Buying Prosperity: the Bonusing of Factories at the Lakehead, 1885-1914
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Document generated on 10/02/2021 5 p.m. Urban History Review Revue d'histoire urbaine Buying Prosperity The Bonusing of Factories at the Lakehead, 1885-1914 Thorold J. Tronrud Trends and Questions in New Historical Accounts of Policing Article abstract Volume 19, Number 1, June 1990 Though Fort William and Port Arthur (now Thunder Bay) used the full gamut of promotional tools to attract industry in the three decades before 1914, they URI: https://id.erudit.org/iderudit/1017574ar relied most heavily on bonusing. Together they granted more money in DOI: https://doi.org/10.7202/1017574ar bonuses to manufacturers than perhaps any other community in Canada. Such a policy occasioned much debate locally over the usefulness and propriety of See table of contents using tax dollars to subsidize industry. This article examines both the extent and effects of bonusing at the Lakehead and the debate it raised. It concludes that while bonuses could, in the short run, greatly affect the rate of industrial growth, the long-term survival of manufacturing depended on favourable Publisher(s) geography and a supportive economic environment. Urban History Review / Revue d'histoire urbaine ISSN 0703-0428 (print) 1918-5138 (digital) Explore this journal Cite this article Tronrud, T. J. (1990). Buying Prosperity: The Bonusing of Factories at the Lakehead, 1885-1914. Urban History Review / Revue d'histoire urbaine, 19(1), 1–13. https://doi.org/10.7202/1017574ar All Rights Reserved © Urban History Review / Revue d'histoire urbaine, 1990 This document is protected by copyright law. Use of the services of Érudit (including reproduction) is subject to its terms and conditions, which can be viewed online. https://apropos.erudit.org/en/users/policy-on-use/ This article is disseminated and preserved by Érudit. Érudit is a non-profit inter-university consortium of the Université de Montréal, Université Laval, and the Université du Québec à Montréal. Its mission is to promote and disseminate research. https://www.erudit.org/en/ Buying Prosperity: The Bonusing of Factories at the Lakehead, 1885-1914 ThoroldJ. Tronrud Though Fort William and Port Arthur The transformation of central Canadian cities lobbying produced millions of dollars of (now Thunder Bay) used the full gamut into industrial centres in the three decades government subsidies for railway expansion of promotional tools to attract industry prior to 1910 had a loud echo on Ontario's and harbour developments such as dredging in the three decades before 1914, they northwestern frontier. The Canadian and the construction of breakwaters and relied most heavily on bonusing. Lakehead "must become one of the great shipping docks. The Lakehead's strategy was Together they granted more money in manufacturing centres of the Dominion. So distinctive, however, for two reasons: it bonuses to manufacturers than perhaps say the seers, — the men of prophetic reached full fruition after most promotional any other community in Canada. Such foresight. So say the practical businessmen campaigns elsewhere were winding down, a policy occasioned much debate locally who have their fingers on the pulse beats of and it made extraordinarily liberal use of over the usefulness and propriety of trade and development of the country." So financial inducements, or bonuses. using tax dollars to subsidize industry. said E. S. Rutledge, Fort William's town clerk, This article examines both the extent in 1898, and he spoke for almost every one of The extent to which industrial strategies, and and effects of bonusing at the Lakehead his fellow boosters in Fort William and Port the granting of bonuses in particular, can and the debate it raised. It concludes Arthur.1 Their ambitions knew no bounds: one explain industrial growth across Canada is that while bonuses could, in the short of the two towns, but never both together, part of a larger debate over the role of run, greatly affect the rate of industrial would inevitably become the "Chicago of the boosters and entrepreneurs in the urban growth, the long-term survival of North", the "Pittsburgh of Canada", or, at the economy. Are cities made by the people manufacturing depended on favourable very least, one of the nation's premier living in them — by the strength of personal geography and a supportive economic manufacturing centres exacting its tribute contacts, sound industrial policies, effective environment. from the entire West.2 Though scarcely more advertising and generous financing — or are than villages when Rutledge made his these factors subordinate to the largely prophesy, Fort William and Port Arthur had impersonal forces of location, markets, 3 6 Résumé definite metropolitan aspirations. With a resources and transportation? Most turn-of- single-minded devotion to this goal both the-century boosters were certain of their Durant les trois décennies précédant communities, emulating their Eastern control. Historians, however, are more 1914, sans négliger aucun moyen Canadian and American