with the settler came the capitalist. The vast expansion of
these years was made possible by borrowing on a scale which neither
credit nor ambition had ever before made possible. Especially from
Britain the millions poured in as soon as Canadians themselves had
given evidence of the land's limitless possibilities. The yearly
borrowings from the mother country, made chiefly by national and local
governments and by the railways, rose to a hundred and fifty millions.
French, Dutch, Belgian, and German investors followed. American
capitalists bought few bonds but invested freely in mines, timber
limits, and land companies, and set up many factories. By the end of
the period foreign capitalists held a mortgage of about two and a half
billions on Canada, but in most cases {229} the money had been well
applied, and the resources of the country more than correspondingly
developed.

The railways were the chief bidders for this vast inflow of new
capital. It was distinctly a railway era. The railway made possible
the rapid settlement of the West, and the growth of settlement in turn
called for still new roads. In the fifteen years following 1896 nearly
ten thousand miles were built, two miles a day, year in and year out,
and the three years following saw another five thousand miles
completed. Two great transcontinentals were constructed. Branch lines
innumerable were flung out, crowded sections were double-tracked,
grades were lowered, curves straightened, vast terminals built,
steamship connections formed, and equipment doubled and trebled.

In this expansion the state, as ever in Canada, took a leading share.
The Dominion Government extended the Intercolonial to Montreal and
began a road from the prairies to Hudson Bay, while the Ontario
Government built and operated a road opening up New Ontario. The
federal policy of aid to private companies was continued, with
amendments. No more land-grants were given, and {230} when cash
subsidies were bestowed, the companies so aided were required to carry
free government mails, materials and men, up to three per cent on the
subsidy. The transcontinentals were specially favoured. The Grand
Trunk system was given large guarantees and cash subsidies for its
westward expansion, and the Government itself constructed the National
Transcontinental to ensure the opening up of the north, and to prevent
the traffic of the west being carried to United States rather than to
Canadian