nties vanished.
Never had railway building been carried on so vigorously in the United
States as in the years 1881-83, and the reaction was correspondingly
severe. The collapse of the boom which had accompanied the first {155}
operations in Manitoba, the failure of harvest after harvest, the
fading away of settlers and speculators alike, robbed all but a
persistent few of faith in the Canadian North-West and in the railway
whose fortunes rose or fell with it. The way of the Canadian Pacific
was made particularly hard by the manoeuvres of rival companies. Some
of the United States Pacific roads, awake to the seriousness of the
competition threatened, attacked it in the New York market. The Grand
Trunk, naturally alarmed by the incursion of the new road into its best
paying territory in the East, used all the power of its influential
directors and its army of shareholders in England to bar the London
market.

The financial policy adopted by the Canadian Pacific was unique in the
records of great railway enterprises on this continent. It was simply
to rely entirely on stock issues, to endeavour to build the road
without incurring any bonded debt. Not until the last year of
construction, 1885, were bonds based upon the security of the road
itself issued for sale. It was doubtless desirable, if possible, to
avoid the reckless methods by which so many American roads had been
hopelessly waterlogged by excessive bond issues. The memory of the
{156} St Paul and Pacific's six-million share capital as against its
twenty-eight-million bonded indebtedness was fresh in the minds of the
members of the syndicate. By keeping fixed charges low, while earning
power was still uncertain, they lessened the risk of having the road
pass out of the stockholders' control into a receiver's hands. Yet as
bonds could have been sold more easily than stock, it increased the
difficulty of finding the necessary capital. Even so, it came within
an ace of succeeding.

In pursuance of this policy the management, faced with a hesitating
market, decided upon a bold step. Late in 1883, acting in accordance
with the advice of New York and London financiers, they decided to
endeavour to make a market for the unissued stock by giving assurance
of a dividend for a term of years. They offered to deposit with the
government as trustees a sum sufficient to provide for ten years a
dividend of three per cent on the $65,000,000 stock already issued, to