George Stephen, 1st Baron Mount Stephen

George Stephen, 1st Baron Mount Stephen
George Stephen, 1st Baron Mount Stephen
Born	Template:Birth date; Dufftown, Scotland
Died	November 29, 1921 (aged 92)
Occupation(s)	Entrepreneur, financier
Known for	First president of Canadian Pacific Railway, chief financial strategist behind CPR

George Stephen, 1st Baron Mount Stephen, (5 June 1829 – 29 November 1921), initially known as Sir George Stephen, Bt from 1886 to 1891, was a prominent Canadian entrepreneur. Born in Scotland, he gained recognition in Montreal as the chief financial strategist behind the Canadian Pacific Railway and was the first Canadian to be appointed to the Peerage of the United Kingdom.

Between 1876 and 1881, Stephen held the position of President at the Bank of Montreal. He was also a generous benefactor, contributing significantly to the expansion of the Montreal General Hospital, donating more than £1.3 million to London's Prince of Wales Hospital Fund, and jointly financing the establishment of Montreal's Royal Victoria Hospital with his cousin, Lord Strathcona. His residence in Montreal's Golden Square Mile later became known as the exclusive Mount Stephen Club.

After retiring to England in 1888, Stephen divided his time between Brocket Hall and 17 Carlton House Terrace. Rising from modest origins as a stable boy, he became one of Canada's wealthiest individuals and maintained close relationships with King George V and Queen Mary.

Early years

George Stephen was born in 1829 in Dufftown, Scotland, to William Stephen, a carpenter by trade, and Elspet Smith. His mother was connected to the philanthropic Grant brothers of Manchester, who inspired the "Cheeryble Brothers" characters in Charles Dickens' Nicholas Nickleby.

Leaving formal education at fourteen, Stephen undertook various roles such as stable boy and shepherd before completing an apprenticeship as a draper and silk mercer in Aberdeen. In 1848, he relocated to London to engage in wholesale dry goods. His cousin William Stephen had already established a wholesale dry goods enterprise in Montreal, which led George to join him there in 1850.

For twelve years, George worked under William until he inherited the business in 1862. He brought his brother Francis into partnership before selling the company in 1867. By 1864, he secured election to the Montreal Board of Trade and by 1866 had launched his own prosperous wool-importing firm while investing in textile enterprises, showcasing his early business insight.

In 1866, Stephen formed a partnership with his cousin Donald Smith (later Lord Strathcona), initiating several ventures including the Paton Manufacturing Company of Sherbrooke alongside Richard B. Angus and Andrew Paton in 1868. By the late 1860s, Stephen had emerged as a principal financier in Montreal. He joined the Board of Directors at the Bank of Montreal in 1873 and ascended to its presidency in 1876, frequently interacting with financial leaders in London and New York. He stepped down as president in 1881 to concentrate on overseeing the company responsible for constructing the Canadian Pacific Railway. Additionally, he established the Canada Rolling Stock Company in 1870 as part of his railway-related investments.

Railroads

In 1877, Donald Smith introduced Stephen to James Hill, resulting in the formation of George Stephen & Associates—one of North America's most lucrative railway partnerships. This group included Hill, Smith, Hill's associate Norman Kittson, and investment banker John Stewart Kennedy. Subsequently, Montreal financiers R.B. Angus and Duncan McIntyre joined their ranks. Hill commissioned portraits of both Stephen and Strathcona; Stephen's portrait remained displayed until 2008 at Burlington Northern Santa Fe Railroad offices.

The syndicate acquired the struggling Saint Paul and Pacific Railroad in 1879 for $5.5 million amid speculation that Stephen utilized his position as President of the Bank of Montreal to secure advantageous loans. Despite media criticism, they successfully revitalized the railroad—renaming it—extended its reach to Winnipeg, and sold it in 1885 for $25 million. This achievement (excluding Kittson who retired in 1881) paved the way for their contract with the Government of Canada to construct the CPR. Stephen served as CPR's inaugural president until 1888.

Constructing the Canadian Pacific Railway

As the inaugural president of the CPR, Stephen undertook the formidable challenge of charting a route spanning 2,000 miles of difficult landscape and securing approximately $100 million in capital, with half of that amount needing to be raised. Acting on Hill's recommendation, he appointed William Cornelius Van Horne to manage the construction of three key railway segments. His collaboration with James Ross proved essential for engineering achievements. By the end of 1881, Stephen recognized that the project's magnitude surpassed initial expectations and devoted his efforts entirely to finishing the transcontinental railway alongside R.B. Angus.

