ALLAN, Sir HUGH,
shipping magnate, railway
promoter, financier, and
capitalist; b. 29 Sept. 1810 at
Saltcoats (Strathclyde),
Scotland, second of five sons of
Alexander Allan and Jean
Crawford; m. 13 Sept. 1844
Matilda Caroline Smith, and they
had nine daughters and four
sons; d. 9 Dec. 1882 at
Edinburgh, Scotland, and was
buried 27 December in Montreal,
Que.
Hugh
Allan was born into an Ayrshire
family with large shipping
interests. From the early 1800s
his father and older brother,
James, operated vessels on the
North Atlantic between Glasgow
and the St Lawrence. After a
parish-school education in
Saltcoats, Hugh at age 13 began
working in the family’s Greenock
counting-house of Allan, Kerr
and Company. He immigrated to
Montreal in 1826 and clerked
with grain merchant William Kerr
until 1830, when he embarked on
a “grand tour” that included
Upper Canada, New York, a return
to his native Scotland, and his
first visit to London. In April
1831 Hugh returned to Canada and
after meeting James Millar*, a
fellow Ayrshireman who may have
acted as Alexander Allan’s
Montreal agent, became
commission agent in Millar’s
general merchandising firm of
Millar, Parlane and Company, one
of Montreal’s leading importers.
Participating in several areas
of the firm’s operations
(including shipping,
shipbuilding, and purchasing
grain from local merchants),
Allan advanced rapidly in the
company and, as was so often the
case in the Montreal merchant
community, the primary catalysts
in his success were family
connections, social bonds, and
access to capital. In 1835 the
company was reconstituted as
Millar, Edmonstone and Company;
Hugh was named a partner and
with his father’s assistance
quickly helped expand the firm’s
shipping operations. The next
year the company acquired the
214-ton barque Thistle,
the first vessel in what was to
become one of the largest
merchant fleets on the North
Atlantic. Several other vessels,
built by Montreal master
shipwright E. D. Merritt, were
added over the next two years,
including the Alliance, a
434-ton steamer for the
Montreal–Quebec City run, which
probably also towed the firm’s
sailing ships through the
difficult Sainte-Marie current
to the Montreal harbour. A large
portion of the capital required
for this expansion was supplied
by mortgages held on these ships
by Allan’s father and brothers
in Scotland.
Most
of the early ships, such as the
Gypsy,Blonde, and
Brunette, were ocean-going
but Allan, recognizing the
advantages of uniting river and
ocean transportation, began
building small schooners for use
on the St Lawrence: with this
dual capacity and the general
improvement in the St Lawrence
valley economy the company’s
business expanded rapidly. By
the mid 1840s the firm
controlled 5 to 12 per cent of
the total ocean-going trade of
Montreal, bringing trade items
such as pig-iron and soap from
Glasgow and carrying Canadian
wheat to British markets. The
addition of the Albion,
Caledonia, Montreal,
Amy Anne,Toronto,
Canada, and Favourite
to the fleet for both river and
overseas traffic gave Edmonstone,
Allan and Company (as the firm
was renamed in 1839) the largest
shipping capacity of any
Montreal-based firm. In 1848 it
had a capital of £30–40,000 and
two years later was described by
a credit-rating service as an
“old safe & [respectable]
House.” Its business increased
by 25 per cent in 1851 and it
maintained a network of agents
as far west as Brantford and
London in Canada West into the
1850s. By 1859 Edmonstone, Allan
and Company, “one of the
Wealthiest concerns in the
Province,” was known for its
responsible management, its
links to trading houses in
London, Liverpool, and Glasgow,
and the spreading of its owners’
influence into allied shipping,
railway, and banking concerns:
it was“as good as a Bank,” and
run by “active, pushing” men.
The firm continued as one
segment of the intricate
shipping interests of the Allan
family and in April 1863 became
H. and A. Allan.
Even
by the early 1850s Allan’s
shipping ambitions had been
outstripping those of William
Edmonstone, his older partner.
As president of the Montreal
Board of Trade (1851–54), Allan
advocated the establishment of a
government-subsidized, regular
steamship line between Montreal
and British ports. Such an
enterprise, he argued, would not
only provide regular mail
service but would also benefit
Canada by increasing the number
of immigrants and by protecting
her exports and imports which
many contemporaries believed
were threatened by the American
Drawback Laws of 1845–46. The
deepening of the St Lawrence
ship channel through Lac
Saint-Pierre to 16 feet in 1853
made possible the inauguration
of this service. But, though
Allan took the initiative as
official head of the Montreal
business community and
personally as an entrepreneur,
there was keen competition.
Samuel Cunard* expressed
interest, as did a consortium
formed in 1852 (including Thomas
Ryan,
Luther Hamilton Holton*, and
James Blackwood Greenshields of
Montreal along with the
Liverpool firm of McKean,
McLarty and Lamont). At the same
time, expecting to secure the
contract, Allan raised capital
from his family (including his
younger brother Andrew*) and
Canadian investors such as
George Burns Symes*, William
Edmonstone, Sir George Simpson*,
William Dow*, John Gordon
McKenzie, Robert Anderson, and
John Watkins, and formed a rival
syndicate. Despite its Canadian
investors, the syndicate was an
international enterprise based
on careful family management on
both sides of the Atlantic:
Andrew had immigrated to
Montreal in 1839 to join Hugh
while two other brothers, James
and Bryce, handled business in
Greenock and Liverpool. Despite
Allan’s lobbying and his
powerful position in the
Montreal commercial élite, the
rival consortium, incorporated
as the Canadian Steam Navigation
Company in 1853, was awarded the
first government subsidy of
£24,000 for the
Montreal-Liverpool run, which
began that year. The
shortcomings of this firm were
obvious almost immediately,
however, and Allan decided to
utilize new technology (steam,
screw propellors, and iron
hulls) in his continuing attempt
to capture the contract. Instead
of building ships in Canada as
Edmonstone, Allan and Company
had done in the 1840s, Allan’s
syndicate commissioned two fast
and powerful steamers, the
Canadian and the Indian,
from Clyde shipbuilders late in
1853. On 18 Dec. 1854 the
syndicate was incorporated as
the Montreal Ocean Steamship
Company and in 1856, with the
help of Conservative politicians
such as John Rose,
George-Étienne Cartier*, and
Lewis Thomas Drummond,
it finally secured the contract,
and the £24,000 subsidy, to
provide regular fortnightly
steamship service between
Montreal and Liverpool during
the summer season and between
Portland, Maine, and Liverpool
from November to May. By 1859
service was on a weekly basis
and Allan reported his capital
investment in the company at
£3,500,000.
