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Manitoba History: “Something Dead Under the House”: Management Conflict in the Hudson’s Bay Company in the 1930s

by Elliot Hanowski
Winnipeg, Manitoba

Number 65, Winter 2011

This article was published originally in Manitoba History by the Manitoba Historical Society on the above date. We make this online version available as a free, public service. As an historical document, the article may contain language and views that are no longer in common use and may be culturally sensitive in nature.

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Canadian rebels. Member of the Canadian Committee of the Hudson’s Bay Company had their photo taken with the visiting HBC Governor, Charles V. Sale, at the Upper Fort Garry Gate, 6 September 1929. Left to right: R. J. Gourley, James A. Richardson, George W. Allan, Sale, James Thomson, Conrad S. Riley.
Source: Archives of Manitoba, Hudson’s Bay Company Archives, 1987/363-C-9/20.

A study of the present narrative will suggest that the administrative relationship which exists between London and Winnipeg was conceived in hallucination, brought forth in panic and nurtured in chaos. – F. A. Stacpole [1]

After his retirement in 1959, former Hudson’s Bay Company executive Philip Chester began making notes for a biography. He initially intended to write about the career of his late colleague George Allan, who had been the Chair of the Company’s Winnipeg-based Canadian Committee. What Chester ended up writing about instead, for the most part, were his own conflicts with the Company’s highest executive authority, the London Board. His ire was especially directed at the Board’s Chair, Sir Patrick Ashley Cooper, Governor of the Company. Decades later these clashes still exercised Chester. In his notes for the biography he included a few pages about an incident from 1936 that had particularly angered him. This was “the Simpson’s deal,” a proposed merger of the retail operations of Simpson’s and the Hudson’s Bay Company (henceforth the HBC).

Philip Alfred Chester (1896–1976), General Manager of the Hudson’s Bay Company.
Source: Archives of Manitoba, Hudson’s Bay Company Archives, 1987/363-C-27/30A.

Sir Patrick Ashley Cooper (1887–1961), 30th Governor of the Hudson’s Bay Company.
Source: Archives of Manitoba, Hudson’s Bay Company Archives, 1981/28-1002 by Karsh, Ottawa.

George W. Allan (1860–1940), Chairman of the HBC Canadian Committee.
Source: Archives of Manitoba, Hudson’s Bay Company Archives, 1981/28-1002 by Karsh, Ottawa.

F. A. Stacpole (?–1960), Assistant to the HBC Governor.
Source: Archives of Manitoba, Hudson’s Bay Company Archives, 1987/363-E-700-S/221.

In the third volume of his history of the HBC, Peter C. Newman traced the tensions that evolved between the London Board and the Canadian Committee, paying special attention to the frequent clashes between General Manager Chester and Governor Cooper. Newman briefly touched on the Simpson’s deal, relying solely on Chester’s dramatic version of the story to do so. [2] In what follows I will examine contemporary sources in order to gain an expanded perspective on the incident. I will argue that while Chester’s version is somewhat unreliable (not least because it was written more than two decades after the fact), the events surrounding the failed Simpson’s deal do fit with Newman’s larger narrative of the company’s internal struggles and the issues of geography, class and nationality that informed them.

To set the scene, it should be explained that while the Governor and Directors of the London Board had long been the highest executive authority of the HBC, ultimately responsible to the shareholders for the company’s performance, the Canadian Committee was a relatively recent invention. In 1910, several directors of the London Board, representing activist shareholders, wished to take advantage of commercial opportunities in Western Canada which the then-current Governor, ensconced in an overly “centralized London bureaucracy,” was neglecting. [3] To get the HBC back in touch with Canadian realities a Canadian Advisory Committee based in Winnipeg was formed in 1912. It consisted of three local businessmen who were to serve as the local eyes and ears of the London Board. This arrangement proved especially important as the HBC embarked on a program of building major department stores. While it was always subordinate to the London Board, over the next ten years the Committee slowly took on more executive functions. An “Executive Department” was formed in 1919 and the word “Advisory” was dropped from the Committee’s name in 1922. [4]

It was the Great Depression, however, which brought a larger delegation of powers to the Canadians, in an effort to shake up the Company and reverse its losses, which “grew from $182,000 in 1929 to just over $2 million in 1931.” [5] In 1930 Philip Chester was elevated to the newly created post of General Manager by Canadian Committee head George Allan and the then-Governor of the London Board, Charles Sale. This, it was hoped, would help rationalize and centralize the management of the HBC’s various departments. The new Manager was to report directly to the Canadian Committee, which was to have added authority, including power of attorney, to deal with local situations as they arose. [6] Exactly what this authority consisted of and what its limits were would become a much-debated issue between Winnipeg and London. In 1930 the chairman, George Allan, stated that the Canadian Committee understood their enlarged duties were “similar in character to the duties and responsibilities ordinarily assumed by directors of companies in Canada.” [7] In 1942, the Governor’s assistant, F. A. Stacpole, cited this as the heart of a misunderstanding that had caused a great deal of trouble over the past decade. He noted dryly that the Committee was determined to “interpret the powers conferred on them in a rather wide sense,” but insisted that in the first place the London Board in fact “had no power to confer powers and authority on the Canadian Committee other than those of agents or managers.” [8]

