VII: The Kingston Economy and the Finances of John A. Macdonald

CHAPTER SEVEN:

THE KINGSTON ECONOMY AND THE FINANCES OF JOHN A. MACDONALD

Kingston in Decline?

The interpretation that Kingston was in ‘decline’ in the second half of the nineteenth century has been persuasively and comprehensively outlined by Brian S. Osborne.

[1] However, in a revisionist approach to the city’s history, Donald Swainson argued that historians have spent too much time explaining might-have-beens, many of which he regards as non-starters in any case. To Swainson, there is little point in focusing upon a hypothesis of ‘decline’ when Kingston was never likely to grow into a metropolitan centre anyway. Rather, he argued, we should concentrate on understanding how Kingston developed into the agreeable middle-sized regional centre, characterised by a small-c conservative political culture which throughout the twentieth century proved intriguingly effective at persuading the taxpayer to invest in its local economy.[2]

The first part of Swainson’s challenge would have struck few chords at the time. Alexander Campbell’s whimsical account of a deserted downtown in 1865 ─ ‘half a dozen people in the street and every fellow with a look of despondency’[3]confirms that mid-Victorian Kingston was obsessed by a sense of hopes unfulfilled. Probably these partly reflected the ambitions of the Loyalist era, the days before 1830 when the town had indeed headed a Lilliputian league table of Upper Canadian urban centres. But if Kingston’s relative stagnation hurt civic pride, it damaged citizens’ pockets even more. Much commercial activity in contemporary Canada hinged upon real estate speculation, quasi-gambling which aimed at quick returns by converting future expectations into current profit. John A. Macdonald himself was speculating in Kingston property as early as 1842. Significantly, by the 1850s he was looking for opportunities further west, buying and selling (or attempting to sell) town lots in places as far away as Guelph and Sarnia.[4]

Two groups of questions arise, one focusing upon Kingston and the other on the affairs of its most celebrated citizen. How far and for what reasons did Kingston under-perform as an urban centre? Did it have a realistic chance of establishing itself as a financial capital independent of Montreal and Toronto? Were John A. Macdonald’s own financial difficulties a symptom of weaknesses in the local economy, or did he exacerbate or even help to cause the city’s problems?

The opposing views of the performance of the Kingston economy may be reconciled by thinking of it in terms of relative, rather than absolute, decline ─ in the compromise phraseology of Osborne and Swainson’s jointly authored history of the city, ‘the relative failure to achieve significant industrial growth and associated demographic growth’.[5] With a population of 3,587, Kingston was the largest urban centre in Upper Canada in 1830, but within two years Toronto had taken the lead. By 1851, registering 11,585 inhabitants, Kingston was barely one third the size of Toronto, and had also been overtaken by Hamilton. From then on, Macdonald’s home town fell steadily further behind.[6] The loss of the seat of government in 1843 came to be seen as one particularly dramatic landmark, with contemporary Kingstonians refusing to see the force of Swainson’s modern-day argument that they had been lucky to acquire the capital and that the city’s restricted infrastructure necessarily gave it an ‘extremely tenuous hold’ on its windfall status.[7] Probably more important, although less immediately obvious, was the completion of the St Lawrence canal system in 1847, which undermined Kingston’s role as a trans-shipment centre by enabling vessels to sail straight past the city. The opening of the Grand Trunk railway in 1856, with its Kingston station four kilometres north of the downtown area, further by-passed the city. By this time, the gap between ambition and performance was starting to show. In 1856, a visitor returning to the city after an absence of five years reported that ‘Kingston does not appear to progress so fast as might have been expected.’[8] ‘Kingston has seen better days’, reported a visitor in 1864, who found the city ‘melancholy’.[9] The following year, Alexander Campbell found it ‘dreadfully dull – more so than usual’.[10] Worse was to follow when the garrison departed in 1871.

            What role did John A. Macdonald play in resisting the disintegration of the city’s hopes?  Essentially, through the first decade of his political career, Macdonald was associated with a strategy that aimed to develop a north-south economic orientation that would supplement and underpin Kingston’s existing role as a trans-shipment point on the east-west axis of the St Lawrence and the Rideau Canal. As he had promised in 1844, a northern hinterland would be opened through the construction a plank road to Perth and so make Kingston the market centre ‘for a large and fertile, though hitherto valueless country'. In the following decade, he was involved with no fewer than four local road companies.[11] Later, in 1853, he supported a project to build a railway to Peterborough. The colonisation roads were authorised by legislation in 1853: by 1861, the Addington road headed northward for about 100 kilometres. The railway to Peterborough was never constructed, and hopes in 1861 that the Grand Trunk might link the city to Lake Huron remained a pipedream. Complementing these hopes for a northern hinterland were schemes to make Kingston the linking point for Canadian and American trade, through the projected Wolfe Island, Kingston and Toronto railroad, planned in 1846 and reorganised to include a canal through Wolfe Island in 1851.[12] The city’s only inland railway link, to the Ottawa valley, was not completed until the mid-eighteen eighties, by which time Macdonald no longer commanded the cash to be a major player in local business ventures: his name is not be found alongside such local Conservatives such as Alexander Campbell, D.D. Calvin and George Kirkpatrick who figured prominently among investors in the Kingston & Pembroke railway project.[13] In any case, the ‘Kick and Push’ simply came too late to challenge the well-established orientation of the upper Ottawa trade down-valley towards Montreal.

            John A. Macdonald certainly cannot be accused of lacking an ambitious plan to make the most of Kingston’s economic potential. Unfortunately, there were three fundamental weaknesses that would undermine the overall strategy. The first was that the potential was never very great. The city’s hinterland filled far more slowly than the more attractive areas of settlement north and especially west of Toronto. This was despite the fact that thousands of immigrants made their way into the heart of Canada by way of the Rideau Canal – and were evidently unimpressed by the country they saw along its banks.[14] A second weakness was that there was no overwhelming reason why traffic should cross from Canada to the United States at Kingston, rather than to the west through the Erie Canal, or further east by way of the much larger port facilities of Montreal. The odds were stacked against Kingston. ‘Even John A. Macdonald could not achieve the impossible,’ observes J.K. Johnson.[15]

            However, it was the unforeseen consequences of the third blow that proved most damaging. In October 1856, the Grand Trunk railway opened between Montreal and Toronto. ‘A November journey from Toronto to Montreal is no longer the thing of excessive toil it once was,’ commented the Globe, a grudging admirer of the railway if not of the way it had been financed.[16] Travel time had been cut from the former minimum of two days to fifteen hours. Consequently, travellers had less reason to break their journey in Kingston, and the Grand Trunk schedules did nothing to encourage them to stop over. Probably typical was the experience of the British journalist, William Howard Russell, who passed through early in 1862. The roving correspondent of The Times newspaper, he was ‘exceedingly anxious to visit a place of so much importance, historically, commercially, and strategically, and fully intended to remain there for some days’. However, it was ‘so dark when the train reached Kingston, that we could see nothing more than the outlines of the station’ with a glimpse of ‘certain spires and steeples rising above the snow.’ Evidently echoing what others told him, Russell noted that the loss of the seat of government had left Kingston ‘a dead body’ politically, but the harbour was ‘said to be excellent’, and the city remained a key point in Canada’s defences.[17]

What was true of passengers was even more the case with bulk freight, the more so as the Grand Trunk located its station four kilometres to the north of the downtown area. This was the result of deliberate company policy, based on British experience, where railway companies seeking access to town centres found that land prices shot up, as indeed was the case in Kingston not long afterwards when the Grand Trunk agreed to build a branch line downtown.[18] It was better to build stations on cheaper land at the outskirts of towns. If the local economy was buoyant, the business district would relocate to meet the trains; if the community was sluggish, the place was not worth a railway service and could be left to stagnate. Above all, it was no part of the mission of the Grand Trunk to support Kingston’s principal transportation asset, water-borne traffic, which it saw as a rival to be eliminated. In the event, the magnificent water route of the St Lawrence and the Lakes proved harder for railways to brush aside than the narrow channels of England’s artificial canal system, but in its immediate impact, the Grand Trunk dislocated Kingston’s river trade, especially as its arrival was promptly followed by the severe economic depression of 1857.  ‘One short year has destroyed the shipping trade of Kingston and all the lake ports,’ lamented the British Whig early in 1858. ‘The railroad has swallowed all.’[19]

