History Paper

Economic History Association

National Policy and Western Development in North America Author(s): Vernon C. Fowke Source: The Journal of Economic History, Vol. 16, No. 4 (Dec., 1956), pp. 461-479 Published by: Cambridge University Press on behalf of the Economic History Association Stable URL: http://www.jstor.org/stable/2114691 . Accessed: 25/03/2014 11:29

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National Policy and Western Development in North America

I

THE general theme of these discussions calls for a reinterpretation of the West as an underdeveloped region. This lends credence to a

hypothesis occasionally encountered that history is comprised of the examination of a succession of conceptual anachronisms devised in each case by the historian's generation for the solution of contemporary problems and applied as an afterthought to the reconstruction of the past. The adoption of the concept of underdevelopment in the present circumstance is in line with this hypothesis and is, in this regard, in good company with well-worn frames of reference utilized by earlier generations of North American economic historians. Turner advanced the frontier thesis as a tool of analysis of the past at a time when major concern was arising over the frontier's disappearance. Innis fashioned the staple-trade approach to Canadian economic development in the interwar years when for a time it appeared that Canadian prosperity and material advance had vanished coincidentally with the mortal ill- ness of the last great Canadian staple, wheat.

The question of economic development took shape in the I930's and has been particularly prominent in the postwar decade. It emerged naturally from contemporary paradox and has maintained a striking vitality because of the persistence of the original paradox in modified form but in a vastly magnified geographical context. The economic circumstance of poverty in the midst of plenty that characterized the second interwar decade has been replaced, temporarily at least, by prosperity throughout the Western World. In global terms, however, the general picture continues to be one of abject poverty, the new pros- perity of the Western World merely offering the paradox of potential plenty in world perspective.

Adam Smith considered the causes as well as the nature of the wealth of nations but his nineteenth-century successors, living in an epoch in which riches appeared to multiply spontaneously as the outcome of invention, discovery, and a way of life self-defined as virtuous, paid little heed to the causes of wealth and bent their limited contemplative

46i

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462 Vernon C. Fowke energies to the discovery of the forces that determine the distribution of the proffered bounty. The business cycle recurrently interrupted material advance but, annoying and unpredictable though it was, it was bearable because of the magnitude and persistence of the growth of wealth and income. The economic catastrophe of the I930's led to greatly increased attention to cyclical fluctuations on a national basis and, in turn, to a questioning whether the alternating prosperity and depression of the business cycle might not have a secular and global counterpart in eco- nomic development and stagnation. Economic development, like the frontier, came to be a matter for investigation when its continued exist- ence appeared most in doubt.

Economic development and underdevelopment cannot be assumed to have had great significance throughout American history simply be- cause they are of vital importance in America today. The record indi- cates that they were clearly recognized in North America throughout the nineteenth century and that policy was frequently related to them. A strong thread of continuity, therefore, links the present with the past. Even superficial observation, however, makes it clear that what constituted underdevelopment in North America a century ago is far from identical with any circumstance that causes major concern today.

The mass of relevant current literature yields great variety of inter- pretation of the term "economic underdevelopment." Some writers regard it as synonymous with technological backwardness and a lack of industrialization. They interpret it as a condition where a high propor- tion of the population make their living by tilling the soil. Others hold that lack of industry is a common but insufficient condition of under- development, that its one significant feature is low per capita income- in short, poverty. Obviously, neither of these interpretations is closely applicable to the significant economic circumstances and trends of nineteenth-century North America. There is, however, a third interpre- tation of underdevelopment, the simplest and most obvious of all, per- haps, that has little relevance today but is by far the most appropriate for a review of the history of this continent. It is simply the view that finds underdevelopment wherever an abundance of natural resources, useful and accessible by existing techniques of production, is exploited to a negligible extent. In terms of proportionality it is the situation where land is abundant and labor, capital, and entrepreneurship are scarce. This condition is not completely absent from the world today but superabundance of natural resources is far from being the crux of un-

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National Policy and Western Development 463 derdevelopment at the present time. This rather than nonindustrializa- tion or poverty, however, was clearly the significant characteristic of the North American West until recent times.

Our concern here, however, is with policy rather than definition, and policy raises the question of purpose. Underdevelopment is studied today primarily because it is recognized as an undesirable condition that ought if possible to be rectified. Although the justification for such action is elusive and imperfectly formulated, it appears to rest on three motives: the humanitarian desire to ameliorate distress among less fortunate peoples; the search for markets and for profitable investment outlets for labor, capital, and entrepreneurship; and the drive for de- fense. The importance of the humanitarian motive for present policy cannot be accurately determined although only the most hardened of cynics would deny its existence. It was not, in any case, of great significance in the North American historical scene since, apart from unpredictable and short-lived calamity, the lot of the inhabitants in the underdeveloped areas was not likely to be inferior to that of comparable groups elsewhere. However, the second and third motives, which we may call the investment frontier and the defensive or strategic motives, were at the heart of the policy of western development evolved by suc- cessive generations of Americans and Canadians, just as they are at the heart of present-day developmental policy couched in global terms.

