of Isandhlwana, 1879 - "as it probably never was"
from: Great Military Blunders; Geoffrey Regan; 2000; Macmillan.

from: British Flags on Land and Sea; Andrew D MacLean; 1929; Hugh C MacLean Publications Ltd, Toronto.
On Page17, the 1627 origins of the white, blue and red ensigns are discussed.

* * *

'Railways draw traffic from a geographic area, move it over their network, and distribute it to their final destination using their own facilities, equipment, and in some cases, those of other carriers. The railway's infrastructure in many cases evolved over time (e.g., Canadian Pacific's transcontinental network was first established in 1867).'

from: 

Handbook of Canadian Security Analysis, 

A Guide to Evaluating the Industry Sectors of the Market, from Bay Street's Top Analysts

(Joe Kan, CFA; 1997; Wiley & Sons)

Quote is from the chapter on Transportation & Environmental Services, by [name redacted], CFA.

*  *  *

'Rally 'Round the Flag'

From some source in the past, I understood that history is helpful because it helps explain who we are and how we got here. 

Historiography is the study of historical writing. 

Regimental flags, battle flags, national flags, imperial flags have a special meaning because of what they represent. They represent The Regiment and its Battle Honours ... or the ideals of the people fighting and dying in battle. There have been terrible losses when the flag 'falls'. It only happens when an army is utterly defeated - there is no one left with the remaining strength to prevent the flag from touching the ground, or from being disgraced by a victorious enemy. 

The Canadian Pacific Railway has always been larger than a simple railway - in what it was intended to achieve politically and practically, and in what the company's leaders intended it to be. It was conceived to settle the former Hudson's Bay lands and ensure 'the west' became part of British North America - not part of the United States. It was a land and sea bridge which spanned much of the British Empire and was ready to serve the needs of the British Empire/British Commonwealth in two world wars. Of course, the Canadian Pacific received money in the course of performing these missions.

In the Great War, it transported labourers from China by ship, and across Canada (in bond), to labour in or near the trenches in Europe. It contributed the expertise of its railway workers and equipment to build and maintain rail transport to the trenches. Its passenger ships were requisitioned as troop transports by the Royal Navy (but sometimes they asked first). In its stations the railway subsequently erected beautiful and poignant statues to pay tribute to its own employees who had made the supreme sacrifice in war. 

In World War Two, the railway's airline personnel were key in the early establishment of the innovative system which would fly new aircraft to Britain from North America - avoiding the U-boat infested waters of the North Atlantic. CPR airline personnel and facilities also played an important role in the plan to train Commonwealth (and American) citizens as pilots and in other flight crew roles. Until amphibious landings could be made in Africa, Italy, France ... Britain defended itself and struck out at the enemy primarily with aircraft. CPR heavy shops were also used in the production of guns and tanks.

The CPR is a corporation, and a corporation is a legal entity, and its board of directors acts as its fiduciary. Ideally, under an independent chair, the board also directly supervises high-level corporate officers such as the 'President and CEO'. Other company officers are hired to lead and supervise the running of the corporation's day-to-day business.

A corporation is in an excellent position to facilitate the writing of its own history through cooperative authors. Books with titles such as The Imperial Highway (1912) and Steel of Empire: The Romantic History of the Canadian Pacific (1937) reminded people of the importance of the Canadian Pacific - just before the wars mentioned above. A corporation is designed to preserve itself, so from a historiographical and public relations standpoint, that's exactly what it does. 

... Those poignant statues were designed to tug at our old imperial, patriotic and religious heartstrings - they are not photographs of a railway volunteer's death by artillery. It is normal healthy corporate behaviour to make us feel grateful to them for honouring 'their' troops. And today they still do this with paint.

Moving closer to the subject of paint - if tomorrow, just the signs and paper coffee cups suddenly said Babe Ruths instead of Tim Hortons ... it wouldn't change the fact that 'Timmies' is controlled by 3G Capital. 3G wouldn't employ more or fewer Canadians. Employees wouldn't get paid more or less. The menu wouldn't change. Babe Ruths wouldn't be a more or less valuable contributor to the quality of Canadian life than it was under its former name. It would just look different and some people might feel differently about it. Of course, the business would receive advice not to make this change if it had an impact on revenues.

Running trades employees of a railway corporation may have liked the camaraderie they shared with their fellow employees. They may have loved their unique work on the good days. They may have been proud of their achievements during their careers - particularly when winning a key 'battle' against the elements or other circumstances. Railways are still organized along paramilitary lines in many ways.

