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After the real estate bubble burst — optimism still strong in 1883
May 05, 2006

 by Bruce Cherney 

A year after the spectacular collapse of the real estate boom of 1881-82, optimism still reigned, although the wild year of speculation was never to be again duplicated in Winnipeg.

Newspapers a year later wrote of “Winnipeg’s march forward,” and that “each year (was) an advance on its predecessor.” The Winnipeg Sun on March 31, 1883, wrote of the “Boom of 1883.”

Of course, when taking into account what had happened, any subsequent so-called “boom” was muted by the consequences of the earlier collapse.

During the real estate boom from June 1881 to mid-April 1882, newspapers across North America and in  Europe proclaimed that Winnipeg was  the place to be, a real-estate bonanza  for quick-buck artists. 

“I doubt if to-day any other city on  the continent, according to its population, can boast of so many wealthy  young and middle-aged men,” said a reporter for the Toronto Globe in March 1882. 

“Thousands of dollars were made by  operators in a few minutes,” wrote J.  Macoun in his book, Manitoba and the  Great Northwest, published in 1882. 

“The excitement spread like wildfire all over the country. Cool-headed professors and businessmen (clerical as well as lay) left their callings in other parts of the country for the scene of the modern Canadian El Dorado.”

“Winnipeg is London or New York on a small scale,” Wrote W.J. Healey in his 1927 book, Winnipeg’s Early Days. “You meet people from almost every part of the world. Ask a man on the street for direction, and the chances are ten to one that he answers, ‘I have just arrived, sir’.” 

 But as with every precipitous climb to wealth and fame, there would be just as dramatic a fall. “If ever there was a Fool’s paradise, wrote George Ham in Reminiscences of a Recointeur, “it sure was located in Winnipeg. Men made fortunes — mostly on paper — and life was one continuous joy-ride.” 

What prompted the real estate boom was the railway — specifically, the arrival of the Canadian Pacific Railway in 1881. With the train came the inevitable opportunists. Ontarians came first, followed by Americans and Europeans. 

 And when the CPR came, it spent millions on a passenger station (the land was a gift from the city), freight sheds, a roundhouse and other railway-related buildings. Winnipeg became the main supply depot for construction on the westward expansion of the CPR to the British Columbia coast. The railway brought workers and settlers to open up the New West and they all passed through Winnipeg. 

Speculation wasn’t limited to Winnipeg lots. Jim Coolican, Winnipeg’s “Real Estate King,” in bold-type advertisements proclaimed: “Cartwright Leads Them All. Unquestionably the Best Situated Rising Town in the Province.” 

In his Winnipeg auction house, Coolican managed to move Cartwright lots to the tune of $20,000 each. 

Cartwright, named after Canadian finance minister Sir Robert Cartwright (1835-1912), remains a tiny village near the North Dakota border. 

Coolican auctioned lots from the real estate exchange at Portage and Main, and in a two-week period was said to have sold $1 million worth of property.

Mythical paper cities sprang to life and lots were sold quickly and expensively. The names of these “cities” reflected the silver-tongued oratory of the speculators: Crystal City, “the featured great city of Manitoba;” Mountain City, “the embryo city;” Dobbyn City, “the future great manufacturing city of the Souris District,” Rapid City, “the Minneapolis of the North West;” Malta, “situated in the garden of the North West;” and the never-to-be-forgotten High Bluff, “the best chance of the season.”

“The Brandon lots sold last night at Skynner’s Auction Rooms (in Winnipeg), opposite the ‘Queens,’ by T.P. Murray, auctioneer, averaged one hundred and seventy-nine dollars per lot. The whole sale amounted to between eleven and twelve thousand dollars,” reported the Sun. “Certainly, as our contemporary puts it, Brandon lots are booming.”

An advertisement in the Sun proclaimed, “Brandon is going to be the Chicago of the West.” This was also the typical claim for Winnipeg. Chicago, the city made by the railway, which grew at a phenomenal pace, was the archetype for communities popping up across Canada’s West.

