All Western Dollars
by Peter Lowe
MHS Transactions, Series 3, 1945-46 Season
My narrative must necessarily start with personalities for the reason that the private banking firm of Alloway and Champion was made up of individuals, who, each in his own way, contributed something to the building and commercial life, of the City of Winnipeg and Western Canada.
It would appear that the young men of the period about 1870 were not much different from those of today. Whether it is a trait of Canadians or not, it has always seemed to me that “we want to go places, learn what is to be learned and see what is to be seen.” This spirit must have formed part of the life of the young men resident in the Provinces of Ontario and Quebec in the days of 1870, when, at the request of the Imperial Government, there was organized a Red River Expedition under Colonel Garnet Wolseley, consisting, we are told, of some 400 Regulars and 800 Canadian militiamen, most of whom came from Ontario.
The route of the Wolseley Expedition to the Red River Settlement was the old established one by way of the Great Lakes, Lake of the Woods, Winnipeg River, Lake Winnipeg and up the Red River to Lower Fort Garry. According to present standards of transportation, the journey was no joyride, and although it was accompanied by a great deal of shouting and much song, all the members were called upon to exert themselves to the limit of their physical strength and endurance. The expedition came to the West by what might be termed the “hard way”. The purpose of the expedition was to guarantee and bring peace to this area of Canada. Its coming had been heralded and the suggested rebellion and much of the dissatisfaction being shown against the then Dominion Government had vanished before its arrival. This was largely brought about by the passing of the Manitoba Act in 1870, which granted Manitoba full provincial government, and guaranteed liberal rights and privileges to the settlers.
William Forbes Alloway, familiarly known as “Bill”, was a private in the Quebec contingent, while Henry Thompson Champion, later known as “Champ”, was a sergeant with the Ontario militiamen. These two men, together with Charles Valentine Alloway, the younger brother of Private Alloway, who came west with the second Wolseley expedition in 1871, were later to become partners in the private banking firm of Alloway & Champion. But before we reach this stage, let me give you some of the highlights of the lives of these young men during the years 1870 to 1879, or the period prior to their launching into the banking business.
W. F. Alloway was born in Ireland on August 20, 1852, the son of Captain Arthur William and Mary Alloway. His mother and father were first cousins and were descendants of very old families who originated in Lincolnshire, some of whom went to Ireland in the year 1690 as part of King William’s army and fought at his side in the Battle of the Boyne. Mr. Alloway was named after an uncle, William Forbes Johnson, a brother of his mother, who in turn had been named after Sir William Forbes who became the founder of the Union Bank of Scotland. This Sir William Forbes began life as a money lender, or what is called a bill discounter, in Aberdeen, Scotland, and this in small measure, may have had some bearing on Mr. Alloway’s later taking to the banking business.
The family came out to Canada in 1855, when William was three years of age. They first settled in Hamilton, Ontario, but removed two years later to Montreal where his boyhood was spent, along with his other brothers.
His father, who was an officer in the Queen’s Own Rifles, became the owner of some fine racehorses which toured the various fairs in the surrounding territory of Montreal, and the boys, who were each about two years apart in age, were the jockeys who rode the horses. Although none but his close personal friends were aware of it, some marks from injuries received in William’s early riding remained with him. His fondness for horses, however, continued throughout his life; he became an expert judge of horseflesh and in addition was highly regarded as an amateur veterinarian.
Private Alloway, when he arrived at Fort Garry, had just passed his eighteenth birthday. He remained a member of the Garrison Force for approximately one year, when he was drafted into the police force commanded by Captain Villiers, that was to take over the new provincial law enforcement.
At the Old Stone Fort a thousand Indians had assembled in 1871 to negotiate Treaty No.1 with the Dominion Government. Long Bones, a minor chief had been in jail at the fort, he having casually murdered one of his squaws. He had escaped from the Lower Fort, and the police had learned that he was being concealed in the camp of his companions then outside the fort. A demand for his surrender had been refused, and the agitation ensuing among the Indians had reached dangerous proportions. About midnight, Private Alloway was awakened and given an order to ride with great haste to Silver Heights, the home of James MacKay, buffalo hunter, a man who could speak all the dialects of the prairie Indians and exerted vast influence among the tribes. It was thought that he alone could quiet the natives. Mr. Alloway’s riding ability stood him in good stead, and he accomplished the ride of twenty-eight miles in one hour and ten minutes after having changed horses at the village. MacKay, who was a big man and weighed more than 350 pounds, had to use his buggy for the hurried journey, but succeeded in arriving at the Lower Fort just before daylight. He talked with the angry Indians all day and persuaded them to surrender Long Bones, and the treaty was signed a few days later.
The thrill of this incident appears to have had a marked influence on youthful Private Alloway’s future. He had played a part in bringing peace to a dangerous situation in which law and order triumphed. For him fear of the West and what it contained was replaced by a new courage and a determination to take an outstanding part in overcoming the difficulties of the new territory.
Mr. Alloway’s first duty as a provincial policeman was to keep order at the elections. He was detailed for Point de Chene. Everything went in order and he delivered the ballot box to Sheriff, later Senator Sutherland. The first parliament met in the Bannatyne house which was situated where the main office of the Canadian Bank of Commerce is now located on Main Street. Mr. Alloway was stationed as a guard at the door when the first Legislative Assembly of Manitoba met.