... But it seems very unlikely that running trades employees love the board of directors.

In turn, did board members become emotional, inconsolable ... when the railway left Rogers Pass and its snowsheds, REITed out its hotels, tore up the DAR, converted to roller bearings, eliminated its fleets of passenger ships, closed Angus, moved CPR headquarters from Montreal to Calgary, diminished The Canadian? 

... Knowing corporate history and being able to explain the human experience of CPR railroading is not the board's job. The present, and the foreseeable future of the corporation is the board's focus.

Amateur and professional historians can point out the remaining physical artifacts, the stations, the roadbeds, the cuts and embankments which remain on the land as a record of the CPR's presence across Canada. They can explain the significance of what the board and officers achieved (always indirectly) through the work of the corporation's employees. 

The human experience of those employees has probably always been the most Canadian thing about the Canadian Pacific Railway. 

In the past, the CPR eagerly and willingly served the far-flung British Empire. The company is now eagerly and willingly integrated into the American 'post-war, rules-based' economic and military empire, as a 'pure play' railway ... sorry ... railroad.

Whether or not the locomotives of two large railways have the letter 'C' painted on them 

is a facile, superficial and doomed way to understand and preserve our national identity. 

The knowledge and interpretation of history is supposed to help us with that task. 

*  *  *

The annual report which follows, 

comes from the end of the presidency of 

the first Canadian-born president of the CPR.

Typical of our political and economic orientation at the time ...

he was knighted by the King to be ...

Knight Grand Cross of the Most Excellent Order of the British Empire

Beatty was President of the CPR from 11 October 1918 

until 1942 when his doctors (and the company) convinced him to resign.

He died in 1943 at age 65.

*  *  *

From the final (2022) CPR Annual Report:

'In 2023 we aspire to connect a continent and transform the freight rail industry'

See the maps inside the back cover of this annual report.

Contemplate the old slogan: World's Greatest Transportation System

Both Herbert Holt and Arthur Purvis have interesting, perhaps contrasting, pages on Wikipedia.

(The mention of one at a baseball game inspired applause!)

Interwar Rail Construction in Saskatchewan and Alberta, Part 1

Once I was on a VIA train to London with my boss as we headed for a hospital site visit. The director of another department happened to be on the same train and came over to sit with us. I commented about a 'stop and inspect' because we had tripped a hotbox detector ... and it turned out that the other director had had a relative in the running trades at Chalk River. 

Furthermore, she had just completed her master's degree and her thesis had examined the question:

Could the American west have been opened up without the invention of the railroad?

She said the answer was: 'Yes, eventually it would have been settled, but it would have taken longer.'

Railway building was/is capital intensive. Railways were the first major users of legal incorporation to facilitate raising that capital - and so they could securitize that investment back to investors. 

While a railway generally required low gradients, once the roadbed was prepared, the railway track structure provided an all-weather route on which one could pull long strings of self-steering wagons.

With the weight of the load distributed longitudinally over steel rails, and laterally over sturdy wooden ties ... railways were ideal for moving high-tonnage trains of bulk commodities in all seasons ... and anything else that would fit through the most narrow bridges, cuts and tunnels of its right of way.

Working to understand Canadian railways and how they have connected with the agricultural, economic, financial, political, social and technological elements of Canadian history can be a life-long pursuit. So much has been written and documented that one's knowledge will never be complete.

*  *  *

I was really pleased when my brother, Eric Gagnon, forwarded a study which Charles Bohi thought might be of interest to me:

Interwar Rail Construction in Saskatchewan and Alberta: An Evaluation

by Charles W. Bohi, Leslie S. Kozma

Presented at the Annual Meeting of the

Prairie Division, Canadian Association of Geographers in 2007

*  *  *

... I will attempt to outline some of the interesting information it presents ...

Indented paragraphs contain my own thoughts in passing.

The images inserted are not from the research paper.
I'll apologize in advance for my failures to relay key points precisely.

*  *  *

About 4600 miles of new railway lines were built in the Prairie Provinces between 1919 and 1935. More than 90% of this mileage was constructed in Saskatchewan and Alberta. 

In 1932 a Royal Commission on Railways and Transportation, referred to as the Duff Commission, was set up, under Chief Justice Lyman Duff (1865-1955). Its conclusion was that the construction of these lines was 'a disastrous mistake'.