To some extent, the local economy adjusted to the challenge. The city acquired a substantial locomotive works.[20] By the early eighteen-sixties, its water-borne trade had also recovered from the initial shock and it is this context that canal tolls became an issue in the elections of 1861 and 1863. The major advantage of transportation by water over the railway lay in its capacity to shift goods cheaply and in bulk. But the government levied canal tolls not on individual vessels but according to the cargoes they carried, so much per barrel of flour or bushel of wheat, a form of taxation that tended to cancel out the advantages of  the St Lawrence route over the Grand Trunk. In 1860, the Cartier-Macdonald ministry abolished tolls on the St Lawrence canals and slashed them on the Welland, to the immediate benefit of river towns such as Kingston. Unfortunately, Cartier’s finance minister, Alexander Galt, was a profligate spender and the Reform administration of Sandfield Macdonald found itself facing a major deficit when it took office in 1862. Their 1863 budget reintroduced canal tolls, and St Lawrence traffic fell by about seven percent in the following year. Mercantile interests were incensed by the abrupt re-imposition of the tolls, which sliced particularly savagely into profits on cargoes that had already been priced. Even if the charges had been phased in, they still represented an unwelcome overhead on water transportation costs. Although he was the Reform party candidate at the 1863 election, O.S. Gildersleeve acknowledged that the canal tolls were costing his company $600 a week, and the Kingston economy was hardly in a state to lose $30,000 a year from the profits of a single firm. Gildersleeve promised that he would press ministers for relief if elected, although Macdonald understandably scoffed at the idea of voting for a government candidate to show disapproval of a government policy. In fact, the Reform ministry heeded the protests and reduced the tolls soon after the election.[21]  We can, of course, only conclude that politicians in 1863 thought the canal tolls were a significant local issue, since we have little means of knowing how far individual voters were swayed by such considerations. But the canal tolls do seem to have constituted a relatively rare example of a province-wide policy issue that had specific electoral implications in the city.

Unfortunately, no amount of fiscal manipulation could reverse the negative impact of technological change. If the arrival of the steam locomotive threatened to by-pass Kingston by land, the rise of the steamship equally threatened its prosperity as a port. In the new era of large steamers, many of which sailed straight past Kingston, there was less work for the city’s shipyards, which specialised in building medium-sized timber vessels.[22] Attempts were made to upgrade harbour facilities to cater for larger vessels but, until he became associated with a Quebec City dock company in 1864, this was not an area in which Macdonald had much business experience. He was neither a major nor a sustained investor in Lake shipping. One of the accusations thrown at him in 1872 was that ‘he deceived us in the Harbor Improvement question and gave us a paltry $10,000 when he could as easily have given us sufficient to built what our harbor needs[,] a breakwater’.[23]

            There is something of a paradox in the fact that John A. Macdonald won his greatest electoral victory, the trouncing of John Shaw by 1189 votes to 9, in December 1857, at just the moment when Kingston’s dreams of greatness seemed terminally shattered. For one journalist, penning a gushing tribute of condolence a few days after Isabella’s death, John A. Macdonald’s ascendancy in the constituency resulted from purely personal qualities: ‘no future triumph will equal that which he obtained when he conquered the love and obtained such a secure hold on the affections of the people of Kingston.’ But was it really true that his popularity ‘differs from that interested sympathy so often bestowed upon the successful politician’?[24] Closely examined, his electoral triumph in December 1857 masks a developing divergence between his role as a local booster and his status as a rising provincial leader. As Premier, Macdonald claimed credit for having ‘shouldered the responsibility’ of funding the completion of the Grand Trunk, after the ministry had come into office to find it ‘lying unfinished and helpless, stopped at Toronto, and valueless.’[25] John Shaw had criticised him on the hustings for failing to force the company to run its line into Kingston ‘before granting the aid they supplicated for’. Of course, it was easy for an opponent to throw out such an allegation. More significant was the attitude of Macdonald’s own supporters. John R. Forsyth, his nominator, implicitly endorsed the criticism, demanding that the Grand Trunk should not only come into the city but run its main line right through it.[26] The British Whig insisted that it would be ‘a suicidal measure’ to oppose a politician who had ‘done everything in his power to benefit the city’.[27]  Macdonald himself encouraged the expectations, claiming that ‘he took pleasure in saying he had never forgotten the interests of Kingston.’[28] But had he done enough? And could he ever do enough?

            The fundamental problem, masked in 1857 under an avalanche of hopeful votes, was one of over-optimistic expectations. Kingston was becoming acutely aware that it had special needs, and looked to the city’s member of parliament to meet them. But Macdonald’s political ascendancy was built upon cross-province consensus, and Shaw was misguided to assume that he could act like a benign dictator. The province had needed the Grand Trunk as much as the company had needed Canada’s money. So many other cities and regions wanted to see the trains running that it would not have been unthinkable to have attempted to make financial support conditional upon special treatment for one trackside community. Sectional considerations also applied to the seat of government, a mirage that was again beguiling the former capital. Although resolved to ‘make a fight of it, Macdonald had privately confessed in March 1856 ‘that we have no chance for Kingston’.[29] To exercise political power in so diverse a community as Canada, it was necessary to defer to other people’s economic interests. Equally fundamental to the maintenance of a majority alliance was a measure of deference to the religious allegiance of his French-Canadian allies, and for Macdonald that particular chicken came home to roost in the Orange arch erected to confront the Prince of Wales in 1860.

If anything, the gap between the needs of Kingston and the political trajectory of John A. Macdonald widened in the years that followed, first as he became the pre-eminent Father of Confederation and then metamorphosed into Sir John Macdonald, imperial statesman. On his return from England in 1867, Macdonald brought his new bride to Kingston, and talked knowingly of how the giants of British politics, Gladstone and Disraeli, had suspended a mighty crisis over parliamentary reform to usher through the new Canadian constitution: ‘I can speak from experience of the great interest taken by the British Government in confederation.’[30] Five years later he inviting Kingston to share in the reflected glory of having a representative who had broken new ground as the first colonial politician to help negotiate a treaty with the United States on behalf of the British empire, even hinting that he could have received a peerage had he wanted one.[31] In the meantime, his new friends in those high imperial circles had withdrawn the British garrison from Kingston and plunged the city into depression. The irony was that the British felt able to pull out their troops precisely because Confederation had established a new political equilibrium in North America. John A. Macdonald’s success in nation-building cost Kingston its lucrative role as a military base. The higher he climbed, the further he moved from his original political base.

Kingston: Canada’s Lost Financial Centre?

Swainson’s emphasis upon the role of State projects in the shaping of Kingston triggers an alternative question: why did the city fail to develop a distinctive private-sector function, as a major financial centre? It is surely no far-fetched hypothesis to wonder whether Kingston might have established a niche as Canada’s banking capital, much as Hartford, Connecticut became an insurance centre and, a century later, Calgary, Alberta, built a successful stock exchange. In 1834, Kingston had become the second Upper Canadian city to establish its own bank. The Commercial Bank in turn spawned a major farm mortgage venture, the Trust and Loan Company of Upper Canada, a project particularly associated with John A. Macdonald himself. Although Queen’s in its early decades was hardly a degree factory, it did produce a steady stream of graduates capable of infusing gritty Presbyterian integrity into the business sector. As Swainson himself has shown, as late as the 1870s, an impressive cohort of eight members of the local elite were prominent members of the Dominion parliament, including Macdonald himself as well as Alexander Campbell and Alexander Mackenzie’s finance minister, Richard Cartwright.[32] To financial infrastructure and human talent could be added the advantage of location. Kingston is situated at the mid-point of the Montreal-Toronto-Ottawa triangle and, as the city’s petition to Queen Victoria had stated in 1857, even New York and Boston were ‘within a few hours’ travel by railway’.[33] In a speech during the 1892 by-election campaign, a sort of symbolic review of the Macdonald era, Cartwright was to deplore Kingston’s failure to exploit this central position.