Mr. Alloway retired from the Police Force in 1871 with very few dollars in his pocket and began to look for business opportunities. His first venture was to open a cigar and tobacco store on the east side of Main Street between Portage Avenue east and Lombard Street, but less for the purpose of vending tobacco than of getting into touch with the many who looked upon the tobacco store as a natural lounging place. Out of the smoke rings and from the conversation which passed between the proprietor and the customers who came from far and near, he learned much about the country to the west, gleaned many business ideas and discerned many opportunities.
His love for animals, especially horses, and his reputation as an amateur veterinarian brought him a wide connection and repute, among horse owners, and won him the friendship and intimacy of Hon. James MacKay, who was the Speaker of Manitoba’s first Legislative Assembly. The two knew good horses and good oxen when they saw them, and both were experts as to the capacity and strength of Red River carts. The influx of settlers was rapid, and when the survey and construction work was begun by the Canadian Pacific Railway Company on its line to the Pacific Coast, it opened up a rich field for freighting. Mr. Alloway and Mr. MacKay then went into the transport business.
Some of the new settlers coming into the West in the early ‘70s used the route over the Great Lakes to the Northwest Angle of the Lake of the Woods, thence by the Dawson Road to Winnipeg. The first work of the new transport firm of Alloway and MacKay included the carrying of provisions to the Northwest Angle, a distance of about one hundred and fifteen miles by the road that was taken. After the dissolving of his partnership with Mr. MacKay, Mr. Alloway continued in the freighting business, and at one time owned and operated 6,000 Red River carts and as many oxen. These vehicles could carry about 700 to 1,000 pounds, and the service he gave extended as far west as Edmonton, east to the Lake of the Woods, and south to Moorhead, Minnesota. Moorhead at that time was the railhead of the Northern Pacific Railway, and many of our early settlers came to that point by rail and proceeded to Fort Garry by cart and wagon transport. Freighting from Moorhead in this way was dealt a death blow in the year 1872, when James J. Hill put a steamer service to work on the Red River, and in turn the steamer service vanished in 1878 on the completion of the first railway in Manitoba, which ran from Winnipeg to Emerson and connected with Jim Hill’s line at the boundary.
Cart and wagon transportation for men and materials both east and west of Winnipeg continued for a number of years during the construction of the main line of the Canadian Pacific Railway, and in particular to points of settlement north of the railway, which had to await the coming of branch lines for some years.
In the Alloway outfits one driver usually handled a train of five or six carts, and the trains were grouped together in brigades of fifty to one hundred carts or more. I have often heard Mr. Alloway speak of large brigades headed for Edmonton, and of the high degree of honesty displayed by those accompanying them. The time entailed in covering the entire distance had to be estimated, and separate carts were included in the brigade containing the supplies upon which the men and animals were to live. Weather conditions often intervened to delay the carts, and the supplies for the men were exhausted before their destination was reached, but regardless of this, and of the fact that the cart contained foodstuffs, not one pound of the provisions which were labelled for delivery at the post of destination would be touched.
While in the ‘70s freighting took much of his time, Mr. Alloway also engaged in other undertakings. He bought horses on commission for the Government, to be used in the railway construction work on the line being run from the head of the lakes to Winnipeg, which line was later taken over by the Canadian Pacific Railway. He sold carts and wagons to survey parties; and because the ferry service over the Assiniboine River at Main Street was being indifferently run, bought out the owner and replaced the half-breeds who were operating it with reliable men. He took an interest in the milling business and was a partner with the Ogilvies in establishing the first flourmill in Winnipeg and Western Canada.
During this time he did not forget his civic duties, as he was a member of Winnipeg’s first fire brigade, which was organized on a volunteer basis. In January, 1876, he was a successful candidate for Alderman for Winnipeg’s South Ward. The qualification necessary was to be worth at least $2,000 in City property, and an unsuccessful attempt was made to unseat him on the assumption that his property holdings were worth only $1,450.
In these early days of the life of Winnipeg, every resident became interested in real estate, and Mr. Alloway was no exception to the rule; but in all such transactions he exercised the same high quality of judgment which enabled him to look at any type of horse and estimate its real value. Mr. Alloway visualized the development of the City, and evidently felt that it would spread westward more than north or south. Later I will dwell on the real estate transactions of the banking firm of Alloway & Champion. As an illustration, however, of the profitable judgment of Mr. Alloway in the land of his community, he told me this story.
A man by the name of James Mulligan and his wife lived on the bend of the Assiniboine River which is still known as Armstrong’s Point. He was an ardent driver of fine horses, and commissioned Mr. Alloway to acquire for him a team of steppers and a carriage. On one of Mr. Alloway’s trips to Eastern Canada which he frequently made, he purchased what he considered to be a perfectly matched span of horses and a Victoria, which he shipped to railhead at Moorhead, Minnesota, and personally drove in easy stages from Moorhead to Winnipeg. After slicking up the horses and polishing the carriage to the nth degree, he drove the outfit to the home of the Mulligans. Mulligan and his wife were greatly pleased with both horses and carriage, as it represented the outstanding feature of its kind that was to be seen in Winnipeg or the West. The outfit cost approximately $1,400, landed in Winnipeg, and Mr. Alloway took in exchange therefore a strip of property five to six chains wide running from the Maryland Bridge to Portage Ave., now bounded by Walnut Street on the west and Maryland Street on the east. He continued to own the property for several years and then sold it for $30,000 cash.