Duff was the first Canadian to read the government's Speech from the Throne - March 12, 1931 - as the new Governor General, John Buchan (Lord Tweedsmuir), had not yet arrived. Buchan wrote The Thirty-Nine Steps and is credited with conceiving and promoting the idea of the famous 1939 Royal Tour of Canada. When Buchan died in office of a head injury, Duff again performed as Administrator of the Government until Buchan's replacement was sent over from Britain. Before becoming a lawyer, Duff had earned a double-barreled BA from the University of Toronto - this was in mathematics and (essential when dealing with the politically-tinged task of presiding over Prairie railway branch lines) metaphysics.

This blog post's alternate title could be: The Duff Commission: Math and Metaphysics

Consistent with the Duff Commission's conclusions, many historians studying railway lines of the Interwar period have blamed Henry Thornton and Canadian National Railways for the ruinous overbuilding of Prairie rail infrastructure.

To examine this consensus, the research paper analyzes:

1. Why the Interwar lines were built.
2. Whether the CNR was actually the aggressor.
3. Whether building these branch lines was 'a disastrous mistake'.

Including the lines built by the Northern Alberta Railway, the new lines constituted almost 30% of the Alberta-Saskatchewan rail network.

It was after 1928 that 40% of these Interwar branch lines in Alberta and Saskatchewan were built. 

Here are some key dates relating to this review:

Mackenzie King, Prime Minister of Canada (Liberal) 1921 to 1930.
RB Bennett, Prime Minister of Canada (Conservative) 1930-1935
Duff Commission 1931-1932
Mackenzie King - second term as PM: 1935-1948

Sir Henry Thornton's term as President of the CNR: 1922-1932
Edward Beatty's term as President of the CPR: 1918-1943

*  *  * 

We when all get the time, we can actually read Duff's report ...

Report of the Royal Commission to Inquire into Railways and Transportation in Canada, 1931-2 / Lyman P. Duff, chairman
 (link to PDF for download)

The website above may sometimes be down on weekends.

*  *  *

Duff noted that the Saskatchewan branchlines lines were through thinly populated areas (compared to the US, and Canada as a whole) ... Saskatchewan had 108 people per mile of line constructed.

In general, the Interwar branch lines constituted 41% of the Prairie's rail network but carried only 4.3% of all traffic.

There was 'no doubt as to the disastrous effects of this [branch line] competition'.

In 1932, to a large extent due to the Duff Commission's conclusions, most new construction of lines in western Canada stopped. 

As you know, after Conservative RB Bennett took power, the political knives were out for the Liberal-hired CNR President, Sir Henry Thornton and he was forced to resign - dying of cancer shortly afterwards in 1933 in New York City.

*  *  *

Question 1: Why were the lines built?

Political Pressure

In the west, farmers were increasingly focused on producing wheat for export and this constituted one of Canada's top exports through the 1920s and 1930s. Canadian-produced tariff-protected industrial products, including steel and farm equipment, were seen to benefit eastern Canadian business interests. Free trade with the US - for example to obtain cheaper farm equipment - would have benefitted western farmers ... and a Progressive 'protest' party developed in the 1920s (also running candidates in provincial elections) to promote policy changes. In the Commons, Mackenzie King required the support of these often free-voting Progressives to remain in power.

The restoration of the 1897 Crowsnest Pass Rate and the completion of the Hudson Bay Railway were both policies brought about through the pressures exerted on Mackenzie King's government by the Progressives elected at the federal level.

Economic Concerns

In the years before World War I, the opening of the west and the growing of wheat for export had had a strong effect on Canada's economic growth rate. After the war, as the result of a recession in 1921, wheat prices had dropped from $2.32 per bushel in 1919 ... to $0.76 per bushel in 1921.

33 bushels per short ton ... $0.76 in 1921 = $10.52 in 2018 dollars. 

King thought that continuing to encourage investment in railway and grain handling infrastructure would revive the economy. Farmers would have shorter distances to haul their grain harvest ... and domestic industries, such as steel making and BC's forest industry, would benefit.

Beyond lumber and steel, you can imagine all the diverse business and government activities which would be necessary to support such an economic expansion ... banking, farm equipment, tools, hardware, household goods, construction materials, retail services, religious institutions, schools.

The authors refer to the 'wheat economy' and much of this was driven by high immigration rates from Europe and the US. Many of these newcomers took up farming on the Prairies because of railway and government incentives.

from: Canada's Five Centuries; W Kaye Lamb; 1971; McGraw-Hill.

