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Moberly land swindle — townsite lots were sold during great land boom of 1881-82
Apr 17, 2009

by Bruce Cherney

A so-called town in Manitoba in the 1880s earned a reputation similar in nature to the scam associated with the Brooklyn Bridge in New York. As “selling the Brooklyn Bridge” is now known as an American metaphor for the ultimate in gullibility, Moberly was at one time the ultimate anecdote for a deal gone sour or an unpleasant experience. 

In response to Ontario’s demand for greater territory at the expense of Manitoba’s claim, a reporter for the Winnipeg Daily Sun on April 1, 1882, commented that if Ontario Premier Oliver Mowatt wanted more land, “he can have our Moberly town lots.” In another instance, a Sun reporter writing about a runaway horse opposite the Globe Hotel on Main Street that threw off its rider and dragged the man for a block through  mud and filth, said he “would not have taken the town site of Moberly to go through the same experience.”

The disparaging remarks about Moberly came with the paper town’s rapid rise to prominence at the height of Manitoba’s speculative land boom. During the real estate boom from June 1881 to mid-April 1882, newspapers across North America and in  Europe proclaimed that Winnipeg and Manitoba were thriving as a real-estate bonanza for quick-buck artists. 

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

The CPR’s presence led to the company spending millions of dollars on a passenger station (the land was a gift from the city), freight sheds, a roundhouse and other railway-related buildings and facilities, boosting the economic vibrancy of the community. With the arrival of the CPR, Winnipeg became the main supply depot for its westward expansion to the British Columbia coast. 

“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.’” 

Although Winnipeg lots quickly changed hands at rapidly increasing prices, 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. Yet today, Cartwright, named after Canadian finance minister Sir Robert Cartwright (1835-1912), is merely a tiny village near the North Dakota border with a population of about 345 people. 

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 where lots sold quickly and expensively. The names of these “cities” reflected the silver-tongued oratory of the sellers: Crystal City, “the featured great city of Manitoba (now classified as a village with 400 people);” Mountain City (abandoned), “the embryo city;” Dobbyn City (now non-existent), “the future great manufacturing city of the Souris District;” Rapid City, “the Minneapolis of the North West;” Malta (now non-existent), “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,’ (hotel) 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.” Chicago, the American city made by the intersection of major railways that grew at a phenomenal pace, was the archetype for claims of future prosperity made by numerous communities popping up across Canada’s West. The desire of the Winnipeg business community was to make their city the “Chicago of the North.”

“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.’” 

Despite the general feeling of optimism, not everybody was impressed by what they saw transpiring. “If ever there was a Fool’s paradise, wrote George Ham in Reminiscences of a Raconteur, “it sure was located in Winnipeg. Men made fortunes — mostly on paper — and life was one continuous joy-ride.” 

One of the Manitoba towns where paper fortunes were made was Moberly, founded by Emerson resident B.B. Johnston along the southwest shore of Whitewater Lake, about 10 kilometres northeast of present-day Deloraine. Johnston advertised Moberly as “the county town of Turtle Mountain County.” 

County, a designation brought to Manitoba by Ontario settlers, was used until the provincial government created the system of rural municipalities.

Moberly was named for Walter Moberly, who discovered the Eagle Pass through the Gold Range for the CPR. He quit the CPR following a dispute — the route he surveyed was not to be the path through the mountains, although Eagle Pass was used — settled in Manitoba, designed Winnipeg’s first sewer system and became the chief engineer of the Manitoba and South Western Railway.

Johnston was following a well-established pattern when he advertised a town that existed primarily on paper. For example, the Hamilton Spectator reported in March 1882: “There is a ‘town’ somewhere in Manitoba called Garfield. It is quite possible that the traveller might pass over the site of the town without being aware of the fact; but it looks pretty on paper, and Garfield lots are being boomed to no end in Winnipeg. The newspapers and dead walls are ornamented with portraits of the martyred (U.S.) president, and Garfield is being made a household  word. The peculiar taste which permits land sharks to make money out of a murdered man is worthy of them  — or of Guitean.” 

President James Garfield was shot in Washington on July 2, 1881, by Charles Guitean and died from his wounds on September 19. During his trial, Guitean said he shot Garfield because it was the “will of God.” Although his mental condition was suspect, Guitean was subsequently executed for the assassination of the president.

