In 1880 the John A Macdonald and the Conservative Government of Canada found a group of Canadians who were willing to under take the building of a transcontinental railway; the Canada to the Pacific Railway. This would fulfill the promise to British Columbia upon her entry into Confederation. The group included the railway promoter J.J. Hill, Donald Smith of the Hudson's Bay Company, and George Stephen of the Bank of Montreal. Negotiations were successfully undertaken, and in 1880 the syndicate was given the contract for the Canadian Pacific Railway.
The company combined predominantly Canadian personnel with the somewhat delusive appearance of international financial backing. Reliance was still placed on the combination of government subsidies and extensive land grants. The cash grant was $25,000,000. The land grant was reduced to 25,000,000 acres, but this was offset by provision for indemnity selection, which allowed the syndicate to choose fertile land in place of any part of its grant that proved unsuitable for settlement. In addition the government handed over to the company the 700 miles of road already built, allowed its materials to come in duty free, exempted it from taxes on its land for twenty years and on its property forever, forbade the construction of any competing line to the south or southwest during the next 20 years, and promised that there would be no regulation of rates until the company was earning 10 percent.
Canada: A Political and Social History. Edgar McInnis. Holt, Rinehart and Winston, New York, 1962 p.332
For Surrey the most significant section in this contract was known as the monopoly clause; the forbidding of construction of any competing line to the south or southwest during the next 20 years. The CPR contract was signed in 1881, the railway was to be completed by 1891 and the monopoly clause was to be in effect until 1901. When the Canadian Pacific Railway (CPR), completed in 1885, chose the north side of the Fraser River as its route and Vancouver Harbour as its terminus, Surrey lost the benefits of a railway connection.
By 1889 the New Westminster Southern Railway (NWSR), a subsidiary of the Great Northern Railway (GNR) was under construction. In 1887 a charter was granted by the provincial government to build a railway from a connection (to the, as yet to be built, Fairhaven and Southern) at Blaine to Liverpool on the Fraser River. After considerable opposition from Ottawa, as a result of the monopoly clause, the clearing of the right of way in Surrey was under way in April 1890. By December 1890 the track was completed from Liverpool (Port Mann) to the Nicomekl River south of Cloverdale. On February 14th, 1891 two special trains met at the border to celebrate the driving of the last spikes. An excursion train ran the 23.51 miles from Liverpool on the Fraser to the border. The northern terminus of the NWSR was on the south bank of the Fraser at Liverpool. Later the terminus was extended to Brownsville where a ferry connection to New Westminster existed. Both passengers and freight shared the ferry across to New Westminster with the Fraser Valley road traffic. To the south the NWSR connected at Blaine with the GNR line.
For the next 10 years the NWSR terminus was Brownsville. The bottleneck of road and rail transportation south of the Fraser River was the ferry link from Brownsville to New Westminster. In 1901 the CPR's monopoly clause expired and on April 24th Premier James Dunsmuir tabled a bill to construct a combined railway and general traffic bridge at New Westminster. The New Westminster Bridge was formally opened on July 23rd, 1904. The bridge, a low–level swing span to permit continued river traffic, was double–tiered, the lower level carrying the railway and the upper level, two eight foot lanes, for foot and vehicular traffic. Tolls were exacted on all traffic to help defray construction costs.
The anticipation of access across a new bridge over the Fraser from Surrey to New Westminster resulted in a railway boom. Surrey was to be the beneficiary of most of this new construction.
The immediate result was a small railway, the Victoria - Sidney Railway, operated a short line from the Saanich Peninsula into the City of Victoria. A syndicate proposed utilizing this link with a fleet of high class ferries operating across Georgia Strait linking to a proposed railway with a mainland terminal, near Ladner, to connect with Cloverdale. In 1903 the Victoria Terminal Railway and Ferry Company (VTRF), opened its 17.49 miles of road from Port Guichon, just west of Ladner, to Cloverdale where it connected with the New Westminster Southern.
James Jerome Hill was a Canadian by birth. He had made money and gained experience with railway construction in the United States. He along with Donald Smith, and George Stephen had made money building a rail line from Winnipeg to St Paul, and south. It was this success that drew John A. Macdonald's attention. Hill had been part of the original CPR syndicate and was a CPR Director. He had invited Van Horne to come to Canada to join the CPR. Hill disputed the route east of Winnipeg. He wanted the CPR to be located through the United States via St. Paul and east to a connection with the Grand Trunk. Van Horne and the CPR Directors wanted an all-Canadian route north of the Great Lakes. This lead to Hill's leaving the CPR and Canada.