            It may be that this particular might-have-been, Kingston as a major financial centre, came close to reality. The key event in what became the almost-Shakespearean tragedy of the Commercial Bank.[34] In 1857, the bank acquired an important new account, that of the Great Western Railroad. With its main line running from Hamilton to Windsor and Sarnia, the Great Western was potentially one of the few profitable railways in Canada, since it not only ran through the province’s most prosperous farming districts but its east-west orientation enabled it to tap the trade of the American Mid-West. Since the company was completing its network and upgrading to overcome earlier engineering failures, it needed access to cash. The Toronto-based Bank of Upper Canada, which had previously held its account, had capped its overdraft, and so the Commercial Bank secured the business. Yet this apparent business coup had a deeper dimension that might shift the internal power structure of Upper Canada. The Great Western was pre-eminently Hamilton’s reply to the emerging ascendancy of Toronto within the province. Hamilton’s railway was teaming up with Kingston’s bank. Western goods might no longer be trans-shipped on the Kingston waterfront, but western money would flow into the city’s bank, adding to the strength and circulation of its note issue. The nexus between the two ends of Lake Ontario, of which the farm mortgage business of the Trust and Loan Company already formed part, might well lead to further investment and collaboration.

            Unluckily, this bright vision not only collapsed almost at once, but dragged the bank itself into liquidation. The Great Western had acquired a financial interest in an American subsidiary, intended to give it access to Chicago although, as it terminated at Grand Haven, an inadequate harbour 200 kilometres north of the Windy City, it was hard to see why cargoes already loaded on to lake shipping should be trans-shipped there. Worse still, the subsidiary, the so-called Detroit and Milwaukee (which ran nowhere near the latter city) was badly built, and desperately in need of an injection of funds to function at all. Without telling the Commercial Bank what it was doing, the Great Western borrowed its money to throw Canadian cash into its American sinkhole. Within two years, the bank had quarrelled with its star customer, the account was switched back to Toronto and the parties went to law to determine who was responsible for the debts. The case was appealed all the way to the Privy Council in London, thus dragging on until 1865, when the bank won a Pyrrhic victory.[35] After details were settled by arbitration, part of the American railroad’s debt to the Commercial Bank was converted into bonds. These were supposed to look impressive when listed on the balance sheet among its assets, but in practice they were worthless: since the Detroit and Milwaukee was unlikely to pay its creditors, nobody would be foolish enough to buy the bonds. As a result, the Commercial Bank came under market pressure. A shareholders’ revolt brought in new directors in 1864, but the attempts made to tighten up banking practice fed the air of insecurity. In 1867, although technically still solvent, Kingston’s bank ceased trading in the face of panic withdrawals ─ providentially, just a few weeks after Macdonald had secured another five-year term in parliament. His new Dominion cabinet did not intervene to prevent the collapse of the Commercial Bank.  The Kingston bank’s premises and what was left of its left of its business were absorbed by the Montreal-based Merchants Bank, who poetically compounded the humiliation by putting in a manager called J.G. Macdonald.[36] It was the end of the dream of Kingston as an independent financial centre.[37] John A. Macdonald was both a cause and a victim of the city’s eclipse.

John A. Macdonald’s ‘Wretched Carelessness’ with Money

What was John A. Macdonald’s role in the collapse of the bank, and how did the disaster affect him? He cannot have been directly involved in the formal acquisition of the Great Western account back in 1857, as he was leading a ministerial delegation to England at the time. However, he could hardly escape his share of responsibility. He had been a director of the bank, and its official solicitor, since 1839.[38] It became embarrassingly obvious during the prolonged court case that the bank had shown itself too willing to accept documentation on behalf of the Great Western that apparently accepted responsibility for the repayment of cash advances, but which the company was able to repudiate. Generally, too, the directors had been slow to tighten up on its more doubtful customers, even though the economic crash of 1857 had given stark warning against over-extension of credit. One reason for this laxity was almost certainly that Macdonald himself was considerably in debt to the bank. Although the arrangement would be barred by the ethics of modern public life, contemporaries almost certainly accepted a tacit pact: Kingston kept Macdonald’s political career afloat, and Macdonald in turn looked after the interests of his home city. The Grand Trunk and the seat of government had dented this cosy arrangement, and the collapse of the bank destroyed it.

The bank crisis broke at the end of October 1867, providentially for Macdonald just two months after he had brushed aside the electoral challenge of the eccentric Doctor John Stewart. The member for Kingston was now Sir John Macdonald, prime minister of Canada. It was in his political interests to save his riding’s bank, it was in his business interests and it was certainly in his personal interests, for any successor institution could be expected to take a less tolerant approach to his own debts. Yet the newly minted Dominion statesman was powerless. As already noted in Chapter Four, his finance minister, Alexander Galt, tried to mobilise the financial sector to put together a rescue package, but the Bank of Montreal played hardball and the bid failed. Galt felt obliged to resign, and privately denounced the prime minister for failing to back him. The Bank of Montreal handled government business but since the Dominion government was new and fragile structure, any threat to switch its account elsewhere would carry little weight. In any case, Macdonald’s ally, George-Etienne Cartier, was too much a Montrealer to permit such a move. Cartier was sore at being passed over for the job of prime minister, and Macdonald needed Cartier more than he needed Kingston.[39] It was the cabinet that determined, in the words of Macdonald’s fatal telegram, that the prospects of a successful rescue were ‘insufficient to warrant any action by Government.’ For Kingston, the collapse of the Commercial Bank was little short of a disaster. Much of the capital of Queen’s University was wiped out, the pension fund of the Presbyterian Church was ravaged and the municipality was unable to meet its debts. For Macdonald himself, it foreshadowed the greatest crisis in his personal finances. Two years later, the Merchants Bank of Montreal, which swallowed up its Kingston rival, invited the prime minister the settle debts totalling just short of an astronomical $80,000. Personally, he was left penniless.[40] Politically, the episode underlined the difference between office and power. In 1867, he was the chairman of a cabinet, and not yet the dictator of a government.

            There was a certain grim symbolism in Prime Minister Macdonald’s inability to save the Kingston bank with which he had been so closely involved for a quarter of a century. His own finances inverted the classic story of career success, running downhill from riches in the direction of rags. In the eighteen-forties, when he was barely thirty years of age, Macdonald occupied ‘a large and commodious house’ on Kingston’s Brock Street, complete with ‘all the comforts and conveniences then known to Canadian civilization’, including expensive household equipment specially purchased during his visit to Britain in 1842. He could even rise to the ultimate contemporary status symbol, his own carriage, horses and coachman.[41] For a time, in 1848-9, he rented Bellevue, the handsome villa close to the lakeshore that is now Kingston’s national monument to its most famous citizen.  It was probably on the strength of his reputation as a successful that Macdonald’s first ministerial appointment, in 1847, was to the office of Receiver-General, the long-range ancestor of the modern Ministry of National Revenue. Unfortunately, the more deeply he immersed himself in politics, the less successful he proved in managing his own finances.