Mr. Alloway informed me that this was the first “chunk of money” he had made in Winnipeg, and that everything he had made up to that time had been acquired the hard way by the sweat of his brow.
When the steel reached Winnipeg in 1878 from the south, profit from freighting declined, and he withdrew from the field which had already become quite competitive. With ready money from his successful operations available to him, he was continually called upon for loans on real estate and for new business enterprise, and in that year opened a small office on Main Street, adjacent to the present main branch of the Bank of Montreal. In the same year on a trip to Eastern Canada Mr. Alloway married Miss Elizabeth McLaren, member of a well known lumbering family of Ottawa. There was one child of this marriage, lost in early infancy. I will always remember their devotion to each other.
Mr. Alloway built for his bride what was then regarded as a substantial home on Assiniboine Avenue. The elite of the City then lived in Point Douglas, and the new residence was far removed therefrom. His choice of location and the judgment he exercised was very soon vindicated, as the Point Douglas residents soon overflowed into the same vicinity. The home was named “The Derries,” which was the name given to the old residence of his ancestors in Ireland. The Assiniboine Avenue property was substantial in area, and gave sufficient room for a tennis court and other sports. Every Saturday afternoon their friends and acquaintances wended their way to “The Derries” and had a round of fun, which was topped by the serving of tea and refreshments to all comers. Thus the home of the Alloways became the early social centre of Winnipeg, and continued to hold this place in the community for many years.
Let us now turn to the life and career of the other senior partner, Henry Thompson Champion. He led a much less adventurous and glamorous life than either Bill or Charlie Alloway. He was born in Toronto in 1847, educated at Upper Canada College, and prior to coming west was a clerk at the Bank of Montreal at Perth, Ontario. He arrived in the West, as I have stated, with the first Wolseley Expedition in 1870 and was a Sergeant with the contingent from Ontario. He remained with the troops in garrison for about two years, when he took his discharge and found employment with the Merchants’ Bank of Canada in Winnipeg. He gained promotion from time to time, and by the year 1879 had become the accountant. His background and training, therefore, fitted him in every way for the part that he was later to play in the banking firm of Alloway & Champion.
Charlie Alloway, the younger brother of W. F. Alloway, came west with the second Wolseley Expedition in 1871. Although not a partner in the various undertakings, he was associated for a number of years with his brother and the Hon. James MacKay in freighting, trading and merchandizing throughout western and northern Canada, over which he travelled extensively. On several occasions in the early days he visited both Fort Churchill and Port Nelson. He was also well acquainted with the Peace River country, and his visions of its development as an agricultural area have been realized.
When the West was being opened up he had the distinction of carrying the first mail between Calgary and Edmonton, and he is credited with being the instrument of destiny in saving the remnant of the myriad hosts of prairie buffalo.
He was a lover of nature and became an authority on the bird and animal life of the prairies. He was a prominent horseman, a member of the Rowing Club, and an enthusiastic cyclist, being president of the Winnipeg Bicycle Club in the days when that pastime was at the height of its popularity.
Between the years 1872 and 1878, Charlie Alloway became acquainted with every trail, stream and lake, throughout the West, and acquired a speaking knowledge of a number of the Indian dialects as well as of French. The greater part of his life in this period was spent on the trail, and after a few days in the city, he was ever willing to return to the broad western expanses.
I have already indicated that W. F. Alloway retired from the freighting service in 1878 and was engaged in the loan business. He must have considered that this field offered profit possibilities, for in 1870 [actually 1879] he sought out his old friend and associate, H. T. Champion, and together with his younger brother, Charlie, they entered into partnership. The records are no longer available to me showing the amount of capital invested by each partner, but my understanding is that the capital was very largely supplied by W. F. Alloway, with smaller amounts being put up by the other two partners. It also seems clear that W. F. Alloway did not put all his ready money into the business, as he was too wise to place all his eggs in one basket.
Under the partnership agreement, the partners were first entitled to receive 5% on the capital they had subscribed, and after this amount had been paid, the surplus profit was divided 40% to W. F. Alloway, 40% to H. T. Champion and 20% to C. V. Alloway. W. F. Alloway and H. T. Champion were considered the senior partners and Charles Alloway a junior partner.
Looking over the partners, we have W. F. Alloway, regarded as a man of sound business judgment and integrity; H. T. Champion, a conservative type of man supplying the knowledge of banking routine as well as the fundamentals of how to obtain proper security for the loans made; and Charlie Alloway who had no loaning or banking experience, but who had linguistic ability and was ready and willing at a moment’s notice to take to the trail and carry out any assignments given him.
Successful partnerships are rare, and looking back over the conditions confronting Winnipeg and the West around the period we are reviewing, it can be asserted that the partnership was well joined, that each partner possessed useful abilities for the times and conditions, and what was lacking in one was available in the others. It could fairly be said that their partnership was like a good marriage, and it was broken only as death called the partners.
The new firm got under way in the premises used by W. F. Alloway in his personal loan business which was located, as I have said, on the east side of Main Street immediately south of the present site of the main office of the Bank of Montreal. In a year’s time they moved to 362 Main Street on the west side of the street, and the new location became their permanent banking premises. The Merchants’ Bank of Canada was the only chartered bank having a branch in Winnipeg at that time, although other banks established branches several years later.
