On November 27th, 1893, the Alberta Railway & Coal Company (AR&CC) leased the narrow gauge line from Dunmore, near Medicine Hat, to Montana Junction, just outside of present day eastern limits of Lethbridge, to the Canadian Pacific Railway (CPR). Part of the agreement would include upgrading the track to standard gauge to accommodate the CPR rolling stock. The portion mentioned would include a third rail, so narrow gauge trains could still access the line that ran south to Great Falls, Montana. The CPR would purchase the entire line from Dunmore to Montana Junction in December 1897.
Construction of the narrow gauge line by the Northwest Coal & Navigation Company (NWC&NC) occurred in the spring of 1885 and ran from Coalbanks (present day Lethbridge) to Dunmore, 110 miles to the east. By August 25th, work was complete, and the next day Engineer Thomas McPherson, pilot of the sternwheeler Alberta, drove the first narrow gauge locomotive in from Dunmore. The arrival was commemorated with a photograph of the Baldwin locomotive and tender, with McPherson peering from the engine’s window. Jack Callahan was stoking the fire; as engineer on the CPR’s Countess of Dufferin, Callahan was the first locomotive pilot in western Canada. A few days later, McPherson’s train returned to Dunmore with twenty full gondolas of mined coal which was unloaded via an overhead coal dock to the waiting CPR standard gauge cars below. On October 19th, the thin iron road was officially opened up for traffic – just months before the CPR finished its transcontinental railway with the hammering of the last spike at Craigellachie, British Columbia on November 7th, 1885.
The NWC&NC’s original intent had always been to extend the railway line west to Fort MacLeod and even beyond – they applied for and received a federal charter that would take them straight to Hope, BC via the Crowsnest Pass, which if played out, would give the firm additional revenue from shipping cattle from the numerous ranches in that district. With the discovery of coal and other hard rock minerals in the Crowsnest Pass and Kootenay areas, the stakes were raised considerably as other competitors were eyeing up the region – CPR of course, as well as the US based Great Northern Railway, the Grand Trunk Railway and also the Canadian Northern Railway. With the recent discoveries, CPR seriously considered building a second line into the mountains. With that being said, they began pushing south from Revelstoke, British Columbia and connecting with Nelson via steamboat.
Despite having the charter, the government dragged its feet on giving Elliot Galt the final approval to proceed. The hesitancy of the government added to the straining relationship the Galt’s had with CPR – trying to stave their main competitor away from dueling rail ambitions, while retaining their own coal business. By penetrating the coal rich Crowsnest Pass and Elk Valley, Elliott hoped to exploit these new fields and increase his company’s usefulness to the CPR. Armed with the government’s blessing, all he needed was money. And lots of it!
The CPR’s general superintendent, William Van Horne, was wary of his smaller rival’s shortcomings and their new Montana connections and told the Prime Minister of his concerns of “granting of a charter through the Crowsnest Pass to any company that may possibly fall under American control.” That was a veiled threat to Great Northern Railway and its president Canadian J.J. Hill – Van Horne’s cross border rival and personal enemy. Van Horne was playing the Dominion heartstrings to scare the Canadian government, but of course, he wanted the Crowsnest as a jewel in the CPR crown.
By 1893, financial circumstances were assaulting the Alberta Railway & Coal Company (AR&CC) on all sides. At both Dunmore and Great Falls the narrow gauge railway restrictions bottle necked coal deliveries. The narrow to standard gauge coal transfer facilities were unable to feed the hungry Canadian Pacific Railway & Great Northern Railway’s needs fast enough. These circumstances revealed that Elliott Galt was not going to have the means to build the Crowsnest line. As a result, he then negotiated with CPR President Thomas George Shaughnessy to lease the Dunmore – Lethbridge line to them. As a sweetener, the CPR agreed to purchase more coal. Recall, a third rail was retained between on the one section, so the AR&CC narrow gauge rolling stock could still access the American line. As well, the 1890 Crowsnest Pass charter was included as a lease to the CPR – the actual sale would take place four years later in 1897.
On Nov 23rd 1893, CPR cars entered Lethbridge for the first time. Despite being a partial surrender of its transport control, the AR&CC benefited through the increased carrying capacity of the full size unit cars and a decrease in carrying costs, culminating in an increase in market share. However, the control the AR&CC had on the local railway scene loosened and a new era of railway development would be soon take place.
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