Since much of his profit
depended on improved navigation
facilities, direct subsidies,
and troop-carrying, as well as
mail and other government
contracts, Allan was assiduous
in pampering Canadian and
British officials. For example,
a former troop-carrier, the
Sarmatian, was refitted to
carry the Marquess of Lorne
[Campbell*] and Princess Louise
to Canada in 1878. With 25
servants and a special piano,
the royal party of 14 was lodged
in staterooms decorated with
blue silk, the royal arms, and
self-adjusting mahogany beds in
which seasickness was “rendered
impossible, the bed adjusting
itself to every motion of the
vessel, so that its pitch and
roll cannot be felt.”
Royalty was of course only the
cream of Allan’s business; his
ships also carried immigrants,
troops, the mail, wheat, and
general cargo. Like most
shippers to Britain, Allan
profited from that country’s
wars in Africa and the Crimea.
In 1862 the British secretary
for war, Sir George Cornewall
Lewis, brought suit against
Allan for “exorbitant” and
“enormous” charges in conveying
military baggage at rates at
least five times those of other
carriers. Allan responded in a
“rough” and “overbearing”
manner, seizing the baggage
until the case was settled. The
transport of immigrants was a
company specialty. In the 1850s
for a fare of£3 10s.
passengers travelled in steerage
and provided their own food,
although like most companies
Allan’s carried “a good supply
of biscuits.” By the 1870s the
Montreal Ocean Steamship Company
(popularly known as the Allan
Line) had a government contract
for the conveyance of “assisted
passengers.”The firm’s
promotional literature noted
that indigent passengers would
receive free Grand Trunk rail
passes from the government and
assured immigrants that“Canada
is a cheap place to live in”
where even the poorest could
have “the confident hope” of
becoming a landowner. The
captains guaranteed a
“religious, sober but cheerful
atmosphere” on their ships, and
female steerage passengers were
provided with stewardesses and
assured of the strict separation
of the sexes. Less reassuring
were the company’s six-shilling
“steerage passenger kit,” which
included “a patent
life-preserving pillow,” and the
fact that death regularly
occurred among passengers.
As
Allan’s transatlantic trade in
immigrants, manufactured goods,
and natural resources expanded
he was forced to look to North
American railways: an ambitious
steamship-fleet owner preferred
not to leave major supply routes
to the vagaries of competition.
Although by the early 1870s
Allan had become Canada’s most
flamboyant railway entrepreneur,
he had moved slowly into
railways. He had stock in the
Champlain and St Lawrence
Railroad in 1851 and lost
heavily in Detroit and Milwaukee
Railway stock, but he was not an
important promoter until the
significance of the Grand Trunk
Railway’s monopoly became
apparent.
In
1859, when the Victoria Bridge
opened in Montreal for through
traffic from Canada West to
Portland, Allan and the Grand
Trunk made a ten-year traffic
arrangement. His steamers were
soon dependent upon Grand Trunk
deliveries: 1,304 of 1,885
freight-car loads shipped by
Allan from Portland in 1873 came
from the American Midwest via
the Grand Trunk. Allan was
frustrated by this dependence.
He wanted the Grand Trunk to
triple its winter deliveries to
Portland to 35,000 tons and to
coordinate freight arrivals with
the departures of his steamers.
He also felt threatened by the
railway’s arrangements with
competing New York and Boston
shippers and by rumours that it
planned to establish its own
steamship line. Worried about
access to his western
hinterland, Allan in 1873
expressed “a desire to protect
ourselves.”
Coinciding with Allan’s
disenchantment with the Grand
Trunk was the Canadian
government’s commitment to build
a railway to British Columbia.
By 1870 his lieutenants had
appeared on railway boards with
charters to build west.
Constructing its line west from
Ottawa, the Canada Central
Railway had Allan’s lawyer, John
Joseph Caldwell Abbott*, as its
vice-president in 1870. Another
of Allan’s agents, Louis
Beaubien*, was the major
promoter of the Montreal
Northern Colonization Railway of
which Allan became president in
1871; purportedly a local
railway to transport firewood
from the Laurentians to Montreal
the road had a flexible charter
permitting connections to the
Canada Central Railway.
Capitalizing on the French
Canadian colonization movement
and support from priests such as
François-Xavier-Antoine
Labelle*, Allan’s railway
benefited from generous laws and
financial guarantees from the
provincial government, municipal
subsidies from most communities
along the route, and a
$1,000,000 subscription from the
city of Montreal. For a short
period three of Allan’s
associates (John Hamilton,
Abbott, and Beaubien) were
directors of the North Shore
Railway which was to join Quebec
City with Montreal. Allan also
owned half the stock in the
proposed Ontario and Quebec
Railway which would link Toronto
and Peterborough to the Ottawa
valley line. These railways
would funnel trade to the port
of Montreal and could be
integrated into a major trunk
system to the Pacific. He was
also on the incorporating boards
of two railways in the
Maritimes: the Eastern Railway
(1870) and the Northern and
Western Railway (1871–72). His
experience with government
contracts, his connections with
prominent Conservatives such as
Sir John A. Macdonald*, and his
reputation as a leading employer
and model citizen in Montreal
made Hugh Allan, probably
Canada’s most important
capitalist by the 1870s, a
logical contender for the
Pacific contract.
It
was the minister of finance,
Francis Hincks,
who in August 1871 told Allan
that Northern Pacific Railroad
backers in the United States led
by George William McMullen and
Charles Mather Smith were also
interested in the Pacific
contract. In December Allan
signed an agreement with the
Americans and began enticing
prominent Canadians to support
the syndicate he was forming. As
usual, his approach was through
the pocketbook. He predicted
that Charles John Brydges
of the Grand Trunk would
join for $200,000 worth of stock
and David Lewis Macpherson* for
$250,000. Neither, however, did
join and Macpherson, hostile to
American involvement, soon
established a rival,
Toronto-based syndicate. In June
1872 Macpherson’s group was
incorporated as the
Inter-oceanic Railway Company of
Canada and Allan’s as the Canada
Pacific Railway Company.
With
a federal election called for
August 1872 Allan had more luck
with the politicians. After
trying unsuccessfully to unite
the Ontario syndicate with
Allan’s group, Macdonald left
Montreal matters in the hands of
Cartier and Hincks. Although
anti-American and employed as
the lawyer for the Grand Trunk,
Cartier, in failing health, was
forced to accept Allan’s terms.