counterparts, divided. Some scholars have suggested that susceptible d'attirer l'industrie, Fort developed nearly identical industrial the strength and vigor of urban industrial William et Fort Arthur (aujourd'hui strategies and employed similar techniques in strategies can explain the success or failure of rebaptisée Thunder Bay) mirent an attempt to transform economies driven by individual towns; that, as E.J. Noble argues in fortement Vaccent sur les subventions. the extraction and movement of raw materials a case study of Orillia, "it is the skill and Ensemble elles versent ainsi aux — grain, forest products, fish and minerals in initiative of the entrepreneur which is the entreprises des sommes qui sans doute particular — into ones based firmly on the decisive factor in community growth".7 Beeby ne trouvaient d'équivalent dans aucune manufactured product. Though the two towns concurs by noting that Toronto's most ville canadienne. Ce faisant elles grew into fair-sized cities by 1914 primarily on successful period of manufacturing growth alimentèrent la controverse parmi leurs the strength of the transportation and coincided with a vigorous campaign to attract contribuables sur l'utilité et l'à-propos resource export sectors, local boosters industries through inducements. He de ce genre de mesure. Les auteurs persisted in viewing manufacturing as the concludes that comparing industrial analysent l'ampleur et les effets des mark of a stable prosperous and mature strategies could well explain the location of subventions au 'elles consentirent et les economy4 For the most part, the Lakehead's factories across Ontario.8 Bloomfield's study débats qui s'ensuivirent. B appert que si approach to attracting industry followed of Berlin yields similar results. She shows a de tels incitatif s pouvaient bel et bien, à familiar patterns, combining the promotional positive correlation between bonusing and court terme, stimuler la croissance rhetoric of the West with the financial economic growth in the city and asserts that industrielle, par la suite, la survie des inducements characteristic of Ontario cities.5 industrial success depended on a judicious entreprises reposait sur le dynamisme Promotional books and brochures were use of inducements.9 In each case inhibiting économique du milieu et sur les produced in abundance and delegations geographical and technological forces are conditions géographiques. travelled far and wide, attending trade fairs overcome by the determination of and expositions and talking to potential entrepreneurs.10 Weaver, on the other hand, investors. Industrial commissioners were hired downplays the influence of inducements by to coordinate activities, write advertising and noting how universal they were and, along make the necessary contacts. Considerable with others, considers geographical factors to / Urban History Review/Revue d'histoire urbaine Vol. XIX, No. 1 (June 1990) The Bonusing of Factories at the Lakehead have played a more significant role in Ptirtl the two Lakehead cities alone, between just determining the location of industry.11 Naylor 1901 and 1913, granted 20 such admits that "the bonusing system was central Fort William and Port Arthur were prodigious inducements worth $1,157,200 for an average to determining the distribution of the existing bonusers. Almost all manufacturing industries of $57,860 each; more than twelve times the industrial capacity" but nevertheless established in the communities prior to the amount given per city in the southern Ontario emphasizes the deleterious effects of first World War, particularly the large sample.15 municipal inducements. Such entrepreneurial enterprises, were bonused.13 Between 1885, efforts he sees as little more than "stop gap" when Port Arthur granted its first industrial Locally the range of cash bonuses was measures designed to fill a hole in the capital subsidy to a local foundry, and the end of extreme: the smallest, $2,500 to a foundry 12 market not filled by private sources. The 1913, the two municipalities gave to operator in 1890; the largest, $270,000 to the example of Fort William and Port Arthur is manufacturers in the form of cash payments, Canadian Car and Foundry Co. (Can Car) in particularly significant to this debate because loans or bond guarantees no less than $2.4 1912. Port Arthur granted only six cash of the extent to which the two ports relied million. (See Table 1) This represents more, bonuses, all after 1901, but these included upon financial inducements to entice, capture perhaps, than an other city in Canada. some of the largest — $250,000 to the and maintain industry. While municipal Between 1867 and 1900, according to Western Dry Dock and Ship Building Co., bonusing may indeed have been nearly Bloomfield's analysis, 178 southern Ontario $225,000 for the Atikokan Iron Company's universal, the amounts granted by each urban centres granted over 250 cash blast furnace, and $60,000 for the Brutinell community were far from equal. The bonuses worth slightly in excess of $2.1 Wire and Nail works. Fort William gave Lakehead gave to manufacturers over twelve million.