A representation of Saskatchewan's 'wheat economy' can be seen in the graph below. The 'oats economy' would have been more geared to the domestic economy ... as this was a key 'fuel' for the horses used in transportation and also for those working as draft animals on farms.

from: Saskatchewan - Its Development and Opportunities; 1919; Government of Canada.

Urban Rivalries

The 'wheat economy' resulted in increased economic activity to provide all the diverse goods and services it required.

With such a demand for goods, there was competition amongst settlements to develop into distribution centres. The ideal outcome was to become a railway junction point - perhaps connected with both railway systems. The classic example of a distribution centre is Winnipeg.

From population centres to settlements farther and farther afield, salespeople fanned out (initially by rail) to contact the retailers and citizens who needed their products.  Freight buildings and warehouses are most efficient when located centrally and when goods can flow out along roads or rail lines to customers in the hinterlands beyond.

The authors cite Camrose, North Battleford, Prince Albert, Estevan and Weyburn as towns aspiring to benefit from new branch lines which might have increased their importance as wholesale distribution points serving larger and larger hinterlands.

One western geography I have been reading suggests that the cities which have grown significantly in the Prairie region were those around its edges: Calgary, Edmonton, Winnipeg. It was suggested that vast distances and the traditionally light distribution of population engaged in agricultural activity along the railways had produced this pattern  - which has largely remained unchanged.

from: Canadian National's Western Depots; Charles Bohi; 1977; Railfare.

A Canadian Northern Railway train circa 1905.

... continuing to examine why the branch lines were built ...

Vast Areas Not Served

One of the examples the authors cite was the Canadian Northern - which had few branches north of its mainline ... in the area west of North Battleford. Consequently, grain growers north of the North Saskatchewan River had long distances to haul their grain and a river to cross before they reached a country elevator.

Another example related to the CPR - which had nothing south of its existing line between Weyburn and Assiniboia. (This area provided the setting for one of our most interesting vacation trips - when we looked at parts of the Fife Lake and Bromhead Subdivisions ... which had been built into this unserved area.)

We are reminded that after World War I farmers were using horse-drawn wagons or sleds to haul their grain. The 1931 Canadian census noted that 97% of the farms were on improved or unimproved dirt roads. The condition of Saskatchewan's rural roads deteriorated during the Depression. These roads were not maintained in the winter until the mid-1950s.

As suggested above, natural features like watercourses (which often had to be forded), ranges of hills, and valleys were major obstacles for farmers moving their grain.

In the 1920s, citizen-owned cars and trucks began to cut into the passenger revenues of the branch lines' often thrice-weekly mixed train schedules. However, there were only 18,257 trucks in service by 1931, while there were 225,000 farms in Alberta and Saskatchewan. Grain was still moved largely by horse ... even if people often chose the convenience of autos over rail for travel between settlements.

With the reintroduced Crow Rate, farmers had a strong incentive to lobby for country elevators to be as near to their farms as possible.

Consider the 'human experience' of farmers in the 1920s ... You can imagine a team of horses working to pull a heavy steel-wheeled wagon (or sled in winter) of grain over all the obstacles described. The load would have been calculated to just make it to the top of the steepest hill, or through the most difficult ford, based on the environmental conditions of that day.  

From all over the catchment area of a country elevator, each farm would be dispatching these small, slow, inefficient movements of grain over and over with an empty backhaul on the return trip.

... Contrast that system with the efficiency of hauling that same quantity of grain over a newly-constructed branch line: Bridges crossed the watercourses; Cuts and fills carried the grain through the hills and over the valleys; Farmers, their family members, and their hired hands spent less time behind horses on dirt roads.

from: Western Canada, Canadian Pacific Railway; prob 1909; CPR 

*  *  *

Question 2: Was the CNR the Aggressor?

The CNR built into 3570 square miles of CPR territory.

The CPR built into 4500 square miles of CNR territory.

Coal is one type of non-agricultural traffic which both railways were often keen to compete for.

... In addition to being used as fuel for steam locomotives, and for industrial and domestic heating and steam production, coal was also used for the production of town gas and coke. In rural areas of the Prairies, where firewood was not available or economical to use, coal was used for domestic heating. The authors note that many small Prairie centres had coal dealerships.

