“On track to make a real rail fortune”.
IF Donald Smith, Lord Strathcona, from Forres, was Canada’s richest man in the 1900s, his younger cousin George Stephen, from Dufftown, was not far behind. And as 1st Baron Mount Stephen, he was the first Canadian to attain a peerage.
His origins were humble. He was born in Dufftown on June 5, 1829, the oldest of eight children of William Stephen, a carpenter, and Elspet, daughter of John Smith of Knockando.
George was educated at the parish school of Mortlach but left at the age of 14 to become a stable boy. At 15 he was apprenticed to an Aberdeen draper and silk mercer, before moving to London in 1848 – first working for a draper and then at a wholesale dry goods house.
At the age of 21, he emigrated to Canada to work for his cousin William Stephen, a Montreal draper, and on his cousin’s death in 1862 became sole proprietor. Driven by a desire to succeed, and his strong work ethic, Stephen demonstrated a strong business acumen. By 1866 he was running his own successful wool-importing company and investing in other textile businesses.
With his business booming, he started buying shares of the Bank of Montreal. His abilities saw him appointed director in 1873 and president of Canada’s largest bank in 1876 – and the most powerful financial figure in the country.
Stephen revolutionised the bank’s thinking, investing in the high yield, but high-risk business of railways. The first venture was the St Paul and Pacific railroad, a group of six investors, including his cousin Donald Alexander Smith from Forres, taking the risk and making their fortunes as it grew in to the St Paul, Minneapolis and Manitoba railroad.
Stephen, as chief financier, headed the group that built the Canadian Pacific Railway (CPR). By feigning reluctance to accept the challenge from the Canadian Government, Stephen drove down the terms to the group’s advantage, but even then the challenge was a mammoth one – to drive the railway through the Rockies to British Columbia.
As president, Stephen little anticipated the enormous difficulties, natural, financial and political, facing the new company. He had underestimated the construction costs. From January, 1884, to April, 1885, his resourcefulness was put to the test – at the edge of bankruptcy, the railway was bailed out by a Government guarantee.
In November, 1885, the last spike was driven at Craigellachie, British Columbia, and the country finally tied by rail. To a significant extent, George Stephen from Dufftown was the person most responsible for the completion of the Canadian Pacific Railway and the opening up of Canada to new settlers.
But it was the St Paul, Minnesota, and Manitoba railroad that was more profitable and which gathered more of his attention. By 1888 he resigned as president of the CPR.
In 1891 he became Baron Mount Stephen, the title derived from a mountain in the Kicking Horse River Valley of British Columbia, previously named in his honour. In 1892 he made his permanent home in England, at Brocket Hall in Hertfordshire.
Towards the end of his long life he turned his attention away from business, giving generously to hospitals in London, Montreal, Aberdeen and his native county.
George Stephen married Charlotte Annie Kane on March 8, 1853, but she died in 1896. They had one adopted daughter, who married Baron Northcote.
Stephen married Georgina Mary Tufnell in 1897. She had been lady-in-waiting to Princess Mary Adelaide, Duchess of Teck, mother of Queen Mary, and Lord Mount Stephen and his second wife regularly entertained the Queen at Brocket Hall.
George Stephen, the boy from Dufftown who changed the face of Canada, died on November 29, 1921, his barony but not his legacy becoming extinct on his death.
Today his contribution is commemorated by a plaque on Dufftown Tower.