Using the influence of his
clerical friends, stressing
French Canadian nationalism, and
alluding to the economic impact
of his Montreal Northern
Colonization Railway which would
have its terminus in Cartier’s
riding (Montreal East), Allan
brought Macdonald’s Quebec
lieutenant into line. Thomas White,
editor of the Montreal
Gazette, met with Cartier
for a three-hour discussion of
railway policy, and two city
aldermen and four city
councillors called on him at
home. Five prominent Montrealers
including Joseph-Adolphe
Chapleau*, a rising young
Conservative, and Charles-André
Leblanc*, an old school friend,
visited Cartier in Ottawa and
urged him to award the Pacific
contract to Allan. By 1 July
1872 Allan felt he had won over
27 of Cartier’s 45 French
Canadian
mps. On 30 July the
politician signed an agreement
drawn up by Allan and Abbott
which acceded to the former’s
wishes concerning the railway.
Nevertheless, despite massive
last-minute contributions from
Allan, Cartier was defeated in
Montreal East.
Although the Conservatives were
returned to power, Allan’s plans
to build the Pacific railway
came apart in the months after
the election. Macdonald finally
forced him to make a clean break
with his American backers but
the Americans, incensed at being
dropped, threatened the prime
minister with a public
disclosure of their involvement,
not only in the railway but also
in the Conservative election
campaign. Allan was apparently
able to mollify them before he
embarked for England late in
February 1873 in an attempt to
raise capital. The crisis seemed
over. However, his lack of
success with the powerful London
financial houses was soon
overshadowed by the disaster
which was now taking shape at
home. The vague yet persistent
rumours of scandal that had
permeated Montreal for months
were about to take concrete form
in Ottawa. On 2 April Lucius
Seth Huntington
rose in the House of
Commons to charge that Allan,
financed partially by Americans,
had purchased control of the
western railway by contributing
huge sums to the Conservatives.
The Pacific Scandal had broken.
Allan’s damning correspondence
with his American backers as
well as his financial
manipulation of the
Conservatives eventually became
public knowledge and led to the
collapse of the Macdonald
government on 5 November. Allan
himself had returned from
England to testify before the
royal commission on the Pacific
railway.
The
scandal and the subsequent
trimming of the project by the
government of Alexander
Mackenzie* ended Allan’s
involvement. in the western road
but his interest in other
railways continued. Still active
as president of the now bankrupt
Montreal Northern Colonization
Railway, he engineered its
takeover by the Quebec
government in 1875. He was
active in the St Lawrence
International Bridge Company and
his bank, the Merchants’ Bank of
Canada, continued to lend money
to railways such as the Kingston
and Pembroke, the Grand
Junction, and the Cobourg,
Peterborough and Marmora Railway
and Mining Company. Just before
his death he participated in
three different syndicates, each
organized to buy the Quebec,
Montreal, Ottawa and Occidental
Railway from the Quebec
government.
Allan had used some of the same
tactics in trying to gain a
monopoly of the shipping trade
on the St Lawrence. Although
himself a shareholder in the
Richelieu Company, formed a
generation earlier by Montreal
and Richelieu valley
professional men and merchants [seeJacques-Félix
Sincennes*], Allan challenged it
by establishing the Canadian
Navigation Company to operate on
the upper St Lawrence and in
1869 by buying two steamers
which he threatened to use on
the Quebec City–Saguenay run. In
return for his promise to divert
the steamers elsewhere the
Richelieu Company offered him an
annual “indemnity” of $4,000 for
five years and free wharfage for
his vessels at their Quebec City
docks. He soon pressured the
company on another route by
selling a Canadian Navigation
Company steamer to the Union
Navigation Company (apparently
also an Allan operation) for use
in competition with the
Richelieu Company on the
profitable Montreal–Quebec City
run: in 1874, after the
Richelieu Company had rejected
amalgamation with him, Allan
sold the Union Navigation
Company two more steamers. A
year later the Richelieu
Company, with its revenues
plummeting, was forced to accept
amalgamation with the Canadian
Navigation Company to form the
Richelieu and Ontario Navigation
Company. Both Hugh and Andrew
Allan were directors of the new
company and Hugh was president
for six years.
He
continued his efforts to
minimize competition in the St
Lawrence valley. Lengthy
negotiations and a sham
bankruptcy by the Chambly and
Montreal Navigation Company led
to its purchase by the Richelieu
and Ontario Navigation Company.
The St Lawrence Steam Navigation
Company, owned by the powerful
Molson family, was a more
formidable competitor and Allan
settled for traffic arrangements
with it. In 1879 his friends in
the Conservative party,
Macdonald and Charles Tupper*,
arranged for the lowering of
government tolls and the removal
of boulders near the Richelieu
and Ontario’s Saint-Lambert
docks. Despite mergers,
consolidation, and government
favours, business was not good
and by 1878 the company’s
dividends had fallen to 2.5 per
cent. There had been grumblings
in 1876 about Allan’s actions as
company president, the wide
distribution of free passes, the
misuse of company funds, and the
Allan family’s growing monopoly
of trade on the St Lawrence.
Louis-Adélard Senécal, a
well-known Quebec City
entrepreneur, received growing
support for his plan to
incorporate the Richelieu and
Ontario Navigation Company and
the Quebec, Montreal, Ottawa and
Occidental Railway into a new,
integrated transportation system
in the lower St Lawrence valley.
Senécal and his companies
quietly bought up Richelieu and
Ontario shares and just a few
months before Allan’s death
succeeded in ousting him from
the board.
Hugh
Allan displayed an early and
persistent interest in banking
and credit institutions. While
still in his thirties he became
a director of the Bank of
Montreal and remained on the
board for ten years (1847–57).
In 1856, in addition to 204
shares in the Bank of Montreal,
he had shares worth £8,000 in
the Commercial Bank of Canada,
£1,000 in the Bank of Upper
Canada, and £2,020 in the City
Bank of Montreal. He was a
director of the Montreal Credit
Company (1871), held 100 shares
in the Maritime Bank of the
Dominion of Canada (1873), and
was president of the Provincial
Permanent Building Society
(1871) which became the
Provincial Loan Company in 1875.
His most important banking
endeavour began when, as a
source of capital and to service
his financial needs, he
established the Merchants’ Bank
of Canada. Run as a family
business, it was chartered in
1861 but did not open until
1864. Allan was routinely
elected president until 1877 and
then was re-elected president in
1882. Andrew Allan, who was on
the board from 1861 to 1883,
succeeded his brother as
president in 1882 and their
brother-in-law, Jackson Rae, was
the bank’s first cashier. In
1868 Hugh, the bank’s largest
shareholder, held 2,658 of its
12,176 shares while Andrew had
875 shares. By the late 1870s,
however, there were other large
shareholders in the bank, such
as Robert Anderson whose 5,042
shares held in 1878 exceeded the
combined holdings of the Allans.