When we look at the banking and variety of loaning facilities now available over the whole of Canada, one wonders what functions the private banking firm performed, but as has happened in each new territory opened, there is a waiting period between settlement and the coming of the public and commercial services usual to older settlements. Canada itself was a new country, and no doubt the West’s waiting period was lengthened by reason of the difficulties of great distances and the fact that the railway to reach the settlement, had to be run through hundreds of miles of rock and muskeg, which could not at that time supply anything towards its upkeep. While some supplies of staple commodities were brought in and were available to settlers, part, and in some areas all sustenance had to be obtained from the natural resources at hand.
Our early settlers, therefore, became resourceful, and of course some more successful in acquiring wealth than others. Neighbourliness was practiced to a higher degree than we know it today not only for protection purposes, but also in the interests of advancing settlement. The man with earned wealth at his command was called upon to make loans to settlers and to fellow pioneers, and as this process continued, recognition as a private banker followed. Thus in the history of Canada private bankers or banking establishments were the forerunners of larger and stronger banks, and some of the chartered banks had their beginnings in private banking firms or bought out private banking firms in order to become established and enlarge their field. This train of events was not new to Canada, and it will be remembered that prior to the establishment of any chartered banks, many private bankers or banking firms were in existence in Eastern Canada. The purposes private banking firms served in the development of Canada cannot be overestimated.
A private banker or banking partnership was not restricted by a charter and was in a position to lend help or withhold it, in any business venture, or take security of any kind whatever. Their only limitation was the amount of capital they had available and the quantity of funds entrusted to them by their depositors. On the other hand, the chartered bank had to work within the powers of its charter, and this in particular excluded the making of loans where the security offered was real estate.
In the early days of Western Canada real estate, or papers having to do with land, was about the only security available, and it was to be had in quantity. The making of these loans was a free and open field for the new private banking firm, and they became the main source of revenue both then and throughout the life of the business. The loans were made at short date, usually from three to six months, and not for long periods, as was usual under mortgage company lending. The private banking firm could also make loans of a similar character to those usually handled by the chartered banks, which included loans to merchants, loans to individuals against specific security or on the endorsement of one or more persons.
Surplus capital could be put at risk and was put at risk, during the rising tide of settlement, by the firm of Alloway & Champion, in well selected farm lands and well located City business sites, as well as other thoroughly considered undertakings. Risks no doubt were taken, but the experience and sagacity of the members of the firm carried them through all the booms and depressions suffered in the West or in Canada as a whole, without their at any time suffering from financial embarrassment.
While giving you some details of the development of Alloway & Champion’s banking and loaning business proper, it will also be my privilege to tell you something of the ventures entered into by the firm in the years running from 1879 to about 1906.
Under the “Dominion Lands” Policy, and as part of the settlement for their title claims to the prairies, the Government, under the Manitoba Act of 1870, set aside ungranted lands to the extent of 1,400,000 acres for the benefit of the “families of half-breed residents”. It was assumed that long familiarity with the country would enable the grantees to select the best lands available, but when reviewing the half-breed claims after the Rebellion, it was found that 90% of the grantees had succeeded in selecting the poorest land obtainable. In 1874 “the half-breed heads of families” themselves, were granted 160 acres of ungranted land or $160.00 in scrip applicable to the purchase of Dominion lands, while in 1876 this was changed by Order in Council to scrip only. In 1874 the original white settlers or their children who had settled at Red River during the Selkirk regime also received grants of a quarter section, later amplified to scrip for $160.00. Land was very cheap in those days and continued so for many years.
Volume II, Part II of the Canadian Frontiers of Settlement series by Chester Martin, which gives a historical record of the “Dominion Lands” Policy in the early days of Western Canada, indicates that between the years 1870 and 1905 the claims of 24,326 half-breeds had been settled, and to them had been issued land scrip covering 2,609,772 acres of land and $3,633,217 of money or cash scrip. It must be assumed, however, that these figures do not include either land or money scrip issued to the original white settlers or their children. (The volume in question goes into the “Dominion Lands” Policy for Western Canada in full detail and devotes considerable space to the issuance of land and money scrip, and readers will find it of outstanding interest.)
While both land and money scrip appears to have been available from 1874 forward, I am not aware that any of the partners who made up the partnership of Alloway & Champion had anything to do with its purchase before becoming established, but after 1879 as a banking partnership they actively engaged in the purchase and sale of both land and cash scrip as long as it was available. The banking firm became widely known as specialists in all classes of scrip.
Winnipeg, of course, was the headquarters in the West for some time for Dominion Lands in Western Canada, and representatives of the Department were responsible for delivery of the scrip to those entitled thereto. When the Dominion Lands agent was about to enter an area to effect delivery of scrip to claimants, it was not difficult for prospective purchasers to become aware of his plans. In fact the purchasers usually accompanied the Dominion agent.
The firm of Alloway & Champion were particularly fortunate in having Charlie Alloway as a partner who could speak most of the Indian dialects then in use. While some of the early writers claim that scrip was sold for as little as a bottle of whiskey, he related to me that money and his own food were the only commodities he carried. Thousands of dollars were concealed in his clothing, and what could not be taken care of in this way, was carried in a bundle and used at night as a pillow. He recounted that it was only on a very rare occasion, that other purchasers did not attempt to intervene between himself and the seller, and although it was possible for the purchasers to get together and agree on the prices to be paid, this was not always the case, and there was considerable competition among the purchasers.