II

A very little broadening of ordinary historical perspective projects the development of the North American West on a continental scale and permits its interpretation as a single massive movement that over a period of two centuries linked the Atlantic and Pacific economies on a broad front from the Rio Grande to the North Saskatchewan. Much of the policy relating to this movement was geographically conditioned and without national differentiation. Yet, above the Rio Grande, two nation states emerged and developed their respective Wests according to autonomous national policies. The lapse of nearly a century between the establishment of the first and second of these states renders close comparison difficult. Examination of national policies reveals, however, a measure of autonomous uniformity, a maximum of interrelationship- both imitative and retaliative-and traces of apparently irrational difference.

A first question is whether western underdevelopment and the pros-

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464 Iernon C. Fowke pect or necessity of doing something about it had anything to do with the establishment of the American and Canadian nation states. As is well known, it was no abstract desire for nationhood that drove the Thirteen Colonies to confederation and thence to federal union, nor did any dream of more perfect political union impel the British North American colonies toward confederation in the middle of the nineteenth century. Profound reluctance rather than eagerness marked in both cases the acceptance of the need for larger political structure. For both groups the federal political condition held exclusive if uncertain promise of survival. To ask whether western development was among the purposes of American or Canadian federalists-using the term un- capitalized-is to ask whether it was among the conditions of survival recognized by these respective groups as essential but unattainable without federal union.

The climate of public opinion in the American colonies in the late eighteenth century suggests that developmental projects under the sponsorship of government were not likely to be among the prime purposes of the founding fathers. It was, of course, pure coincidence that saw the publication of the Declaration of Independence and The Wealth of Nations in the same year but there was nothing coincidental in their appearance within the same era. They emerged from the same general view toward government, one that rejected state interven- tion of almost every sort. For Americans the tyranny of government was no academic concept. Among the latest and most irksome of the pre-Revolutionary frustrations imposed upon the colonists were the Proclamation of I763 and Orders in Council leading up to the Quebec Act, all designed to curb rather than foster westward advance and economic development. The colonists were not resentful that the English government did not actively sponsor and assist western develop- ment but rather that it sought arbitrarily to prevent spontaneous expansion.

English governmental tyranny may have been worse because it was English; it was insufferably bad because it was governmental. It had, nevertheless, to be endured or rejected and rejection required effective force. Along with the privileges of separation from the Empire went responsibilities including defense, a major burden formerly borne by Britain as a part of the price of empire, now transferred to the states as part of the price of independence. If, as seems clear, the futility of disorganized resistance against Britain led in I777 to the Confederation, the futility of attempting disorganized survival among hostile nations

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National Policy and Western Development 465 led to the federal union. Only the "dread of foreign powers," says Lord Bryce,' was sufficient to overcome the widespread hostility to the federal constitution and its greater centralization of control. Defense and not development was the prime purpose for which the American nation state was created.

Western development and land policy created active political issues in the United States within months of the Declaration of Independence. By the time the federal constitution was adopted the public domain had been created and the basic principles that were to govern its distribution had been laid down.2 The constitution gave Congress complete and unrestricted power for the disposal of any territories of the United States and for the admission of new states.3 With the beginning of the new century the federal government made the first appropriation of public lands for internal improvement. The enabling act admitting Ohio to the Union in i802 provided for the allocation of a proportion of the proceeds of lands sold by Congress within the state for road construction, and similar agreements were made with other states in subsequent years.4 Land grants for canal construction and river improvement were introduced in the i820's and the railway land-grant system in the i850's.

The railway land-grant system may have evolved naturally and with- out major modification from the canal land-grant system and this, in turn, from embryo in the Federal grants of cash for roads. Yet it would be difficult to argue convincingly that western development was among the major purposes of Congress at any time before it emerged in full flower with the railway land-grant scheme at the middle of the century. A few million dollars in cash and some three million acres of the public domain went toward road and river improvement before i850.6 Mean- while the trans-Mississippi West had been acquired step by step and the

1 James Bryce, The American Commonwealth (New York: The Macmillan Co., 1914), I, 26.

2By the Ordinance of May 20, 1785. For a concise summary of the beginnings of American land policy see Roy M. Robbins, Our Landed Heritage: The Public Domain 1776-1936 (Prince- ton: Princeton University Press, 1942), PP. 3-19.

8 Art. IV, sec. 3. "New States may be admitted by the Congress into this Union; . . . The Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States; .

4 Robbins, Our Landed Heritage, p. 27. 5 For an analysis of the relationship between canal and railway land-grant systems see John

Bell Rae, "Federal Land Grants in Aid of Canals," THE JOURNAL OF ECONOMic HISTORY, IV (May, 1944), i67-177.