            Macdonald plunged into the property boom of the early eighteen-fifties, making down payments on blocks of land and assuming that he could cover the outstanding purchase price from the profits of quick re-sale. In January 1855, he confessed that he had ‘speculated too heavily in real estate’. His investments were not selling as rapidly as he had hoped, the instalments were falling due ‘and I am put to my wits’ ends to make my pay[men]ts.’ Two months later, he pleaded with a creditor, ‘I haven’t got a shilling to jingle on a tomb stone.’[42] True, unlike his Tory contemporary John Hillyard Cameron, Macdonald escaped outright bankruptcy in the crash of 1857, but that may well have been because his special relationship with the Commercial Bank. Far more damaging than the impression that he was short of money was the increasing opinion of his contemporaries that he was a reckless and unreliable financial manager. In August 1859 he was badly let down by a business associate on whose behalf he had presumably given an open-ended guarantee. The partner defaulted, and Macdonald was ‘embarrassed’, and also angry, to find that his Kingston properties had been seized and were to be put up for auction. ‘I am quite unable to pay my own debts & meet this one of yours as well.’[43] The Hamilton businessman Isaac Buchanan found it hard to believe that ‘a man of so much intellect and versatility’ could be ‘such a child’ when it came to money.[44] Macdonald himself proved to be frustrating to deal with, as David Shaw, his business partner in the 1862 Kingston town lots promotion was to discover. ‘Macdonald has all but ruined me by his wretched carelessness’, he grumbled in 1861. Over a decade later, Shaw was still reproachful: ‘you certainly were awfully neglectful of your own interest as well as mine’.[45]

            Since his financial embarrassments were a matter of public knowledge, Macdonald characteristically put a brave face on the problem, and sought to turn it to his political benefit. As he told supporters at a banquet in Toronto in 1860, ‘when first I entered the public service, my name stood infinitely better at my banker’s than it does at the present time’. A career in politics ‘has not made my fortune. … I have not fattened on the public plunder.’[46] He repeated the point on the hustings at the general election of 1863. ‘Mr Macdonald said that public life had not been to his pecuniary advantage; his balance at the bankers would have been larger had he kept to the honors of his profession’. Again, ‘he defied any man to prove a charge that public office had been of the slightest pecuniary advantage to himself.’[47] By admitting that politics had left him poor, Macdonald could portray himself as honest and incorruptible. However, as an argument for retaining the local support, it may have been less than persuasive in two respects. First, the increasing concern among at least some of the voters was not that Macdonald had omitted to enrich himself but rather than he was failing to secure the prosperity of the city. Second, John A. Macdonald’s political career had begun as an outward projection of his role as leading figure in the local business community. The blunt truth was that Kingston had not greatly benefited from the various road, rail and canal companies that he had helped to promote in more prosperous times. The more he talked down his own finances, the less plausible he appeared as a source of capital for future local projects. No politician can pose as a rainmaker when everyone knows he is lost in his own financial desert. But there was, too, a third, unspoken threat to his security. By the early 1860s, Macdonald was in no position to ride out any unforeseen financial disaster – and the economic history of nineteenth-century Canada is littered with the unexpected manifestation of crashes and bankruptcies.

John A. Macdonald was not alone among Canadian politicians and businessmen in floating on a bubble of debt. Most appear to have assumed that they would be able to satisfy their creditors and provide for their families over an entire working lifetime, and that eventually they would balance their personal accounts. John A. Macdonald was unusual in living, and working, to the age of 76, for few of contemporaries remained active much beyond their sixtieth birthdays. But early in 1864, his game of financial musical chairs came crashing to a sudden end through the untimely death of his law partner, Archie John Macdonell, leaving massive debts for immediate settlement. Macdonell had been Macdonald’s partner for ten years. His role was to act as the firm’s Kingston anchor, and there was a certain symbolism in the fact that in 1854, the year Macdonald helped bring about the alliance between the Upper Canadian Conservatives and the Lower Canadian Bleus, he should have gone into business with a Catholic. It was true that Macdonald’s dual public role, as a party leader and as an exceptionally conscientious cabinet minister, diverted his attention from home-town office affairs, but there is also evidence that he was slack at management. Back in 1849, his first business partner, Alexander Campbell, had despairingly declined to renew their agreement, after warning Macdonald that ‘your private affairs are likely to increase the embarrassments of the firm’. Creighton’s account of the break-up conveys the impression of a petulant Campbell attempting to blackmail his mentor for more money. In fact, Campbell was genuinely concerned to support Macdonald’s political career. He was also discreetly sympathetic about the costs incurred in coping with Isabella Macdonald’s mystery illness and her three-year convalescence in the United States. His problem was that both partners had drawn so heavily on the firm’s account that it was technically insolvent, even to the point of having difficulty in repaying money deposited by a client on trust.[48]  

            Campbell was one of nature’s worriers, and that was probably an advantage in dealing with the easy-going John A. Macdonald. An engaging glimpse of office politics from the late eighteen-fifties may be revealing. A long-serving clerk called McIntosh felt obliged to offer his resignation, on the grounds that he was over eighty years of age and conscious of his failing powers. Far from accepting the offer to shed a useless pair of hands, Macdonald showered the old man with compliments, assuring McIntosh that he was the kingpin of the entire office, the man who supervised junior staff and kept the business running smoothly. Duly flattered, McIntosh continued to draw his pay and carry an octogenarian workload to the day of his death.[49] Cynics might suggest that the image of generous, genial ‘John A.’ would have been damaged by accepting McIntosh’s offer to go. Although modern pension schemes lay far in the future, it is probable that the firm would have felt obliged to grant McIntosh a retirement allowance. Maybe Macdonald shrewdly calculated that it was good public relations to shoulder the extra cost of keeping the old man on the payroll a few years longer, but the episode does not reflect a hard-nosed business determined to force down its costs. During the 1863 election, it was alleged that ‘Mr Macdonald was not able to look after his own business.’[50] Just as how serious were the problems would soon be revealed.

            Of course, nobody expected Macdonell to fall mortally ill and die at the age of 41.[51] His death left Macdonald solely responsible for the partnership’s debts, which one undated calculation put at $68,000. This liability placed him entirely in the hands of the Commercial Bank. Even though he was a member of the board of directors, he had to agree to conditions, particularly designed to fetter his good-natured tendency to multiply his problems by standing security for equally insolvent friends. Soon afterwards, he had to refuse an appeal for financial support from a hard-up political ally: ‘I am under an engagement to the Bank not to endorse for any one; and my personal arrangements prevent my assisting you with the money itself.’[52] In theory, Macdonald was entitled to recover about half the deficit from Macdonnell’s estate. An account drawn up on 19 June 1867 – two days before Macdonald became Sir John and first prime minister of the Dominion – estimated the amount due at over $33,000. That would have notably eased the burden – but for the inconvenient problem that Archie John’s estate was virtually non-existent. Throughout the remainder of the eighteen-sixties, Macdonald was pursued by a particularly pertinacious young Toronto lawyer, Richard Snelling, over a debt of just $4,000. Macdonald was ‘apprehensive’ about the case, and Snelling had an uncanny knack of renewing his demands at crucial moments in the Confederation story. The plaintiffs won their case, with costs, when it finally came to court in 1870, with Snelling contemptuously remarking that this was precisely the outcome he had predicted six years earlier. Refusing to accept a plea that the Macdonell estate was a mythical entity, he announced a renewed determination to seek satisfaction from Macdonald in his personal capacity. Two years later he was pressing for payment of over $6,000. As Macdonald put it, Snelling’s campaign ‘will only give me some trouble’, but presumably far more embarrassing were the suspicions of the Macdonell family. When Archie John’s widow died in 1881, their unmarried daughter demanded what she regarded as her share of her parents’ estate. On being told that there was nothing, and that any assets belonged to Macdonald, she became angry and threatened legal action.[53] It is impossible to know whether this imbroglio hurt Macdonald’s standing in Kingston, but the affair as a whole cannot have helped his reputation as a businessman, and the Miss Macdonell’s resentment may help to explain why he made no attempt to win back his old seat at the general election of 1882.

            A.J. Macdonell’s death inflicted long-term damage on John A. Macdonald’s finances. It also came close to ending his ministerial career. As Sandfield Macdonald’s Reform ministry collapsed at the end of March 1864, it became public knowledge that his namesake felt that the crisis in his business affairs made it impossible for him to return to office.[54] ‘I declined positively to accept office,’ he recalled in a speech in 1873. ‘My partner in business was at the point of death. It was utter ruin to me to return to the Government and I declined.’ The governor-general commissioned first Fergusson Blair and then Alexander Campbell in the hope of securing a centrist coalition ministry. Both men failed and, accompanied by Cartier, they roused Macdonald ‘at midnight, while I was wrapped in slumber’, with an ultimatum: if he would not take office, they would abandon the province to the Grits.[55] In more than one respect, the Macdonell crisis symbolised a turning point in Macdonald’s career. On the one hand, the financial debacle highlighted his waning position among the city’s commercial elite. On the other, his old-warhorse decision to throw in his lot with the new Taché-John A. Macdonald cabinet was of crucial importance for the history of Canada. Three months later, that minority administration was transformed into the Great Coalition that carried Confederation. The Upper Canada Conservatives were so weak in the Assembly that if Macdonald had not enjoyed the advantage of incumbency, it is doubtful whether he would have been included in the new combination, especially as it was so largely shaped to win the adherence of his unforgiving foe, George Brown. Historians are hardly entitled to make the counter-factual pronouncement that without John A. Macdonald, Confederation would not have come about, but it is certainly true to claim that both the Quebec Resolutions, the 1864 blueprint for union, and the British North America Act, the 1867 constitutional statute, owed much to his hard work and legal acumen. Political ambition and political addiction no doubt played their parts in his decision to go back into government in March 1864. (Richard Cartwright, then a confidant, though later an uncharitable critic, claimed that Macdonald, who was always a competitive personality, could not stomach the possible elevation to high office of his one-time law student, Alexander Campbell.[56]) Whatever the reasons, his decision to take part in the unstable and unpromising Taché-Macdonald ministry marked the moment of his final transition of his priorities from Kingston affairs to Canadian politics.