Probably the most coveted and most lucrative freight was LCL - Less Than Carload. (During my father's work in the CPR Department of Freight Receipts at Windsor Station in Montreal they said 'Less Carload' ... maybe CPR docked employees for lost time if they added 'Than'.) Typically, LCL would be a boxcar containing freight from more than one shipper ... destined for a number of consignees at a given population centre. Freight buildings were built at these centres to receive, document, store and distribute the foodstuffs, hardware, household goods etc  received. Often bulk commodities would be received at an industry spur or railway team track (again, we refer to horses).

Express traffic and federal mail contracts also bolstered railway profits and took some of the sting out of hauling the area's agricultural commodities.

The authors provide abundant local geographical evidence regarding particular routes built by both railways to particular centres - which is beyond my ability to explain adequately. 

The authors write that Henry Thornton was often 'reasonable' about the location of new CNR lines and granting trackage rights to the CPR.

In contrast, the CPR often aggressively defended its territory and its own population centres with counter-construction - to block the CNR and/or to spoil the profitability of the unserved territory into which the CNR might build. The CNR tried to build lines reaching CPR centres such as Swift Current, Red Deer and Medicine Hat but was effectively rebuffed.

Below, I attempt to illustrate only a few simple examples which are cited in the research paper.

The authors are very thorough and exact in their documentation of the actual

context and progression of events - which I am not attempting to reproduce here.

(Regular readers of this blog long ago gave up any expectation of seeing academic rigour!)

The maps are taken from: Railroad Map of Western Canada; no date - 1950s?; Canadian Freight Association.

We can only infer that track or stations represented in black are joint operations between CNR and CPR.

 CNR built a line toward Swift Current.

CPR countered by building to Stewart Valley ...
with the implication of building a bridge and line to reach Matador - which was never built.

*  *  *

CNR would have built to Medicine Hat, but CPR would not grant trackage rights within the city.

CPR maintained its monopoly in southern Alberta including the Lethbridge area's coal traffic.

*  *  *

CNR granted trackage rights into Prince Albert and North Battleford.

CPR built freight stations in North Battleford, Humboldt and Prince Albert, 

but shared passenger facilities with CNR at these locations.

North Battleford is a junction northwest of Saskatoon.

Humboldt is a junction roughly east of Saskatoon.

*  *  *

The CPR built more than 700 miles of track north of the CNR's Yorkton SK-Saskatoon-Wetaskiwin AB line.

To see that area on the map above, follow the blue CNR line from the southeast corner of the map 

to 'Artland' in the orange Saskatchewan-Alberta border area.

*  *  *

The authors list the following centres as being invaded by the CPR after World War I:

Saskatchewan: Humboldt, Lloydminster, Melfort, North Battleford, Prince Albert, Tisdale.

Alberta: Vegreville

1931 data for the seven centres

Total population: 23,843

Retail trade: $26,903,500

*  *  *

from: Imperial Royal Canadian World Atlas; ed: Fred James; 1935; Geographical Publishing, Chicago.

*  *  *

The Drumheller coal region includes that area of black 'joint stations' to the northeast of Calgary. 

Before the CNR, the Canadian Northern in 1918 had double-tracked Munson to Wayne 

to handle the heavy coal traffic (up to 30 trains per day).

CPR received permission from BRC to build into these coalfields in 1919.

CNR eventually allowed trackage rights and built a joint line south from Rosedale to East Coulee.

The authors cite this as 'the most serious CPR incursion into CNR territory in Alberta'.

*  *  *

Question 2: Was the CNR the Aggressor?

"Given the CPR's aggressiveness and the CNR's willingness to cooperate with it by granting trackage rights into major trade centres, the charge that the CNR was the aggressor in the Interwar construction of branch lines is not supported by the evidence."

*  *  *

Thanks to Charles Bohi for sending me these Big Beaver photos.

Additional Charles Bohi photos of Big Beaver track and elevators, 

and Coronach and Rockglen stations,

can been seen in these posts:

South of Moose Jaw to Congress, Assiniboia and Rockglen, 1989

Fife Lake, Coronach, Big Beaver to Lake Alma, Saskatchewan in 1989

Big Beaver, SK#11, Paterson Elevator, Look NE, July 1984, Bohi Photo

Big Beaver, SK, End of Track Fife Lake Sub. Supposed to be connected to Bromhead Sub at Minton, Look SW, July 1984, Bohi Photo

Question 3: Was building these lines a disastrous mistake?

... in the next post ...