I Thomas Donaldson, The Public Domain (Washington, D.C.: Government Printing Office, 1884), pp. 257-26i. Army Engineers provided additional important assistance to waterway and harbor improvement through survey services, these activities being more readily identifiable with defense than economic development.

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466 Vernon C. Fowke public domain thereby extended to approximately I.4 billion acres. The whole process indicated that Congress was more interested in acquisition than disposal and this because defense considerations con- tinued to outweigh those of development. Only gradually was economic development accepted as a proper federal activity and a proper object for which to expend the public domain. The need to accommodate the land- settlement requirements of western migration had been apparent from the early days of the Union, but the urgent financial commitments and limited alternative revenue sources of Congress long rendered unaccept- able any general free-grant system of land disposal.

Western development played a much more prominent part in the deliberations of the Fathers of Canadian Confederation than it had for the founders of the American Union, and this for two main reasons. In the first place there had, in the intervening decades, been a significant change in the attitude concerning the proper sphere of government activity. The change had been imperceptibly slow and unrationalized, but the force of circumstances had eventually established, in the British colonies at least, the fact that major developmental expenditures essen- tial for the provision of transportation facilities on the frontier would not be forthcoming if left to the initiative of profit-seeking venture capital. This inexorable truth 7 had been demonstrated in Canada, first in roads and later in river improvement and canals. With the advent of the railway in the i840's little time was lost in waiting for private capital to demonstrate its inevitable inadequacy on an unassisted basis. The Guarantee Act 8 passed by the United Province of Canada in i849 provided government aid for railway construction and predated the American railway land-grant scheme by a matter of months. Canadian colonial governments before Confederation were avowedly liberal and, by twentieth-century standards, amazingly laissez faire, but on the question of government intervention for developmental purposes they had no scruples.

The other main reason for the prominence of developmental con- siderations in the plans for Canadian Confederation was the urgency of

7Albert Gallatin, then Secretary of the United States Treasury, had clearly enunciated this principle in his report on internal improvement presented to Congress in i8o8. There appears to have been no general acceptance of the principle at that time or none, at least, of its full implications in terms of policy.

8 14-15 Vic., C. 73. In 1833 Congress authorized the State of Illinois to divert a land grant made in 1827 for the construction of a canal to construct a railroad. This authorization was the first Congressional railway land grant but was not utilized. See Donaldson, The Public Domain, p. 26i.

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National Policy and Western Development 467 the economic difficulties which, along with a number of political prob- lems, impelled the colonies toward union. Political deadlock and certain unfavorable modifications of the defense structure helped to prove the futility of continued disunity, but the economic features of the impasse appeared at least as insoluble and were far more widely apprehended. Britain's abandonment of imperial preferences at mid-century cast the colonies adrift willy-nilly. The commercial interests on the St. Lawrence had, throughout long fur-trading generations, established and effec- tively maintained the conviction that the St. Lawrence was the most obvious if not the only natural trade route to the heart of the continent. With the loss of the fur trade in I82I they retained the conviction but had not the ability to make it effective in the expanding trades of the midwestern agricultural frontier against the superior competitive skill of the Albany and New York merchants. To counter the effects of the Erie Barge Canal the Canadians had eventually completed a system of canals on the St. Lawrence during the i840's, only to find that their American rivals were on the point of effecting rail connections between the Atlantic and the Mississippi. The Canadians in turn constructed the Grand Trunk Railway from the American border at the St. Clair River through Toronto and Montreal to join with an American line terminating in an ice-free port at Portland, Maine. This expensive project was complete by i86o but was insolvent and, of much greater significance, was ineffective in its basic purpose of drawing American trade through Canadian commercial channels. The British North American colonies had public obligations of approximately $ioo million at Confederation, the proceeds of which had been largely devoted to developmental projects of almost certain inefficacy as long as the colonies remained disunited.

The possibilities of western development were too uncertain to appear as the cure for all the economic ills of pre-Confederation days. With Canada permanently denied a Middle West by geography, the thousand miles of barren and trackless Shield that separate the St. Lawrence from the prairie plains in the Dominion are in the sharpest possible contrast to the corresponding fertile lands of the Old Northwest of the United States. Plains and Shield together were owned by the Hudson's Bay Company a century ago, and its officials assured all interested parties that Rupert's Land possessed no agricultural prospect. Nevertheless there were vigorous and well-informed advocates of the view that the western territories were certain to possess great potential wealth and ought no longer to be neglected.

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468 Vernon C. Fowke Prominent among the leaders of the federation movement in Canada

were those who argued, with heavy reliance on American analogy, that the really creative prospect in the Confederation scheme lay in the opportunity thus to be created for the opening of the central plains. The resolutions arrived at by the Quebec Conference in i864 provided that the proposed federal government should undertake without delay the completion of the Intercolonial Railway, to link the St. Lawrence with the Atlantic seaboard, and that the establishment of communica- tions with the North-Western Territories should be "prosecuted at the earliest possible period that the state of finances will permit." ' In the final act of federation, the British North America Act of i867, provision was made for the possible entry of Rupert's Land and the North-West Territories into the union but, as proof of the uncertainties involved, no reference was made concerning western rail or other communications. As will be noted below, however, the new Dominion was barely formed when it became actively involved in western affairs.