Land scrip was issued in the name of the claimant, and when properly transferred, permitted the holder to file the scrip on any Dominion Government land then open for homestead, and patent would issue in due course, without the performance of the usual homestead duties. The transfers from the claimants were taken in blank in order that the scrip could be used by any purchaser.
Purchasers were found among new settlers who continued to arrive in increasing numbers, as well as among those settlers who had already homesteaded on Dominion Government land, who found it irksome to carry out the homestead duties on the land they had chosen, while others desired to increase their holdings.
Scrip in quantity also fell into the hands of speculators who anticipated higher land prices, as taxation at that time did not offer any serious obstacle. Such speculators wisely inspected the lands they anticipated acquiring for quality before filing the scrip thereon, choosing locations as close as possible to the anticipated railway or branch railway lines. As settlement gained in volume, these speculators, later known as Land Companies, made connections or arrangements with agents in the Middle States for the gathering and forwarding of settlers to Western Canada, and they in turn became the purchasers of the land obtained at low prices through the use of land scrip. Under such plans you can visualize the opportunities for good profit on dealings in land scrip.
In the early part of Alloway & Champion’s history they confined themselves to the purchase and sale of both land and money scrip rather than buying on a speculative basis, which involved the acquiring of land in return for the scrip. Many assignments, however, were accepted by them to purchase scrip in quantity for speculators, on agreement to deliver the scrip at an agreed on price or at cost plus a commission for making the purchase.
On completion of the railway across the prairies, it was not long before there was a demand for branch railway lines. Manitoba received first attention in this direction, while in what is now Saskatchewan and Alberta branch construction followed later. On completion of the branch railway between North Portal and Moose Jaw in the early ‘90s, which joined up with the U.S. line at the boundary, American settlers began streaming into Saskatchewan and the flow increased in velocity at the turn of the century.
The Haslam Land Company of St. Paul, Minnesota was one of the colonizing agents handling settlers to this territory, and Alloway & Champion entered into a joint arrangement with them. Alloway & Champion supplied the scrip while the Haslam people selected the land, brought the settlers to the land and made sales of the land to the settlers. In the early stages, settlement was made along the branch railway between North Portal and Moose Jaw and later along the branch lines which were extended from Manitoba into Saskatchewan, and which connected with the main line at Regina.
This joint venture in the purchasing of scrip and the sale of the land to settlers obtained through scrip was very successful and quite profitable, both for the banking firm and the colonization agents. It must also have been satisfactory for the settlers, as the contracts they entered into gave no trouble and were fully liquidated.
A new use for land scrip was also found during the years of branch line railway construction. These branch lines to a very large extent were being run through territory occupied by homesteaders on Government land. In order that marketing facilities would be accessible to settlers, the railways established a station and town site about every six miles along its line. Invariably it was found that the station and town site were to be located on property occupied by a homesteader, who had not obtained his patent or acquired title to his land. The Land Department of the railway would buy out the homesteader, and after doing so would look for the required quantity of land scrip for filing thereon in order to complete its title, and when scrip was required for this purpose, more than the going market price was obtainable by the seller.
Let me now give you some information respecting cash or money scrip. Over quite a period of years settlers had a number of alternatives for obtaining land in the West, which included homesteading, acquiring property through land scrip, purchasing from the Hudson’s Bay Company, the Canadian Pacific Railway or the Dominion Government.
Cash or money scrip was a form of security more adapted and in keeping with private banking enterprise, and this class of scrip was very largely dealt in by Alloway & Champion. The scrip could be applied at its face value, to the purchase of Dominion Government lands, and was accepted by the Lands Branch of the Government, in payment of all or any part of the principal or interest owing to them by the purchaser. Much of this scrip was purchased from the claimants at the time of delivery to them by the agent of the Dominion Government, and was bought at varying discounts on the dollar which discount was influenced by the amount of competition at hand.
Most of the Dominion Government sales of land at the time were being channelled through Winnipeg, and it was not difficult for the banking firm to get in touch with those intending to purchase Government land or those who had purchased land and still owed instalments thereon. You can very well see that the purchaser who owed $1,000 on Dominion Government land, was a ready customer to purchase money scrip at say 85 or 95 cents on the dollar and thereby make a saving of 10 to 15% or more, in paying his contract with the Government. The quantity of land sales made by the Government, would seem to have always been much greater in volume than the money scrip available, which resulted in a fairly quick turnover of the scrip purchased with satisfactory profit to the bankers.
Another form of land scrip dealt in by Alloway & Champion was South African Veterans’ scrip, which was authorized in 1908 to Canadian veterans of the South African War. The scrip covered a grant of two adjoining quarter sections of Dominion lands without fee and without the usual homestead duties required. The scrip was transferable and found ready market at prices which reached as high as $1,500. Any scrip not filed on land could be surrendered to the Government for $500 in cash. The firm simply dealt in this scrip on a commission basis, but a supply was always kept on hand to meet local demand.
