Over its first 20 years, Canada was routinely running current account deficits of between 7 and 10 per cent of gross domestic product (GDP), financed by foreign borrowing. This was not a problem, of course, as the borrowing was being used to increase the economy’s capacity.
To complete the railroad, the government turned to a group that included Donald Smith—also known as Lord Strathcona—and his cousin George Stephen, president of the Bank of Montreal and, as it happens, an ancestor of mine. (Stephen is my mother’s family name.)