III

To ignore the significance of defensive strategy and global sectional- ism would leave one with a most distorted picture of the forces serving to shape the attack on underdevelopment in the world today. This could be said with equal truth and relevance of the development of the North American West. The question of defense was persistent through- out the nineteenth century, partly because the conflict among European powers embraced the North American prospect and partly because of the emergence of rival groups in North America itself. The sectionalism of the nineteenth century, on the other hand, was intranational and, apart from phases that merged into open hostilities in the American Civil War, it was nonmilitary and limited exclusively to economic rivalry. The international conflicts were also strongly conditioned by economic considerations and much of the defensive strategy referred to in this analysis was economic rather than military in character. Example will best serve to illustrate the points involved.

The "dread of foreign powers" that was such a potent force in the formation of the Union persisted in varying force throughout the first half of the nineteenth century and did much to shape the policy of

9 Parliamentary Debates on the Subject of the Confederation of the British North American Provinces, 3d Session, 8th Provincial Parliament of Canada (Quebec, I865), hereafter referred to as the Confederation Debates, p. I03.

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National Policy and Western Development 469 Congress toward the western territories. The trans-Mississippi West was acquired by a succession of steps related chiefly to defensive strategy and until mid-century the federal government was more concerned to secure territory to round out the defensive frontier than it was to encourage the disposal or development of the public domain. The steps by which the Louisiana Purchase evolved from negotiations designed initially to secure unimpeded navigation of the Mississippi 10 are well known. The international significance of the Lewis and Clark expedi- tion that followed almost immediately after may not come so readily to mind.

The prominence given by Captain Cook in the I780's to the wealth in furs available in the North Pacific intensified the activity of the Russians, who were already well established in the trade, and attracted world-wide attention and a host of rival interests. Among the new- comers were the English, sailing from India and China as well as from home ports, the Spaniards, and New Englanders, the "Bostons." Alexander Mackenzie established overland contact in i793 and a variety of fur-trade groups interested themselves in the approach by land. These were the circumstances in which Jefferson dispatched Lewis and Clark in the year following the Louisiana Purchase "to explore the Missouri River and such principal streams of it as by its course and communication with the waters of the Pacific Ocean may offer the most direct and practicable water communication across the continent for the purposes of commerce." " The international implications of the expedition are evident from the care taken by Jefferson to allay the suspicions of foreign representatives. He sought funds for the venture from Congress in a confidential message stating: "The appropriation of two thousand five hundred dollars 'for the purpose of extending the external commerce of the United States,' while understood and con- sidered by the executive as giving the legislative sanction, would cover the undertaking from notice and prevent the obstructions which inter- ested individuals might otherwise previously prepare in the way." 12 To Lewis he stated: "Your mission has been communicated to the ministers here from France, Spain and Great Britain-and such assur- ances given them as to its objects as we trust will satisfy them." 13

10 See Benjamin H. Hibbard, A History of the Public Land Policies (New York: The Mac- millan Co., I924), pp. 14-i6.

11 Elliott Coues, History of the Expedition under the Command of Lewis and Clark (New York, 1893), I, xx-xxvi, as cited in Harold A. Innis, A History of the Canadian Pacific Railway (Toronto: McClelland and Stewart, 1923), p. 5 n.

12 Ibid. 13 Ibid.

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470 Vernon C. Fowke Although not the only influence at work, the search for national

security was by far the most prominent of the motives that impelled Congress toward the acquisition of the other territories which, by mid-century, gave to the United States approximately its present-day continental boundaries. The question of security persisted after i850 but it assumed different guise and appeared in two distinct areas of interrelationships. The first one was intranational; it concerned the United States exclusively and arose from the intensification of sectional- ism that eventuated in the Civil War. The other arose from the fact that American nationalism was gradually divested of the defensive quality that had long characterized it and assumed an increasing aggres- siveness epitomized in the concept of Manifest Destiny. This raised in question the status of the British territories comprising the northern half of the continent at the critical moment when the parent country was granting political and economic freedoms that indicated a serious consideration of the complete severance of the imperial relationship. Fortunately, or unfortunately, depending on the point of view, the destiny of the United States to occupy the entire continent was not nearly so manifest to political leaders at the policy level as it was to a variety of publicists and special pleaders. The result was just that degree of indecisiveness and cautious delay on the part of the American government that permitted the emergence and crystallization of a national consciousness in the English colonies. It also allowed the British government time to reconsider halfheartedly in terms of the prospects of Oriental trade its earlier ill-defined intention to abandon the North American colonies and thereby cut its overseas losses.

