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The Pacific Great Eastern Railway and British Columbia

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Title: The Pacific Great Eastern Railway and British Columbia
Author: Stephenson, Paul John
Degree: Doctor of Philosophy - PhD
Program: Interdisciplinary Studies
Copyright Date: 2012
Issue Date: 2012-04-02
Publisher University of British Columbia
Abstract: On February 20, 1912, Premier Richard McBride announced the creation of the Pacific Great Eastern (PGE) railway. The line was to be built from Vancouver, 460 miles northeast to Prince George, passing through Squamish, Lillooet, Williams Lake, and Quesnel. McBride committed government guaranteed bonds of $35,000 per mile or $16,100,000 for construction. The construction contract was awarded, without contest, to Foley, Welch and Stewart (FW&S) with a contractual completion date of July 1, 1915. By November 30, 1915, however, FW&S had exhausted all the bond money but had only completed 164 miles of track between Squamish and Clinton. On February 22, 1918 the BC government assumed control of an insolvent PGE project and immediately became liable for interest charges of more than $900,000 annually plus repayment of the principal. This study examines a wide range of primary documents, including a Legislative Select Committee report, British Columbia statutes, Royal Commissions, financial audits, mortgage documents, reports commissioned by the Legislative Assembly, legal records, political debates and newspapers. Comparative, statistical, deductive and economic methodologies are used to support synthesized analysis establishing the culpability of Premier McBride in the mismanagement of the PGE. Statistical analysis of the private and social values of the railway demonstrate that it was not feasible as a private venture and the amount of necessary investment to realize its social value made it an irresponsible project for McBride to initiate given the limited financial capacities of BC in 1912. This study concludes that the failure and ultimate insolvency of the Pacific Great Eastern Railway by 1918 was the result of mismanagement by Premier McBride in letting contracts which were incentive-incompatible with public interests and acted in violation of sections of the Railway Act; opportunistic contractors who, in the interests of maximizing profit, exploited poorly-crafted contracts and provincial government ineptitude; and economic conditions which, prior to 1912, created optimism about the PGE but after 1912 indicated that the project was not viable.
Affiliation: Arts, Faculty of
URI: http://hdl.handle.net/2429/41911
Scholarly Level: Graduate

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