This brings us back to the 1930s and the eruption of the tensions between Board and Committee in “the Simpsons’ Deal.” In the unfinished memoir mentioned above, Philip Chester began his version of the story by explaining that in the summer of 1936 the Canadian Committee had cancelled the Joint London Buying Office that it shared with the Simpson’s stores. This joint office had been designed to create efficiencies for both companies in purchasing European goods and had been introduced in the first few years of the Depression. Governor Cooper and the London Board were unhappy with the Committee’s unilateral decision to end the arrangement, wrote Chester sarcastically, “possibly because the Governor had assumed the Buying Offices came under his direction.” Therefore the vice-president of Simpson’s, David Gibson, had travelled to London to more officially “arrange the separation” with the Board. Canadian Committee chair George Allan then received a cable summoning him to England, causing him to exclaim suspiciously to Chester, “Phil, there’s something dead under the house somewhere!” The two went to London, where on the first day Allan attended a meeting of the Board. Elsewhere, Governor Cooper’s assistant, F. A. Stacpole, secretly “spill[ed] the beans” to Chester about the proposed merger. The HBC operated stores in Western Canada, while Simpson’s strength was in the East; coming together would allow them to challenge the nation-wide presence of Eaton’s. But the arrangement also would have eliminated the existing Canadian Committee, and this, to Chester’s mind, was Governor Cooper’s hidden agenda. Caught by surprise, Chester was infuriated.

On the second day both Chester and Allan attended a Board meeting where Chester railed vehemently against the Simpson’s plan for forty minutes. After Allan also had his say, the meeting ended, and London Board member Edward Peacock quietly reassured Chester, telling him not to worry. Not long after, “Cooper told George Allan they had decided not to go through with the deal.” [9] Unaware of these manoeuvres, “a few days later” the representatives of Simpson’s came to call upon Governor Cooper. After seeing him for only a few minutes and learning that the deal was off, they hastily left, in “a state of fury and consternation.” According to Chester, Simpson’s president Charles L. Burton was so enraged with Governor Cooper that he explained the whole failed plan, previously secret, to Chester and Allan. Cooper, he claimed, had seized upon the idea of a merger (originally suggested by David Gibson) as a means of getting rid of the current Canadian Committee. Burton even let the pair look through his files to see the details for themselves. Upon their return to Winnipeg, Allan and Chester revealed the truth to the rest of the Canadian Committee, who were outraged. A mass resignation was for a time considered, but eventually decided against. Chester’s account identified Cooper as the scheming mastermind behind this plan. Decades later, his notes for the memoir still seethed over the “faithless disloyalty” and “machinations” of the Governor, “whose measure was such that it was unthinkable he would retain the Governorship too long.” [10] Clearly Chester’s memories were strongly tinged by the emotions of his long-term relationship with Cooper, who he saw as his nemesis. This is all very dramatic, but what really happened? Other contemporary documents describing the events and the larger context of the failed Simpson’s deal depict a more complex reality.

Sir Edward Robert Peacock (1871–1962), a Canadian on the London HBC Board.
Source: Archives of Manitoba, Hudson’s Bay Company Archives, 1987/363-P-P/1 N8469.

Charles Luther Burton (1876–1961), President of Simpson’s.
Source: Archives of Manitoba, Hudson’s Bay Company Archives, 1984/40-339 by Karsh, Ottawa.

Ian Patrick Robert Napier (1895–1977), a member of the London HBC Board.
Source: Archives of Manitoba, Hudson’s Bay Company Archives, 1987/363-N-6/1.

To begin with some background about the personalities involved, it should be noted that Cooper and Chester had some things in common. Both were promoted to their positions during the early Depression. Both men were born in the United Kingdom, came from backgrounds in accounting, and, as experts in their fields, were part of the transition to a new style of professionalized management which was becoming prominent throughout the Anglo-American world. [11] Nevertheless their social rank and prospects were far apart. Cooper, a Scot, came from “middle circumstances” in Aberdeen but went to Cambridge, married a wealthy heiress, and ended up living in an opulent mansion. Much of this success was due to judicious use of his managerial and financial skills in the service of the Bank of England and overseas British companies. [12] His skill at salvaging ailing British concerns was what resulted in his appointment to the HBC’s Governorship in 1931. In 1932 he was appointed a full director of the Bank of England, and he would go on to serve on the boards of eight other companies. [13] Deeply embedded in the multinational corporate elite, Cooper moved in powerful circles and was the epitome of the “gentlemanly capitalist.” His diaries are full of lunching and shooting dates with British luminaries, long vacations (often working) to exotic locales around the world, and his “leisure” time spent running the affairs of his local Anglican church and exclusive private club. [14]