            The financial disaster uncovered by Archie John’s death constituted such a milestone in the career of John A. Macdonald that it is curious that his two principal biographers should have referred to it only obliquely and in retrospect.[57] The massive deficit placed him at the mercy of the Commercial Bank at just the moment when Kingston’s major financial institution was about to collapse into much less tender hands. However, we should not lose sight of the fact that, as already noted, his finances had been parlous for several years prior to his partner’s death. To concentrate too much on the near-collapse of his legal business would be to downplay a longer-term weakening of his ties with the city. By the end of the eighteen-fifties, the days of John A. Macdonald as an imposing householder on Brock Street or at Bellevue were already becoming a memory. Isabella Macdonald’s debilitating illness made it impossible for her to run a home in a normal fashion, and soon after the seat of government returned to Upper Canada from Quebec at the end of 1855, John A. moved his wife to lodgings in the new capital, Toronto – an upheaval which probably triggered the major setback that she suffered in January 1856.[58] It seems unlikely that he ever occupied a home of his again in Kingston, although he continued to claim identification with the city. ‘It is here, although years ago I gave up my residence amongst you, where all my hopes are centered’, he told diners at a banquet in his honour in November 1860. In 1844, running against Manahan, he had projected himself as the local candidate. ‘A residence in Kingston since infancy has afforded every opportunity to me of knowing the wants and claims of our “Loyal Old Town”.’ By 1860, that kind of rhetoric was transmuted into the past tense: ‘here my boyish days were spent; here in manhood I labored in honest industry; here my fellow subjects honored me by electing me their representative in Parliament’.[59] For a time his mother’s house provided him with a local base: it was in the garden of her home that he held a victory party for his supporters after defeating Mowat in 1861.[60] Helen Macdonald’s death in 1862 further loosened his ties with the city. On the hustings in 1863 he still called himself ‘a simple citizen of Kingston’, but a Reform party supporter challenged his claim to belong to the city at all: ‘Mr Macdonald’s only inheritance was a burnt house on Brock street.’[61] The way in which the local press reported his visits to the city – and their brevity – emphasised the widening gap.[62] When he re-established a matrimonial home after marrying Agnes Bernard in 1867, it was in Ottawa. After his fall from office in 1873, he moved to Toronto. It is little wonder that he was losing support among the ‘younger men’ by 1872, for to many of them he must have been virtually a stranger, or – as opponents cruelly denounced him in 1878 – a ‘Deserter’.[63]

            Overall, then, it might be concluded that, by the middle of the eighteen-sixties, John A. Macdonald had not only recklessly created his own money problems but that he also bore a share of responsibility for the undermining of the city’s premier financial institution. Thus both need and opportunity coincided to make him a full-time politician based in Ottawa, with neither the resources nor the active local involvement that could contribute to any recovery of the Kingston economy. In fact, the most important of Macdonald’s remaining financial interests pushed him still further from Kingston in the years after Confederation, and further contributed to the city’s marginalisation. He had been a founder of the Trust and Loan Company back in 1843 and ─ even more important ─ its solicitor from the outset.[64] This, along with his similar relationship with the Commercial Bank, had made it possible for him to practise as a corporate lawyer, who could abandon the lawyerly drudgery of courtroom work while simultaneously bank-rolling his political career. The aim of the project was to attract capital from Britain, which the company would then lend out to farmers at a profit. To achieve this, it was necessary to circumvent the province’s Usury Laws, which imposed an artificial cap on the interest that could be charged on loans ─ a well-meaning interference with market forces designed to create cheap credit which in fact ensured that the returns available on investment were too low to attract vitally needed overseas capital. Thanks to the persistent lobbying by the member for Kingston, the legislature amended the Trust and Loan Company charter in 1850 to allow it to charge higher rates of interest. John A. Macdonald promptly sailed to England and arranged for the Canadian concern, and its helpful charter, to be reorganised as a subsidiary of an English company bearing the same name.[65] The fact that the business now operated under an imperial charter gave it, in Macdonald’s opinion, ‘an exceptional advantage over other merely Colonial associations[66] ─ and the fact that the charter required its headquarters to be based in Kingston was a considerable boost to the city’s status as a financial centre.

            It was probably thanks to his connection with the Trust and Loan Company that John A. Macdonald was able to survive the financial hurricane that almost overwhelmed him between 1864 and 1869. After the death of Archie John Macdonell, his law firm was reorganised as Macdonald and Patton. In its first six years of operation, the business derived a least two-thirds of its annual income from its Trust and Loan Company work.[67] While it was the partnership that handled the day-to-day farm mortgage business, Macdonald insisted that he alone controlled the relationship with the Trust and Loan Company. James Patton was merely ‘my locum tenens’, insisted Canada’s prime minister in January 1871: ‘I hold the position of Solicitor & legal adviser to the Company’, and hence major business decisions should be referred to him.[68] Patton would later protest to Macdonald that this placed him in a unenviable position. ‘You alone are recognized by the Company ─ and yet I, being on the spot, am held accountable for the satisfactory discharge of the Solicitor’s duties!’ Macdonald had no very high opinion of his junior partner. ‘He is methodical, regular & punctual,’ he reported to a fellow director, ‘and a sufficiently good lawyer to see no bad [land] Titles are forced upon you.’ But Patton was an unpolished and unyielding personality who frequently clashed with Trust and Loan Company officials. For this he offered no apologies. Too often, Pastton told Macdonald, he found himself ‘left to fight your battles’ alone and unaided. ‘Had you been on hand occasionally, these difficulties would not have sprung up, much less have assumed serious proportions.’[69]

            Sir John A. Macdonald’s determination to maintain control from the prime minister’s desk in Ottawa underlines the importance to him of his position with the Trust and Loan Company as the last of his once-thriving commercial enterprises.  It followed that he would have to put the interests of the company before any remaining loyalty he might feel to Kingston. By 1869, he had concluded that those interests would be best served by shifting the effective centre of the Company’s activities to Toronto. In reality, he had little choice if he was to maintain his status as an effective policy adviser. The refinancing of 1850 had transferred ultimate control to London, and London evidently wanted the business to capture a larger share of Canada’s burgeoning farming sector. As with any other branch-plant operation, the Trust and Loan Company’s Canadian management had to meet head office targets or lose their jobs. ‘I have a horror at the idea of seeing a new man from England taking charge of the business,’ Macdonald wrote early in January 1870 ─ at a time when the Canadian history textbooks have his attention desperately focused upon the Red River crisis. London wanted the business to grow ─ and that meant refocusing activities on Ontario. ‘Its progress during the last three years has been really marvellous’.[70] Since most of that growth was concentrated in the districts to the west of Toronto, Toronto must replace Kingston as the chief centre of operations.  

