Colonel Baker's Recollections
Crows Nest Coal Company By Col. James Baker
In 1887 I was discussing with William Fernie, an old time miner and former Gold Commissioner for Kootenay, Dr. Dawson's geological report where he mentioned the discovery of an 18-inch [.45-m] seam of coal in the Crows Nest Pass and gave his opinion that from the formation there would probably be discovered extensive coal fields.
Fernie then told me that some years previously when he and his brother were cutting out a trail through the Crows Nest Pass, he had discovered a 14-foot [4.3-m] seam of coal not far from the one Dr. Dawson had discovered.
I then formed a small syndicate including the two Fernies and others for the purpose of exploring for the 14-foot seam of coal and William Fernie was employed at wages for the purpose. He could not find the 14-foot seam but in searching for it found one of 30 feet [9 m] and after that several other seams and eventually the 14-foot seam turned up.
Those were the Martin Creek seams and they form the Upper Coal Fields.
In my trips up there I had noticed what I thought were leads lower down along Elk River, but their number and length made me doubtful. However the next year I sent Fernie to explore and he discovered no less than 12 seams of coal one above the other running for miles parallel with Elk River; all the leads I had seen were in fact coal.
I instructed Fernie to follow those leads to the termination of the sandstone formation south which was about six miles below Morrissey Creek, and north as far as Coal Creek.
This he did and accurately located the outcrop of the coal and we thought it terminated at Coal Creek.
We the syndicate, then subscribed sufficient money to buy the land located along the outcrop of the coal from Morrissey Creek to Coal Creek and also the upper coal fields at Martin Creek. Amounting in all to 11,000 acres [4451 ha]. The land was purchased under the Land Laws for the time being at one dollar per acre. As at that time there were no Land Laws for coal lands. As the land was useless without a railway we explored the Pass to Lethbridge and found it was by far the easiest along the whole length of the Rocky Mountains in British Columbia.
In 1888 the Syndicate was formed into TWO companies. One the Crows Nest Railway Co. and the other the Crows Nest Coal Co. the latter holding the 11,000 acres [4450 ha] of coal lands.
A railway charter was applied for and obtained from the Provincial Legislature.
I visited New York, London and Montreal and found it was useless to attempt to float the railway without a large land grant.
In 1889 we made further explorations for coal and found that the outcrop of the lower fields extended North for about 18 miles [30 km] up to and beyond Michel Creek, down which the railway route must be made.
In 1890 an application was made to the Provincial Government by the Crows Nest Railway Co. and also by four other railway companies for a grant of 20,000 acres per mile [5 029 ha/km] of railway. The Crows Nest Line specified also the whole of the coal lands as part of the 20,000 acres per mile.
The grant was agreed to by the Railway Aid Bill of 1890, without a division.
Time went on and it is needless to enumerate my exertions to obtain capital for building the railway in various parts of the world; but it could not be obtained although the whole of the coal lands and railway charter were offered on very reasonable terms. At last an extension of time was asked for and granted by the Legislature without a division. As time went on and another extension was required by the company of which I was President.
I refused to ask for this extension - in the month of October - unless the Company could obtain funds for getting on immediately with the survey and construction of the railway and guarantee to complete it. Accordingly, negotiations were set on foot with capitalists in Toronto and Montreal by which they were to receive a one third interest in the Coal Company and the Railway Company on condition o putting up $40,000 cash immediately to commence working surveys and giving satisfactory guarantees that they would prosecute the line to completion in the spring.
The $40,000 was subscribed and the agreement signed and the survey commenced in November. In February the House met and a further extension of time was obtained for the building of the railway. During the whole of this time the coal seams were being explored. The whole of the $40,000 was expended on the railway by the time the House met in February.
The new financiers who had been admitted into the Company continued to get on with the railway up to the mid-summer after the Session, but they then announced to the company that on account of the great financial depressions they could not carry out their agreement to finish the railway. They had cut out the right of way through the Crows Nest Pass and got out a large number of ties besides making the location survey. We found it useless to go to law with them as they had completed a part of their contract.
Eventually arrangements were made with the C.P.R. (through the influence of Messrs. Cox & Jeffray) to take over the railway charter and build the line, which they agreed to do provided they could get a subsidy from the Dominion Government. Messrs. Cox & Jeffray came into the Coal Company and had a fourth share of the whole property.
By the agreement with the C.P.R. that Company was to pay the Coal Company $100,000 for the charter, which sum was to form working capital for the mines and they were also to hand over the coal lands attaching to the railway land grant and amounting to about 400,000 [162 000 ha] useful only for timber, for the mines.
The C.P.R. retained 6000 acres [2428 ha] of the best Coal lands on condition that they should not work it so long as the Coal Co. provided coal at a profit not succeeding 75 cents a ton. The Dominion Government granted the C.P.R. $11,000 per mile [$6,837/km] to build the lines, but stipulated that 50,000 acres [20 235 ha] to be selected by the Dominion Government out of the coal lands should be held by the Dominion but not worked so long as the Coal Company provided cheap coal.
Throughout all these years the Coal Company paid taxes on the 11,000 acres [4 451 ha] of coal lands.
About 1894, the Provincial Government passed an Act fixing the price of coal lands at $5.00 per acre [$12.35/ha] and a royalty of 5 cents per ton on all coal mined and sold.
The Tax Collector assessed the Crows Nest Coal lands at $10.00 per acre [$24.71/ha] and the Company naturally appealed as the Government price was on $5.00 and at that time the lands were lying idle for want of a railway.
The Company has paid many thousands of dollars as taxes, and they are now paying $50.00 per day as royalty.
The company has already expended $750,000 on developing the coal mines, erecting coke ovens, etc, and they will spend $1,000,000 more next year for the same purpose. The Company has not yet received a cent of dividend on the capital invested.
The railway and development of the coal mines have been and will be of immense benefit to the Mining Industry of the Province, and the Company after years of anxiety and risk of loss of capital subscribed naturally expects to make a good thing out of the enterprise. I may certainly claim the credit of inaugurating and of piloting the business to a successful termination; it cost thirteen years of labour, hard work and anxiety and if it had not been for this the Crows Nest Pass would have been only a name and neither railway nor coal would have been heard of.
It is estimated that in two years' time the Coal Company will have a market for over 3,000 tons [2 700 tonnes] of coal and coke per day and by that time they will have invested $2,250,000 in the Province. The royalty on the coal the Company will then pay to the Province will be about $50,000 a year, besides taxes. By the arrangements made the Company is bound to sell cheap coal.
It should be remarked that it was the Legislature which granted the charter and the extensions of time, land grant, etc. And that no division was ever taken on the subject.
(Sgd.) James Baker. March 29th, 1900.
Source: Document in the British Columbia Archives: I/GB/GR/M/729