Chester, on the other hand, came from a dissenting (that is, non-Anglican) working-class background in industrial Derbyshire. After serving in the First World War, he put himself through accounting school. Joining the HBC at the London office, he was assigned to Winnipeg in the position of Chief Accountant in 1925. He took pains to rid his accent of any features that might identify his class origins. He lived to work, driving himself very hard and expecting all those who reported to him to follow his example. In his limited spare time he associated with other Winnipeggers, albeit prominent ones like Manitoba Free Press editor, John W. Dafoe. [15]

The conflict cannot, however, be reduced solely to a clash between two individuals, whatever their differences. Right from the beginning of the 1930s there is evidence of the London Board’s discomfort with both the expanded powers of the Canadian Committee and Chester’s aggressive management style. London directors Vivian Smith and Sir Frederick Richmond wrote to Committee chair George Allan on 13 March 1931 to complain, almost apologetically, that they had not been consulted about certain matters, though they were “probably quite trivial ones.” [16] In fact, Smith seemed more intent on stressing that “the only thing I want Chester to be very particular about is not to alter questions of principle without referring to London.” [17] In a letter to Allan, Chester responded that he was:

… not surprised to learn that London had misconstrued our vigorous efforts to get things right as quickly as we could…but I was naturally very much distressed to learn that this had developed into a personal attack upon my motives and intentions. [18]

This back-and-forth would turn out to be a pattern continuing for the rest of the decade, and it could at times become quite personal, on both sides.

Closer to the Simpson’s deal, in 1935 we find Cooper fulminating in his diary against the “intransient [sic] attitude of the Canadian Committee.” [19] Around this time he had a long discussion on the matter with James Henry Thomas of the British Government’s Dominions Office. Thomas knew Philip Chester, and to Cooper’s evident delight,

… described him as a young man who had come too far too fast, who had no experience other than Hudson’s Bay, and needed above everything else experience in other organizations and to have his nose rubbed in it (“and rubbed damned hard!”) He gives him 100 percent marks for his ability, but thinks he is far too puffed up. He also said he was far more “Canadian” than the Canadians, with all their attendant weaknesses.

This diagnosis sums up not just Thomas’ opinion but the general attitude of Cooper and the Board. Chester was seen as competent, but also arrogant and over-reaching. There is, however, more to his intransigence than arrogance: Chester, a Briton, had apparently “gone native” and become “far more ‘Canadian’ than the Canadians.” This was probably not so much a question of nationalism per se as a comment on the desire of the Canadians to exert local control over the HBC, despite their provincial position as Winnipeg-focused businessmen. Cooper asked Thomas for help and advice in dealing with what he called “the malicious campaign of Chester against the Board.” [20]

This tension was never simply a personal matter between Cooper and Chester. The Governor’s diary indicates discussions on the subject of Chester with his colleagues on the Board, who he claimed generally agreed with him. Further, a letter from London Board member Sir Edward Peacock to Canadian Committee member James Richardson, dated 9 January 1935, expressed great concern over Chester’s assertions of independence but hastened to add:

As a Canadian, I am well aware of the unhappy history of the attempts of English boards to manage a number of important companies in Canada, the Grand Trunk Railway being, perhaps, the outstanding example. I am not likely therefore, to err on the side of trying to keep in the hands of the Hudson’s Bay Board more power than is necessary. [21]

Peacock is an interesting figure who helps illustrate the multinational or at least trans-Atlantic character of the business elite to which Cooper belonged. Peacock was indeed a Canadian, from a middle-class background who, like Cooper, had used his managerial skills to rise to the heights of British society. He, too, became a director of the Bank of England and eventually oversaw the finances of the Royal Family. It was for this service that he was knighted in 1934. [22] Peacock’s letter states that Cooper had granted the Canadian Committee expanded powers, but goes on to agree with the Governor that:

… the ultimate responsibility rested with the Board. When Mr. Chester was over here two years ago he expressed views as to his relationship to the Board which indicated that he was not prepared to accept the situation and felt that the Board really had no right to dictate policy or question his actions, that being the sole prerogative of the Canadian Committee. I was surprised and disappointed at the crudeness of his attitude on this subject and was glad to learn that after a talk with the Governor he had modified the attitude he had taken up over some matter then under discussion. It has been clear, however, that he has not really changed his mind. [23]

It is interesting to remember that, in Chester’s account of the failed merger, Peacock would go on to side with him against Governor Cooper.

