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  in his own name, mainly in shares of the Bank of Montreal. He became a ‘chief trader’, and in 1862 a ‘chief factor’. A few years later his interest in the Hudson's Bay Company was much enlarged, and politics and railway building made heavy demands upon his energy.

The Hudson's Bay Company was a profit-sharing enterprise, for by the deed poll of 1821 two-fifths of its profits, divided into eighty-five shares, went to officials, a chief trader holding one of these and a chief factor two. Such officials were known as ‘wintering partners’. In 1862 the capital of the company was quadrupled, and the wintering partners' interests became threatened. For some years the Canadian government had held that the company's charter did not cover all the territorial rights it claimed, and negotiations for the surrender of the trade and land monopoly were in progress.

In 1868 Smith, who had held something like a roving commission for a few years, became head of the company's Montreal department; this led the government to treat him erroneously as Canadian head of the company, and soon brought him into politics. In March 1868 a bargain was struck between the Canadian government and the company; for £300,000 and large land grants the territorial claims were bought out together with the trade monopoly. Smith, seeing that the wintering partners would suffer, began to buy the company's shares, gradually became its chief shareholder, and within three years was able with his associates to control its policy. The wintering partners, apparently unaware that he was a shareholder, asked him to represent their interests in London; in 1871 an agreement was reached there by which the traders got no share in the company's lands, and had their rights to a share of profits capitalized at a low figure. It has been claimed that Smith did everything possible for his old colleagues, but the terms of settlement make this questionable. His associations henceforth were with the shareholders, not with the local traders. He became chief commissioner of the company, in 1883 a director, and in 1889 its governor.

His entry into politics was dramatic. French half-breeds formed fully half of the scattered population in the west, just acquired by Canada. They took alarm at the arrival in 1869 of Canadian surveyors, fearing the loss of lands held only on a squatter's title. There was a tangle of intrigue, one group wanting to anglicize the west, one desiring annexation to the United States, a third working for an independent republic. The government was negligent, and unrest grew into the revolt headed by Louis Riel [q.v.]. Sir John Macdonald assumed without foundation that Smith, as the chief officer of the Hudson's Bay Company available, knew the west intimately, and sent him to negotiate. Smith reached Fort Garry (Winnipeg) in December 1869, was kept a prisoner by Riel for over two months, and could achieve little. In 1870 the rising was crushed, and Manitoba organized. Smith was elected in 1871 by Selkirk as conservative member of the federal parliament. In 1873 he took a prominent share in overthrowing Macdonald's government on the Canadian Pacific scandal; he had been counted on for support and his defection made defeat certain. The conservatives thought him a traitor and attacked him bitterly; in 1878 Macdonald interjected in the Commons ‘that fellow Smith is the biggest liar I ever met’. Smith, though a conservative, invariably tended to support every ministry in power. This, and his breach with Macdonald, kept him out of the conservative party until it took up a protective tariff. In 1879 he was unseated on an election petition, and in 1880 defeated. He re-entered parliament in 1887 for a Montreal constituency. In 1896, when the conservative party was tumbling into ruin, he was suggested as its possible leader, but he was too old and had too wide business interests to desire a position so difficult.

Railways received most of Smith's attention between 1873 and 1886. His visit to the west in 1869 led him to plan lines in Manitoba. Soon after came his big opportunity. An American railway, later the Great Northern, which held valuable land grants conditional on its completion, had twice gone bankrupt; it was the property of Netherlands bondholders, who had advanced $20,000,000 but wished to cut their losses. Two Canadians, J. J. Hill and N. W. Kittson, who lived in St. Paul, saw their chance; they approached Smith, his cousin George Stephen (afterwards Baron Mount Stephen) [q.v.], who in 1876 was president of the Bank of Montreal, and R. B. Angus, that bank's general manager. The group bought out the bondholders for a sum roughly equal to interest due on the bonds, and finished the line largely with money borrowed from the bank which they controlled. The railway prospered, and its owners voted themselves its common stock and a large 497