 While the Hamilton newspaper said Garfield was “somewhere” in Manitoba, it was advertised by Winnipeg’s real estate auctioneers as “midway between Winnipeg and Portage la Prairie” in the “County of Marquette, east of Oak Point on Lake Manitoba.” Today, the community is not found on any map, but during the boom auctioneer company W. Dufour advertised that “a great many lots have been sold ... and before this time next year there will no doubt be over 200 buildings erected.” The auctioneers promised that investors would double their money on the purchase of a Garfield lot within three months’ time.

The lure of Garfield was that it was expected to be located at the CPR junction of the line proposed by the Garfield, Woodlands and Oak Point Railway Company, which was incorporated by an act of the Manitoba government on December 22, 1881.

Another act of the provincial government creating the Manitoba and South Western Railway Company would have instilled Johnston with the belief that he had been granted a licence to print money. But simply anticipating a rail link was not sufficient grounds for success, as such promises often were as worthless as the paper towns the not-yet-built railways created. 

The Nelsonville Mountain reported that Gen. Hammond purchased two sections for the South Western owned by Alex and Henry McCullough and John Graham in the Boyne River district for $40,000 — a staggering sum for the era — in order to build a railway station.

 Rev. Wilson, the Church of England clergyman at Nelsonville, sold his homestead a kilometre away from Nelsonville for $12,000.

On November 17, 1881, Winnipeg auctioneer Joseph Wolf advertised in the Manitoba Free Press 109 Nelsonville lots for sale in “the oldest, largest and most favoured town in the far famed Pembina Mountian country.” 

Nelsonville was predicted to become a prime town site along the branch line of the South Western Railway.  Unfortunately for the “favoured town,” all the railway acts passed by the Manitoba government would be disallowed by Ottawa due to conflicts with the CPR’s monopoly clause. Under the terms of the Canadian government’s agreement with the CPR, the railway had a monopoly on railway construction in Western Canada for a 20-year period. As a result of CPR objections and Ottawa ruling in favour of the railway, the majority of residents and businesses moved lock, stock and barrel to Morden, which was to be served by a CPR branch line. Nelsonville, eight kilometres north and five kilometres west of Morden by road, became a ghost town.

In daring disregard of the CPR’s monopoly clause, railway bills were enacted by the Manitoba government that further fuelled the speculative boom in alleged communities such as Moberly.

Wolf’s auction house in Winnipeg’s Golden Hotel on December 23, 1881, sold 93 Moberly lots for prices ranging from $25 to $97.60, “aggregating $5,625, and making a total, (for) the two night’s sale of $11,873.”

The Sun reported a day later that a Mr. Wade of the firm Wade & Burns, proprietors of a steam grist mill in Crystal City, left for Moberly to supervise the erection of a flour and feed store at the “new town.” A Mr. Stewaat (sic), the registrar for Turtle Mountain County, left on December 20 for Moberly after the local government accepted the donation of four acres of land for a court house and registry office. The newspaper said Moberly “is in the centre of a thickly populated settlement and seems destined to become quite an important commercial centre.”

A year later, the London, Ontario-based Advertiser ran an article under the headline Gigantic Land Swindle: Disastrous Termination of the Moberly Boom. A subhead read, “Green ’Uns Woefully Taken In,” reminiscent of “selling the Brooklyn Bridge” to the gullible.

The article reprinted in the Winnipeg Daily Sun on September 16, 1882, told of a “grand sale of lots in the alleged town of Moberly” that took place in the Ontario community in January 1882. The article said Johnston, as a Manitoba merchant and land speculator, accumulated wealth estimated to be upwards in “the hundreds of thousands.”

“It is stated that he has erected in Emerson a palatial residence and aptly named it ‘Moberly House’ — a monument to his successful speculation.”

Johnston prepared a map showing Moberly’s location and presented the town to London investors as “destined to become a place of greater importance.” He further said the town had 1,000 inhabitants, fine hotels, stores and churches. Johnston claimed the town was situated on “high and dry ground,” and predicted a great rush to buy land.

The Advertiser said “a gentleman who visited the place not long ago states that the entire site is practically worthless, being covered with water and not a trace of building is to be seen.”