“Winnipeg was the centre of a boom, from which the evil radiated in all directions,” Alexander Begg, a local merchant, wrote in his History of the North West. “Towns were surveyed all over the Province and Territories, and lots in them were disposed of at auction at fabulous prices. The town site mania was aptly described by a railway conductor who had taken a trip to the end of the CPR track, on his return East. Asked how the country was progressing, he said: ‘Well it’s the greatest country I ever struck ... there’s a new town about every three miles from Winnipeg to Moose Jaw. Where there’s a siding, that’s a town, and where there’s a tank and a siding that’s a city’.” 

Col. Kennedy, the city’s registrar of deeds, estimated in December 1882 that the year’s real estate transactions would total between $10 million and $12 million. “Most of the large transactions were in Main Street property,” he said. “The Hub corner changed hands several times. A few years ago a portion of that was purchased for $15,000, and the purchaser was considered to be crazy ... now it has sold for $ 115,000. 

Member of Parliament A.W. Ross, called the “king of land,” was a prominent speculator. In April 1881, he purchased some Main Street lots at $75 a foot and sold them in June for $100. 

“People thought it a good spec., and I thought so too. Within six months the same property went for $400 a foot.” 

Real estate auctioneer Joseph Wolf, who was known as the “Golden Auctioneer” because he operated out of the Golden Hotel and Real Estate Exchange, was said to have sold a half million dollars worth of real estate in the first six months of the boom, much of it out-of-town real estate. For example, three nights in a row he heard bids and sold $133,000 worth of North Brandon lots. His personal worth was said to have been in the neighbourhood of $200,000. 

On April 12, 1882, Ross began to advertise lots in Edmonton, which would be “the future Golden City of the Dominion.” At first, people flocked to his Winnipeg office snapping up the lots. Speculators felt profits were just around the corner, but they couldn’t find anyone willing to buy the lots they had only the day before purchased. 

Coolican attempted to revive the faltering market by taking a luxurious excursion with fellow speculators down to St. Paul, Minnesota to sell Manitoba lots. He sold $100,000 worth of lots in Manitoba along the international border, but Mother Nature would play a dastardly trick upon Coolican and his companions.

The Red River was in flood. Many lots sold to St. Paul investors were inundated. The CPR line between St. Paul and Winnipeg was washed out, and Winnipeg was cut off. It would take three weeks before the rail link was restored and by that time, the water-sodden city residents realized the bubble had burst. 

Coolican eventually got back to Winnipeg via boat on April 28 and took out a front page ad announcing, “Coolican’s Return! and the Boom Returns Also!” But, there were no takers. 

“The boom was purely speculative,” said Ross. “The operators went into it on the presumed requirements of the coming summer and over did it. The floods came, and the whole thing then collapsed.” 

It is estimated that only about five per cent of those who speculated in property made money. Too often, the collapse left people destitute. They had bought property with small down payments and were left with large debts that they couldn’t repay. 

Robert Hill, in his book Manitoba, wrote that men who had been “deemed  honest and good for any amount, were  turned out of house and home, their  goods and chattels liened on and sold  by the sheriff, in many cases not bringing the latter’s fee.” 

The Globe reported that a man from Brockville named Sheppard was rumoured to have “lost $30,000 in speculating and hanged himself in consequence.” 

“Banks and other financial institutions which had encouraged and fostered the reckless inflation of boom days,” wrote the Winnipeg Board of Trade in its 1884 report, “were now mercilessly exacting in their demands,  and many a man, who in a more confident state of trade could have weathered the pressure with honour was forced to insolvency.” 

Merchants who received goods on credit couldn’t meet their obligations to wholesalers and bankers, so they were forced to declare bankruptcy. 

Wholesale and retail trade remained in the doldrums for several years in Winnipeg. Still, once the speculators were weeded out, the normal business of building a city could continue. The physical volume of construction in 1883 was higher than during the boom, but lowered in value simply because costs had substantially declined. 