The banking firm, although not going widely into the land business, also used land scrip to acquire selected blocks or parcels of Manitoba and Saskatchewan good quality agricultural land. Purchases were also made from the Canadian Pacific Railway of lands in close proximity to contemplated new branch lines, their location having been indicated by advance survey parties. Another source of purchase was at auction sales of Indian Lands. When a tribe required capital, they were permitted with the authority and under the supervision of the Indian Affairs Department to sell off a limited part of their land holdings at public auction. School lands were offered for sale in the same way for the purpose of obtaining money to build schools.
The lands purchased were resold to settlers as the railway branch lines progressed and settlement increased. The lands, however, were not held off the market for high prices, and the policy was to sell on demand arising at the going prices for the district. The lands were turned over at modest profit and instead of retarding settlement actually assisted it.
In 1873 the Manitoba Legislature approved an Act, which opened the way for the establishing of our municipal system in the Province. It conferred power on the municipality to build roads, ditches, schools and other facilities looking to the welfare of the residents of the municipality. To meet such expenditures, the municipality was permitted to levy taxes on the lands in the municipality benefiting from the improvements and in the event of non-payment of the taxes levied, the land became subject to a tax sale procedure. Under this procedure the municipality held an annual tax sale, sold certificates representing the arrears of taxes due them which carried a penalty of 10% per annum to the holder. If the owner failed to redeem within two years, the holder of the certificate was entitled to place the land under tax application. Service of legal notices on all the parties interested in the land then followed. Failure to redeem within six months after this legal notice was served, resulted in forfeiture of the land to the tax applicant.
Alloway & Champion became extensive purchasers of tax sale certificates immediately on entering the private banking business in 1879, and this lucrative form of investment continued throughout the years. Agents were employed, who had knowledge of the value and quality of the lands covered by the tax certificates advertised for sale by municipalities, while they knew Winnipeg values themselves. The very large part of the certificates were always redeemed, many shortly after sale or a few months after sale, and this increased the profits made. In a limited number of cases tax title was obtained to the property but profits on resale far exceeded losses.
At the turn of the century the in-flow of people brought the population of Manitoba to more than a quarter of a million, and in the territories to the west to 158,000. The records indicate that 24% of the whole population was to be found in cities, towns and villages, of which Winnipeg with a population of 42,340 was the largest, and had the distinction of being the “Gateway to the West.”
Around this time, as a demonstration of their belief in the future of the city of Winnipeg and Western Canada, the banking firm of Alloway & Champion selected and purchased some outstanding parcels of real estate in the Winnipeg business area. W. F. Alloway made the selections and the other partners agreed with his judgment. They already owned their premises at 362 Main Street as well as the property adjoining to the north or about eighty feet. There was purchased the westerly 192 feet on the south side of Portage, between Fort Street and Garry Street, as well as fifty feet on Garry Street immediately to the rear, and in addition, forty-four feet on the south side of Portage Avenue between Garry Street and Smith Street. The price paid for all this property appears to have been about $90,000.
Values rose very rapidly, and within a few years the south-east corner of Portage and Garry, being forty-two feet on Portage Avenue where the National Trust Co. Ltd. are now located, was sold to the Winnipeg Free Press Co. Ltd. for $55,000. They erected the present building thereon. About 1903 or 1904 the remaining 150 feet on Portage Avenue was sold to the Dominion Government, and our present Post Office was erected on this property. The sale price to the Dominion Government was $150,000, not a high price according to present standards of value. The fifty feet on Garry Street on which a two-storey garage had been erected was entered in the books at a cost of $38,000. In 1912 this garage property was sold for $100,000. It is now part of Post Office.
The sales set out were all effected prior to the T. Eaton Co. Ltd. making a decision to come to Winnipeg and locate on Portage Avenue, and I venture to express the opinion that the sale of the site on Portage for our Post Office had much to do with future development of this thoroughfare.
I had the pleasure of selling the remaining forty-four feet on the south side of Portage Avenue between Garry and Smith Streets in 1919 at a price $205,000.
It will be noted that the original investment of $90,000 in the properties set out brought a capital return in excess of $500,000.
This random recording of the purchases and sales of business sites in Winnipeg, does not represent by any means all the transactions the firm entered into. Those enumerated, however, are outstanding from point of profit and they also indicate the shifting of our retail outlets from Main Street to Portage Avenue, as well as the time the movement began.
The private banking firm of Alloway & Champion in course of time, also entered into the purchase of mortgages and agreements for sale. In making such purchases, in addition to receiving the rate of interest called for in the contract, it was usual to take a discount off the face value of the mortgage or agreement for sale, the amount being governed by the length of the term the mortgage or agreement had to run. As a reserve against possible loss, the total discount was then placed in a deferred profit account and only credited to profit as the annual or semi-annual instalments under the contracts were duly paid.
While many companies who purchased mortgages and agreements, in the ups and downs of Winnipeg real estate values lost substantial parts of their capital in their ventures, to my knowledge, Alloway & Champion did not suffer loss, and in fact made good profits in this way. They did not, however, just go blindly ahead making purchases. There were years when they would not make any purchases, except contracts which were of a preferred character. This is a clear indication that they exercised foresight and judgment in respect of the times and conditions. They apparently became experts in gauging Winnipeg’s real estate cycles and their many years of experience stood them in good stead.
I have now given you a fairly comprehensive resume of the ventures entered into by the private banking firm, the opportunities for which were brought about by the rapid development of the West. During all this time, however, Alloway & Champion never overlooked the fact that the mainstay of their business was banking and loaning, and we now return to that side of the undertaking. It offers some very interesting highlights.