            He had outlined the new strategy as early as the fall of 1869. In line with the terms of its precious imperial charter, the Trust and Loan Company would maintain its official headquarters in Kingston, while transferring the real centre of its operations to a new office in Toronto.[71] Macdonald’s justification for the new strategy may seem shocking: the leader of the new Dominion did not seem to have the prosperity of the Canadian people in the forefront of his thinking. Rather, the business opportunity lay in the fact that many Ontario farmers were cash-poor, and ran up debts with country shopkeepers, who were in turn dependent upon suppliers in the major cities. ‘It is the custom in Ontario for the Country dealers to take security on a customer’s real estate for the debts due to them, and they frequently assign these to the wholesale merchants at Toronto or Montreal who supplied them with their stock in trade,’ he explained to a fellow director. Thus the hard-up farmers would find themselves at the mercy of big-city interests, who pressured them into settling their accounts by raising loans from the finance companies specialising in the farm mortgage business. ‘Your company by not having an office in Toronto loses most of the opportunities’, he explained. In arguing for a move to Toronto, Macdonald was evidently not emphasising the interests either of the farmers of Ontario or of the citizens of Kingston. ‘The transfer of the business to Toronto would be of great professional advantage to myself,’ he added.[72] Soon afterwards, Macdonald and Patton opened a law office in the provincial capital. John A. Macdonald’s electoral difficulties throughout 1874 delayed his own departure, but by 1876 he too was settled in Ontario’s largest city. Not only was a ‘Deserter’: he had taken the effective centre of operations of the city’s last remaining major financial business with him.

            Paradoxically, John A. Macdonald’s dependence upon the farm mortgage business, which propelled him to Toronto and so helped lose him his parliamentary seat at Kingston in 1878, also probably played a role in bringing him back again nine years later. At a time when Ontario agriculture was booming, Macdonald had planned to increase the Trust and Loan Company’s mortgage business by exploiting farmers’ cash-flow problems. The good times continued for a decade: between 1871 and 1881, production of wheat, the province’s staple export crop, almost doubled, from 14.2 million bushels to 27.4 million. But the eighteen-eighties became a period of challenge and readjustment on the farms. Although ‘crisis’ may be too strong a term, rural Ontario was not a happy place, and at the general elections of 1887 and 1891, farmers voted heavily for the Liberal party and its various schemes aimed at securing access to the United States market on any terms. Wheat production dropped by almost seven million bushels between 1881 and 1891, probably because of competition from fast-growing Manitoba. The shortfall was balanced by an increase in the production of oats, a cattle-feed crop, as Ontario farmers switched to raising livestock, so that they could supply eastern Canada’s growing cities with meat and dairy products. Kingston may have been demographically sluggish, but Toronto’s 56,000 population of 1871 almost trebled in the next twenty years. Between 1871 and 1891, dairy cows in the province increased by 37 percent, other cattle by 39 percent and swine by 28 percent.[73]

Pigs and cattle needed shelter from the Canadian winter, so the shift to livestock production entailed investment in barns and milking parlours, requiring farmers to spend money at a time when their incomes were falling. The outcome was predictable: farmers had to borrow. Perhaps the most imposing example was the project launched by John A. Macdonald’s long-time foe, George Brown, who developed an ambitious pedigree cattle breeding operation at Bow Park near Brantford. Brown travelled to Britain in 1876 to bid directly for investment in his company, but most farmers were forced into the arms of loan companies.[74] One estimate suggests that the total mortgage debt in Ontario rose six-fold during the eighteen-seventies and eighties, from $13 million to $82 million.[75] As early as 1880, from the prime minister’s desk in the House of Commons, Macdonald found himself forced to defend the Trust and Loan Company against charges of extortion. ‘I have been connected with that Company for thirty years,’ he said, ‘and I have never known a case in which they have taken more than 8 per cent.’[76] Canada’s farmers may not have shared his complacent view of the company’s moderation.

By 1882, the lugubrious Oxford professor and Toronto resident, Goldwin Smith, was pronouncing that ‘the loan societies were the landlords of Ontario.’[77] Five years later, when he returned to face the electors of Kingston, the Trust and Loan Company was the second-largest mortgage business in the province, having been recently overtaken by the Toronto-based building society, Canada Permanent, which also handled urban real estate and lent money in Manitoba.[78] By 1887, it unlikely that rural Ontario constituencies would have welcomed Sir John A. Macdonald, founder of the Trust and Loan Company, as well as its solicitor, beneficiary and policy adviser.

True, Macdonald had run in two rural ridings in 1882, but both constituencies, Lennox and Carleton, were in eastern Ontario, a region that was already looking to western Canada as an outlet. Richard Cartwright, a close observer of the Lennox scene, assessed the level of corruption behind Macdonald’s victory as ‘flagrant’ and set out to marshal evidence to overturn the result. To his surprise, even Liberal activists were reluctant to co-operate. At least twenty leading Liberals were investors in colonization companies that planned to invest in farmlands on the Canadian prairies. In addition to being prime minister, Sir John A. Macdonald also held the portfolio of minister of the interior, making him the politician who controlled the resources of the future provinces of Alberta and Saskatchewan. Even his opponents could see the value of maintaining his goodwill.[79]

In any case, it is difficult to imagine John A. Macdonald as the voice of the farming community. With his innate sense of fun, it must be doubted whether he could muster the gravitas required to share concern about the price of animal feed or interest in the chances of fine weather for the harvest. Challenged during a debate on improvements on sheep breeding, one of Macdonald’s cabinet colleagues was unable to name the breed of rams that the government had recently imported to improve the provincial stock. Prompting him in a stage whisper, John A. suggested ‘hydraulic’. Victorian propriety was shocked when visitors to an agricultural fair at Kingston in 1888 encountered a troupe of bare-legged acrobats immediately upon entering the exhibition grounds. Unfazed, Sir John A. explained that at such events, it was customary to display the calves first.[80] Fundamentally, Macdonald was an urban animal because Canada’s cities offered the best opportunities for an entrepreneurial corporate lawyer to cut deals and make money. The imperative of making money led him to abandon Kingston in the eighteen-seventies for the more prosperous environment of Toronto, while his fundamentally urban identity helped propel him back to take the seat again in 1887. But he returned to a Kingston that no longer dreamed of mushrooming into the metropolitan centre of a teeming hinterland, a Kingston that had lost its status as an independent financial centre twenty years earlier. It was probably true to claim that no politician had done more than John A. Macdonald to build a Canada that stretched from ocean to ocean. Yet even this near-miraculous nation-builder had proved incapable of overcoming the limitations that handicapped the potential flowering of his home town. Kingston’s relative decline and the roller-coaster of John A. Macdonald’s personal finances had multiply intersected, to form an essential context for the unravelling of his electoral fortunes.

Tailpiece

 

At a party rally during the 1892 by-election campaign, Richard Cartwright delivered a speech that rang the chimes of Kingston’s hopes and plucked the chords of its repeated disappointments. It was an elegiac review of the hopes and setbacks that had characterised the half-century Macdonald era in the city’s history. He challenged the audience to compare ‘the natural advantages which Kingston possesses’ with the fact that ‘her progress has been lamentably slow.’ One hundred years earlier, it had been ‘an important town in Canada’ and ‘Kingstonians would have in those days felt scornful if it had been suggested that dirty Little York would have passed Kingston in prosperity.’ At the start of the nineteenth century, cities such as Buffalo, Cleveland and Rochester had not even existed, yet they had ‘shot ahead, while Kingston has been getting along more slowly.’ Cartwright even invoked Lord Sydenham’s opinion that ‘anyone with half an eye’ could see that Kingston was the obvious capital for Canada,  although even he could not blame Macdonaldian duplicity for the city’s deprivation of the seat of government. ‘She would have been the capital if the pledge of the Imperial Government had not been broken, and would have been better off than she is to-day.’ With some exaggeration, Cartwright claimed that Kingston still had the best harbour in Canada, coupled with ‘the advantage of ... being at the foot of the Lake navigation, the head of the St. Lawrence River,’ giving it the potential to become ‘the outlet of the great commerce that would pass to the United States.’ 