A letter from London Board member Ian Napier to Cooper, dated 7 January 1935, expressed concerns similar to Peacock’s. The letter was self-consciously marked “Strictly Private.” Napier conceded that the Canadian Committee was exercising “powers that were granted to them in October 1930,” but argued that since Cooper and the other members of the British Board were the ones who were responsible to Company’s shareholders they should have the upper hand. He told Cooper that

… your suggestion that the Head Office be moved to say Toronto, is, I think, a good one as it should enable the Company to have a more intelligent and businesslike Canadian Committee, especially as there are many more business people to draw from in Eastern Canada than in Winnipeg.

Napier went on to encourage Cooper in putting the Canadian Committee in its place, since in his opinion its attitude was “unbearable.” He thought it unlikely that Allan and his Committee would resign, but even if this were to happen, he asked suggestively, “would this be so serious a matter as it at first seems?” [24]

This supports Peter Newman’s claim that Cooper had already been thinking about a shift to Toronto. [25] What is particularly interesting is that this may have been intended in part to get rid of the members of the current Canadian Committee, and that the Governor had the support of at least some of the Board for this line of thought. At the end of Napier’s letter, however, immediately after his remark about mass resignation, he writes: “I would not like to see Chester go at this juncture, as he is a very capable man and I think that he could be brought to his senses.” Despite their discomfort with his assertions of autonomy, the members of the London Board do seem to have admired Chester’s ability to get results.

It should also be noted that Chester was not alone in pushing for Canadian autonomy, but that he worked in tandem with Canadian Committee chair George Allan. On 2 March 1934, Cooper wrote a letter to Allan to complain that the salary of the General Manager (Chester) and others was reduced without the London Board being consulted. One would think that the Governor would approve of lower salaries (he himself had offered to take a pay cut in 1931) but the real issue was Allan’s disturbance of the status quo. [26] The members of the Board, he insisted, “know of nothing that has transpired to the detriment of the Company as a result of the existing arrangements and they strongly deprecate any attempt to strain the interpretation of these arrangements.” He specifically reminded Allan of his personal record: “They [the Board] see no reason why the mutual understanding and friendly co-operation that you have helped so much to build up should not continue to develop to the great advantage of the Company and of all concerned.” Almost two months later the same dispute was still going on, with Cooper reiterating: “One authority only can control finance, and that must be the London Board.” [27]

Another example comes from May 1936, when Cooper wrote about a meeting between George Allan and Sir Alexander Murray, his Deputy Governor:

… Murray had a dust-up with Allan, who tried to say that the Committee could override the Board. Murray broke off negotiations and insisted on the matter being put before the full Board, when Allan climbed down and paid magnificent lip service. [28]

This seems to have been a tactic used regularly by the Canadians: to push for more control, and if they were rebuked, to back down; but only for the time being. London Board member Peacock, of course, had previously alluded to similar behaviour on the part of Chester. Besides this bluffing, the Canadians seem to have used purposeful incompetence, deliberate misunderstandings, and inaction to frustrate their British supervisors. On a Canadian visit in 1937, Cooper wrote in his diary about a ten-hour discussion with Allan that was meant to put him in his place but seemed to lead nowhere. Cooper complained, “It is difficult to judge whether he has his tongue in cheek or is failing to grasp the situation.” On that same visit, he grumbled of Allan, “It is terrible how long he takes to deal with the simplest thing.” [29] In the immediate aftermath of the Simpson’s affair in 1936 there were more of these complaints: “A talk with Allan in the afternoon, when we exchanged views frankly, and he was completely reasonable. But, Peacock put it afterwards he was speaking without his ‘master.’” [30] The next day Cooper attempted to remonstrate with this master: “A long talk with Chester. If the English language means anything, he was entirely reasonable and satisfactory, but I fancy it was all eyewash.” [31]

The principle that “it is easier to apologize than to ask permission” also guided the Canadians. They would at times go ahead and do what they wanted to, on their own, choosing to deal with London’s reaction after the fact, with the defence that they had sincerely thought they were only exercising the responsibilities given them in 1930. This seems to have been what happened when the Canadian Committee discontinued the Joint Buying Office the HBC shared with Simpson’s. Exasperated, Cooper wrote to Allan on 10 August 1936 and informed him that the Board felt it was “regrettable” that no one on the Canadian Committee had bothered to “give the Board an outline of what was evidently in mind, nor write to us in sufficient time to advise us of your proposals.” Cooper insisted that “no further action” be taken by the Canadian Committee until David Gibson of Simpson’s went to London. This way the London Board could exert its authority and deal with Simpson’s directly. [32]