The reports of worthless land led investors to seek legal redress. “All the necessary preliminaries were taken with the utmost secrecy, the parties interested being strictly enjoined to keep silence for fear that Johnston might get wind of the proceedings and skip across the border from Emerson ... Informations were laid before a magistrate, and it is reported at least nearly two dozen warrants were issued for his arrest, representing as many persons, nearly all Londoners, the amounts varying from $20 all the way up to $800, and in all aggregating within a few dollars of the large amount of $4,000.” 

The newspaper contained a list of London residents allegedly defrauded by Johnston and mentioned “several Petrolia men are also urging on the prosecution.”

The warrants charged Johnston with obtaining money under false pretenses.

Ben Young, a police officer with the London sheriff’s department, was sent west on September 4, 1882, with a “pocketful of warrants” to apprehend Johnston. County Crown Attorney Hutchinson followed shortly after to attend to “any legal difficulties” arising from the case.

Once in Emerson, the appearance of the officials from Ontario impressed upon Johnston that he was in a great deal of trouble. Fearing the worst, he quickly proposed a settlement that eventually satisfied the defrauded investors.

With the settlement, the Advertiser proclaimed, “So endeth the Moberly boom.”

In spite of its lack of buildings and people, Moberly had been placed on official government maps, including Edouard Deville’s 1883 map of Western Canada, published on behalf of the Canadian government and now found in the Public Archives of Canada. Later maps do not show the mythical town.

While towns such as Dobbyn City, Malta, Garfield and Moberly proved to be nothing more than names on a map, few speculators were deterred and the land boom continued.

Col. Kennedy, Winnipeg’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 on Portage Avenue, 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 property. 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 lots in St. Vincent, Minnesota, a few kilometres south of Emerson, Manitoba. They sold $100,000 worth of lots, but Mother Nature played a dastardly trick upon Coolican and his companions as most of the lots sold to St. Paul investors were inundated by Red River floodwater — much to their chagrin. 

The New York Times, serving the city where many of the investors in Manitoba railways were located, reported telegraph poles linking the city with the south were washed out by the flood as was the CPR line between St. Paul and Winnipeg — the city was cut off from the outside world. 

The first indication of impending peril was news from Emerson. The April 17 Emerson International reported that people lined the banks of the Red near the Emerson Bridge to watch the water rise. “About six o’clock a large field of ice came floating down, and gave what remained of the bridge a pretty good shock, but it stood nobly. At this time the water was within a few inches of the flooring of the bridge and this same floe of ice carried away the swing portion of the bridge composed of wood and iron, and after floating a short distance down stream, went to the bottom.” 

Two piers and a span on the west shore remained intact after a portion of the bridge fell into the water.

The Sun reported on April 19 that ice on the Red River began to break up. “While the news of high flood at Fargo and the carrying away of the Emerson Bridge were exciting public attention here, the citizens were congratulating themselves that the river was going to empty itself without loss of property on its banks nor yet causing alarm for the safety of the bridges.”

The newspaper marvelled that people believed Winnipeg would “escape scot free when the river had to bear the floods on the upper stream and all the contributions of the streams between.”

Even the Sun predicted on April 14 that the”opening of navigation cannot be far off” because Red River ice was breaking into “cakes” swept away by the current. In anticipation of the new navigation season, Winnipeg’s shipyards were said to be a hive of activity with “artisans ... hard at work on the river craft.”

From Wednesday night until Thursday at noon, the Free Press reported that the “ice remained motionless — a rugged, sinister area, picturesque but terrible. From bank to bank, up and down the river for miles was one vast plain of grinding, troubling ice.”

At 1:15 in the afternoon of April 19 — just four days after its grand opening — the Broadway Bridge began to swing and sway with the impact of a massive ice jam covering the breadth of the river. As a result of its unnatural motion, one and then two spans plunged into the river and travelled downstream upon the ice at an estimated pace of 10 km/h.

It would take three weeks before the rail link was restored and by that time, water-sodden city residents realized the bubble had burst. 

Coolican eventually got back to Winnipeg via steamboat 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 overdid 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 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.” 

“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.” 

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 continued. The physical volume of construction in 1883 was higher than during the boom, but lowered in value as costs had substantially declined. 

Typifying the speculative nature of the Manitoba land boom was the “Gigantic Land Swindle” involving the paper community of Moberly. While many lost fortunes in other ill-advised ventures during the boom, the Ontario investors in Moberly felt “highly elated over their success,” reported the Advertiser, when “Johnston agreed to refund nearly the total amount claimed.”