            The magic solution for Kingston, so preached Cartwright, was continental free trade. He called the Liberal policy of Unrestricted Reciprocity ‘a chance of dealing on even terms with the United States’ ─ although by implications they would be terms that the Americans would dictate. Kingston ‘had the great advantage of position, standing midway between two great Canadian cities ─ Montreal and Toronto’ and it lay within ten hours’ travel of New York. Give the people of Kingston access to American markets and, if they proved worthy of their founding forefathers, prosperity would follow. ‘No city in Canada would have such a chance of becoming great as the Old City of Kingston.’ With Reciprocity, ‘they would become a railroad centre, and great manufactories would spring up’, dominating the trade of the entire section of the country between Toronto and Montreal. ‘Kingston would become a great emporium and the people would become a great race.’[81]

It was rousing stuff as an election speech but, as a serious analysis of the Kingston economy, it was flawed and tired. There had long ceased to be any advantage in the city’s location at the point where Lake Ontario met the St Lawrence, since cargoes generally did not require trans-shipment and so most vessels sailed straight past. Even the east-west water route did confer advantages, it was mere intellectual sleight of hand to imply that this must also make Kingston the ‘outlet’ for north-south trade. There would no doubt have been advantages in securing tariff-free access to American markets ─ New York State alone was the home to six million people ─ and the seven percent fall in the population of Kingston during the census decade after 1891 was almost certainly caused by the sky-high McKinley tariff which the Americans adopted that year. But free trade is a game of gains and losses: the locomotive works flourished during the Laurier years thanks to contracts to supply the Intercolonial and the Canadian Northern.[82] Without the sheltering tariff wall of the National Policy (which the Laurier Liberals essentially left in place after 1896), Canadian railways might have proved less enthusiastic about purchasing Canadian rolling stock. The previous experience of partial (sectoral) free trade with the United States, under the Reciprocity Treaty of 1854, was not encouraging. John Counter’s ambitious plans to access the American market through Wolfe Island transportation links had culminated in his own bankruptcy, while the Grand Trunk Railway had treated Kingston not as a hub but merely as another wayside station between Toronto and Montreal. Even ‘the great advantage of position’ within the Toronto-Montreal-New York triangle was illusory. It was too late for Kingston to challenge the three urban giants as a communications hub, and the city could only benefit from their proximity by finding some niche economic role. The Commercial Bank might have made it a regional financial centre, but the Commercial Bank had collapsed twenty-five years before.

To ask how far the city’s disappointments could be blamed upon John A. Macdonald is in itself to ignore the systemic weaknesses in Kingston’s position ─ its poor hinterland, the limited advantages of its port. Recovering the seat of government was always going to be incompatible with his role on the larger stage as a consensus politician and coalition builder. He had at least done something to consolidate Kingston’s position as a sub-regional capital, gifting it handsome public buildings in the eighteen-fifties and the controversial dry dock of thirty years later. Of the intervening period, he had spent five years in opposition at Ottawa and nine years in exile from Kingston. In retrospect, it was his inability to deliver any major project for his constituency during the first five years of the Dominion that seems crucial, both in economic and electoral terms. Kingston badly needed an injection of capital by the late eighteen-sixties. Instead, while Sir John A. Macdonald projected himself as the imperial statesman defending Canada’s interests in the Treaty of Washington, the British government withdrew the garrison that had injected so much cash into the local economy. Worse still, Macdonald had played a double role in the downfall of the Commercial Bank, failing as a director to ensure that it curbed its vulnerability to debt, and proving impotent as prime minister to persuade his cabinet colleagues to come to its rescue in the terminal crisis of 1867.  

But it would be unfair to single out John A. Macdonald as the sole cause of any of Kingston’s problems. To a remarkable extent, the city’s elite worked together to fund the various projects that were hoped would lift it into the big league. However much they might divide at elections, in the eighteen-eighties Conservatives like Campbell and Cartwright invested alongside Liberals such as Cartwright and Gunn to promote the K&P railway, the cotton mill and the locomotive works, just as political opponents such as Macdonald and Counter and Gildersleeve had worked together thirty years previously. John A. Macdonald had certainly not been alone in his failure of stewardship as a director of the Commercial Bank ─ and Cartwright, who was unlucky enough to be serving as President when it crashed, was hardly qualified to point the finger of blame. What changed was the silent elimination of John A. Macdonald from the ranks of shakers and (less often) movers who tried to kick-start the local economy. His own financial misfortunes and the city’s economic problems would run in parallel, with some interconnection, but their combined effect was to force them apart. In 1844 he had referred to his home town as the place ‘with whose fortunes my own prosperity is identified’.[83] A quarter of a century later, neither John A. Macdonald nor the city of Kingston had much prosperity to share.

ENDNOTES

 

[1] Brian S. Osborne, ‘Kingston in the Nineteenth Century: A Study in Urban Decline’, in J. David Wood, ed., Perspectives on Landscape and Settlement in Nineteenth Century Ontario (Toronto, 1978 ed.), pp. 159-81.

[2] D. Swainson, ‘Chronicling Kingston: An Interpretation’, OH, 74, 1982, pp. 302-33.

[3] Campbell to John A. Macdonald, 18 May 1865, in J. Pope, ed., Correspondence of Sir John Macdonald (Garden City NY, 1921), p. 27.

[4]Young Non-Politician’, pp. 139-43. But Macdonald and a business partner offered for sale, apparently with some success, 79 town lots in July 1862.

[5] Swainson, ‘Chronicling Kingston’ OH, 74, 1982; KBP, p. 2. Osborne specifically accepts that ‘decline’ was relative, but also labels it ‘significant’, Wood, ed., Perspectives, p. 160.

[6] Osborne, in Wood, ed., Perspectives, pp. 161-2; J.M.S. Careless, Toronto to 1918: An Illustrated History (Toronto, 1984), p. 43. Toronto was called York until 1834.

[7] Swainson, ‘Chronicling Kingston’, OH, 74, 1982, pp. 322-7.

[8] Canadian News (London, England), 29 October 1856, p. 171.

[9] Quoted, Osborne, ‘Kingston in the Nineteenth Century’, in Wood, ed., Perspectives, p. 159.

[10] Pope, ed., Correspondence of Sir John Macdonald, p. 27.

[11] ML I, p. 12; ‘Young Non-Politician’, p. 146.

[12] Osborne, TPD, p. 75; Johnson, TPD, p. 146.

[13] KBP, p. 181.

[14] Osborne, TPD, pp. 69-77.

[15] Johnson, TPD, p. 154.

[16] Globe, 13 November 1856.

[17] W.H. Russell, Canada: Its Defences, Condition, and Resources (London, 1865), pp. 65-8.

[18] A.W. Currie, The Grand Trunk Railway of Canada (Toronto, 1957), pp. 71-4.

[19] Daily British Whig, undated, quoted Canadian News (London), 26 May 1858, p. 168.

[20] G. Richardson, ‘The Canadian Locomotive Company,’ TPD, pp. 157-67.

[21] Henry C. Klassen, Luther H. Holton: A Founding Canadian Entrepreneur (Calgary, 2001), pp. 138-41: Kingston Daily News, 13 June 1863.

[22] Osborne, ‘Kingston in the Nineteenth Century’ in Wood, ed., ed., Perspectives, pp. 170-3.

[23]Young Non-Politician’, p. 145; Daily British Whig, 23 July 1872.

[24] Commercial Advocate, 1 January 1858, quoted Canadian News (London), 20 January 1858, p. 24.

[25] Speech in the Assembly, 12 March 1858, Macpherson, I, p. 350.

[26] Daily British Whig, 15 December 1857.

[27] Daily British Whig, 8 December 1857.

[28] Daily British Whig, 15 December 1857.

[29] ML I, p. 356 (17 March 1856). For the sectional nature of the resulting vote, Knight, p. 176.

[30] Daily News, 17 May 1867.

[31] Daily News, 26 July 1872.

[32] Donald Swainson, ‘Kingstonians in the Second Parliament: Portrait of an Elite Group’, TPD, pp. 261-77.

[33] The petition, of 15 June 1857, was for the return of the seat of government. New York was stated to be a 12 hour journey, Boston 18 hours distant. Knight, p. 227.

[34] This account is based on Max Magill, ‘The Failure of the Commercial Bank’, TPD, pp. 169-81.

[35] Magill’s account may be supplemented by Currie, Grand Trunk Railway of Canada, pp. 172-5.