Gibson’s visit to London does indeed seem to have been the catalyst for talk of a merger. The most direct statement on this topic in Cooper’s diary states, “Discussions going on between ourselves and Robert Simpson & Co. for a possible amalgamation between us in Canada. I have been on the telephone to Toronto a couple of times.” This brief note was found between entries marked 10 December and 14 December. The timing makes little sense. Either Cooper was still pulling strings behind the Canadian Committee’s back, or, what is more likely, this is a fragment that was included in the wrong place when Cooper’s diary was being typed out. On the other hand, Chester’s version of the story makes it seem as though the matter was essentially decided after the 11 November meeting in which he spoke out, but this was probably just self-congratulation on his part. In fact, Cooper does not seem to have been particularly fazed by Chester’s impassioned speech, writing in his diary simply “A meeting with Murray, Peacock, Allan, Chester and Stacpole. Chester examined and criticized the Simpson organization in detail for us.” [33] The diary indicates that meetings with Chester, Allan and Simpson’s president Charles Burton went on for weeks afterwards. Furthermore, his meeting with Allan on 10 November seems to have made more of an impression. After the meeting of the full Board, Allan

… met [Board members] Murray, Peacock, and myself, and wholeheartedly condemned Simpson’s and our proposals. It was very evident that he had coached himself and been coached, but he overdid it and Murray firmly pointed out to him that it would have been better for him to have expressed his opinion on the matter, but to have reserved judgment until he had time to study the situation and proposals. [34]

And on 12 November Cooper wrote, “Went over the ground for our meetings with Burton. Allan very sticky. Chester silent. Peacock was admirable.” [35]

For Cooper and Burton the end of the idea seems to have come on 24 November 1936. According to his diary, when the two met, Cooper told Burton that:

… we had been studying his financial structure and policies, and that I had discussed these with my colleagues. We felt that in view of the difference between their and our financial structure and their policies with regard to finance we could not see any possibility of linking the two concerns together. Moreover the merchandising and personnel policies adopted by himself and Chester were so widely divergent, that I saw little prospect of amicable working, even if we succeeded in getting the two concerns together financially. He was naturally disappointed, but took a sensible and calm view of the situation. He immediately said that he would take steps at once to remove his Buying Office from ours. [36]

In Chester’s version of events, when the deal fell apart President Burton was furious with Cooper and willing to “spill the beans” (a favourite phrase) to the Canadians. [37] In Cooper’s story, though, Burton was angry with Chester:

… he broke out in a regular tirade against Chester and Martin [Chester’s manager of retail operations], said he found them both impossible people to deal with, and described in detail how, on their return from London, they had dodged him and his associates and how Simpson’s had to send Colebrook to Winnipeg and the very unpleasant way in which he had been received there. He wound up by saying that the only way to work the Buying Office was with confidence and goodwill, and stated with emphasis: “We have no confidence, and Chester and Martin have no goodwill.” It was quite evident from our talk that he had in mind that in the amalgamation he would eliminate Chester and Martin completely. [38]

Both Chester and Cooper, respectively seem to have regarded Burton as being “on their side,” when perhaps he wanted to declare a pox on both their houses. [39] Further, contradicting his later memory that 11 November was the pivotal date, on 24 November Chester sent a telegram to his subordinate Francis Martin in Winnipeg: “Very satisfactory outcome for Buying Offices and other party decided to make own arrangements and expect discuss with them tomorrow after which will cable again.” [40]

Cooper’s decision to give up on the Simpson’s amalgamation seems to have been influenced as much by other factors as by Allan and Chester’s opposition. In his diary he wrote of negotiating with President Burton and J. H. Gundy (the founder of Wood Gundy stockbrokers) who, as one of Simpson’s main shareholders, served as an outside director. [41] Cooper was not impressed: “Gundy puts cold shivers down my back, and I feel thoroughly anxious regarding his bona fides. He started bluffing heavily about calling off the negotiations, etc…” [42] On the same day, he talked with Peacock who had sent someone to consult Sir Joseph Flavelle. Flavelle, until recently a major stockholder in Simpson’s, was “giving … very emphatic warnings” against “the Simpson Amalgamation.” [43] He was a Canadian millionaire who, like Edward Peacock, had come from a modest background, put his business talents to work for the Empire, and received a knighthood for it. The fact that he was counselling Cooper indicates that questions of class and wealth were far more important than notions of British or Canadian nationality. [44]

After the plan was given up, both the London Board and the Canadians seem to have wanted to downplay it for the record. The Board minutes for 24 November (a meeting at which Allan and Cooper were present) referred to “recent discussions” among Cooper, Murray, Peacock, Allan, Burton and Gundy:

… as to the possibility of arranging some closer association in respect of the operations of the Retail Stores of the two companies, in connection with which question Mr. Allan had been invited to come to London so that the Board might have the benefit of his advice and guidance. During the discussions, however, it had not been found possible to arrive at any comparable basis of the respective financial structure, personnel and operating policies… [45]

Burton and Cooper thus agreed that there was no point in pursuing the question further.