Our prairies were being settled not only by people from Eastern Canada, the United States and the British Isles, but also from many parts of Europe. These included Poles, Russians, Ruthenians, Austrians, Hungarians as well as Germans, Danes, Hollanders and Belgians. On arrival in the West, some, and in many cases all the money in their possession was in the gold, silver or the paper currency of the country from which they migrated.
Alloway & Champion developed foreign money or exchange facilities to meet this need. Daily quotations were received on all foreign exchange from several New York banks who were specializing in purchasing foreign moneys from immigrants entering the United States. New York was the clearing centre for foreign exchange. Alloway & Champion not only dealt in foreign currency over their own counter, but bought foreign exchange from the chartered banks in the West to whom they supplied up to date quotations by mail. They were recognized as the largest foreign exchange bankers in the West for many years.
Not all the settlers brought from European countries to the West immediately took up land, and a considerable part of the immigrants from central Europe, in particular, were engaged in railway construction work. Such immigrants, if married, usually left their families in the country of their origin, and after being employed for a short time wished to send money home for their support.
To meet this desire, Alloway & Champion began employing young men who could read, speak and write the central European languages, and they established foreign connections which permitted them to send money to almost any part of the world, by bank draft or money order. It was only natural on the provision of these facilities that the immigrants themselves asked to open savings accounts with their surplus funds. A high degree of confidence was brought about between the immigrants and the banking firm who treated them fairly and with kindness, the extent of which was probably not equalled by any other concern in the West.
By the year 1904 the volume of foreign business done by Alloway & Champion reached such proportions that a decision was made to erect a branch office near the Canadian Pacific Railway depot, largely for the purpose of giving banking service to foreign immigrants and residents. The branch was opened at 667 Main Street in 1905, and was successful from the beginning. My career with Alloway & Champion began in this branch in October, 1906, and the staff then consisted of five linguists including a stenographer who was called on to operate not only an ordinary typewriter, but a Russian language typewriter as well. The remaining staff was made up of an English manager, myself as teller, and an office boy, all of whom acquired sufficient knowledge of the language spoken by those of Slavic descent, to do the business of his department or to direct the customer to the linguist in charge of serving his particular need.
This branch became one of the busiest banking offices in Winnipeg, and the chartered banks must have looked upon it many times with a great deal of envy. It supplied every banking need of the foreign population as well as other needs subsidiary to banking. The sale of foreign drafts, the purchase and sale of foreign currencies and the money order remittances to Central Europe reached an extensive volume and brought satisfactory but not high profits, while the number of savings accounts operated reached high figures.
This branch of Alloway & Champion also became a booking agent for all Atlantic Steamship Lines, and in the fall, when the construction work on the railways ceased for the year, both rail and steamship tickets were sold to large groups of immigrants who journeyed to their place of European origin for the winter, again returning in the spring. The steamship tickets sold were not always eastbound or out of the country, but the firm developed a large business in prepaid or westbound transportation into Canada. These sales were made to residents who desired to bring their families or other relatives from Europe or the British Isles to Canada. In a great many cases the purchasers were not able to pay the full value of the tickets purchased and the banking firm provided loans for this purpose.
The records indicate that after 1906, Alloway & Champion made no new purchases of either farm lands or city property, and that a decision was reached to make sales of these assets as and when satisfactory prices were obtainable. Half-breed land scrip and cash scrip had largely vanished from the market by this time, and only an occasional scrip came to light. It is apparent that the firm reverted more closely to carrying on legitimate banking and loaning, or investments which were closely related to the banking business.
A statement of assets and liabilities dated September 1st, 1906, is in my possession which shows that the total assets of the partnership at that time were $890,000. There was due their depositors $335,000, and the capital employed in the business was $555,000. At that time John J. Lenfestey, who had been employed as accountant for a number of years, was taken into the partnership and became general manager.
The policy of disposing of the lands and properties owned by them was successful and by the year 1912 the capital of the partnership and undivided profits amounted to $1,125,000, or double that of 1906. In this year the partnership made application to the Province of Manitoba for incorporation and became a limited liability company, with paid-up capital of $1,025,000 and a reserve of $125,000. W. F. Alloway became the president, H. T. Champion the vice-president, C. V. Alloway a director, and five additional directors were added in the persons of Sir Daniel H. McMillan; Hon. Colin H. Campbell; George F. Galt; D. E. Sprague and F. W. Heubach. J. J. Lenfestey continued as general manager and I became the secretary, having been moved from the foreign branch to the head office in 1910.
The head office premises at 362 Main Street were rebuilt in 1910-11, and had become a small but model banking structure, with substantial vaults and up-to-date equipment.
You entered the premises through heavy bronze doors, which were kept shining “like a nigger’s heel” and as a result, the banking office became known as the bank with “gold doors.” Many strangers to the city found the premises by this simple direction from a friendly policeman or citizen.
The business continued to progress, and the savings left on deposit with the company grew year by year; at the foreign branch office they reached as high as $1,800,000. The loaning facilities at the head office expanded at the same time and the funds were promptly loaned out or invested in liquid securities, in order to provide quickly saleable assets to meet any demand on the part of depositors. In addition to the capital and funds available through deposits, the company had a line of credit at its bank of $1,000,000. Bank credit was only sparingly used, but was a valuable asset in case of need.
