Business: Miners' Mart | TIME

(See front cover)

During the wintry years of its northern Depression, Canada’s financial centre of gravity shifted westward from the first city of the Dominion to the second, from staid old Montreal to booming Toronto. In mental atmosphere the two cities are different as Boston and Chicago. From the golden days of the fur trade to the building of the railroads, from the peopling of the prairies to the rise of lumber and newsprint, the wealth of Canada tended to flow through Montreal. Some of that wealth always came to rest in the snug little mansions at the foot of Mount Royal, and Montreal became about as venturesome as the Bank of England.

Meantime Toronto, with a native itch for the long shot and a grandstand view of Ontario’s vast mineral resources, captured Canada’s relatively young mining industry. As far back as the century’s turn when the big strikes were still in the West, Toronto’s interest in mining was so hot that not one but two mining stock exchanges were founded. Later they merged as the Standard Stock & Mining Exchange, long a rival of the conservative old Toronto Stock Exchange, which dates back to 1852. With development of the great Ontario mines around Cobalt, Sudbury, Porcupine and Kirkland Lake, the wealth of the North funneled into Toronto. Thus when the greatest mining boom in Canadian history was touched off by the pound’s fall from gold and the New Deal’s devaluation of the dollar, Toronto was ready-set to cash in.

Cash in it did. In the five years through 1936 the value of Canada’s mineral output soared from $191,000,000 to a new high of $360,000,000, nearly one-third in gold alone. The total of dividend payments by Dominion mines more than tripled. Mining now ranks ahead of lumber and newsprint as the most important Dominion industry outside of agriculture. And the Toronto Stock Exchange, now merged with its old mining rival, not only outstrips the Montreal market in dollar-volume of trading but also exceeds every exchange in North America except New York’s “Big Board” and the Curb Exchange. In number of shares traded it even tops the Curb.

This week after a four-day Easter holiday the Toronto Stock Exchange will re-open for business in a brand-new building, the most up-to-date trading floor in the world. Toronto likes to think of this new building as symbolizing not only the new importance of its mining mart but the coming of age of the Dominion’s most boisterous industry. To mark this notable event with appropriate fanfare, President Harry Broughton Housser scheduled not one but two formal openings.

The first occurred last fortnight when Broker Housser played banquet host to 800 U. S. and Canadian bigwigs, including President Charles R. Gay of the New York Stock Exchange and President Kenneth S. Templeton of the Chicago Board of Trade. The party afforded a public opportunity for hosts & guests to brush up on such goodwill items as that the U. S. is Canada’s best customer, that, next to Britain, Canada is the best U. S. customer, that the U. S. stake in Canada amounts to some $4,500,000,000 (far larger than the Mother Country’s) and that Canadians own more than $1,000,000,000 worth of U. S. securities. And after the well-wishing, Broker Housser proceeded to show his potent visitors a few new tricks in their own trade.

In his big new modernistic building, the only completely air-conditioned building in Canada, President Housser has every mechanical gadget known to U. S. markets and a few more besides. Neatest innovation is an automatic quotation service, not for actual transactions, which are history, but for the going bid & ask prices. Operating on the same principle as the Teleregister electric quotation board common to U. S. board rooms, the service clicks up the bids & asks on the sides of the nine hexagonal trading posts where brokers can see them at a glance. Moreover, the same service is available to anyone with a “dial ticker” in his office. To get a quotation direct from the floor on, say, International Nickel, a customers’ man merely dials Nickel’s number (in) on an instrument which looks like an enclosed typewriter with a telephone dial instead of a keyboard. Within a few seconds the dial tickers tap out the going bid & ask for Nickel.

So thoroughly mechanized is the whole new $750,000 Toronto Stock Exchange that floor members had to take lessons in how to do business there. Actual trading on the new floor was to begin this week at a brief British ceremony with the visitors’ gallery closed. Over the regular ticker at 9:50 a. m. was to go an address from President Housser, followed by congratulatory messages from the Honorable Vinent Massey, Canadian High Commissioner in London, and from Chairman Robert Barclay Pearson of the venerable London Stock Exchange. By remote control the chairman of the London Stock Exchange was then to sound the opening gong at 10 a. m. Toronto time (same as New York). Prearranged, the first transaction was to be between President Housser and Norman C. Urquhart, his stout, decisive vice president. The stock: International Nickel, bluest of Canada’s blue chips.

Fusion Man. Logical for more than investment reasons was the choice of International Nickel for the first sale. Trading in Toronto is divided horizontally between regular listings and a so-called “curb,” which is physically and financially a part of the Exchange, and has identical membership. A dying institution, the “curb” corresponds roughly to the unlisted section of smaller U. S. exchanges. But Toronto trading is also divided vertically between a mining section and an industrial section in somewhat the same manner as the New York Stock Exchange segregates stocks and bonds. In Toronto, International Nickel is rated an industrial, because of its fabricating activities. It is also the world’s premier nickel miner, so that it represents a happy blend of mine and mill.