The sharpening of the lines of sectionalism within the United States and the development of nationalism in the British territories had the utmost significance in shaping the conditions of western development after i850. Atomistic sectionalism, or the rivalry of half a dozen cities for commercial advantage, delayed the commencement of Pacific rail- ways for ten or twenty years 14 and it was not till after the withdrawal of the southern states that a choice could be made from among the reduced number of contending routes. Of greater and more positive significance for the West, however, was sectionalism on a broader scale, comprising the various regions-each one with a diversity of compatible but by no means identical interests.

The three major sections were the commercial and industrial North;

14 Edward C. Kirkland, A History of American Economic Life (New York: Appleton-Century- Crofts, Inc., 1934), pp. 376-382.

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National Policy and Western Development 471 the slave-owning, plantation South; and the small-farm, agrarian frontier of the West. The West had the typical frontier expansionist philosophy, its residents desirous of free land, easy money, low tariffs, and government aid toward transportation improvements. The North long viewed the growth of the West with far from unmixed enthusiasm, recognizing in the presence of cheap frontier lands a damper on local property values and a threat to abundance in the labor market. The public domain had originally been pledged for the reduction of debt and its revenue potentialities could neither be forgotten nor readily relinquished. The South saw public land revenues as a welcome alter- native to the proceeds of higher tariffs but favored western expansion as an extension of the plantation and slave-holding economy. The West and the South had much in common before the mid-nineteenth century. They worked together for low tariffs, easy money, and freedom from centralized control of banking, and in the struggle for radical land policies such as graduation, donation, and the retrospective pre-emption measures of the 1830's. A growing interest in the economic potential of the Mississippi Valley brought strong and effective support from all sections for the Illinois land-grant measure of i850, inaugurating the federal subsidization of railway construction.

The sharpening of sectionalism in the United States in the i850's was accompanied by a reappraisal of the western prospect and a realign- ment of sectional affiliation. The railway provided the North Atlantic seaboard with an entree to the Middle West and the Mississippi Valley -that challenged the commercial dominance of the southern river ports. Some, indeed, foresaw the day when the transcontinental railway would provide direct connection with the Orient, a northwest passage at last. *The threat to property values and the loss of labor associated with west- ward migration came to appear of negligible importance in comparison with the economic stimulation that arose from the enlarged market for goods and services. For the South, however, the situation was different. The threat to the Mississippi commercial system associated with railway construction, and the effects of westward migration on property values and labor costs, were not offset by any new demand for southern productions. Free homesteads, the new goal of northern and western land reformers, would provide no revenue as a safeguard against tariff increases and would do nothing to extend the slave-labor plantation system. In fact, with the increasing certainty that free soil was the natural counterpart of free homestead, the South changed from active support to active opposition of western development on any lines along which in the immediate future it appeared likely to proceed.

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472 Vernon C. Fowke The last struggles of the South against the hostile circumstances of

the mid-nineteenth century yielded a measure of success such as fre- quently accompanies last struggles and at the same time resulted in a marshaling of the new forces to unaccustomed but concerted action. Southern leaders advocated cession of public lands and successfully opposed free homestead. They were credited with strong influence in precipitating the war with Mexico and succeeded in opening to slavery all the territories secured thereby with the exception of California. In the Kansas-Nebraska Act of i854 they achieved the repeal of the Missouri Compromise and opened the entire Northwest to slave occu- pancy. They were instrumental in the cancelation of ship subsidies and selectively blocked the extension of federal funds for internal improvement.

The Republican party, which emerged in i854 as a direct reaction of the North and West against the unrestrained southern dominance of federal organs of government, was victorious at the polls in i86o on a platform founded on commitments relating to western expansion. Chief among these were the pledge of freedom in the territories, free homesteads, and a Pacific railway, these three more than outweighing western opposition to the protective tariff that was included for par- ticular appeal to eastern industry. The government moved gradually to implement its pledges although the major westward steps were not taken, or perhaps made possible, until after the withdrawal of the southern states. In i86i telegraphic communications were established with the Pacific coast, Kansas was admitted as a state and the Territories of Colorado, Nevada, and Dakota were organized. In i862 the Home- stead Act was passed along with legislation incorporating the Union Pacific with generous subsidy provisions to secure the first Pacific railway. The Territory of Idaho was organized in i863 and that of Montana in i864; in the latter year Nevada was raised to statehood. At the same time the incorporation of the Northern Pacific anticipated the fulfillment of Whitney's dream of a railway from the Great Lakes to Puget Sound. Western development, temporarily arrested by sectional conflict in the United States, was pushed forward with great vigor after i86o as the central feature of the defensive strategy of the Union.