It is worth noting that Chester’s role in the discussions is not mentioned at this point, and it is possible that the British did not want to give him too much satisfaction, since at the end of the affair he did in fact win a number of concessions. Though he was originally chastised for ending the Joint Buying Office without consulting London, “future arrangements for HBC purchases of merchandise” was handed over to him, “subject to report to the Canadian Committee and the Board.” [46] The entry ended with the Governor and Board genteelly expressing “their warm appreciation and thanks” to Allan and Chester for having come all the way to London in order to offer “the benefit of their advice.” [47]

The Canadian Committee held a special meeting on 23 December to hear from Allan and Chester when they returned. The minutes read, simply, “The Chairman made a verbal report to the Committee upon his recent visit to London.” [48] This diplomatic omission is unsurprising, if Chester’s memories of the outrage expressed at that meeting were even partially true. Copies of these minutes were, after all, sent to London. The Canadian side did, however, leave a more official record in the minutes of the January 1937 Store Managers’ Conference that was held in Calgary. Allan gave the gathered managers an official and likely sanitized version of events, beginning, “I feel I must make some reference to the many wild and unfounded rumours that have been circulating about our Stores and Simpson’s.” After explaining the Committee’s desire to split up the Joint Buying Office that had been shared with Simpson’s, he stated that the Governor and London Board

…have always valued very highly this association with Simpson’s, and before this was done they very naturally wished to see if it could be sustained, even if it meant a closer tie-up than had heretofore prevailed. The Governor called me and our General Manager to London to discuss the matter, and it was very soon found that no closer association or tie-up was possible, so plans were completed for the splitting up of the Buying Offices. There is still the greatest friendliness and co-operation between Simpson’s and ourselves. I and my associates on the Canadian Committee value this and wish it to be sustained, but that is all there is to it, and I can say without hesitation that our recent discussions on any form of closer association will never be renewed. [49]

This reassuring version contains the basic contours of the story but in considerably more diplomatic form than Chester’s later telling. It is worthwhile noting the fact the Canadian Committee ordered two copies of these Minutes be sent to the London Board, and explicitly drew their attention to the paragraphs quoted above. [50]

Cooper’s assistant, F. A. Stacpole’s first letter to Chester after he returned to Canada is dated 28 December 1936. In it he made no direct reference to the Simpson’s deal or any conflict between Cooper and Chester. In passing he mentioned a contemporary event, King Edward VIII’s abdication in order to marry the American divorcée Wallis Simpson. In this connection he wrote: “In fact I should imagine the Simpson matter covered a good deal of deeper underlying factors.” [51] This may have been nothing more than a straightforward reference to the King’s intended bride. Whether or not Stacpole intended a double meaning, Chester chose to create one. In his response, in a letter dated 4 February 1937, he indulged in a little gloating:

As you probably heard, there are many stories circulating round Canada, some of which are about why the HBC is like the Duke of Windsor, and the name of Simpson appears in the answer…. We have tried hard to scotch the rumours throughout our own organisation – unfortunately, a little too much of the truth did get about – but on the whole I think it can be said that all’s well that ends well, and the general consensus of opinion is not too wide of the mark in its reflections. [52]

Though Chester’s account remembers F. A. Stacpole as a confidant, in 1942 the latter would write an in-house historical analysis of the administrative relationship between Winnipeg and London that was critical of both Chester and Allan. He argued that many of the HBC’s problems had stemmed from an ill-defined allocation of authority between the Board and Committee which had become particularly problematic after 1930. He also suggested that the Committee had frequently over-reached itself and yet, having won authority, had not used it effectively to create a centralized administration within Canada. Therefore, he recommended moving the Canadian headquarters to a larger and more dynamic city, such as Vancouver, which could supply more open-minded and cosmopolitan businessmen to serve on the Committee.

Stacpole’s candid treatment of the Simpson’s deal is instructive. He writes that the Canadian Committee may have felt that they had “scored rather a victory over the Board” in 1936. This was because “they brought about the breaking off of the discussions with the Simpson Company on the subject of a possible amalgamation,” a view which gives more credit to the Canadians’ role than Cooper does. Stacpole admits that the Committee may have been correct in opposing the plan as unworkable and that the Board showed undue haste in rushing “this particular fence.” However, he criticizes the Canadians for defensively opposing all amalgamations on principle and cautions that some sort of merger may very well prove necessary in the future. [53]