In
its first years the Merchants’
Bank was dominated by Hugh
Allan, who faithfully attended
board meetings to approve bank
policy, appointments, and major
loans. He handled problems in
England and when in Montreal
often went to the head office on
Saturdays to count the money and
supervise the burning of
mutilated bills. This was not an
idle exercise. In 1868 he
discovered a shortfall of $500
in bank funds: seven employees
were dismissed and criminal
charges were laid against the
accountant and head teller. In
1873 the board, which routinely
rubber-stamped Allan’s decisions
before 1877, wired him
concerning the bank’s biggest
liability, the bonds of the
Detroit and Milwaukee Railway:
“Board approves: do best you
can.” And two years later it
said: “Scheme set forth in [your
letter] or any settlement
approved by you will be
satisfactory.”
The
Merchants’ quickly established a
reputation as one of Canada’s
most aggressive banks. Allan
reported immediate and growing
profits that averaged 10 per
cent of the bank’s paid-up
capital: $30,502 in the first
year of operation, $100,671 in
1867, and $726,120 in 1871. In
1868 the Merchants’ took over
Kingston’s floundering
Commercial Bank of Canada.
According to Allan, who had been
a Commercial Bank shareholder
and handled the negotiations, it
had liabilities of $1,170,960
and assets of $2,666,680, much
of the latter being in stocks
and bonds of doubtful value.
Allan’s offer of one Merchants’
share for three Commercial
shares was accepted; the
takeover gave the Merchants’
Bank 17 branches in the
important Ontario hinterland and
expansion in Ontario was rapid.
In Quebec, however, the bank was
hesitant to move beyond
Montreal; in 1871 it had only
two branches in Quebec outside
Montreal, but there were 22
Ontario branches, 16 in towns of
less than 5,000 inhabitants. By
the mid 1870s the bank had
opened a branch in London,
England, had nine employees in
New York, and had built a fine
head office of Ohio stone on
Montreal’s Place d’Armes.
Allan’s association with the
Merchants’ Bank brought benefits
beyond special borrowing
privileges, profits on shares,
and his annual presidential
salary ($4,000 in 1874). The
bank was part of an expanding,
interlocking commercial and
industrial empire in which one
sector generated business for
another. It could be as simple
as a $5,000 bill to the bank
from Allan’s shipping company
for transporting Quebec bonds to
the bank’s London office. His
Citizens’ Insurance Company of
Canada insured the bank’s
employees and invested $36,000
in its stock. His Montreal
Telegraph Company rented space
in the bank’s Ottawa building,
and the Montreal Elevating
Company, of which he was a
director, was voted overdraft
privileges of $3,000 by the
Merchants’ board. In 1875 a
contractor for one of Allan’s
railways defaulted and brought
the Banque Jacques-Cartier to
its knees, but the Merchants’
helped prop it up with a time
extension. Often the benefits to
Allan were more direct. In April
1872 he was given 165 shares
held by the bank in the Ontario
Woollen Company and one month
later the board authorized a
credit line of $20,000 to the
company. In 1876 he borrowed
$300,000 from the bank (using
his bank stock as collateral) to
aid his Vale Coal, Iron and
Manufacturing Company. Another
of his companies, the Montreal
Cotton Company, was given a
$50,000 bank advance “on their
own paper.”
In
1877 the Merchants’, by then
Canada’s second largest bank,
nearly collapsed and it became
clear that the handsome profits
announced annually by Allan had
been achieved by carrying losses
forward. The bank was further
weakened by sloppy inspection
procedures and loans
administration, over-expansion
into small Ontario towns, and
heavy losses on the New York
gold market and on two major
investments. From the Commercial
Bank it had inherited Detroit
and Milwaukee Railway bonds with
a face value of $1,735,350.
These bonds matured in 1875 but
the bank was unable to redeem
them for even 20 per cent of
their face value. The bank made
another questionable investment
in May 1876 when Allan told the
board that the bank had bought
at par £4,185,333 of a Quebec
government bond issue
necessitated by the bankruptcy
of Allan’s Montreal Northern
Colonization Railway and its
sister project, the North Shore
Railway. Faced with the
reluctance of British financiers
to invest in Canadian securities
outside the public sector and
the collapse of the province’s
two most important railway
projects, the government had
little choice but to raise
construction money itself.
Although Allan assured a worried
bank stockholder that the loan
to the province was “mutually
advantageous,” the bank’s London
manager reported that it would
be “impossible” to place the
Quebec bonds on the London
market, even at 95 per cent of
their face value.
In
February 1877 Allan resigned as
president because of what he
called“absurd rumours” and
“senseless” clamour raised by “a
few interested Brokers, and by
personal enemies of mine.” The
new president, John Hamilton,
moved quickly to save the bank.
The Bank of Montreal and the
Bank of British North America
lent the Merchants’ $1,500,000
on the guarantee of the
directors’promissory notes, and
a new general manager, George
Hague*, was hired from the Bank
of Toronto. He wrote off
$113,143 for losses in the
Montreal office, $222,611 on
branch losses, a $198,704 loss
in the New York office, $633,000
in bad debts, $305,196 on the
Detroit and Milwaukee bonds,
$553,000 on losses in other
securities, and $223,991 “from
unanticipated difficulties in
placing the [Quebec government]
loan on the London Stock
Exchange.” Allan exhibited
remarkable resilience by
regaining the presidency of the
bank in 1882.
His
dealings with the Merchants’
Bank show how he constructed a
complex commercial and
industrial empire by constantly
expanding his interests. The
telegraph was a natural adjunct
to his steamship and rail
communication. Allan was
associated with the Canada
Atlantic Cable Company, was
president of the Montreal
Telegraph Company (1852), and
was a director of two American
companies, the Troy Telegraph
Company and the Western Union
Telegraph Company. He was also
an early participant in the
development of the Canadian
telephone industry; in 1878,
using lines installed by the
Montreal Telegraph Company, he
made one of the first Canadian
long-distance telephone calls,
from Montreal to Princess Louise
in Ottawa. Of more importance
were the lengthy negotiations of
the newly established Bell
Telephone Company with Allan,
resulting in its purchase of the
Montreal Telegraph Company’s
“telephone plant” for $75,000.
