and culture. They also wanted provincial status, including guarantees for language and religion similar to those that existed in the Province of Québec. The Métis also sought land grants in settlement of their ancestral claims. Macdonald readily agreed to these terms, but refused one final request: amnesty in all matters arising out of the military conflict. Without the Scott execution, such a request might have been possible. Macdonald was personally inclined towards amnesty, but dared not risk the wrath of Ontario voters.
The negotiation concluded with Manitoba joining Confederation. Riel fled to America. While in exile he was elected on three occasions, twice by acclamation, to the House of Commons to represent the Manitoba riding of Provencher. The fugitive never took his seat.
Meanwhile, the strain of office and ongoing struggles in his family life contributed to Macdonald slipping into states of extreme intoxication. Sir Stafford Northcote, governor of the Hudson’s Bay Company, reported to British Conservative leader Benjamin Disraeli that Macdonald had fallen into temporary drunkenness: “His habit is to retire to bed, to exclude everybody, and to drink bottle after bottle of port. All the papers are sent to him, and he reads them, but he is conscious of his inability to do any important business and he does not.”
In the meantime, while progress was being made in the West, relations south of the border were deteriorating, with the issues of trade and fishing rights the most frequent irritants. International relations were not then a colonial purview, and Macdonald was frustrated that Canada was not properly represented in the British-led negotiations with the Americans. On the lack of representation for a dispute over the three-mile limit for the fishery, Macdonald remarked: “We must consider that if Canada allowed the matter to go by default, and left its interest to be adjudicated upon and settled by a commission composed exclusively of Americans having an adverse interest, and Englishman having little or no interest in Canada, the government here would be very much censured if the result were a sacrifice of the rights of the Dominion.”
The Macdonald government was heavily criticized over the treaty that was eventually signed with the United States over the fishery. Great Britain had struggles of its own with the United States and was not about to consume political capital over what it considered a minor trade issue in one of its colonies. Macdonald understood—and reluctantly accepted—Canada’s “inadequacies” when it came to self-representation. But he made certain his British masters understood the galling discomfort and humiliation Canadians felt at not having sovereignty over relations with their neighbours to the south. As he signed the treaty negotiated by England in 1871, Macdonald teased aloud so his British masters could hear, “Well, here go the fisheries ...we give them away ...here goes the signature ...they are gone.”
With Newfoundland and PEI showing little interest in a confederated Canada, Macdonald’s attention again turned westward, this time to British Columbia, whose entry into Canada depended on commencing the construction of a railway across the continent within two years and finishing it within ten. The railway was to be built by the private sector, and paid for with subsidies from the government plus considerable grants of land. A condition imposed by Macdonald on the Pacific Railway was that, “Canadian interests are to be fully protected . . . no American ring will be allowed to get control over it.” As Macdonald well knew, however, the operation could not be entirely Canadian: it required the financial support of loans and guarantees from England. And here Macdonald leveraged to his advantage the concessions England had made to the United States. He demanded compensation from the United States—through England—for the money Canada had spent to suppress the Fenian raids. But what he really wanted was financing for a transcontinental railroad.
Macdonald’s uneasiness about the Americans was both sincere and strategic. He was eager to run for reelection on a theme of Canadian independence from America, to the point that he considered shedding the Conservative label. Writing to T.C. Patteson, editor of the Mail, Macdonald explored a new name for his party: “I think (the term Conservative) should be kept in the background as much as possible, and that our party should be called the ‘Union party,’ going in for union with England against all annexationist and independents and for the union of all the provinces of British North America ...what think you of such a name as ‘the Constitutional Union Party?’”
He then told Patteson his major policy plank: “The paper must go in for a National Policy in tariff matters, and while avoiding the word ‘protection’ must dedicate a readjustment of the tariff in such a manner as incidentally to aid our manufacturing and industrial interests.”
The need for a National Policy fit well with Macdonald’s view of the conspiracies that existed south of the border to undermine Canada. Asserting Canadian interests through trade restrictions may have been economically unwise, but it was politically saleable to a population wary of American influence. Macdonald’s nationalistic fervour and instinctive distrust of the American neighbour would be matched in intensity by only one subsequent Conservative prime minister, John George Diefenbaker.
Meanwhile, the other great National Policy initiative, the transcontinental railroad, was beginning to take shape. The challenge was to assemble a Canadian-led team with the ingenuity, experience, and, most important, the financial capacity to do the job. No single company was capable of assuming so huge an undertaking, so Macdonald encouraged the creation of a public–private partnership on a scale not contemplated before or since.
The second Canadian federal election that took place in 1872, when the Macdonald government was in its fifth year, included British Columbia and Manitoba. Macdonald’s justification for seeking a second term was clear: the work of building the nation, he wrote to his minister of finance, was far from complete. “Confederation is only yet in the gristle, and it will require five years more before it hardens into bone.”
But victory for Macdonald was far from certain. His Québec lieutenant, Georges Étienne Cartier, was unwell and his popularity in his Montréal East riding was substantially diminished, partly due to a powerful consortium of railroad interests opposed to Macdonald’s plans. Macdonald then sought support from the trade unions, a group he thought should be aligned with the Conservative cause. Macdonald believed in legislation to create better working conditions for workers and supported, with some humour, strengthening the role of trade unions: “I have a special interest in (unions) because I’m a working man myself. . . . If you look at the Confederation act, in the framing of which I had some hand, you will admit that I’m a pretty good joiner; and as for Cabinet making, I’ve had much experience.”
Macdonald and Cartier were in a fight for their political lives. They feared the railroad project under the Liberals would flounder and with it, their vision for Canada. Sir Hugh Allan, who represented the Canadian Pacific Railway Company, was lobbying heavily to become president of a much larger railway consortium. In the heat of negotiations, Allan offered “financial assistance” to the Conservatives. Cartier initially set the “immediate requirements” as $60,000, to be split between Macdonald, Cartier, and Hector Langevin.
The sum of $25,000 was deposited into the Merchant Bank for Macdonald’s use. None of it was used for his own election, instead being allocated to other Ontario constituencies. But it was not enough to meet Macdonald’s campaign needs. In desperation, he pressed Allan’s solicitor, John Abbott, for more. On August 26, Macdonald cabled Abbott: “I must have another $10,000.Will be the last time of calling. Do not fail me. Answer today.” Hugh Allan delivered. In the end, Macdonald accepted $45,000; Cartier and Langevin received $117,000, worth over $3 million in current value. But the donations came with strings attached, unspecified conditions that Allan and his company thought would be addressed over the course of negotiations concerning the railway. It also left Macdonald and his colleagues beholden to an unsavoury character with whom they would have substantial business dealings. It was a disaster in the making. Macdonald, however, arrogantly believed he could avoid scandal. Because the funds helped to advance the cause of Canada, he believed he was justified in accepting them.
Conservatives won the 1872 election, but just barely. The 99 Conservatives would need to rely on a few of the six independents to maintain power in the 200seat legislature. The Tories won with substantial strength in the West, and took 37 of 65 seats in Quebec. They nearly swept Nova Scotia and New Brunswick. But the Liberals, with