# Dictionary of National Biography, 1927 supplement/Smith, Donald Alexander

​SMITH, DONALD ALEXANDER, first Baron Strathcona and Mount Royal (1820–1914), Canadian financier, the second son of Alexander Smith, a tradesman, of Archieston, by his wife, Barbara, daughter of Donald Stuart, of Leanchoil, was born at Forres, Morayshire, 6 August 1820. In 1838 his maternal uncle, a fur-trader named John Stuart, got him a clerkship in the Hudson Bay Company. He was first employed at Lachine, in 1841 was sent to Tadoussac, and in 1847 to Labrador, where he remained for the next thirteen years. In 1853 he took as wife Isabella, the daughter of a company trader, Richard Hardisty. He rose steadily in the Company's service and on his own account began operations as a financier; his colleagues trusted him with their salaries, he paid them interest and ​invested in his own name, mainly in shares of the Bank of Montreal. He became a ‘chief trader’, and in 1862 a ‘chief factor’. A few years later his interest in the Hudson's Bay Company was much enlarged, and politics and railway building made heavy demands upon his energy.
The Hudson's Bay Company was a profit-sharing enterprise, for by the deed poll of 1821 two-fifths of its profits, divided into eighty-five shares, went to officials, a chief trader holding one of these and a chief factor two. Such officials were known as ‘wintering partners’. In 1862 the capital of the company was quadrupled, and the wintering partners' interests became threatened. For some years the Canadian government had held that the company's charter did not cover all the territorial rights it claimed, and negotiations for the surrender of the trade and land monopoly were in progress.
In 1868 Smith, who had held something like a roving commission for a few years, became head of the company's Montreal department; this led the government to treat him erroneously as Canadian head of the company, and soon brought him into politics. In March 1868 a bargain was struck between the Canadian government and the company; for £300,000 and large land grants the territorial claims were bought out together with the trade monopoly. Smith, seeing that the wintering partners would suffer, began to buy the company's shares, gradually became its chief shareholder, and within three years was able with his associates to control its policy. The wintering partners, apparently unaware that he was a shareholder, asked him to represent their interests in London; in 1871 an agreement was reached there by which the traders got no share in the company's lands, and had their rights to a share of profits capitalized at a low figure. It has been claimed that Smith did everything possible for his old colleagues, but the terms of settlement make this questionable. His associations henceforth were with the shareholders, not with the local traders. He became chief commissioner of the company, in 1883 a director, and in 1889 its governor.
His entry into politics was dramatic. French half-breeds formed fully half of the scattered population in the west, just acquired by Canada. They took alarm at the arrival in 1869 of Canadian surveyors, fearing the loss of lands held only on a squatter's title. There was a tangle of intrigue, one group wanting to anglicize the west, one desiring annexation to the United States, a third working for an independent republic. The government was negligent, and unrest grew into the revolt headed by Louis Riel [q.v.]. Sir John Macdonald assumed without foundation that Smith, as the chief officer of the Hudson's Bay Company available, knew the west intimately, and sent him to negotiate. Smith reached Fort Garry (Winnipeg) in December 1869, was kept a prisoner by Riel for over two months, and could achieve little. In 1870 the rising was crushed, and Manitoba organized. Smith was elected in 1871 by Selkirk as conservative member of the federal parliament. In 1873 he took a prominent share in overthrowing Macdonald's government on the Canadian Pacific scandal; he had been counted on for support and his defection made defeat certain. The conservatives thought him a traitor and attacked him bitterly; in 1878 Macdonald interjected in the Commons ‘that fellow Smith is the biggest liar I ever met’. Smith, though a conservative, invariably tended to support every ministry in power. This, and his breach with Macdonald, kept him out of the conservative party until it took up a protective tariff. In 1879 he was unseated on an election petition, and in 1880 defeated. He re-entered parliament in 1887 for a Montreal constituency. In 1896, when the conservative party was tumbling into ruin, he was suggested as its possible leader, but he was too old and had too wide business interests to desire a position so difficult.