To simplify matters, Stephen restricted the pool of investors, but this approach entailed significant risks and limited appeal in financial centers such as London and New York. By 1883, mounting fiscal pressures compelled Stephen to stake nearly all his personal wealth, even leveraging his Montreal residence as security. That year, Hill stepped down due to concerns over competitive interests but retained half of his shares out of loyalty. Shortly thereafter, Kennedy resigned, causing stock values to fall and complicating further fundraising. In 1884, McIntyre’s departure forced the board to purchase his shares themselves, sowing enduring discord with Stephen.

Drawing on his banking experience and sharp business insight, Stephen navigated complex funding challenges despite escalating costs from engineering difficulties and political obstacles. A turning point arrived in 1885 when he personally convinced Lord Revelstoke and Barings Bank in London to guarantee £3 million in company stock.

On 7 November 1885 at Craigellachie, British Columbia, Donald Smith hammered in the final spike of the CPR.

Throughout the entire endeavor, only Stephen, Smith, and Angus remained steadfast from the original syndicate. Their bold investment paid off handsomely, establishing what would become a leading transportation system and generating substantial wealth almost immediately.

Aftermath

Between 1882 and 1890, Stephen donated over $1 million to Sir John A. Macdonald's administration, acknowledging its vital role in ensuring the Canadian Pacific Railway (CPR) reached completion amid financial hardships. Nevertheless, he dismissed assertions that government aid alone was responsible for the CPR’s existence. Engaged in a public dispute with John Norquay regarding an unpopular monopoly clause, Stephen eventually relented in 1888 by permitting construction of branch lines south of the main CPR route. Despite his reputation as a financier, Stephen found public debate challenging and stepped down as CPR President in 1888, naming William Cornelius Van Horne as his successor.

Although financially successful overall, Stephen’s personal resources were heavily strained by his commitments to the CPR project. In contrast, James J. Hill profited more by holding onto his railroad shares while Stephen was compelled to sell much of his stake to ensure project completion. He later regretted encouraging colleagues to invest in the CPR rather than Hill’s Manitoba Railway but remained a loyal supporter of Hill throughout his career. Stephen continued serving as a CPR director until 1893 but gradually diminished both his involvement and shareholdings, even advising others to follow suit. Ironically, a significant portion of Stephen’s wealth ultimately originated from investments in Hill’s railroads.

Salmon fishing

Following his retirement, Stephen devoted himself to salmon fishing, a pastime he shared with his first wife. In 1873, he acquired a property located at the junction of the Matapédia and Cascapédia rivers, where he frequently stayed and entertained distinguished visitors, including Governors General. As an early advocate for sport fishing in the Gaspé Peninsula, he introduced many newcomers to the sport and generously contributed to the area's development. Later, in 1886, he purchased another estate at Grand-Métis and constructed Estevan Lodge. This estate was gifted in 1918 to his niece Elsie (Meighen) Reford, who transformed it into the famous Jardins de Métis (Reford Gardens).

Philanthropy

Stephen is remembered as a prominent philanthropist who directed much of his wealth toward healthcare initiatives without seeking public acclaim. In 1890, together with his cousin Lord Strathcona, he acquired the Frothingham estate in Montreal’s Golden Square Mile for the benefit of the Royal Victoria Hospital, donating it to the city under conditions that limited its use exclusively to medical education and treatment. Each contributed $500,000 to fund construction and an additional $500,000 in stock to establish an endowment following the hospital’s opening in 1893.

He also funded a wing at Montreal General Hospital and supported medical institutions in Scotland. In 1901, Stephen donated £25,000 to eliminate the debt of Aberdeen Royal Infirmary, an act that earned him the Freedom of the City of Aberdeen that same August.

Although most closely associated with the Royal Victoria Hospital, Stephen allocated the majority of his fortune to London’s Prince of Wales Hospital Fund. Working closely with the future King George V, he became its largest donor, contributing gifts totaling £1,315,000.