Since 1934 when it merged with the old Standard Stock & Mining Exchange, the Toronto Stock Exchange, too, has represented a blend of mining and industry, though not always a happy one. To the outside world the Toronto Exchange is an exclusive club of 113 members, many of whom are sons and grandsons of oldtime members who paid as little as $5 for their original seats (today’s price $90,000). Internally the clublike atmosphere has been ruffled by a tendency to line up into an industrial faction and a mining faction. Harry Housser, a fusion candidate popular with both sides, was made president last year in what has turned out to be a successful attempt to ease the strain.

Born 52 years ago in Winnipeg, Broker Housser made a Dominion name as a hockey star, first at Toronto’s swank St. Andrew’s College, later at the University of Toronto and then on Toronto’s old St. George hockey team, amateur champions. He got his business start in Massey-Harris (farm implements), shifted to brokerage, setting up his own firm, now H. B. Housser & Co., in 1917. For years he had been a power in Exchange affairs, took an active hand in negotiating the merger that really made Toronto a miners’ mart, played a big part in planning the new building to house it. At first he was disturbed by Architect S. H. Maw’s modernism, for Broker Housser is rated a Solid Citizen with a wife, daughter and grown son, pride in his golf, a fondness for fishing and a natural leaning toward conservatism. The executive offices in his new building are period (Queen Anne and Georgian), but the president’s office does have a highly functional bar adjoining. At home Harry Housser has to serve his guests himself because his two servants are Seventh Day Adventists who will have nothing to do with liquor.

Up until a few years ago H. B. Housser & Co. avoided mining issues like the plague. A director in such companies as Canada Foundries & Forgings and Stop & Shop Stores, Broker Housser found unspectacular industrials good enough to give him a city home on Warren Road, a country place in Thornhill, just outside Toronto. But with arrival of the mining boom, which has made speculation in Toronto as common a pastime as the cinema, H. B. Housser & Co. began to diversify. Harry Housser was one of the group which backed Kerr Addison, which in the past year went from a few cents a share to $5.

The Pennies. Nearly one-third of the 500 issues listed on the Toronto Exchange sell below $5 per share and scores are below $1. It is these “penny stocks” that account for the huge share-volume run up in daily trading. Toronto had a 5,000,000-share day last year, and a 1,000,000-share day is poor business. It is also the “pennies” that give Toronto its peculiar flavor. Bay Street (Toronto’s Wall Street) and the surrounding district are not unlike any financial district in smaller U. S. centres. There are a Childs and a Savarin restaurant. Because hard liquor is banned in Ontario restaurants Toronto has developed a “Broker’s Cocktail,” a startling yet appropriate combination of beer and champagne. For in Toronto, the gap between beer and champagne may be extremely narrow and is frequently bridged on the pungent name of a northland mine. Last year the best bet among the pennies was O’Brien Gold which soared from 34¢ to $14. In the past few years MacLeod-Cockshutt climbed from 10¢ to $5.40; Pickle Crow from 50¢ to $9.20.

Every runner in Bay Street knows the story of the fun-loving Toronto broker who bought 20,000 shares of Continental Kirland at one-eighth of a cent per share to send to his friends as Christmas cards in big denomination certificates. After he had mailed every last certificate, the stock suddenly bounced to 80¢ per share, a 640-fold appreciation.

What today is a Mandy, Bobjo or God’s Lake, a Consolidated Chibougamau, a Bagamac or an Ymir Yankee Girl may be tomorrow’s Noranda, Dome or Lake Shore. Or it may turn out to be a Red Lake, which lately tumbled from $1.78 to 66¢on annual report in which the company revealed that its ores were not up to expectations. A contributory factor in the fall of Red Lake was a widely-circulated but quite false report that the president had been arrested.

The Millionaires. In the early stages of the mining boom, Toronto was a lush pasture for bucketeers, sharpsters and boiler-room operators who had skipped across the frontier after the Securities Act went into effect in the U. S. Most of them have since been cleaned out by the Ontario Securities Commissioner, John Milton Godfrey, who is a sort of one-man SEC. All stock salesmen are now licensed, and selling stock by telephone is banned. Though he has never used it, the Securities Commissioner also has power to regulate the Toronto Exchange. Co-operation is so close between the Exchange and Commissioner Godfrey that that public official sits in on sessions of the listing committee.

Because of the nature of mining finance, regulating securities in Canada has to be limited to prevention of the grosser types of fraud. The first stage in the development of a mine is grubstaking the prospector. From the rim of the Arctic Ocean to the shores of the St. Lawrence, Canada today is crawling with prospectors grub-staked by individuals, syndicates and big mining corporations. As soon as a prospector stakes a claim, money has to be raised for surface exploration to see if diamond drilling or a shaft is worthwhile. This money is usually raised by a small syndicate. Not until there is proof of actual ore can stock be sold to the public. But the presence of ore, like the stock prospectus, means little. It took 20 years and the Whitney millions to get the Flin Flon in northern Manitoba into production for Hudson Bay Mining & Smelting. About all that a good broker, the Toronto Stock Exchange or the Ontario Securities Commissioner can do is to give some assurance that the issuing company has a serious business purpose.

