Friday, August 11, 2006

Donald Alexander Smith: Lord Strathcona

b. Aug. 6, 1820, Forres, Moray, Scotland
d. Jan. 21, 1914, London, England

First Baron of Strathcona and Mount Royal East, Donald Alexander Smith was a great Victorian entrepreneur. While making a large fortune for himself, he used business and politics to help cobble together British North America.

To understand his weight in international business, it is important to remember a grant (in effect, articles of incorporation) that King Charles II issued in 1670 to the Company of Gentlemen Adventurers Trading into Hudson Bay. The grant went to his cousin, Prince Rupert, and a small group of Rupert’s business associates.

Today known as the Hudson’s Bay Company or The Bay, the organization’s charter provided for a monopoly over trade in the lands fed by rivers flowing into Hudson Bay. The equivalent of 40 per cent of modern Canada, that vast territory was known as Rupert’s Land until after Canadian Confederation began in 1867. Constructed upon trade in premium animal pelts from cold northern climates, it was history’s largest private commercial empire.

The most notable of many notable men to rise through company ranks, Smith began his career at The Bay in 1838, as a clerk. Fifty years later, he was the company’s major shareholder, and he served as governor for another 25 years, until his death in 1914.

Smith was born in Scotland in 1820, knighted in 1886 and granted a peerage in 1897. He was a fur trader, financier, railway promoter and statesman. He was also a politician, and he was not averse to using Parliament for personal advantage.

A towering figure in Canadian business and politics in the formative years of the nation, during his long life Smith displayed a brilliant, restless energy. Dour by temperament, his fur-trading years in the cold, rugged north made him as tough as nails. The Bay was a strict taskmaster.

Smith understood the company’s role in Canadian history. When he received the keys to the City of Edinburgh in 1903, he gave a thoughtful explanation of its impact – although one that suffers from political correctness in present-day Canada. The subject of his speech was “young Scotsmen – their capacity for hard work.”

According to Smith,
“The men who have been connected with the administration of the (Hudson’s Bay) Company for the last two centuries have been mostly drawn from Scotland. They cut themselves away from the world for long periods; they looked after the interests of the country, and became friendly with the aborigines. But for their watchfulness and their determination to look after British interests, it is quite certain that Western Canada today would not be a part of the Empire. And it is equally certain that the transfer of the Hudson's Bay territory to Canada could not have been carried out so readily and with so little friction, but for the civilising influence which the Company had exercised for so many years."

Smith was heavily involved in the negotiations through which The Bay ceded its lands to Canada in 1869, and he became Ottawa’s negotiator when local Métis leader Louis Riel staged a rebellion in reply. The following year Smith was elected to Canada’s House of Commons by a political riding in the new province of Manitoba; this was the beginning of his political life. He simultaneously served as chief commissioner for The Bay.

Smith was a key figure in business within the feisty frontier province, which had been home to fur-trading forts before becoming a small colony. He created a monopoly on riverboat freight traffic from Minnesota to booming Manitoba, which was now being settled through that adjacent American state. His railroading experience began when he and his partners successfully promoted the St. Paul, Minneapolis and Manitoba Railway.

Early in his years in Parliament, Smith played a decisive role in bringing down the federal government of John A. Macdonald, a fellow Conservative. At issue was the Pacific Scandal (1873), linked to an early proposal for a railroad to the west coast.

After Macdonald returned to power, he resurrected the railroad project, which went forward in 1880 with Smith’s financial support. Smith created a syndicate controlled by five Canadians (including himself) who directly owned only 20 per cent of the shares in the Canadian Pacific Railway (CPR). Prime Minister Macdonald remained angry because of Smith’s withdrawal of support during the Pacific Scandal, so Smith was not on the board of the new enterprise.

The CPR connected Canada’s commercial heartland in southern Ontario and Québec to the Pacific Ocean. This meant cutting through the stone, forests and swamp of the vast Canadian Shield; building through the flat, unsettled prairies; raising trestles and dynamiting tunnels through the western cordillera. So doing, it tied the southerly perimeter of what had once been Hudson’s Bay Company lands into the Canadian orbit, and therefore into the Empire.

In a way, in 1885 the railroad itself vindicated Smith of Macdonald’s wrath. In that year, he became the central figure in Canada’s best-known photograph. Surrounded by a crowd of railroad workers in southeastern British Columbia, he was driving the last spike in the world’s longest stretch of railroad.

Always faithful to both Canada and the Empire, at age 69 Smith became Canada’s High Commissioner to London. Eleven years later, he equipped and maintained a regiment for the Boer War (1899-1902). Also known as the Royal Canadians, Lord Stathcona's Horse Regiment celebrated its centennial anniversary in 2000.

Lord Strathcona supported educational and philanthropic causes. He was a patron of McGill University in Montreal, where he founded the Royal Victoria College for women. In addition, he served as rector and chancellor of the University of Aberdeen.
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