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Private Property in Peril: Ontario Businessmen and the Federal System, 1898–1911*
Published online by Cambridge University Press: 11 June 2012
Abstract
Two opposing groups of business interests — large, internationally-oriented financiers on the one hand and local businessmen and small manufacturers on the other — engaged in economically-based political conflict over the proper nature of the federal system in early twentieth-century Canada. The national financial community proved unable to protect its conception of private property rights by legal and political means at the national level, and the resulting victory of provincial rather than federal control over property rights made possible the creation of a publicly owned hydro-electric system in Ontario.
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- Copyright © The President and Fellows of Harvard College 1973
References
1 Kolko, Gabriel, The Triumph of Conservatism: A Reinterpretation of American History, 1900–1916 (Chicago, 1963), 284Google Scholar. Wiebe, Robert H. also concludes that, “In all, the business community was the most important factor — or set of factors — in the development of economic regulation.” Businessmen and Reform: A Study of the Progressive Movement (Chicago, 1962), 217Google Scholar. On the emergence of a group of financiers with national and international interests, centered in Montreal and Toronto, see Acheson, T. W., “The Social Origins of Canadian Industrialism: A Study of the Structure of Entrepreneurship” (Ph.D. thesis, University of Toronto, 1971Google Scholar), passim.
2 There is a vast literature on the development of the Canadian constitution. Canada, Senate, Report Pursuant to the Resolution of the Senate to the Honourable the Speaker by the Parliamentary Counsel [W. F. O'Connor] Relating to the Enactment of the British North America Act (Ottawa, 1939)Google Scholar reprints extracts from the first and third judgments quoted; see Annex 3, Case 10, Liquidators of the Maritime Bank v. Receiver General of New Brunswick (1892), 28–29, and Case 16, Attorney General for Canada v. Attorney General for Ontario (Fisheries Reference) (1898), 42–46. Lord Herschell's decision in Brophy v. Attorney General for Manitoba (1895) is quoted in Kennedy, W. P. M., The Constitution of Canada (London, 1922), 421Google Scholar.
3 Kelly, Alfred H. and Harbison, Winfred E., The American Constitution, Its Origins and Development (3rd ed., New York, 1963), 496–542Google Scholar. Field is quoted at 509. This represented a complete reversal of the position taken by the majority in Munn v. Illinois (1877), where Chief Justice M. R. Waite declared, “For protection against abuses by legislatures the people must resort to the polls, not to the courts.” See Miller, Arthur S., The Supreme Court and American Capitalism (New York, 1968), 53.Google Scholar
4 To some degree this begs the question of the precise connection between ideology and material interest. We hope to examine the question of whether these differing conceptions represented conflicting business ideologies through further empirical study of the behavior of entrepreneurs in the utilities field in Ontario.
5 Nelles, H. V., “Empire Ontario: The Problems of Resource Development,” in Swainson, Donald, ed., Oliver Mowat's Ontario (Toronto, 1972), 189–210Google Scholar, and Nelles, , “The Politics of Development: Forests, Mines and Hydro-Electric Power in Ontario, 1890–1940” (Ph.D. thesis, University of Toronto, 1970), Chapter IIGoogle Scholar; Christopher Armstrong, “The Mowat Heritage in Federal-Provincial Relations,” in Swainson, Oliver Mowat's Ontario, 93–119, and Armstrong, , “The Politics of Federalism: Ontario's Relations with the Federal Government, 1896–1941” (Ph.D. thesis, University of Toronto, 1972), Chapter 3Google Scholar.
6 Nelles, “Politics of Development,” Chapters IV and V, discusses the regulation of the mining industry and the role of businessmen in the formation of the public power movement.
7 Canada, House of Commons, Debates [hereafter cited as Debates] July 7, 1903, 6116–17, 6092–93, 6198; August 3, 1903, 7813–14; August 21, 1903, 9420–28. Frederick Hamilton to J. S. Willison, August 12, 14, 15, 1903; Hamilton to A. H. U. Colquhoun, August 15, 1903; Willison Papers, Public Archives of Canada [hereafter PAC], 13140–52. H. H. Dewart to the Editor, Toronto World, July 10, 1903; Petition of the Municipal Representatives re the Principles of the Bill Incorporating the Toronto and Hamilton Railway Company, July 14, 1903; Fred Markey to Sir Wilfrid Laurier, July 15, 1903; Memorandum Submitted in Support of the Toronto and Hamilton Railway Bill, by H. H. Dewart July 22, 1903; Petition of W. D. Lighthall et al. to Sir Wilfrid Laurier and the Dominion Cabinet, July 27, 1903; Laurier Papers, PAC 75011, 75066–71, 75093–98, 76096–103, 76076–85.
8 Debates, March 17, 24, 1905, 2720–25, 3135. R. W. Scott to James P. Whitney, March 30, 1905; Whitney to Scott, April 1, 1905; Whitney to Laurier, April 1, 1905; R. G. Code to Whitney, May 11, 1905; Whitney Papers, Provincial Archives of Ontario.
9 Debates, February 15, 1909, 1026–53; April 19, 1909, 4520–38; May 3, 1909, 5373–5404; May 4, 1909, 5561; May 7, 1909, 5958–60; May 7, 1909. Canadian Annual Review of Public Affairs, 1908, 283–84; 1909, 220–21. Conmee to Laurier, April 1, 1908; n.d. [April, 1909]; and replies, Laurier Papers, 138533–38, 155252–72. See also the correspondence between James P. Whitney and R. G. Code, March–May, 1909, in the Whitney Papers.
10 This paragraph is based upon a reading of the E. H. Bronson and C. E. L. Porteous Papers, PAC. On the basis of these and other collections, we intend to make a further study of the franchise question in Ontario.