However wasteful this system may appear, it has dotted Canada with producers of gold, silver, copper, lead, zinc, nickel, cobalt, radium (which is mined at Great Bear Lake on the Arctic Circle). And it has created an entirely new set of Canadian tycoons, many of whom started as prospectors. Typical are Harry Oakes and William Henry Wright, who with another partner staked the claims that became Ontario’s Lake Shore Mines. One night before the War with the mercury at 40° below they waited up until the stroke of midnight to re-stake a claim which was about to expire. Harry Oakes finally raised some capital for development in Buffalo, and Lake Shore turned out to be the richest claim in Canada, past or present.

Today Harry Oakes is supposed to have an income of around $3,000,000 annually while the figure for Bill Wright is about $2,000,000. Harry Oakes showered his home town of Niagara Falls, Ont. with benefactions, served his guests on solid gold, had his picture painted with his wife and six children all on one canvas, finally retired to Nassau to escape income taxes.

Bill Wright stayed in Ontario, living by himself in a barnlike mansion in Barrie, a small town 40 miles north of Toronto. A onetime British butcher, he served in the Boer War, got a veteran’s grant in Canada, turned to prospecting when the land proved barren. During the World War he was famed as the only millionaire private in the Canadian Expeditionary Force. So rich he does not know what to do with his money, he nevertheless complains bitterly about two things: 1) having to walk downstairs to answer the telephone at night and 2) having to pay 70% of his income to the Government. For a while he dabbled with a string of race horses, has lately bought up and combined Toronto’s Globe and Mail & Empire (TIME, Nov. 30). But he admits that newspapers bore him, and no one has yet discovered why he set up his broker, C. George McCullagh, as a bigtime publisher.

Not all the prospectors have prospered. Sandy Mclntyre lives on guaranteed grubstake from big Mclntyre-Porcupine, whose claims he originally staked. And Mclntyre-Porcupine is run by Jack P. Bickell, a suave, handsome bachelor who made his fortune in the city side of mining and who sports one of the show places of Toronto, where he entertains everyone from Ontario’s rambunctious Premier Mitchell F. (“Mitch”) Hepburn to visiting U. S. stockmarketeers like Bernard E. (“Sell ’em Ben”) Smith.

Most spectacular prospector-tycoon is Jack Hammell, a onetime professional fisticuffer from the mining camps of California who quit a good brokerage house job in Manhattan to head for the Klondike. By his account he has won and lost eleven fortunes. He was among the first in the great Cobalt silver rush, but his first big money came from the Flin Flon, which he sold to the late Harry Payne Whitney. Since then he has had a hand in Pickle Crow and Red Lake. At 60, he still prospects by plane, summer and winter, is sometimes called “the gentleman adventurer of the mining world,” sometimes “Crack-the-North-Open” Hammell.

Toronto still talks about the time that Jack Hammell ran a speech in a Toronto newspaper at full advertising rates, surprising the publisher if not himself when readers unanimously acclaimed it as the best feature of the day. Another Toronto millionaire prospector is Tony Oklend, an Austrian emigrant who staked Long Lac in 1926. From his pile he bought a big house in the suburbs, hired a platoon of servants headed by a butler. When the servants arrived he called them together to announce: “I don’t care what you do around here but I do the cooking.”

Cat. In wealth if not in prestige the open-handed Toronto millionaires are a match for Montreal’s best. Richest man in Canada is Sir Herbert Samuel Holt, testy, 81-year-old Chairman of the Royal Bank of Canada. An Irishman from Dublin, he got his start in Canadian Pacific Ry., made a fortune in Montreal utilities, another fortune in textiles. Hardboiled, hot tempered, hobbyless, he has been known to pick up an inquisitive newshawk, toss him bodily downstairs.

But even Sir Herbert’s wealth does not yield an income as big as that of his Nassau neighbor, Harry Oakes. Montreal still dominates Canada’s old industries, though its political influence, like its financial influence, has waned. Politically, financial Toronto is about as liberal as the Archbishop of Canterbury but in spirit the Liberal Government of Prime Minister King is close to exciting Toronto, just as the previous Conservative Government of pious Richard Bedford Bennett was close to decorous Montreal.

Toronto mining stocks have slumped lately, like stocks in the U. S., but with the rise of non-ferrous metal prices to take up where gold left off, the boom is by no means dead. Moreover, the Toronto brokers, a superstitious lot, have had a good omen. For years the Exchange has harbored a tawny old cat, nameless but famed throughout Canada for the fact that each time it has kittened, mining stocks have started a long upswing. Last week as the brokers cleared out of their old quarters to move into the new building on Bay Street, they noted that the cat was big once more.

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