by Ken Montague
(published in the Wellington Business Digest, Vol. 1, Issue
5, April 1985)
A Short History of Guelph-Wellington Business, Part 2
The Guelph area has always had to contend with the older, larger, and
wealthier centres which surround it. When the neighbours spent serious
money in support of their business activity, Guelph had to respond with
its limited resources or else accept decline. It has usually managed
to scramble well enough to keep up. However, for Guelph to prosper,
rather than just survive, it needed some advantage which the neighbours
couldn't bypass or get for themselves. Despite some admirable attempts
to gain such advantages, Guelph has not been able to hold on to many for
very long. Opportunities have often been exploited and then lost
or counteracted, leaving an increased population which was just a little
too large to be supported by the remaining business activity.
In 1840, Guelph secured a big advantage for itself by becoming the administrative
centre for a new District of Wellington, which extended all the way to
Georgian Bay and Lake Huron. Formerly, everything had been done
from Hamilton, but now Guelph would gain the administrators' salaries
and the trade brought by those forced to come on official business.
A professional community would grow to service those same visitors. The
outrage of our western neighbours was apparently very satisfying.
Unfortunately, and typically, such gains for Guelph were soon partly
counteracted by continuing efforts to dismantle the huge District. Owen
Sound quite sensibly thought that it should handle the far north. The
town of Galt, then our chief rival, thought that it should have its own
district running within three miles of Guelph itself. Galt didn't
get its way, but the district was indeed broken up. In 1852, Waterloo
County was hived off with Berlin (Kitchener) as the county seat, and Owen
Sound took over Grey (with Bruce) County in 1853. The oddly shaped
remainder was pretty much our present Wellington County. Wellington's
unwieldy form has meant that a place like Clifford, in the northwest corner,
is closer to six other county seats than it is to Guelph.
The trade from the outlying townships was lost to the new administrative
centres, and some of Guelph's professional people had to go with it. If
this seems a small matter, one must remember that Guelph had fewer than
3,000 people until the 1850's. Small matters mattered indeed.
The little band of Guelphites faced a larger problem, however, when the
town of Galt began to raise money for a branch of the Great Western Railway
from Hamilton. Guelph would lose much of its commercial function
if it didn't get a line of its own. Trading on the Toronto-Hamilton
rivalry, Guelph leaders promoted a branch of the Grand Trunk Railway from
Toronto to Guelph. Initial investment was raised mainly through
the selling of debentures by Toronto, Guelph, and municipalities in between.
To gain an 'edge', it was also planned to run a line to Galt, so
that Guelph could benefit from being in two railway systems and from price
competition between them.
Once it was clear that the lines were coming, Guelph boomed. Land
worth £300 in 1851 sold for £1,800 to £2,700 in 1855. Speculators
in the know bought and subdivided land around the proposed station sites.
New factories and quarries were opened. Guelph would profit
from being the most northerly railway town in western Ontario. It
seemed too good to be true and, unfortunately, it was.
The Grand Trunk arrived in 1856 and the initial boom promptly collapsed,
taking with it those new firms which were undercapitalized. It also
became clear that a line brought in at one end of town could be carried
out the other, making Guelph a place on the way to some place else. Still
worse, the railway systems decided not to compete and indulged in a little
price fixing, finally amalgamating altogether in 1882. Guelph was
faced with a monopoly's pricing and escape was impossible until the late
1880s, when Guelph, by itself, built a line to the newer C.P.R. at Campbellville.
Worst of all, a line which would become part of the C.P.R. was built
from Toronto to Elora and Owen Sound in the '80s, and another branch went
through Galt to St. Thomas, draining the south. Guelph's commercial
importance was over, but it would at least survive.
Guelph turned to industry for its salvation. Early industries were
small firms which supplied area farms and handled their produce. After
the railway boom, larger and more mechanized factories came to perform
the same functions, but real change started with firms which did not so
much serve the area as sustain it by selling to national and international
markets. Among the better known of these: the James Goldie
Co. Ltd. (milling, etc.); the Raymond Sewing Machine Co.; McRae &
Co. (textiles); and the Bell Organ Co. These firms came in the 1860s
and brought capital and skilled workers with them.
The Board of Trade, also founded in the 1860s, actively sought industries
to come to Guelph. They themselves promoted and sold stock in an
agricultural implement factory. They urged civic improvements to
bring custom and subsidies to bring manufacturing. Guelph was determined
to share in the industrialization which grew behind tariff walls erected
in 1859 and raised in 1878.
These efforts increased after the turn of the century. There were
higher bonuses for new manufacturers, large scale direct subsidization,
and enormous involvement in municipal ownership and investment. Cheap
hydro-electric power was brought in; water, sewage, gas, and other services
became city-owned; the street railway was taken over and expanded. One
can see that industry was picking up the economic slack by the fact that
between 1881 and 1911, a period when the population grew by only 2,300,
there were 1,331 new industrial workers. Guelph was envied and carefully
studied by other cities.
However, trouble had to come and it did. For example, an Industrial
Dept., set up in 1910, had brought in 16 new industries by 1914, but by
1919, 10 of the 16 were either out of business or gone elsewhere. In
the Guelph Historical Society's History of Guelph 1827-1927, author
Leo Johnson lists four causes for the difficulties. Most obviously,
the costs of acquiring and running city services was ruinous. To add to
the burden, large companies in trouble had to be propped up by direct
subsidy. More familiar is the fact that the wealthy neighbours could
woo away those firms who had come only because of the bonuses, tax rebates,
and artificially low-cost utilities. More generally, small centres
were also losing firms to the dramatic amalgamations which began around
1908. Guelph markets could be served more cheaply from giant factories
in Toronto, so why keep a small facility here? The trouble with
railway lines is that the trains can run both ways.
Guelph lost some of its largest manufacturers to consolidation. The
Raymond Sewing Machine Co. was sold to a U.S. firm and by 1922 only a
distribution network remained. The Bell Organ Co. disappeared in
the 1930s, absorbed into what had been its British branch.
To top things off, somebody decided to hold the Great Depression. When
it was over, Guelph was very aware that it had survived on small, locally
owned industry, the salaries of government administrators and employees
of such institutions as the Reformatory and the agricultural and veterinary
colleges. As a result, Guelph became mistrustful of large firms
and developed an almost religious fervour for diversification. It
would never again become dependent on large concerns or even on any one
segment of the economy. Attempts at really large-scale expansion
Guelph drifted into making a virtue of seeming necessity and lauded the
stability of a slow, careful growth. It became insular and
given to strange illusions about how well it was doing. Next time,
we'll look at the slow climb back to the edge of considerable business
Part 1 Thin
Air and Lots of Money
Part 3 The
Price of Independence