nstruction of the Canadian Pacific
railway. It was first proposed to utilise the "water-stretches" on the
route of the railroad, and in that way lessen its cost, but the scheme
was soon found to be impracticable. The people of British Columbia were
aggrieved at the delay in building the railway, and several efforts were
made to arrange the difficulty through the intervention of the Earl of
Carnarvon, colonial secretary of state, of the governor-general when he
visited the province in 1876, and of Mr., afterwards Sir, James Edgar,
who was authorised to treat with the provincial government on the
subject. At the instance of the secretary of state the government agreed
to build immediately a road from Esquimalt to Nanaimo on Vancouver
Island, to prosecute the surveys with vigour, and make arrangements for
the completion of the railway in 1890. Mr. Blake opposed these terms,
and in doing so no doubt represented the views of a large body of the
Liberal party, who believed that the government of Canada had in 1871
entered into the compact with British Columbia without sufficient
consideration of the gravity of the obligation they were incurring. The
commons, however, passed the Esquimalt and Nanaimo bill only to hear of
its rejection in the senate, where some Liberals united with the
Conservative majority to defeat it. When the surveys were all completed,
the government decided to build the railway as a public work; but by the
autumn of 1878, when Mr. Mackenzie was defeated at a general election,
only a few miles of the road had been completed, and the indignation of
British Columbia had become so deep that the legislature passed a
resolution for separation from the Dominion unless the terms of union
were soon fulfilled.

During the existence of the Mackenzie government there was much
depression in trade throughout the Dominion, and the public revenues
showed large deficits in consequence of the falling-off of imports. When
the elections took place in September, 1878, the people were called upon
to give their decision on a most important issue. With that astuteness
which always enabled him to gauge correctly the tendency of public
opinion, Sir John Macdonald recognised the fact that the people were
prepared to accept any new fiscal policy which promised to relieve the
country from the great depression which had too long hampered internal
and external trade. In the session of 1878 he brought forward a
resolution, declaring emp