The wide range of sources examined here show that the Simpson’s deal was not simply a duel between Philip Chester and Patrick Cooper, though their personalities were definitely contributory. It was an episode in an ongoing struggle for authority within the company, informed and enflamed by the distance between London and Winnipeg, and by differences in class and national outlook (though as we have seen the differences between British and Canadian identities were not so clearly defined at this time). The Canadian Committee, and particularly its chair, George Allan, seem to have believed that because they had a better grasp of local realities than did the London Board and that the more leeway the Committee had to act, the better off the Company would be. They resisted any change, including mergers, which they believed would entail shifting the Company’s focus and authority away from their hometown, Winnipeg. [54] The Board, meanwhile, viewed the Committee as parochial and frequently saw its demands after 1930 as unreasonable. Cooper’s assistant, F. A. Stacpole, dismissively summarized the Canadian position as ‘Unless we are given a blank cheque to do what we want to do we can’t (or perhaps rather won’t try to) do anything.’” [55]

Governor Cooper may have seen amalgamation as a way of wresting back authority that had been unwisely given to the Committee in 1930, but first and foremost the Simpson’s deal had to make economic and structural sense. He and the Board ultimately backed away from the idea as being too unwieldy and drastic. His diary indicates that he did not wholly trust Simpson’s, that he received significant warnings against the merger, and that the differences in company structure were a real barrier. The welfare of the Company had to come first, and the temperamental Chester was, ultimately seen as doing more good than harm. In fact, in 1946 Chester was given a seat on the English Board, and became “Managing Director” for Canada. [56] Despite his lofty position as a very well-connected “gentlemanly capitalist,” Cooper had to contend with and give ground to assertive subordinates. Nor was he untouchable; Governor Cooper was ultimately forced to resign in 1952, because it was discovered that he was spending Company funds inappropriately on himself. [57] In the long run, an amalgamation did take place: the Simpson’s chain was bought by the Hudson’s Bay Company in 1978. By that point, the Company was under Canadian control.

The Winnipeg store. The neighbourhood was still partially residential when this aerial photo of the five-year-old Hudson’s Bay Company store along Portage Avenue was published in the September 1931 issue of The Beaver magazine.
Source: Archives of Manitoba, Hudson’s Bay Company Archives, 1987/363-N-6/1.


1. Hudson’s Bay Company Archives (hereafter, HBCA), Stacpole, F. A. Aide-Memoire: the Administrative System and Structure of the Hudson’s Bay Company, Sec. B, Pt. 56.

2. Peter C. Newman. Merchant Princes. Toronto: Viking, 1991, p. 348.

3. Newman, pp. 159-161.

4. HBCA, Stacpole, Aide-Memoire, Sec. A, Pt. 42.

5. David Monod. Store Wars: Shopkeepers and the Culture of Mass Marketing, 1890-1939. Toronto: University of Toronto Press, 1996, 217. See also Newman, pp. 279-306.

6. Newman, p. 258.

7. HBCA, quoted in Stacpole, Aide Memoire, Sec. B, Pt. 53.

8. Ibid., Sec. B., Pt. 64; Sec. B. Pt. 53.

9. HBCA, Philip A. Chester, “Notes on a biography of G. W. Allan”.

10. All quotations in this paragraph: Ibid.

11. Alfred D. Chandler, Jr. The Visible Hand: The Managerial Revolution in American Business. Cambridge: Harvard University Press, 1977, pp. 490-500.

12. Newman, pp. 283-285.

13. Mark Brayshay, Mark Cleary, and John Selwood. “Power geometries: social networks and the 1930s multinational corporate elite.” Geoforum 37 (2006), p. 989.

14. HBCA, Cooper, “London Diary,” [microfilm].

15. Newman, pp. 285-288.

16. HBCA, Vivian Smith and Frederick Richmond, London, England, to George Allan, Winnipeg, Manitoba, 13 March 1931.

17. Ibid.

18. HBCA, Philip Chester, Winnipeg, Manitoba to George Allan, Winnipeg, Manitoba, 29 March 1931.

19. HBCA, Cooper, “London Diary,” 17 January 1935 [microfilm].

20. HBCA, Cooper, “London Diary,” 15 January 1935 [microfilm].

21. HBCA, [Edward Peacock], to James Richardson, Winnipeg, Manitoba, 9 January 1935. This draft letter is unsigned, but as the author was on the London Board, identifies himself several times as a Canadian, and refers to Queen’s University, it is safe to assume it was Peacock, a Queen’s alumnus and native of Ontario.

22. McInnis, Marvin. “Sir Edward Robert Peacock.” Queen’s University Economics Department [, viewed 28 March 2008]

23. Ibid.

24. HBCA, all quotations in this paragraph: Ian Napier, London, England, to Patrick Ashley Cooper, London, England, 7 January 1935.

25. Newman, p. 265. He writes: “In the mid-1930s the British Governor hinted that a move to Toronto might be desirable, to take better advantage of the country’s future opportunities.” Unfortunately he offers no reference to back up this statement. He goes on to indicate that there was an outcry in Winnipeg’s business community over this hint, which would indicate its public or semi-public nature.

