Financial stress
The CVR experienced financial difficulties at various points in its existence, which mainly arose from the effects of the worldwide Long Depression. During its construction, concerns were expressed as to whether it would result in overcapacity in providing rail traffic west of Toronto, which the Toronto Telegram noted:
The enterprise was conceived in folly and nurtured in scheming. Even were it in running order at this moment, it would starve to death for lack of support. It runs midway between the Grand Trunk and Great Western lines, and is as necessary to the welfare of Toronto as would be a sidewalk for passengers down the middle of Yonge Street with the pavement on each side.[28]
Such concerns continued to be expressed after its opening, as existing competition between the GTR and the GWR had already depressed freight rates on that corridor.
As early as 1874, it received approval to settle certain debts through exchange into shares,[29] and in 1876, it was requesting that the provincial construction subsidy of $2000/mile[30] be increased to $3500/mile.[31] In 1877, it had to obtain longer terms with respect to the bonds it had issued.[32] Existing provisions allowing municipalities that subsidized the CVR to appoint directors to its board were broadened in 1878,[33] and further provision for exchanging bonds was made in 1880[34] and 1881.[35] George Stephen played a significant role in bailing out the CVR in 1880,[36] together with a group of entrepreneurs organized by E.B. Osler, when the lack of cash prompted a strike over wages being three months in arrears.[37]
Upon its completion in 1881, these difficulties were still present, and discussions arose on the possibility of a lease to the Great Western Railway, while other discussions occurred at the same time concerning the GWR being leased to the CPR.[13] The GWR was eventually leased to the Grand Trunk Railway, and the CPR (through the Ontario and Quebec Railway) acquired the CVR following its acquisition of a 999-year lease to a railway line between Woodstock and London from the London Junction Railway.[38] The CVR was amalgamated with the O&Q in 1883.[39] In the following year, The O&Q was taken over by the CPR on January 4.[40]
In 1888, William Van Horne admitted at a meeting that the CPR had been dealing with problems arising from the original construction of the track, declaring, "It takes all our time to try and straighten out the line of the Credit Valley Railway, laid down and built by Mr. Laidlaw, because it is so crooked."[41]