Allan was active in other
transportation sectors that were
directly related to his shipping
interests: warehousing,
elevator, station, bridge, and
tunnel companies. President in
1870 of the Montreal Warehousing
Company (established in 1865 to
erect sheds and warehouses),
which held its board meetings in
the offices of the Montreal
Ocean Steamship Company, he was
also a director of the Montreal
Railway Terminus Company (1861),
the Canadian Railway Station
Company (1871), and the St
Lawrence International Bridge
Company (1875). As his dealings
with the Grand Trunk illustrate,
Allan knew the importance of the
American Midwest. With prominent
Americans James Frederick Joy
and Henry Porter Baldwin of
Detroit and Nathaniel Thayer of
Boston, as well as important
Canadian investors such as
George Stephen* and William McMaster,
Allan was on the incorporating
board of the Detroit River
Tunnel Company in 1870. Five
years later, with four Montreal
merchants (including his brother
Andrew), he chartered the St
Lawrence and Chicago Forwarding
Company.
Allan also participated in at
least five insurance companies.
As well as an important source
of capital, these companies
provided fire and marine-loss
protection for his interests.
His entry into injury and life
insurance for his workers
allowed him to recoup a
percentage of wages and may have
been a reaction to the
development of provident
societies and other
working-class protective
organizations. He was associated
with three marine insurance
companies: he was a founding
director of the Marine Mutual
Assurance Company of Montreal in
1851, of the Canada Marine
Insurance Company in 1868, and
14 years later (with Andrew) of
the St Lawrence Marine Insurance
Company of Canada. His most
important insurance operation,
however, was incorporated in
1864 as the Citizens’ Insurance
and Investment Company (after
1876 as the Citizens’Insurance
Company of Canada). Hugh Allan
was its first president and
Andrew was a perennial member of
the board. Citizens’ bonded the
employees at the Merchants’ Bank
and provided fire insurance for
Hugh’s companies. His stevedores
on the Montreal docks had one
per cent of their pay deducted
for compulsory accident
insurance with the company,
which covered only
“on-the-job”injuries and did not
apply to sickness. Permanently
injured employees received $5 a
week, and in the event of death
$500 was paid to the family. In
1872 Allan was listed as a
director of the Canada Life
Assurance Company and was named
in the charter of the Manitoba
Insurance Company. That same
year Andrew was a director of
the Confederation Life
Association.
Manufacturing in Montreal took
off in the period from 1861 to
1881 and Allan was active in
organizing capital for dozens of
companies in cotton and wool
textiles, shoemaking, iron and
steel, tobacco, and paper. The
vehicle for the increasing
concentration of capital was the
developing business institution,
marked by the separation of
management and ownership and by
the advent of the stock market.
In textile production as in many
other instances, Allan had the
capital to get in on the ground
floor, and he was able to
benefit after 1878 from the
National Policy. Canadian
textile production had risen
dramatically between 1861 and
1871, and grew even more sharply
after 1878 when the tariff on
woollen goods was doubled and
the tax on imported cotton
increased from 17.5 to 30 per
cent. With tariff protection the
value of Canadian cotton
production tripled in four years
to $1,753,500 in 1884. Allan was
president of the Cornwall
Woollen Manufacturing Company
and owned 165 shares in the
Ontario Woollen Company. George
Stephen – fellow Scot, president
of the Bank of Montreal, and the
city’s leading wholesale
merchant – had interested Allan
in cotton textiles and the two
financiers capitalized on the
willingness of Cornwall, Ont.,
to subsidize textile production.
Allan became president of a
Cornwall firm, the Canada Cotton
Manufacturing Company, in 1872,
and was an incorporator of the
Stormont Cotton Manufacturing
Company eight years later. He
had also helped found the
Montreal Cotton Company in
Valleyfield, Que., in 1874. With
dividends of 11 per cent in
1880, 20 per cent in 1881, and
14 per cent in 1882, Montreal
Cotton stock sold at a premium
of up to 60 per cent in 1881–82.
Profits were high but working
conditions in the cotton mills
were notorious. Allan, never
noted as a model employer, was
more concerned with profit than
with the welfare of his
employees, and his cotton mills
were the subject of complaints
concerning wages, drinking
water, child labour, and
industrial accidents. Weavers in
the Canada Cotton and Stormont
Cotton mills were paid $5 a week
in 1888 and a dyer in Cornwall
was paid $1.25 a day. In the
Montreal mill ten-year-old
children worked barefoot through
the winter.
Allan took an early interest in
the production of iron, steel,
and rolling-stock. Impressed by
the efforts of Toronto and
Hamilton manufacturers to
satisfy the Grand Trunk’s needs,
he and Stephen exhorted Montreal
merchants in 1870 to
show“enterprise and energy” by
investing in the Canada Rolling
Stock Company. Allan was also a
director of the Canadian Railway
Equipment Company (1872) and the
Ontario Car Company (1882), and
with Peter Redpath* and Stephen
he owned the Montreal Rolling
Mills. Specializing in nails,
tacks, and pipe, this company,
one of the four largest
ironworks in Quebec, declared a
7 per cent dividend in 1878.
The
interruption of American tobacco
imports during the Civil War had
given a boost to tobacco
manufacturing in Montreal, and
Allan served as president of the
Adams Tobacco Company (1882).
Pulp and paper was another
growth industry, doubling its
production twice between 1861
and 1881. Allan was a director
of the Canada Paper Company, one
of the first industrial
companies to be listed on the
Montreal Stock Exchange. A cheap
labour base, access to capital,
and improved transportation
systems contributed to the rapid
growth of shoemaking in Montreal
in the decade 1861–71, the value
of production rising from one to
nine million dollars. Hides came
from the west, tanning was done
in Quebec City, and the finished
leather was sent to Montreal.
Allan was president (1882) of
the Canadian Rubber Company of
Montreal, one of the oldest shoe
and boot makers in Montreal.
Allan was also active in
exploiting natural resources
such as land, fish, and mining.
His interest in western land
speculation may have developed
from his Pacific railway project
and the western operations of
the Merchants’ Bank. President
of the Montreal and Western Land
Company, he visited western
Canada just a few months before
his death in 1882. In that year
he was also president of the
North-West Cattle Company and
the Canada and Newfoundland
Sealing and Fishing Company. An
active mining speculator, he was
an original shareholder in the
Montreal Mining Company founded
in 1847. By 1855 the company was
plagued with stock manipulation,
haphazard bookkeeping,
unwarranted dividends, and a
debt of£19,340 to the Commercial
Bank. In addition, that year the
company was implicated in a
scandal involving the transfer
of 200 shares of stock to John
Ross*, former attorney general
of Canada West and president of
the Grand Trunk Railway.