11 B. E. Walker to A. B. Aylesworth, January 11, 1907, Walker Papers, University of Toronto Archives. The Railway Commission had been created in 1903 to regulate rates and service of railroad companies under federal jurisdiction.
12 Debates, May 10, 1906, 3077–3101; May 29, 1906, 4035–77; January 29, 1907, 2229–80; March 19, 1907, 4946–64; Statutes of Canada, 6–7 Edw. VII, c. 16; Gibbons to Laurier, November 29, 1906; December 10, 1906, Strictly Private; January 7, 1907; January 22, 1907, Confidential; Laurier Papers, 116166–71, 116504–05, 117937–45, 118550–52. On the drive to avoid competition, see Bliss, J. M., “‘A Living Profit’: Studies in the Social History of Canadian Business, 1883–1911,” (Ph.D. Thesis, University of Toronto, 1972)Google Scholar, Chapter 2.
13 Debates, April 22, 1907, 7314–7407; April 23, 1907, 7485–91; April 26, 1907, 7915–17; February 24, 1908, 3721–30; February 25, 1908, 3703–04; March 3, 1908, 4368–70; March 6, 1908, 4543–44. Canadian Annual Review of Public Affairs, 1907, 494–96; 1908, 45. A. B. Aylesworth to James P. Whitney, February 18, 1907; Whitney to R. G. Code, January 21, 22, 1908, Private; Code to Whitney, February 7, 1908, enclosing, J. M. Gibson to Whitney, March 9, 22, 1907, and Whitney to Gibson, March 9, 1907; Whitney Papers. George P. Graham to Laurier, November 18, 1907, Confidential, Laurier Papers, 132283–84. Gibson to J. S. Willison, January 13, 1908, Private, Willison Papers, 11654–55.
14 A. B. Aylesworth to B. E. Walker, January 18, 1907, Walker Papers.
15 For details of the Cobalt Lake and Hydro controversies, see Nelles, “Politics of Development,” 299–308, 466–474.
16 E. R. Wood to Laurier, June 17, 1909, Personal, Laurier Papers, 157057–60. This attempt to use the power of disallowance to protect property rights has obvious parallels to the use of the 14th Amendment in the United States.
17 The provincial government triumphantly printed 1,000 copies of the Appeal Court's decision in the Cobalt Lake case as a pamphlet, The Florence Mining Company v. The Cobalt Lake Mining Company: Ontario Court of Appeal (Toronto, 1909)Google Scholar. See also J. P. Whitney to E. C. Whitney, April 7, 1909, Whitney Papers. Canadian Annual Review of Public Afiairs, 1908, 285–87, 1909, 381–83.
18 Debates, March 1, 1909, 1750–58. Letters to Laurier protesting the confiscatory Ontario acts during the summer and fall of 1909 from such financial luminaries as B. E. Walker, E. R. Wood, John Blaikie, F. A. Vanderlip, C. W. Kerr, and James Mason may be found in the Laurier Papers. For details of the struggle over disallowance, see Armstrong, “Politics of Federalism,” Chapter 4.
20 In this pattern of conflict there were, of course, anomalies. In 1900 J. M. Gibson and the other members of the Hamilton syndicate had to rely on the province for the manufacturing condition on nickel; in 1907 Gibson turned to Ottawa for protection of his utilities empire. To add to the confusion, he had, as Attorney General in 1903, strongly protested to Ottawa about the use of the charter ploy by local electric railways in Ontario. But by 1907 he himself had become a utilities magnate, and as we have seen, quickly set about protecting his interests from interference by Ontario through federal regulation. In the same way Henry M. Pellatt may be found on different sides at different times. As the promoter of the Cobalt Lake Mining Company he applauded the outcome of the great battle for provincial rights fought on his behalf. Yet that very victory meant that as vicepresident of the tottering Toronto utilities syndicate he would lose the war in 1910.
20 Lord Grey to Laurier, April 10, 1910, Laurier Papers, April 10, 1910, 206676–94, reports Smith's deathbed conversation. Lord Grey himself had a deep interest in various Canadian companies, and his son-in-law Arthur Grenfell, was a London banker with wide Canadian interests.
21 Wallace Nesbitt to Laurier, November 1, 1909; Laurier to Nesbitt, November 3, 1909; Laurier Papers, 161564–67.
22 Whitney to Grey, December 14, 1910, Whitney Papers. Whitney spoke the truth. Before becoming Premier, he and his brother had been involved with some of these same men in a railway promotion. See Whitney to E. C. Whitney, February 7, 8, 16, March 9, April 1, 1899, Letter Book, 1899, Whitney Papers. Though not himself a member of the financial elite, he clearly shared their outlook. He was a late and reluctant convert to public ownership, who became convinced of its necessity only by the stubbornness and violence of the reaction of the private power interests.
23 Whitney to Grey, January 9, 1911, Private, Whitney Papers.
24 Walker to Grey, January 30, 1911, Private, Walker Papers.
25 Quoted in Kelly and Harbison, The American Constitution, 525, 685–721.
26 See Hurst, James Willard, Law and Economic Growth: The Legal History of the Lumber Industry in Wisconsin, 1836–1915 (Cambridge, Mass., 1964)Google Scholar, for a discussion of the institutional setting of business enterprise in Wisconsin; see also Scheiber, Harry N., “Government and the Economy: Studies in the ‘Commonwealth’ Policy in Nineteenth Century America,” Journal of Interdisciplinary History, III (1972), 135–151CrossRefGoogle Scholar.
27 Kolko, Triumph of Conservatism, 285.