When the Great War broke out in 1914, the company was in very sound financial condition, and although the steamship and foreign remittance facilities were largely cut off, it maintained a satisfactory earning position. The company kept its affairs in a highly liquid position during the war and gave strong support to Government Victory Loans.
Early in 1916 Mr. Champion showed signs of being in poor health, and he died in June of that year. Mr. Lenfestey, the general manager, retired the same year and I became the general manager and secretary of the company. After Mr. Champion’s death, W. F. Alloway began to feel that the responsibilities he was carrying were too great for a man of his age, and the years 1916 to 1919 were used to put everything in “apple-pie order,” with the end in view of selling the entire business to one of the chartered banks. He negotiated with only one bank the Canadian Bank of Commerce, who were our own bankers and the sale was consummated in 1919. The bank bought all the capital stock of the company. The public were not informed of the change in ownership at the time. Outwardly there was no change, the same policies were continued and, at the request of the bank, W. F. Alloway carried on as president of the company.
The new owners had purchased the business with the full intention of enlarging its scope and field. Accordingly the company took out registration to do business in the Province of Saskatchewan and when this was completed, mortgage loans on farms located in well selected districts were made to the extent of half a million dollars and tax sale certificates (in which a large volume of business was done in Manitoba) were purchased to the extent of a quarter-million dollars. The company had the co-operation of all the branches of the Canadian Bank of Commerce in Saskatchewan, in making both the mortgage loans and purchasing tax sale certificates.
The extension of the field covered continued until the year 1923, when at the decennial revision of the Bank Act by the Dominion Government, an amendment came into force which required the chartered banks when publishing their annual statement of affairs to append a full statement of any subsidiary companies in which a bank had a controlling interest. This amendment was not liked by the new owners or the other chartered banks, and the acceptance of new business was brought to a halt.
After thinking very seriously about the subject, I personally came to the conclusion that this change in the Bank Act would restrict the new owners in any further development, and that eventually the business would be closed out, with the banking assets being distributed to other branches of the bank. W. F. Alloway, however, was still a powerful force, and he did not wish the business closed out until after his death, which occurred on February 6, 1930, his brother, Charles V. Alloway, having predeceased him in September, 1929. Some six months after the death of W. F. Alloway, as was expected, the business of the head office was transferred to the main office and the Portage and Garry branch of the Canadian Bank of Commerce, and that of the foreign branch was amalgamated with the Main and Alexander branch of the bank. Thus, one of the most successful, and I believe the largest, private banking concern ever established in the history of Canada came to an end.
There is one thing which is very outstanding in respect to the history of the banking firm of Alloway & Champion Limited. When the three original partners who established the business arrived in the West in the ‘70s, they had no capital whatever in their possession, and at no time did they receive any assistance or financial help from outside sources. Hence the title of this paper “All Western Dollars” carries with it the true assertion that the business was developed with dollars made in the West. If these old timers still stood in our midst, they would proclaim that Western Canada continues to be a land of great opportunity for men with vision, energy and initiative.
There is a happy sequel to this narrative which has left and will continue to leave its mark on the city of Winnipeg for all time. The senior partner, W. F. Alloway, had a burning love for the city of his adoption which could not be quenched. During his whole life, he was in the middle of every movement to further Winnipeg’s advancement, be it financial, industrial, or the welfare of its people. The benefactions of himself and his good wife to the charitable organizations of the community were generous to a fault, and when aware of community welfare needs, solicitation was unnecessary substantial cheque was already on its way.
My relations with Mr. and Mrs. W. F. Alloway had become very close, and went as far as sitting in with them when giving consideration to the disposition of their estates. Looking back over old wills made by them, charitable and welfare purposes were the main theme, and new developments of this nature were always closely watched and studied. In the course of time Mr. and Mrs. W. F. Alloway heard of the establishment of the Cleveland Foundation, a community trust for charitable purposes, and immediately took steps to obtain the fullest information. A study of their operations soon convinced them that they had found a method of leaving funds for welfare purposes, in a manner whereby the amounts donated, could not become moribund or restricted in use by the “dead hand” of the past.
In 1921 they were instrumental in having a foundation for charitable and welfare purposes incorporated by special act of the legislature of Manitoba, along similar lines to that of the Cleveland Foundation. As the founders and promoters, they buried self and called the organization “The Winnipeg Foundation” after their own beloved community in order that not they alone, but other citizens of small or large wealth, would be given the opportunity of contributing to the well-being of the community in the same manner as they had elected.
Mr. Alloway made his first contribution to the foundation with these words: “Winnipeg has been my home, and has done more for me than it ever may be in my power to repay. I owe everything to this community and I feel that it should derive some benefit from what I have been able to accumulate. It therefore gives me much pleasure to enclose my cheque for $100,000 ‘as a starter’ for the foundation.” This gift was followed by others during his lifetime, and on his death the entire capital of his estate and that of his good wife, who predeceased him in 1926, reverted to the foundation for its charitable and welfare objects. The total of their gifts amounted in all to $1,700,000.
Abraham Lincoln is quoted as saying, “I like to see a man proud of the place in which he lives; I like to see a man live in it so that the place will be proud of him.” Both Mr. and Mrs. Alloway were proud of the place in which they lived; Winnipeg can well be proud of them and of the living and enduring memorial which they established in the Winnipeg Foundation.
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