Upon his passing in 1921, after providing for family members and charitable causes, Stephen bequeathed £1.4 million divided among nineteen relatives—approximately £75,000 each—an amount considerably smaller than his overall charitable contributions. He left minimal charitable legacies within Canada, believing his prior donations and his enduring impact through the CPR had sufficiently repaid his adopted homeland.

Montreal to England

In 1880, Stephen engaged architect William Tutin Thomas to create an opulent mansion in Montreal's Golden Square Mile, now recognized as George Stephen House. Constructed over three years at a cost of $600,000, it was celebrated as a pinnacle of Italianate architecture. After relocating to England, Stephen’s sister Elsie Stephen and her husband Robert Meighen acquired the residence in 1900. The building subsequently became home to the Mount Stephen Club clubhouse in 1926.

By the mid-1880s, Stephen was spending more time in England. Following his retirement from the CPR in 1888, he established permanent residence there. The Stephens maintained a London home at 17 Carlton House Terrace and leased Brocket Hall near Hatfield, Hertfordshire from 1893 until his death in 1921.

Stephen was honored with a baronetcy in 1886 and became the first Canadian elevated to the Peerage of the United Kingdom in 1891 as Baron Mount Stephen "of Mount Stephen in British Columbia and of Dufftown in Scotland." This title referenced Mount Stephen peak in the Rocky Mountains near the CPR line; several CPR properties were also named after him.

As a member of the House of Lords, Lord Mount Stephen seldom spoke publicly or participated on committees. After 1894, he made only occasional visits to Canada but maintained considerable influence there, notably facilitating appointments such as Lord Minto’s governorship in 1898. From the 1890s onward, he entrusted management of his vast investments across Canada, the United States, and England to local representatives.

In recognition of his contributions, Lord Mount Stephen was appointed a Knight Grand Cross of the Royal Victorian Order in 1905.

Charlotte (1830–1896), the inaugural Lady Mount Stephen

On 8 April 1853, in London, George Stephen wed Annie Charlotte Kane (1830–1896), daughter of Benjamin Kane, an ex-officer of the Royal Engineers who served in the British protectorate over the Ionian Islands. Charlotte received her education in London and is particularly remembered for nursing Prince Leopold, Duke of Albany, back to health during a royal visit to Montreal. In 1887, she was introduced to Queen Victoria, who subsequently presented her with an oil portrait as a token of appreciation.

Lady Mount Stephen frequently entertained distinguished guests at Brocket Hall, including the future King Edward VII and the Duke and Duchess of Connaught. She was instrumental in introducing canoeing to Scotland and enjoyed fishing expeditions alongside her husband both in Canada and Scotland. She passed away in London on 10 April 1896 and was laid to rest near Brocket Hall. The couple did not have biological offspring but adopted Alice Brooke from Montreal.

Alice Maude Stephen (née Alice Brooke; died 1934), DBE, married Henry Northcote, 1st Baron Northcote, in 1873; their union produced no children. She was honored as a Dame Commander of the Order of the British Empire in 1919.

Georgiana (1864–1933), the second Lady Mount Stephen

Following Charlotte’s death, Mount Stephen remarried in 1897 to Georgiana Mary "Gian" Tufnell (1864–1933), daughter of Captain Robert George Tufnell R.N. and granddaughter of Sir William Curtis, 1st Baronet. Gian’s aristocratic connections included being the aunt of George Glyn, 2nd Baron Wolverton, and serving as Lady-in-Waiting to Princess Mary Adelaide, Duchess of Teck—a frequent visitor to Brocket Hall and mother of Queen Mary. This relationship led to a lasting friendship between Gian and Queen Mary; the couple regularly hosted King George V and Queen Mary at their estate. The Duchess of Teck gave her endorsement to their marriage.

In March 1900, Gian endured the loss of a stillborn daughter; no further children were born from this marriage. She preferred life at Brocket Hall over their London residence on Carlton House Terrace and earned high regard within Hatfield for her charitable endeavors. In 1919, she was appointed Dame Commander of the Order of the British Empire for her contributions to Queen Mary’s Needlework Guild—the same year her stepdaughter Alice received this distinction.

Gian presented Queen Mary with a diamond rivière necklace that was later worn by Princess Margaret on her wedding day. Lady Mount Stephen died in 1933 at Cuckfield, Sussex. With no direct heirs from either marriage, Lord Mount Stephen’s titles became extinct.

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