IV

Sectionalism was of slight importance in the determination of Canadian policy regarding Western development. The colonies of the

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National Policy and Western Development 473 mid-nineteenth century did not, like the states of the American Union, face westward from a north-south Atlantic axis many hundreds of miles in length. Instead they were strung in bits and pieces from the islands of Newfoundland and Prince Edward to the maritime colonies and the ribbon development along the St. Lawrence river valley. Fundamental differences in economic and political outlook between English-speaking merchant and French-Canadian habitant prevented adequate improvement of the St. Lawrence before the union of Upper and Lower Canada in i84i. But these differences in outlook were cultural rather than sectional. Rivalry between Montreal and Toronto complicated and delayed the mustering of resources for the construction of the first Pacific railway in the i870's, and the political necessity to "do right" by other centers such as Quebec City determined the location if not the actual decision to construct the National Transcontinental railway before the First World War. At no time, however, did sectional differences condition the progress of the West in Canada as in the United States

Much of the drive for the development of the Canadian West in the last half of the nineteenth century was primarily a defensive reaction to the American doctrine of Manifest Destiny. Although the processes implicit in this concept had been at work from the beginning of the century, by the time it was formulated precisely at the end of I845 15 there was only one direction left for its further operation and that was north. What the outcome would have been had this doctrine been pursued with consistency and vigor can only be surmised. It was not so pursued and its periodic injection into the North American body politic in small doses a century ago merely served, like a recurrent vaccination, to build a healthful measure of resistance.

The near stalemate over Western policy in the United States during the i850's created an impression of security in the British provinces that had to be completely abandoned in the i86o's as the American govern- ment marshaled the possibilities of western expansion in its fight against the South. The route projected for the Union Pacific was far from the boundary of British possessions, but the Northern Pacific, chartered in i864 to link the Great Lakes with Puget Sound, was a different affair.

15 Writing in the New York Morning News, December 27, i845, with specific reference to the Oregon Boundary dispute, John L. O'Sullivan spoke of "the right of our [the American] manifest destiny to overspread and to possess the whole of the continent which Providence has given us for the development of the great experiment of liberty and federated self-government entrusted to us." Cited by Albert K. Weinberg in Manifest Destiny: A Study of Nationalist Expansionism in American History (Baltimore, 1935), p. 145.

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474 Vernon C. Fowke Its location would be just across the line from Rupert's Land and its American advocates as well as careful Canadian observers regarded it as a bid for the entire West. A note of military urgency was introduced by the Fenians in i866.

Specific proposals for annexation were not lacking. A bill providing for the absorption of all British North American territories was intro- duced into the House of Representatives in i866 but was defeated."6 In i867 Senator Ramsey of Minnesota moved that the Senate Committee on Foreign Relations consider the advisability of a treaty with Canada that would provide for American annexation of all territories west of longitude go degrees. The Senator argued that prompt action was needed to forestall the Canadians. The resolution was tabled but was reintroduced in i868 and passed with minor amendments. The Senate Committee on Pacific Railroads, to which the resolution was then referred, considered action unnecessary since the construction of the Northern Pacific close to the British territories would, in any case, inevitably lead to their absorption.

Advocacy of annexation was restricted to a few vociferous sources in and out of Congress 17 but Canadian political leaders may well be excused for interpreting the official American view as one of procrastina- tion rather than prohibition. The policy of the Dominion government concerning the West was strongly conditioned from the first by the threat of American engulfment. The gold discoveries of the i850's and the simultaneous renewal of interest in Far Eastern trade made the coastal colony of British Columbia a greater prize than the central plains. These had to be held and utilized, however, to assure title and

16 See F. W. Howay, W. N. Sage and H. F. Angus, British Columbia and the United States (Toronto: The Ryerson Press, I942), pp. i96-i97. Proposals for annexation of the North American territories by the United States were neither surprising nor, indeed, entirely unac- ceptable to public opinion in England. The Tinmes of London said: "British Columbia is a long way off. . . With the exception of a limited official class it receives few immigrants from England, and a large proportion of its inhabitants consists of citizens of the United States who have entered it from the south. Suppose that the Colonists met together and came to the con- clusion that every natural motive of contiguity, similarity of interests, and facility of administra- tion induced them to think it more convenient to slip into the Union than into the Dominion.... We all know that we should not attempt to withstand them." Lord Granville, Secretary of State for the Colonies, "expressed the wish that the British possessions in North America would propose to be independent and annex themselves." See Hugh L. Keenleyside, "British Columbia- Annexation or Confederation?" Canadian Historical Association, Annual Report 1928, p. 36.

17 Keenleyside cites examples of unofficial annexationist utterances. See his article, "British Columbia-Annexation or Confederation?" p. 37. See also Donald F. Warner, "Drang Nacb Norden: The United States and the Riel Rebellion," Mississippi Valley Historical Review, XXXIX (1952-53), 693-7I2.

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National Policy and Western Development 475 access to the coast. Confederation was but a few months old when the final negotiations were undertaken for the transfer of Rupert's Land from the Hudson's Bay Company to the new Dominion. The transfer was completed by i870.