Arranged by Cartier, Ross’s
quick profit of £1,000 was
apparently necessary to
facilitate the location of a
county court-house at the site
of a company mine in the Bruce
Peninsula. Allan was furious at
the deal which had not been
entered on the company’s books.
He denied being the mysterious
purchaser of the stock Ross
obtained and, after leading an
investigation which found
“extreme irregularity,” he
resigned as president. Also
associated with the Mulgrave
Gold Mining Company, Allan was a
director of the Vermont and
Canada Marble Company and
president of the Thunder Bay
Silver Mining Company (1882).
Coal, the primary energy source
for steamships, railways, and
manufacturing industries, was
Allan’s most important mining
interest. His investment in Nova
Scotia’s Pictou mines rose
rapidly in the 1860s and he was
the only Canadian director in
1865 on the founding board of
the New York–based Acadian Coal
Company. In 1873 he was involved
in the establishment of the Vale
Coal, Iron and Manufacturing
Company. President of the
company until his death, he
placed the head office in
Montreal and used $300,000 of
his Merchants’ Bank stock as
collateral to construct the
company’s railway, wharf,
surface plant, and miners’
houses: his son Hugh Montagu
Allan* later inherited the
company presidency. The National
Policy again benefited Allan.
Its tax of 50 cents a ton on
imported coal allowed the Vale
Coal Company to retain large
Montreal coal consumers such as
the North American Glass Company
and the New City Gas Company of
Montreal (later the Montreal Gas
Company).
Allan, in addition to land held
by his companies, owned a
substantial amount of property
himself. By 1872 his holdings
included Ravenscrag (his
609,260-square-foot estate on
Mount Royal) and the
79,260-square-foot site of his
former home on Rue
Sainte-Catherine on which stood
a dozen stores and a music hall.
Aside from his summer estate,
Belmere, on Lac Memphrémagog in
the Eastern Townships, Allan,
never a gentleman farmer like
his brother Andrew, owned at
least four properties on the
outskirts of Montreal, each in
an area of potential urban
expansion. He held a
13,637-square-foot site in
Hochelaga (now part of
Montreal), a village on the
eastern limits of the city,
where one of his companies, the
Montreal Northern Colonization
Railway, proposed to locate its
terminus and yards, and 30 acres
on Côte Sainte-Catherine (now
part of Outremont) on the
northern extremity of the city.
Near the Lachine Canal he held
79 acres himself plus 8 acres
owned jointly with Robert James
Reekie, with whom he also shared
26 acres in Saint-Henri (now
part of Montreal), another
potential area for manufacturing
expansion. Besides his two
residential sites Allan owned
three properties within the city
of Montreal, including an
11,637-square-foot site in the
west-end ward of Saint-Antoine.
He held two properties in the
business core, a
9,553-square-foot property in
the Place d’Armes banking
district (probably the site of
the Merchants’ Bank) and a
26,850-square-foot site on
McGill Street where his shipping
company had its head office.
Although he was astute in
obtaining what he wanted from
governments, Allan’s political
influence was largely behind the
scenes. Indeed, he apparently
did not consider the act of
voting to be of great
importance, noting in 1873 that
he had voted in only one
parliamentary election. He had,
however, volunteered for
military service in the
rebellions of 1837–38, reaching
the rank of captain, and in 1849
he was a prominent
anti-annexationist. A lifelong
Conservative, he directed some
$400,000 to the party’s federal
campaign in 1872 while pursuing
the Pacific contract; his lawyer
noted that Conservative policies
were so favourable to Allan’s
interests that a contribution
three times as large would have
been justified. Campaign
contributions were only one
means of manipulating
politicians: George-Étienne
Cartier’s constituents needed
jobs in Allan’s proposed railway
shops, Francis Hincks’s son
wanted a position in the bank,
and politicians sailed on
Allan’s ships and danced at his
parties.
Controlling Canada’s second
largest bank increased his
political power. The Merchants’
Bank made loans to the provinces
of Manitoba and Quebec, and to
the city of Winnipeg. Favoured
politicians were named by head
office as solicitors for local
branches and ex-finance minister
John Rose became the bank’s
London solicitor. Future prime
minister J. J. C. Abbott had a
$1,000 annual retainer as the
bank’s Montreal lawyer in 1866.
Sir Charles Tupper and Sir John
A. Macdonald became special
solicitors for the Winnipeg
branch in 1883.
Even
more dramatic evidence of the
link between the state,
politics, and business is
provided by politicians who were
among the Merchants’ debtors.
Although John Hillyard
Cameron*’s large debt was the
subject of board discussions in
February 1870, Macdonald was
probably the bank’s most
prominent debtor and it seems
clear that the prime minister
granted favours to his
creditors. Macdonald and Allan
had apparently not corresponded
before 1868 when the Merchants’
Bank inherited the former’s debt
of almost $80,000 to the
Commercial Bank. Soon after,
Allan jogged Macdonald’s memory:
“when quite convenient I will be
glad to receive your proposals
for settlement.” Before settling
his debts Macdonald did his best
to cater to Allan. He helped him
get favourable provincial
legislation from Quebec,
informed him of cabinet
discussions on lighthouses, and
accepted his choice as
emigration agent, assuring him
that the new agent would be as
“friendly as possible” to his
steamship operations. In
November 1869 Macdonald asked
the bank to accept the property
held as collateral and his life
insurance policies as payment.
When the bank accepted these
terms he wrote to Allan thanking
him for his “kindness” and added
that Francis Hincks was at work
on banking policy. In February
Macdonald apologized for not
giving Allan’s Montreal
Telegraph Company a monopoly on
government business; according
to Macdonald it was “impolitic”
to raise the matter. Despite the
Pacific Scandal, the two men
remained in touch. Allan wrote
to Macdonald in 1878 asking for
tariffs on rubber goods, shoes,
hose, sewing machines, cottons,
woollen goods, coal, and wrought
iron.
Allan took a direct approach to
what he described as
“influencing” newspapers. He
expedited European news via his
telegraph and steamers to
friendly newspapers, and his
bank made loans to important
publishers such as
Georges-Isidore Barthe* of Sorel
and John Lovell* of Montreal.