26. Newman, p. 284.

27. HBCA, Patrick Ashley Cooper, London, England, to George W. Allan, Winnipeg, Manitoba, 24 April 1934.

28. HBCA, Patrick Ashley Cooper, “London Diary, dictated aboard the Beringia,” May 1936, [microfilm].

29. HBCA, all quotations in this paragraph: Cooper, “London Diary,” 18 March 1937, [microfilm].

30. HBCA, Cooper, “London Diary,” 26 November 1936 [microfilm].

31. Ibid., 27 November 1936.

32. HBCA, Patrick Ashley Cooper, London England, to George W. Allan, Winnipeg, Manitoba, 10 August 1936. Included in London Minute Book 1934-1937 volume, 6 October, p. 195.

33. HBCA, Cooper, “London Diary,” 11 November 1936 [microfilm].

34. Ibid., 10 November 1936.

35. Ibid., 12 November 1936.

36. Ibid., 24 November 1936.

37. HBCA, Chester, “Notes on a biography of G. W. Allan”.

38. Ibid.

39. Interestingly, Chester claimed in his notes that Charles Burton’s autobiography originally contained a whole chapter on “these events with HBC” which was cut out in response to Chester’s urging. Whether or not this is true, Burton’s biography, A Sense of Urgency, does not contain any direct mention of the failed merger. HBCA, Chester, “Notes on a biography of G. W. Allan.” and Charles L. Burton, A Sense of Urgency: Memoirs of a Canadian Merchant. Toronto: Clarke Irwin Company, 1952.

40. HBCA, Philip A. Chester, London, England, to Francis F. Martin, Jr., Winnipeg, Manitoba.

41. Burton, pp. 216-7, 231, 340.

42. HBCA, Cooper, “London Diary,” 13 November 1936 [microfilm].

43. Ibid.

44. Bliss, Michael. A Canadian Millionaire: The Life and Business Times of Sir Joseph Flavelle, Bart., 1858-1939. Toronto: Macmillan of Canada, 1978.

45. HBCA, Governor and Board, Hudson’s Bay Company, Minutes, 24 November 1936.

46. HBCA, Governor and Board, Hudson’s Bay Company, Minutes, 24 November 1936. The minutes also stated: “With regard to the London Joint Buying Office and arrangement for European purchases through that office, Mr. Burton had intimated that, in view of the situation which had developed on the 27/28th July, 1936, the Robert Simpson Company, Limited, Toronto, wished to terminate the Joint Agreement, and it had been arranged that the necessary steps in this connection should be discussed and settled by the General Manager for Canada and the representatives of the Robert Simpson Company, Limited, Toronto.”

47. Ibid.

48. HBCA, Canadian Committee, Hudson’s Bay Company, Minutes, 23 December 1936.

49. HBCA, Minutes of Store Managers’ Conference, held at Calgary, January 1937.

50. HBCA, Minutes of the Canadian Committee Meeting, held 21 January 1937.

51. HBCA, F. A. Stacpole, London, England, to Philip Chester, Winnipeg, Manitoba, 28 December 1937.

52. HBCA, Philip A. Chester, Winnipeg, Manitoba, to F. A. Stacpole, London, England, 4 February 1937.

53. HBCA, F. A. Stacpole, Aide-Memoire, Sec. C, Part 10. David Monod’s book Store Wars cites this section of Stacpole’s Aide-Memoire as a footnote to its brief mention of the Simpson’s deal, which asserts that “the London shareholders” became so desperate during the Depression that “in 1936 they offered to sell the entire chain to Simpson’s. Apparently, C. L. Burton did not feel that his store could afford the expansion.” See Monod, p. 217. I have been unable to find a reference to Burton in Stacpole’s work.

54. Newman, pp. 264-266.

55. HBCA, F. A. Stacpole, Aide-Memoire, Sec. C, Part. 9.

56. Newman, p. 441.

57. Newman, p. 307.

Published Works Cited

Bliss, Michael. A Canadian Millionaire: The Life and Business Times of Sir Joseph Flavelle, Bart., 1858-1939. Toronto: Macmillan of Canada, 1978.

Brayshay, Mark, Mark Cleary, and John Selwood. “Power geometries: social networks and the 1930s multinational corporate elite.” Geoforum 37 (2006), pp. 986-998.

Burton, Charles L. A Sense of Urgency: Memoirs of a Canadian Merchant. Toronto: Clarke Irwin Company, 1952.

Chandler, Alfred D., Jr. The Visible Hand: The Managerial Revolution in American Business. Cambridge: Harvard University Press, 1977.

McInnis, Marvin. “Sir Edward Robert Peacock.” Queen’s University Economics Department [, viewed 21 November 2010]

Monod, David. Store Wars: Shopkeepers and the Culture of Mass Marketing 1890-1939. Toronto: University of Toronto Press, 1996.

Newman, Peter C. Merchant Princes. Toronto: Viking, 1991.

Page revised: 3 August 2016

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