As late as i865 the leaders of the Confederation movement had refused to commit themselves regarding the early construction of a Pacific railway.'8 By the beginning of i870 the British Colonist, pub- lished in Victoria and a strong advocate of Confederation rather than annexation, described a railway to the coast as "the only bond strong enough to retain British Columbia." 19 "If the railroad scheme is utopian," said the Colonist, "so is Confederation. The two must stand or fall together." Simultaneously, Prime Minister Macdonald in Ottawa was replying to C. J. Brydges, general manager of the Grand Trunk Railway, who had written to report a conversation with Governor Smith of Vermont, then president of the Northern Pacific. Said Macdonald: 20

. . .It is quite evident to me, not only from this conversation [as reported by Brydges], but from advices from Washington, that the United States Government are resolved to do all they can, short of war, to get possession of the western territory, and we must take immediate and vigorous steps to counteract them. One of the first things to be done is to show unmistakably our resolve to build the Pacific Railway.

In i871 the Dominion government accepted the commitment to con- struct a Pacific railway within ten years as part of the terms of union under which British Columbia entered Confederation.

A variety of circumstances delayed the construction of the Canadian Pacific railway for a decade but the project was entrusted in i88i to a newly organized and substantially subsidized syndicate, the Canadian Pacific Railway Company, and the main line was completed by i885. Defensive strategy played a prominent part in the location of the line in both its eastern and western sections. Three possible routes existed for construction between the St. Lawrence River and Fort Garry, or Winnipeg, in the Red River Settlement. One was via Chicago, a second via the Sault and south of Lake Superior, and a third to the

18 Confederation Debates, pp. 86, I03, 243-244, 475-476. 19 As cited in Keenleyside, "British Columbia-Annexation or Confederation?" p. 39. 20 See Sir Joseph Pope, Memoirs of the Right Honourable Sir John Alexander Macdonald,

G.C.B. (Toronto, I894), pp. 524-525.

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476 Vernon C. Fowke north of Lake Superior. The third route was generally known to be immensely difficult and costly to construct and to have negligible traffic prospects; it had the one virtue that it was all-Canadian. The Grand Trunk Railway and Toronto interests strongly urged construction by way of Chicago but this route was rejected early and consistently. The route to the south of Lake Superior was a much more serious contender and was actively advocated as late as i88o on the grounds of comparative ease of construction and impressive traffic prospects. All such argu- ments failed, however, against the superior claims of patriotism and defense against American absorption. Attacking the south-shore proposals of the Opposition in the House in i88i, Prime Minister Macdonald said: 21

[Their proposal is one for] building an easy road across the prairies, and so connecting with the American system of railways, and carrying away the trade of the North-West by one or more American channels, to the utter ruin of the great policy under which the Dominion of Canada has been created, and to the utter ruin of our hopes of being a great nation, and to the ruin of our prospect of getting possession of the Pacific trade, and connecting Asia with England by a railway passing through the dominions of England.

As for the north-shore route, Macdonald said: 22

I am proud to say that if our scheme is carried out, the steamer landing at Halifax will discharge its freight and emigrants upon a British railway, which will go through Quebec, and through Ontario to the Far West, on British territory, under the British flag, under Canadian laws, and without any chance of either the immigrant being deluded or seduced from his allegiance or his proposed residence in Canada. ...

Nationalism and the flag rather than economics located the Canadian Pacific railway to the north of Lake Superior. The worst fears expressed concerning the high costs and low traffic of this area have been amply and continuously demonstrated. The area is still referred to in railway rate cases as a "traffic bridge" accounting for a significant part of the high costs of Canadian railway operation. Not western development, but western development exclusively integrated with the St. Lawrence economy, was the national policy of the Fathers of Canadian Confederation.

Defense against the threat of American economic occupation was

21 Canada, House of Commons, Debates, i88i, p. 491. 22 Ibid.

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National Policy and Western Development 477 largely responsible for a major change of route for the western part of the Canadian Pacific Railway and for the construction of an im- portant branch line. Early surveys indicated that a line from Winnipeg, swinging in a northerly arc along the Park Belt, through the Yellow- head Pass, and thence down the Fraser River to the coast would, of all possible routes, be the easiest to construct and operate and the most likely to yield adequate traffic. It was taken for granted for more than a decade that this route would be followed but it was abandoned on short notice in i882 in favor of main-line construction across the short- grass plains due west of Winnipeg and through the costly Kicking Horse Pass. Evidence to explain the change of plans is incomplete but there is much to suggest that it was in large part dictated by desire to forestall penetration into the Canadian central plains by American railways. Construction of the Crow's Nest Pass line in the i890's was a specific response to American occupation already well established. The wealthy mineral region of southeastern British Columbia had been developed largely by American capital as a natural part of the Inland Empire centred upon Spokane. The public subsidy and private capital that went into the Crow's Nest Pass line were designed not so much to foster development in the area as to wrest it from American control and benefit.

