by Bruce Cherney (part 2)
Writing in the April 23, 1887, Manitoba Sun, Charles Bell, a Winnipeg trader, real estate speculator and historian, cited the St. Paul Pioneer-Post that described Colonel James “Jim” Sarsfield Coolican’s auctioneering prowess when selling lots in St. Vincent, Minnesota, to St. Paul investors during the 1881-82 land boom.
The auction was proceeded by a brass band marching through the streets and “irresponsible youths” shoving “yellow dodgers (handbills) into the hands of passer-bys ...”
In the evening, the auction was held in the Opera House in St. Paul, Minnesota. It becomes quite evident from the account that what Coolican was selling wasn’t merely real estate, but also dreams of easy money.
“Gentlemen, I can’t go away from St. Paul and believe that you are all paupers,” said Coolican. “Twenty dollars for such a lot as that, two blocks from the shop reserves, and a corner lot, too; just the place for starting a saloon! Do I hear thirty? Going at thirty. Do I hear thirty-five? Remember, this sale is without reserve. Hitch on while the boom is on, and you will be wearing seal-skins and diamonds next year. Thirty dollars! Thirty dollars! Five do you say? Just in time; why I met a young man on the train the other day, and he showed me his bank book with a credit of $18,000, and he said he had $45,000 worth of real estate. He came to Winnipeg in a cattle car, and was returning in a Pullman ... Gentlemen, this double row of lots clear outside the town was bought by Winnipeggers yesterday at $250 per lot.”
Coolican didn’t get anywhere near that high of a price, settling for $33 to $66 per lot.
An article in the St. Paul Globe on April 16, 1882, reporting on the sale of St. Vincent lots, called him, the “Great Coolican,” and described him as having a “dark complexion, black hair, side whiskered and mustache, hair parted in the middle, clear skin, about 5 feet 11 inches, and the general appearance of a man who lives well and takes the world easy.”
The Globe reported that Coolican was “an active auctioneer, with a pleasing address and good flow of language, and especially free with catch phrases, such as ‘catch on,’ ‘why don’t you pile on,’ ‘spread out your breast and spit out,’ ... ‘warm up to your work,’ etc., etc.’”
The newspaper said Coolican regaled the St. Paul audience at Sherman Hall with tales of the profits made in Winnipeg. “He told of a piece of property on Main Street, 25x200, which nine months ago sold for $35,000. Every one said the purchaser was crazy, but he sold it again for $50,000, and again it was sold for $73,000. He was one of a syndicate who purchased it at the latter figures, and they are now refusing $115,000 for it.”
The terms of sale of each St. Vincent lot at St. Paul was 20 per cent down, 30 per cent on May 1, and the remaining 50 per cent in six months. Coolican said the terms of 20 per cent down and another 30 per cent by May 1 gave the purchaser ample time to investigate the title, “and if any flaw was found the money would be returned ...”
Such terms were a problem if someone purchased more than they could realistically afford and the lot(s) suddenly lost value, driving the purchaser into insolvency and having to forfeit on the mortgage. In all cases, the desired outcome was to quickly flip properties for a profit, but this relied upon maintaining the “fools’ paradise,” which more sage observers knew could not continue.
A modern example is the sub-prime mortgage crisis in the U.S., when housing values dropped dramatically and mortgage holders, who purchased houses that were beyond their financial means, could not make their monthly payments.
In its obituary, the Manitoba Free Press claimed Coolican deserved the nickname “king” and “got it. There were others in the same line during the land boom, such as James Wolf, T.P. Murray, W. Dufour, but none of his local standing.
A Free Press reporter recalling the boom, wrote: “The crowds on Main street when Jim Coolican was auction king have never been surpassed; his august appearance and cheery voice were irresistible.”
“His appearance was commanding and it was seldom that he could not impress the stranger within our gates,” according to the April 12, 1902, Free Press obituary.
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.
George Ham wrote in his book, Reminiscences of a Raconteur (1921), on that day there “was a frightful frenzy. Without any knowledge of the locality of the property, people invested their money in lots at fabulous prices. Many overbought, some tried to unload and the next morning there was a slump, and you couldn’t give away property as a gift. The boom had busted. Where, the day previous, the immense throng had gathered in such numbers that window panes were smashed, in their eagerness to buy, only those who wanted to sell were seen. It was the morning after the night before. And a mighty sad one it was.
“And Winnipeg came down to earth again.”
A Winnipeg resident who was a boy during the boom, “remembered well the episode of the Edmonton town lots ... (Free Press, November 8, 1923). “This day when they put on those town lots away and in Edmonton was absolutely the last big day of the boom. There was such a crowd that they broke the windows of the auction room. They were re-sold at an advance four or five times before night. But next night,’ concludes this witness, ‘they were not worth a dollar.’”
Coolican attempted to revive the faltering market by taking a luxurious excursion with fellow speculators down to St. Paul, Minnesota, to sell Manitoba and Minnesota 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 A.W. 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.”
Instead of advertisements claiming boom times, newspapers were filled with mortgage sales and nightly sales of stock from bankrupt businesses.
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 (1890), 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 Toronto 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 lower 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.”
When the bubble burst, Coolican’s paper fortune disappeared, so he was forced to settle down to the more mundane task of auctioning off pianos and everyday furniture, as well as properties at prices more reflective of their actual value. But the collapse of the boom and the subsequent recession in Winnipeg meant there were few property auctions to promote.
Commenting on Coolican’s fate, a Canadian “exile” told the St. Paul Pioneer Press (reported in the February 5, 1899, Manitoba Free Press) that Coolican had been a high-roller during the boom, making money so fast that he could hardly count it. When the collapse came, he had little of his former fortune on hand. “One day Coolican was wearing diamonds, while a few weeks later he would hardly know where to get ‘the price’ of a drink.”
But the ex-Canadian, who had been in Winnipeg to observe the boom, said Coolican always had one asset: the ability to land on his feet, and so he did.
The Free Press obituary claimed that Coolican left the city in the summer of 1882 for the United States (an assertion repeated to this day in biographies of Coolican), but his permanent departure for Minneapolis was in the summer of 1884. Coolican may have briefly gone to Minnesota, but returned soon afterward to Winnipeg. In fact, Coolican was about to embark on another phase of his career in Winnipeg.
It was reported that Coolican was primarily responsible in 1883 for uniting the Winnipeg’s Irish residents into the St. Patrick’s Benevolent Society. Through the auspices of the society — and perhaps to atone for his earlier unbridled excesses — Coolican became a leading figure in its mission to alleviate the plight of the poor.
At a January 7, 1884, St. Patrick’s Benevolent Society meeting, Coolican outlined his plan “for the relief of many of the poverty-stricken and half-starving people in the city.”
It was a dire situation exasperated by the land boom’s collapse in the spring of 1882.
(Next week: part 3)