The railway which was to have the most significant impact on Surrey was the Great Northern. The Great Northern Railway (GNR) was a transcontinental railway running through the northern US States. Its president was James Jerome Hill. Hill had been part of the original syndicate that had obtained the 1881 CPR contract. He had a falling out with the construction superintendent William Cornelius Van Horne. Hill wanted the western link of the CPR to use his railway through the United States via St. Paul and east. This would avoid the costly construction along the rocky and largely barren shore of Lake Superior and bringing traffic and prosperity to Hill's own lines in the American Midwest. Van Horne, who wanted an all Canadian line, disagreed and Hill left the CPR swearing revenge against Van Horne and the CPR.
William Cornelius Van Horne was an American who had gained his railway construction expertise in the United State. He had been invited to Canada by James Hill to act as the construction superintendent for the CPR. Van Horne believed that the Canadian Pacific should be an all–Canadian route. He also believed that the CPR's future lay in the west and thus southern British Columbia became one of his greatest concerns. It was these beliefs that brought the CPR into conflict with Hill's GNR.
When J.J. Hill first crossed the Canadian border with his subsidiary New Westminster Southern in 1891, the Great Northern Railway began a relentless war with the Canadian Pacific Railway for control of southern British Columbia's rich freight trade. The twenty years which followed produced some of the most intense and violent rivalry in railway history. p148
With his Great Northern mainline under construction, Hill could not muster the capital to build the costly bridge needed to cross the half–mile wide Fraser River south of Vancouver. Hill's railway was, therefore, twenty miles short of Vancouver and twenty miles short of inflicting any serious wounds on the CPR. p24
McCulloch's Wonder: The Story of the Kettle Valley Railway. Barrie Sanford Whitecap Books. Vancouver, BC 1978.
James Hill saw the VTRF railway as an opportunity to advance his plans for an east west continental railway that would link into GNR rail lines in the Kootenays to form a competing Canadian transcontinental railway. The VTRF line, from Port Guichon to Cloverdale, was purchased by the Vancouver, Victoria and Eastern Railway and Navigation Company (VVER) in 1907. The press quickly shortened this to its initials VV&E. The navigation service was quickly abandoned when the CPR began direct steamship service between Victoria and Vancouver. This GNR subsidiary extended the line from Cloverdale to Huntingdon in 1909. The line was intended to be part of a through route from Vancouver to the Kootenays. However, the completion of the BC Electric Railway in 1910 and the growing competition from road transport brought a rapid decline in service. The VV&E continued to operate its trains on the mainland but on a very infrequent basis thus earning the company its nickname Molasses Limited. By 1906, passenger trains from Port Guichon to New Westminster ran only on Mondays.
Surrey was impacted by and benefited from this competition. Competition in the valley continued to grow and in 1910 the completion of the BC Electric Railway from Vancouver as far east as Chilliwack severely impacted the VV&E. The competition with the CPR's Kettle Valley Line to control the trade of the Kootenays was dealt a major blow in the 1911 Federal Election. Hill had hoped that Free Trade would eventually allow him to divert the interiors'; resource industries products southward towards Spokane and his Great Northern System. Sir Wilfred Laurier had fought the 1911 election on the issue of Free Trade with the United States. The campaign was dominated by latent anti–Americanism, along with fears that the prosperity of the first decade of the 20th Century could be eroded by free trade. This and the opposition from the CPR that foreshadowed its demise if trade links became north south following the natural geographic alignment. The result was the resounding defeat of the Laurier's Government. Laurier's defeat also ended J.J. Hill's dream of seeing train load after train load of good flowing over the international border on his railways.
The result of the defeat of Canadian–US Free Trade was the near immediate demise of the VV&E in British Columbia. Hill's dream of an east west continental railway ended. Vancouver, Victoria and Eastern (VV&E) Cloverdale to Huntingdon which was officially opened 1909 found it could not compete with the BC Electric Railway opened in 1910, along with increased road traffic. Service declined steadily and the line was officially abandoned in 1929.
In 1907 the Great Northern Railway (GNR) began re–routing its main line from Blaine to the New Westminster Bridge to follow the coast line of Semiahmoo and Boundary Bays. The original rail line, operated under the subsidiary the New Westminster Southern Railway (NWSR).
It was the 1880 political decision (the monopoly clause) that delayed the railway boom period is Surrey until after 1901, and it was the Free Trade Election of 1911 that ended the Canadian east west railway dreams of James Hill and his Great Northern system.
Canada: A Political and Social History. Edgar McInnis. Holt, Rinehart and Winston, New York, 1962
McCulloch's Wonder: The Story of the Kettle Valley Railway. Barrie Sanford Whitecap Books. Vancouver, BC