The completion of the Pacific railroad committed British Columbia to Canada and gave notice of Canadian intention to hold the central plains. But the intention could be made effective only by occupation and economic utilization. The whole national project, in fact, required the development of the West as a market for eastern products and a field of investment opportunity for eastern capital and entrepreneurship. The first years were consequently occupied with the formulation of plans for the opening of the western frontier to productive uses. The railway would provide transport and communication and the purchase of Rupert's Land from the Hudson's Bay Company would establish a Canadian counterpart of the American public domain. The survey pattern, the free homestead, the railway-land-grant and school-reserva- tion systems were all ready to hand in American experience and were adopted with a minimum of variation. The Department of the Interior was organized in i873 and the Royal Northwest Mounted Police were established the same year. The Dominion government would entrust to no private agency the responsibility of fostering immigration and the Department of Agriculture devoted almost its entire energies to this task until it was transferred to the Department of the Interior in

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478 Vernon C. Fowke i892. The "National Policy" of i879 converted the Canadian tariff from a revenue to a protective basis in order that the western market might be preserved exclusively for the eastern Canadian manufacturer and western traffic for east-west, all-Canadian railroads.

Despite the most persistent efforts by the Dominion government the pace of western development was distressingly slow for a generation after Confederation. Canada was in competition with the United States, South America, Australia, and New Zealand for the emigrants of Europe and not till the turn of the century did the attractions of the Dominion begin to yield heartening results. During the first three decades of the new century, however, immigration and settlement established the Canadian wheat economy in the central plains and created an investment frontier of sufficient magnitude to vitalize the economic life of the entire Dominion. Immigrants from the United States comprised upwards of one half of the total.

V

This paper has touched but a few of the many features of western development. Others are to be dealt with later in these meetings. My failure to make more than passing reference to land policy may, however, require a special dispensation. This seems not too much to ask in view of the attention long accorded this phase of the subject by competent scholars. There is the additional fact-which may or may not be accepted as relevant to the work of the historian-that the underdevelopment of today is not associated with vast continents of unused resources as in the nineteenth century but is at its worst in regions where the least likely of all problems to arise is how to distribute an abundance of fertile land. This immeasurably complicates the attack on underdevelopment today; it also minimizes the signifi- cance of the lessons of nineteenth-century land policy for the present.

It would, in fact, be difficult to deduce clear lessons from the disposal of the American public domain and Dominion lands. The free home- stead stands pre-eminent in the public imagination as the final fruition in the evolution of improved land systems. Yet it came late in the United States, it was continually modified, and at no time did it avoid the evils of speculation or give assurance of appropriate land use. The free- homestead system was effective throughout the duration of Dominion lands, from i870 to 1930, yet the Dominion government disposed of more lands by or for sale than on the homestead basis. Canadian home-

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Discussion 479 steaders were not accorded the privilege of commutation, of securing title by purchase prior to ordinary term. Forty per cent of Canadian homestead entries were forfeited; four out of every ten Canadian homesteaders failed to "prove up" and secure title to their claims. That part of the Canadian plains which was most exclusively disposed of as homesteads has demonstrated improper utilization of agricultural re- sources to a shocking degree. The conservation movement in the United States and Canada may be regarded as the counterpart, or, more properly perhaps, the aftermath of the operation of the land policies that preceded it.

VERNON C. FOWKE, University of Saskatchewan

DISCUSSION

FOREST G. HILL: Professor Fowke ably demonstrates the merit of a comparative approach to American and Canadian economic history. His penetrating analysis reveals how relevant the understanding of economic development in Canada is to the study of that in the United States. Of the two, the Canadian national period has been shorter, the essential lines of economic growth simpler, and the role of government clearer and more pronounced. Canadian experience thereby provides a fruitful comparative basis for analyzing the longer, more complex development of the American economy and the more varied, often puzzling, part taken by government.

In effect, this paper constitutes a study in the political economy of national- ism, or of two competitive economic nationalisms. It reveals the origin and operation of a kind of laissez-faire mercantilism in the North American geographic and cultural environment. The two governments actively engaged in the strenuous task of nation-building, along lines at once adaptive, com- petitive, and complementary. National policies were consciously and strategically designed to foster national defense and economic development. Both nations used government promotion as well as the market mechanism to achieve rapid settlement and exploitation of large regions well adapted to agriculture and other forms of primary production.

The parallels between American and Canadian economic development have therefore been significant, sometimes striking. National policies toward the growth of the West were often similar, as shown by government land policy, encouragement of immigration, promotion of waterways and rail- roads, resort to the protective tariff to foster domestic trade and industry, and other concerted efforts to advance the production of staples. Further- more, the relative strengths of defense (or strategic) and developmental objectives were probably more alike in the two nations than Professor Fowke envisions.

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