“Real estate values have been rather quiet since then,” Ross said at the end of 1882, “but there have been some heavy sales. I think the future of real estate is all right. We shall have another boom in central Winnipeg property. It will not be speculative, but a genuine boom. The city will continue to grow, and the demand will overtake the boom.” 

“The best quarantee of the future prosperity of Winnipeg is to be found in the confidence and faith in the future possessed by those who are willing on the strength of their opinion to largely invest their means here,” said the Sun in a special feature which reported on the construction “boom” of 1883 that had an aggregate value of $3,955,990.

“The building boom of last year surprised every one. But the operations of this year, especially after the experience of the past few months (i.e the bust), will be much more surprising, and the season has not yet commenced!”

The Sun said the money for the 1883 construction season was coming from Great Britain and a large amount of “idle money” in Winnipeg “awaiting safe investment.”

The Sun reported that construction volume in 1883 would surpass the previous year because of the building of “the Wright, Ryan, Higgins, Post Office, English syndicate, Donaldson’s corner and other magnificent blocks ... These blocks are all going up on Main, Princess and intermediate cross streets ... This year will also be noted for the erection of many palatial private residences, principal among which will be Hon. (MP) A.G.B. Bannatyne’s $60,000 dwelling, a $25,000 residence for David Young, besides others ranging in cost from $10,000 down.”

What the article didn’t explain was how Bannatyne could afford his new palatial residence, since he was made virtually penniless by holding on too long to property he purchased during the 1881-82 boom. Yet, it was reported that his residence “will surpass anything in existence on the banks of the Assiniboine River this spring.” 

Called when completed “Bannatyne’s Castle,”  the home at 158 Westgate was torn down in 1950.

J.R. Sutherland was planning a home on Boundary Street that was projected to  cost  $30,000.

Merchant David Young planned a $25,000 home at Armstrong’s Point, which at the time was the location of choice for the city’s elite.

J.S. Dennis Jr. had just completed the construction of a $15,000 two-storey private residence in Fort Rouge in 1883.

The article also mentioned the construction of “wooden shanties, footing up to a probable cost of $2,000 ... being erected on the east side of Main Street between the track and Common Street.”

“Another feature in the projected buildings is the large number of terraces (apartment blocks),” reported the Sun. “These are intended for middle-class people, to rent at $35 to $50 a month. But there are very few dwellings or terraces for the working classes, to rent at $15 to $25 a month, projected.”

The “English syndicate” mentioned in the article was building on property bought during the 1881-82 land boom at the corner of Portage and Main for the exorbitant price of $1,500 a foot of frontage. ‘It is the most valuable property in the city,” reported the Sun. 

The syndicate intended to build a $150,000 block for financial agents — they wanted the building to be the financial headquarters for the city — as well as an arcade in the rear on the Albert Street side of the building. Apparently high finance and fun were companions in the 1880s.

Among the public buildings listed was: 

• The residence for the lieutenant-governor  at a cost of $33,000 on Kennedy.

• Roman Catholic Academy to cost about $80,000.

• Fort Rouge schoolhouse to cost $8,000.

• Methodist Episcople Church for between $30,000 and $40,000.

• A $30,000 police station at the corner of James and King streets.

• The $5,000 Church of the Immaculate Conception proposed by Bishop Tache in Point Douglas.

• A new four-storey $200,000 post office.

• A new building for the legislature (the existing Manitoba Legislature dates from 1917) estimated at $70,000.

• Grace Methodist Church on the corner of Notre Dame and Ellice.

• The Victoria Hall concert hall at the corner of Adelaide and Notre Dame.

• A $50,000 general hospital on a block of land bounded by McDermott, Bannatyne, Olivia and Emilia streets.

• St. John’s College fronting on Main Street.

• Princess Opera House opposite the Grand Hotel to cost $40,000. Carol Budnick in her book, Theatre on the Frontier: Winnipeg in the 1880s, wrote that the 1,376-seat Princess looked grand on the outside, but because of its hasty construction, the building “was not much better than most frontier theatres, which most often tended to be flimsy wooden firetraps.”