Railways received most of Smith's attention between 1873 and 1886. His visit to the west in 1869 led him to plan lines in Manitoba. Soon after came his big opportunity. An American railway, later the Great Northern, which held valuable land grants conditional on its completion, had twice gone bankrupt; it was the property of Netherlands bondholders, who had advanced $20,000,000 but wished to cut their losses. Two Canadians, J. J. Hill and N. W. Kittson, who lived in St. Paul, saw their chance; they approached Smith, his cousin George Stephen (afterwards Baron Mount Stephen) [q.v.], who in 1876 was president of the Bank of Montreal, and R. B. Angus, that bank's general manager. The group bought out the bondholders for a sum roughly equal to interest due on the bonds, and finished the line largely with money borrowed from the bank which they controlled. The railway prospered, and its owners voted themselves its common stock and a large ​bond issue; by 1906 they had collectively received, besides interest on their investment, about $300,000,000 in securities. From this success they, with others, turned to the Canadian Pacific. The liberal party's policy of national construction was abandoned when Macdonald came into power in 1878; in 1880 the Canadian Pacific Railway Company was organized under Stephen, and Smith, who owing to his quarrel with the conservatives did not figure openly at the beginning, soon became a director. The transcontinental line was pushed through despite great difficulties, Smith and his colleagues staking all their resources to get it completed. In November 1885 Smith drove the last spike. This made many regard him as the railway's chief builder; but, though one of the group, he was never its leader, and Stephen's was the directing brain.
In 1886 Smith was knighted, in 1897 created Baron Strathcona. In 1896 he became high commissioner for Canada; henceforward he made his home in Great Britain, and became something of an imperial figure. His great wealth allowed him to entertain more liberally than any previous occupant of the office. He gave freely to hospitals and education in Scotland, Canada, and the United States, in the last thirty years of his life distributing more than £1,300,000. He raised at his own expense a regiment of rough-riders for service in the South African War. But, though more prominent than he had been before, Strathcona had little direct influence on Canadian development during this last period of his life. He was not in sympathy or close touch with the younger liberal leaders who were in power at Ottawa after 1896, and the chief Canadian government activity in London, immigration, was not under his control. His splendid physique enabled him to remain in office long after the usual age for retirement. Till the end he attended personally to many details, and ran his office on rather autocratic lines. He showed a tendency to resent the success of other men's ideas, and largely for this reason opposed Earl Grey's plan of a central house for the offices of all the Dominions. He clung to his position when the Canadian government would not have regretted his resignation. In November 1913 Lady Strathcona died, and after a short illness his own death followed in London on 21 January 1914, at the age of ninety-three. In 1900 his patent had been modified so as to make the barony transmissible through the female line; this was done because his only child was a daughter, and in recognition of his raising of ‘Strathcona's Horse’. He was succeeded in the barony by his daughter, Margaret Charlotte, who married in 1888 Robert Jared Bliss Howard, F.R.C.S. She died in 1926, and the elder son of this marriage is the present holder of the title.
Lord Strathcona has been regarded as a great statesman and financier, of the same calibre as Cecil Rhodes, and also as the man chiefly responsible for the increased corruption of Canadian public life in the 'eighties: both estimates are excessive. The immense power of finance, and particularly of the Canadian Pacific Company, was not a beneficent force in Canadian politics; but Strathcona's personal responsibility for its exercise is unproven. That he had any far-reaching political views or any deep purpose is equally doubtful. He was led from fur-trading to politics and railway building by forces which he did not create and could hardly guide. The expansion of Canada westwards, following swiftly on federation, altered the tone of Canadian politics and the scale of Canadian business. Until he was approaching fifty years of age, Strathcona's activities had hardly reached beyond Labrador and the lower waters of the St. Lawrence; and save that he acquired manufacturing interests in Montreal he showed no realization of what was coming. A mistake of the Canadian government turned his attention to the west, and with his customary shrewdness he saw its importance. Through his whole life he was a strenuous worker, an able judge of men, apt to seize opportunity. Financially generous, he was also a good hater, but never let animosity interfere with business. Had he chosen a political career it is doubtful whether he would have succeeded in it, for he lacked the three qualities—eloquence, personal charm, and strength of conviction—one at least of which is needed in a national leader. Rhodes went into finance to achieve a political end, Strathcona into politics largely for the sake of business.
A portrait of Lord Strathcona by W. W. Ouless, painted in 1890, is in the possession of the family.
[Beckles Willson, Life of Lord Strathcona and Mount Royal, 1915; W. T. R. Preston, Strathcona and the Making of Canada, 1915; O. D. Skelton, The Railway Builders, 1916; J. Pope, Memoirs of Sir John Macdonald, 1894; Canadian House of Commons Debates.]
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