The latter received a loan to
publish the Canada
directory, apparently on the
condition that he handle the
printing for Allan’s telegraph
and steamship interests. The
Montreal Gazette was
under Allan’s influence for
years. Although he sold his
share of the paper to Richard
and Thomas White in 1870, the
new owners remained in debt to
him and had a $20,000
“accommodation”at the Merchants’
Bank, which also loaned money to
their timber operations in
Pembroke, Ont. Given this
financial link, the Gazette
usually paid careful tribute to
Allan’s activities and ideology
as it did on 28 July 1871: “We
mentioned yesterday a rumour to
the effect that Mr. Hugh Allan
had been honoured by the Queen
in having had conferred upon him
a Baronetcy. . . . That his
eminent services in connection
with ocean steam navigation have
been thus recognized is matter
for sincere congratulation among
all classes of the people in
Canada. No Knight in the Queen’s
galaxy of Knighthood, has more
worthily won his spurs. And it
is a subject of honest pride to
Canadians that one who has done
so much to develop the great
interests of the St Lawrence
route, has not only reaped the
pecuniary rewards which
enterprise and indomitable
pluck, such as he has shown,
richly deserve, but has also
been honoured with well merited
distinction by his Sovereign.”
The material basis of the
Gazette’s legitimizing
function could hardly have been
made more direct than when Allan
traded part of the Whites’ debt
for editorial support. During
the 1872 campaign for a
$1,000,000 subsidy for his
Montreal Northern Colonization
Railway, Allan deducted $5,000
from their loan.“Immediately
after,” his lawyer commented,
“we noticed that the advocacy of
theGazette was all that
could be desired.”
Allan also took the direct
approach in dealing with Quebec
politicians such as Hector-Louis
Langevin* and Cartier. He
subsidized their campaigns,
arranged for them to rub
shoulders with the British
élite, named their friends as
company lawyers, and advertised
in their newspapers. In return
he received charters, favourable
legislation, and the repeal of
laws he disliked. His
interference was blunt and the
results usually swift. “Allan
has telegraphed wishing the St.
Lawrence navigation act
repealed,” Langevin wired
Macdonald. “The Quebec
government have promised me it
shall be done.”
Although a member of a Scottish
shipping dynasty Allan never let
ethnicity dominate over business
sense. Dozens of Scots such as
William Dow, George Burns Symes,
and John Redpath* shared
boardrooms with him, but others
such as David Lewis Macpherson
and John Young* never hesitated
to sabotage his projects. The
latter was perhaps Allan’s most
persistent opponent. They were
members of two competing
bourgeois groups in Montreal and
their political and economic
quarrels spanned a 25-year
period. Young, as commissioner
of public works, played a major
role in blocking Allan’s
application to provide steamship
service between Montreal and
Liverpool in the early 1850s. A
vociferous Liberal by the late
1860s, Young enraged Allan by
attacking public subsidies to
his railways and by advocating
free trade with the United
States. Allan, a manufacturer
and protectionist, complained to
the prime minister about
Young’s“annexationist” ideas. In
1873, however, he repaid old
debts when the Merchants’ Bank
refused a $6,000 loan to the
bankrupt Young. Nor did he show
special leniency to other errant
Scottish friends. Isaac
Buchanan, a prominent Hamilton
wholesaler, railway
entrepreneur, and politician,
owed Allan’s bank $55,000 in
1872. Over a four-year period
Buchanan tried, apparently
without success, to ease the
terms: his wife reminded Allan
of their common heritage and
Buchanan made courtesy calls to
Allan’s home and sent
condolences on the death of his
brother. As his interests spread
across the continent Allan chose
partners who brought him
capital, local or ethnic
prestige, political influence,
or technical expertise.
Allan was cynical and astute in
exploiting the Roman Catholic
clergy and French Canadian
bourgeoisie. While still a youth
he had spent two winters in the
villages of Sainte-Rose (now
part of Laval) and
Sainte-Thérèse where he learned
to speak French, and as a young
commission agent he had bought
grain from French Canadian
merchants along the Richelieu
River. Publicly he was a model
of tolerance: “I assure you, to
whatever nationality you may
belong, you will have full
justice in everything I have to
do with; I know nothing of
nationality; I am desirous of
getting the best man in the best
places and of giving everybody
fair-play.” With the means and
the power to placate,
manipulate, or, if necessary,
discipline his allies in the
local French Canadian élite, he
also knew which pockets to line
and which priests to pamper, his
aim being, he explained to an
American colleague, to show
French Canadians where “their
true interest lay.” When in 1871
he bought the controlling
interest in and became president
of the Montreal Northern
Colonization Railway, an
enterprise with important
nationalist overtones, he went
“to the country through which
the road would pass, and called
on many of the inhabitants. I
visited the priests, and made
friends of them, and I employed
agents to go amongst the
principal people and talk it up.
I then began to hold public
meetings, and attended to them
myself, making frequent speeches
in French. . . .”
Allan cultivated leading French
Canadian clergymen. In 1870 he
authorized a special stop of a
company steamer for
Louis-François Laflèche*, the
new bishop of Trois-Rivières,
permitting him to disembark in
his own diocese on his return
from Rome. Prominent Catholic
laymen such as Louis Beaubien
were named to his boardrooms;
Joseph-Édouard Lefebvre* de
Bellefeuille, a leading
Ultramontane and friend of
Bishop Ignace Bourget,
was secretary in several of his
companies.
François-Xavier-Antoine Labelle,
the amiable curé of Saint-Jérôme
who was Allan’s favourite
cleric, was described by one
Quebec editor as “Sir Hugh’s
right arm.” At a dinner held in
his honour in February 1872
Allan interrupted toasts to pay
tribute to Labelle. In November
he invited Labelle to a
Ravenscrag ball “for although I
do not expect you would dance,
and more especially the fast
dances, you might like to see
it. I expect to have about 500
people at it. Will you come?”
Like
many of their English-speaking
counterparts, French Canadian
opinion-makers showed great
respect for Allan. Bishop
Bourget freed Labelle from his
parish duties so that he could
participate in the campaign to
raise municipal subsidies for
one of Allan’s railways. In 1871
the bishop’s newspaper, Le
Nouveau Monde,
praised the Montreal Northern
Colonization Railway as “une
œuvrenationale” and
endorsed Allan’s efforts to
deepen the St Lawrence shipping
channel and to build a new
bridge over the river. Le
National, founded in 1872 by
Montreal Liberals, also
supported his Pacific railway
scheme and the $1,000,000
municipal subsidy which he
sought from the city. Le
Journal de Québec
described him as “le
chevalier de
Ravenscrag”and La Minerve
felt that his presence on a
railway board gave “a moral
guarantee.”