• The $100,000 Holy Trinity Church.

• CPR Station (not the present station at Higgins and Main, which was built in 1906) at a cost of $100,000 — a stone structure, it replaced an unassuming wooden structure — CPR roundhouse at a cost of $40,000 and a passenger depot at a cost of $3,600. The CPR Palace Hotel was completed in 1883 at a cost of $450,000, according to the article.  CPR’s elegant Royal Alexandra Hotel, since demolished, was completed in 1906.

Prominence of place in the article was given to the new city hall. Construction had started the previous fall and when completed the reported cost was to be $50,000. “It is one of the most handsome structures on Main street, and is visible both from the (CPR) depot and from the Hudson’s Bay store (on Main Street).”

The new city hall, completed in 1886, was affectionately called the “gingerbread house” and was a fixture of Main Street until it was torn down to make way for the existing city hall.

One of the largest investors in 1883 was W.C. Harris, an eastern manufacturer (Harris Implement Company), who in 1891 merged with the Massey  Manufacturing Company to form Massey-Harris which had extensive holdings on Princess Street. 

“W.C. Harris has prepared plans for a solid block of store and offices on Main Street, to cost $35,000; a block for theatre and publishing house to cost $60,000 and a large block on Main Street for hotel and stores to cost $75,000,” reported the Sun. He was also making plans “for a large, first-class hotel in the north end of the city and for a large, solid brick furniture factory, shops and warerooms in the south end; also a solid brick factory in St. Boniface.”

The Massey Manufacturing Company of Toronto announced it would be building a “solid brick warehouse on  the southwest corner of William and Princess streets at a cost of $50,000.”

One of the unique events of 1883 was the reported move of the Rossin Hotel to William Street where it was to be rebuilt from two to three storeys and 60 rooms at a cost to exceed $45,000.

John Higgins was projected to be spending $110,000 to erect three blocks: one on the west side of King Street, one on the corner of King and Alexander, and a third at the corner of Main and Logan. Higgins with his partner David Young had earlier built a three-storey brick store on the west side of Main Street in 1874. In his later years, Higgins and his family lived in a house they named Roseville on the bank of the Red River at the foot of Gomez Street.

Thomas Ryan, the shoemaker who arrived in Winnipeg in 1874, built a new store — Thomas Ryan Boots and Shoes — in 1883 at 472 Main St., the city’s first with all-stone construction and an electric passenger elevator. The Sun reported the cost for the building was $35,000. Ryan became Winnipeg’s mayor in 1888 after serving four terms as alderman. He was known throughout the community as the “shoe king.”

“(Archibald ) Wright’s block (Main and William) ... will eclipse any building this side of Chicago,” said the Sun, “and will rival any building devoted to commercial purposes even in the great western metropolis.” Indeed, the projected cost of the edifice was a staggering amount for 1883 — $250,000.

According to the Dictionary of Manitoba Biography by local historian J.M. Bumsted, Wright was born in Scotland and came to Winnipeg in 1869 as a saddler. He later formed the Winnipeg Saddlery Company. He owned large parcels of land along the Assiniboine River which the city eventually bought to create Assiniboine Park. He was also the first resident of the Tuxedo neighbourhood of Winnipeg.

The new buildings and residences in Winnipeg weren’t just for people, “the largest stable in town,” at two storeys and 120-by-160 feet to accommodate 70 horses with side apartments for attendants was completed at a cost of $20,000 on Smith Street by a Mr. McKarchie.

Despite claims of an 1883 building boom, the year preceding was the real time when it seemed that fortunes could be made with little effort and the future prospects for the city were limitless. 

“The later Winnipeg  may be a better city,” wrote George Ham in 1921. “It was a short life from ’71 to ’82, but while it lasted, it was a life with a ‘tang’ to it — a ‘tang’ born of  conditions that cannot be repeated and  therefore cannot be reproduced.”