George Stephen and the Canadian Pacific Railroad
By Phin Upham
Much of the financial backing for the Canadian Pacific Railroad’s expansion came about because of the work of George Stephen. Stephen was Scottish and Quebecker in descent with a background in the banking sector.
He’d worked his early life in family businesses, and then into business for himself importing wool. He’d grown a descent fortune by the mid-1960s and was looking for an investment opportunity to grow his holdings. He found one in the railroad business.
He purchased controlling shares in the Montreal Rolling Stock Company, and also collaborated with his cousins to open a textile manufacturing company. By 1881 he was fully focused on the railroad industry.
He purchased a nearly bankrupt St. Paul and Pacific Railroad in the United States, and then flipped both for a tremendous profit. That helped him get the clout he needed to build the Canadian Pacific Railway. He got a contract and set to work on the line. The construction was no easy undertaking. The region the line was planned to cross was mountainous, and they had to contend with natives in the area.
There were two flaws. The first was that the land was not as fertile as they had first imagined. Surveyors who had been to the region had visited during or after rainfall, so growth was happening but was not assured. The second flaw was of a technical nature. A 4.5 percent gradient was needed at one section of Kicking Horse Pass, which forced the railroad to place multiple safety switches and regulations on train speed. Even still, there were several runaways during the construction.
Phin Upham is an investor from NYC and SF. You may contact Phin on his Phin Upham website or LinkedIn page.