[36] Douglas McCalla regards the prolonged banking crisis of 1866-67, which claimed several scalps, as a knock-on effect of the 1857 depression, which had left too many uncollectable debts. D. McCalla, Planting the Province: The Economic History of Upper Canada 1784-1870 (Toronto, 1993), p. 237.

[37] Worth noting is the contemporary experience of the Ontario city of London, which was in the process of overtaking Kingston in the population stakes. Backed by successful ventures in industrial entrepreneurship, London was establishing locally controlled financial institutions during the years when Kingston lost control of its bank. F.H. Armstrong and D.J. Brock, ‘The Rise of London: A Study of Urban Evolution in Nineteenth-Century South-Western Ontario’, in F.H. Armstrong, H.A. Stevenson and J.D. Wilson, eds, Aspects of Nineteenth-Century Ontario: Essays Presented to J.J. Talman (Toronto, 1974), pp. 80-100, esp. p. 94.

[38] Creighton, YP, p. 72.

[39] Montreal was perhaps the one Canadian city big enough to have diverse interests in an issue of this kind. Cartier was depositor with the Bank of Montreal, but was building a share portfolio in two other Montreal banks. Another major Montreal businessman, Luther Holton, had recently been brought in to the Commercial Bank as a director to clean up the operation. He tried to prevent collapse at the behest of a Montreal savings bank which had  $20,000 tied up in Kingston. And Max Magill points out that by 1860, there were more Commercial Bank stockholders resident in Montreal than in Kingston. Some of these would have welcomed transfer of control to their own city. Brian Young, George-Etienne Cartier: Montreal Bourgeois (Kingston and Montreal, 1981), pp. 21, 25;  Klassen, Luther H. Holton, p. 210; Magill, TPD, pp. 179-80.

[40] OC, pp. 33-4, 38-9, 41, 57. Well-wishers established a trust fund to support his wife and child while he was seriously ill in 1870.

[41] Macpherson, I, p. v; Pope, Memoirs, I, p. 15.

[42] Macdonald to S. Thompson, 22 January 1855, quoted, ‘Young Non-Politician’, p. 143; ML I, p.  260 (letter of 24 March 1855).

[43] ML II, p. 171.

[44] Quoted, P.B. Waite, Macdonald and His World (Toronto, 1975), p. 17

[45] LAC, Macdonald Papers, D. Shaw to Sir H. Smith (copy), 25 June 1861, and undated note marked ‘late 1873’.

[46] Address, p. 5.

[47] Daily News, 13 June 1863.

[48] YP, pp. 147-9. The correspondence is in LAC, Macdonald Papers, vol. 194, from 1 June 1849 through to late September. Thanks to Campbell’s habitually imprecise dating of letters, the order of events is not wholly clear.

[49] Macpherson, I, pp. 102-3.

[50] Daily News, 13 June 1863.

[51] Macdonell died on 27 March 1864, of a ‘pulmonary complaint’, presumably tuberculosis. He had travelled to Philadelphia a few weeks earlier to seek ‘the best medical advice which the American continent affords’. Daily News, 29 March 1864.

[52] LAC, Macdonald Papers, vol. 509, Macdonald to Dunbar Ross (copy), 14 May 1864.

[53] Records relating to the MacDonnell estate are in LAC, Macdonald Papers, vol. 542, especially J. Shannon to Macdonald, private, 9 March 1866; Macdonald to H. Bernard, 15 February 1871; R. Snelling to J. Shannon, 12 December 1870 and J. Shannon to Macdonald, March 30, 1881. I am grateful to Dr Peter B. Waite for his guidance on this matter.

[54] E.g. Montreal Gazette, 30 March 1864. Both Pope, Memoirs, I, p. 256 and Creighton (YP, pp. 347- 352) indicate that Macdonald was reluctant to take office in March 1864, but do not say why. Sandfield Macdonald had resigned on 21 March, and the Taché ministry was sworn in on the 30th.

[55] Toronto Mail, 17 November 1873.

[56] R. Cartwright, Reminiscences (Toronto, 1912), p. 48.

[57] Pope, Memoirs, II, p. 76; Creighton, OC, pp. 8, 34.

[58] ML I, p. 343. Despite being confined to her bedroom at Bellevue, Isabella Macdonald seems to have been tough on servants. Ibid., pp. 151, 165. She had spent her teenage years on a slave plantation in Georgia.

[59] Address, pp. 1-2, and compare Pope, Memoirs, I, p. 32.

[60] Creighton, YP, p. 314.

[61] Daily News, 13 June 1863. The fire is unexplained.

[62] E.g. Daily British Whig, 8 December 1857; Daily News, 21 May 1863, 16-17 May 1867.

[63] Daily British Whig, 17 September 1878.

[64] J.K. Johnson, TPD, pp. 145, 359 corrects YP, p. 157, which gives 1844.

[65] YP, pp. 157-58; R.T. Naylor, The History of Canadian Business 1867-1914 (Kingston and Montreal, 2007 ed.), I, p. 23.

[66] LAC, Macdonald Papers, Vol. 516, Macdonald to Chapman, confidential, 21 October 1869

[67] ‘Young Non-Politician’, p. 144.

[68] LAC, Macdonald Papers, Vol. 541, Macdonald to Chapman, 20 January 1871.

[69] LAC, Macdonald Papers, Vol. 541, Patton to Macdonald, private, 26 March 1874; Vol. 518, Macdonald to Chapman, private, 27 June 1871.

[70] LAC, Macdonald Papers, Vol. 516, Macdonald to Chapman, private, 7 January 1870.

[71] Similarly, in 1900, the Bank of Nova Scotia (Scotiabank) shifted its general office to Toronto while maintaining its official head office in Halifax.

[72] LAC, Macdonald Papers, Vol. 516, Macdonald to Chapman, confidential, 21 October 1869.

[73] I.M. Drummond, Progress Without Planning: The Economic History of Ontario from Confederation to the Second World War (Toronto, 1987), pp. 30-34. Agricultural statistics were published annually in The Canada Yearbook. These are taken from the 1905 issue, pp. 79, 91.

[74] J.M.S. Careless, Brown of the Globe: ii, The Statesman of Confederation 1860-1880 (Toronto, 1963), pp. 345-47, 361-66. Brown’s project was soon in trouble and there was conflict with the overseas investors.

[75] Drummond, Progress Without Planning, p. 318. It is in the nature of the mortgage business that there will be defaulters and finance companies will repossess some properties. For two examples of the Macdonald law firm selling repossessed farms near Kingston on behalf of the Trust & Loan Company as early as 1862, Daily News, 8, 22 October 1862.

[76] Debates of the House of Commons of Canada, 1880, 1, 5 April 1880, pp. 1038-39.

[77] A.B. Cooke and A.P.W. Malcomson, eds, The Ashbourne Papers, 1869-1913 (Belfast, 1974), p. 169. Goldwin Smith argued that the concession of proprietary rights over their landholdings would not be to the advantage of Irish peasant farmers, since their status as tenants protected them from losing property assets to moneylenders. Thus he may have exaggerated the plight of Ontario farmers to emphasis his point: Smith was inclined to exaggeration. As part of the land registration process, i.e. to assure potential purchasers of clear title, farmers were required to supply details of mortgages. A study by David P. Gagan of a Peel County township, in the immediate hinterland of Toronto and Hamilton, finds surprising low levels of indebtedness to mortgage companies. This may not have been a typical case: the area was very fertile, and proximity to the two cities seems to have enabled farmers to raise capital through private arrangements. D.P. Gagan, ‘The Security of Land: Mortgaging in Toronto Gore Township 1835-95’ in F.H. Armstrong, H.A. Stevenson and J.D. Wilson, eds, Aspects of Nineteenth-Century Ontario (Toronto, 1974), pp. 135-53.

[78] Drummond, Progress Without Planning, p. 318.

[79] Cartwright, Reminiscences, pp. 242-43.

[80] Biggar, Anecdotal Life, pp. 204, 232.

[81] Globe, 13, 15 January 1892.

[82] KBP, p. 203.

[83] ML I, p. 12.

Copyright © 2017 Ged Martin. All Rights Reserved.
Joomla! is Free Software released under the GNU General Public License.