Donald Smith had developed an interest in…

Donald Smith had developed an interest in railway expansion through his work with the Hudson's Bay Company (HBC), and in 1875 is among the incorporators of the Manitoba Western Railway.

He is also a partner in the Red River Transportation Company.

Politicians are allowed to serve in both the provincial and federal parliaments in this period of Manitoba history, and Smith had been elected to the Canadian House of Commons for the newly formed riding of Selkirk in early 1871.

He had sat as an Independent Conservative, and initially supported the government of Sir John A. Macdonald.

Easily reelected in 1872, Smith is a strong defender of HBC interests in the House of Commons, and also speaks for issues concerning Manitoba and the Northwest.

He helps create the Bank of Manitoba and the Manitoba Insurance Company during this period, assisted by banker Sir Hugh Allan.

In 1872 Smith had been appointed in the first group of members of the Temporary North-West Council the first governing assembly of Northwest Territories.

Smith is one of the few people who serves on two provincial / territorial legislatures and the federal parliament at the same time.

Smith had broken with Macdonald in 1873, after the Prime Minister had delayed reimbursement for Smith's earlier expenses in Red River.

Smith had voted to censure the government in a motion over the Pacific Scandal, and was thereby partly responsible for the government's defeat.

Smith remains an Independent Conservative, but his relations with the official Conservative representatives will often be strained in later years.

Manitoba had abolished the "dual mandate" in 1873, and Smith resigns from the provincial legislature in early 1874 (the first person to do so).

In the Canadian general election of 1874, Smith defeats Liberal candidate Andrew G. B. Bannatyne by 329 votes to 225.

The Manitoba Free Press suggests that Smith had encouraged Bannatyne's candidacy to prevent more serious opposition from emerging.

In 1873, the HBC had separated its fur trade and land sales operations, putting Smith in charge of the latter.