But
Allan was never free from
criticism. The working
conditions in his factories, his
manipulation of government
subsidies and policies, and his
attempts to establish monopolies
and purchase politicians all
prompted objections from various
elements in society. The most
severe attacks, both from his
contemporaries and from
historians, concern his conduct
during the negotiations for the
Pacific contract. He was not,
however, more corrupt than
fellow Canadian businessmen or
old political friends such as
Cartier or Macdonald. Political
payoffs, hidden backers, the use
of foreign capital, the
manipulation of contracts, and
the diverting of public funds
for private use were norms of
the business morality of the
day. The chevalierof
Ravenscrag was resented more for
his successes than for his
methods, and his most powerful
opposition generally came not
from offended Canadian
nationalists but from rivals in
Montreal and Toronto. Many of
the comments of his detractors,
especially those concerning his
close ties with French
Canadians, were often repeated.
“The contest [for the Pacific
contract] has been, really,
between Ontario and Quebec,” a
bitter D. L. Macpherson had
written to Macdonald in 1872.
“Quebec has secured the prize –
thanks to French
domination.”
Allan’s accumulation of wealth,
climaxing in an estate estimated
at between six and ten million
dollars, enabled him, his
family, and his heirs to live in
privileged circumstances. The
Allans hosted governors general
and royalty, had 11“live-in”
domestics in their Montreal
residence, and owned a private
steam yacht, Lady of
the Lake, for
summer use on Lake Memphrémagog.
In 1860 Allan had bought the
Simon McTavish* estate on the
slopes of Mount Royal and over
the next three years built
Ravenscrag, the mansion which in
the opinion of one editorialist
surpassed “in size and cost any
dwelling-house in Canada, and
looks more like one of the
castles of the British nobility
than anything we have seen
here.” Designed in Italian
Renaissance style by the
architectural firm of Hopkins
and Wiley, the mansion’s 34
rooms included a billiard room,
a conservatory, a library, and a
ballroom that could accommodate
several hundred guests. From the
75-foot tower there was a fine
view of the city, the port, and
the distant Green Mountains of
Vermont.
Little is known of Allan’s
personality or private life.
Apparently a handsome man, he
appears in photographs as a
short, somewhat stocky
individual with a full beard and
moustache that offset his
mid-life baldness. He was a
member of the Tandem Club and
the Montreal Citizens’
Association (1868), an honorary
member of the North British
Society of Halifax (1871), and
president of the St Andrew’s
Society (1848–50). A curler,
presumably of some ability since
he was named skip in 1852, he
served as president of the
Montreal Curling Club in 1846–47
and 1874–75. Described by his
minister as a man of “little
sentiment” who believed
that“religion consisted mainly
in a man doing his duty,” Allan
was accorded accolades and
individual honours from the
clergy, the military, and the
crown: a Montreal-area priest
described him as “a new
Hercules,” he was named a
lieutenant in the Montreal 3rd
Battalion (1847), and he was
knighted by Queen Victoria’s own
hand in England in 1871.
His
philanthropic activities seem
restricted for one of his wealth
and rank although it is not
clear if this was typical of his
Montreal peers. A lifelong
Presbyterian, he attended St
Gabriel Street Church and later
St Andrew’s Church. He served as
the Presbyterian representative
on the board which divided the
clergy reserves, and was
chairman of the church’s
temporalities board in the
1870s. He made minor donations,
usually through his wife, to the
Montreal Ladies’ Benevolent
Society and the Protestant
Orphan Asylum, but his major
philanthropic activity was the
Montreal Sailors’Institute, of
which his brother was president
(1872) and of which the Allans
were the primary patrons. Hugh
did become a lifetime governor
of the Montreal Protestant House
of Industry and Refuge after
making a $500 contribution in
1863, and he was a member of the
first board of the Protestant
Hospital for the Insane (1881).
In
1882, the year after his wife’s
death, Allan died of a heart
attack while visiting his
son-in-law in Edinburgh. The
body of the “deceased knight”
was returned to Montreal, placed
in a highly polished oak coffin
with silver handles, and laid
out in Ravenscrag. The funeral,
held on 27 Dec. 1882, caused the
closing of the stock exchange
for the afternoon. The hearse,
preceded by a squad of city
police and a detachment of
firemen, was followed by his
family; political, commercial,
and industrial luminaries;
“employees from the manager down
to the workers on the
wharves”;and some 2,000
citizens. After the service in
St Andrew’s, Allan was buried
beside his wife in the family
mausoleum in Mount Royal
Cemetery.
It
was symbolic that he should die
in the land of his birth and be
buried with honour in his
country of adoption. A member of
an important Scots shipping
family, he had been trained by
his father’s colonial associates
and, as a young man, promoted to
partnership in a prominent
Montreal merchant house. His
operations were characterized by
internationalism: he did
business in London, Liverpool,
Glasgow, New York, and Chicago;
he transferred the ships he
purchased from Canada to
Scotland; and his Merchants’
Bank had some of its most
profitable activities in New
York. At the same time, able in
many instances to exploit both
French and English Canadian
nationalism, he remained a
staunch anti-annexationist.
Combining capital, international
ties, and a willingness to
invest in new forms of
transportation, he had built
Canada’s most important
steamship company. He increased
his company’s power by carefully
attending to the protection of
markets, soliciting favourable
legislation, obtaining
subsidies, and limiting
competition.
From
his shipping base Allan expanded
vigorously into the industrial
economy which developed after
1860, exploiting Montreal’s
growing metropolitan strength
and widening markets brought by
the transportation revolution.
With improved technology, the
increasingly bureaucratic nature
of business, and the revised
political structures of
confederation, he became one of
Canada’s first monopoly
capitalists. Despite some false
starts and without the
rationalization of later
industrial organization, Allan
developed an integrated
financial, transportation, and
manufacturing empire. His ships
carried immigrants, his
factories hired them and made
the material for their clothes,
his land companies sold them
land, and his finanical agencies
insured them and lent them
money.
Capital was the key. Perhaps the
most knowledgeable Canadian
entrepreneur in the use of
subsidies and public capital, he
could tap both long- and
short-term funds from his
contacts in commercial banks,
savings banks, insurance
companies, and mortgage
cooperatives. Rather than being
just a model Canadian
entrepreneur who profited in
systematic fashion from the
economic opportunities offered
by Canada, Allan emphasized the
importance of capital – and not
management or technical skills –
as the central factor in
permitting the exploitation of
emerging economic sectors in
mid-19th-century Canada.