by Bruce Cherney
The Winnipeg Foundation, which last year allocated grants to 600 local charities totalling $16.2 million, recently celebrated its 85th anniversary.
The foundation was established in 1921 by William “Bill” Forbes Alloway, a prominent local banker, who provided an initial gift of $100,000.
“Winnipeg has been my home, and has done more for me than it ever may be in my power to repay,” said Alloway when he created the foundation. “I owe everything to this community and I feel that it should derive some benefit from what I have been able to accumulate.”
The second gift was three $5 gold coins by an anonymous donor. In 2001, the Moffat family of Winnipeg provided a $100-million gift, the largest ever made to a Canadian community foundation. The late Israel Asper provided a gift of $10 million in the same year.
Since Alloway’s original gift, the foundation has grown to include 1,700 endowment funds. Over the years, the foundation has made over $150 million in grants.
All gifts are pooled and permanently invested. The foundation only uses interest generated by the funds to make grants to community projects.
The first grants by the foundation were in 1922: $6,000 equally shared by the Margaret Scott Nursing Home, Knowles Home for Boys, the Victorian Order of Nurses, the Children’s Hospital and the Children’s Aid Society.
The foundation in 2003 made its largest grant to date of $6 million for the Canadian Museum for Human Rights, which is to be located at The Forks.
In their estates, William and Elizabeth Alloway left nearly $2 million to the foundation.
Alloway was born in Ireland on August 20, 1852, the son of Capt. Arthur William and Mary Alloway. When William was three years old, his family immigrated to Canada, settling first in Hamilton, Ontario. Two years later, the family moved to Montreal.
Alloway came west in 1870 as an 18-year-old private in the Quebec militia contingent of the Col. Garnet Wolseley expedition sent to the Red River Settlement. The Wolseley expedition arrived in August with the stated purpose of restoring peace in the settlement following the resistance of 1869-70 led by Louis Riel — actually, the settlement was quiet peaceful when the contingent arrived. The Canadian Parliament had passed the Manitoba Act on May 12 which came into effect on July 15, creating Canada’s fifth province.
For a year, he remained in the garrison force, after which he was drafted into Manitoba’s first police, commanded by Capt. Frank Villiers of the Quebec Rifles who also arrived in 1870. Lieutenant-Governor Adams Archibald charged Villiers to form the Mounted Constabulary Force (later the Manitoba Provincial Police). Villiers’ command consisted of 20 men who responsible for policing the entire province.
In 1871, Alloway’s younger brother, Charles Valentine Alloway, came to Winnipeg in the second militia contingent. He, along with Henry Thompson Champion, who arrived in 1870 as an Ontario militiaman, would eventually become business partners with William Alloway.
Champion was born in Toronto in 1847 and had been a clerk in the Perth branch of the Bank of Montreal before coming west with Wolseley. He served with the garrison troops for two years and then was employed as an accountant until 1879 by the Merchant’s Bank of Canada in Winnipeg.
The younger Alloway was an adventurer, becoming familiar with much of the new West. During his travels from 1872 to 1878, he learned French and became acquainted with aboriginal dialects.
The elder Alloway wasn’t long in the MCF, retiring in the same year he joined. He looked for a challenge in business, first setting up a cigar and tobacco store on the east side of Main Street between Portage Avenue and Lombard Street.
According to Peter Lowe, who would rise to become the secretary of Alloway & Champion board of directors, and wrote an article for the Manitoba Historical Society in 1946 on William Alloway, the purpose of Alloway’s store was not so much sales but the accumulation of knowledge about the opportunities in the West from customers who smoked in the store’s lounge.
“Out of the smoke rings from the conversation which passed between the proprietor and the customers who came from far and wide, he learned much about the country to the west, gleaned many business ideas and discerned many opportunities,” wrote Lowe.
One of those opportunities was the transportation of freight using Red River carts. Alloway went in partnership with James MacKay, who was at the time the first speaker for the Manitoba Legislature.
“The two knew horses and good oxen when they saw them, and both were experts as to the capacity and strength of Red River carts,” said Lowe. Each cart could carry between 700 to 1,000 pounds.
The partners got into the business at the right time — there was an influx of settlers from the East and work was beginning on the survey of the route for the future Canadian Pacific Railway transcontinental line.
Alloway and MacKay at first ran provisions for the arriving settlers by cart to the Northwest Angle of Lake of the Woods. This was the Manitoba beginning of the Dawson Road to Winnipeg, the notorious corduroy (logs laid across its path) overland route from the east, bemoaned by travellers for its continual bumps and jars.
The partnership was eventually dissolved and Alloway struck out on his own, extending his Red River cart transportation business to Moorhead, Minnesota, which was then the railhead for the Northern Pacific Railway, and to Edmonton via the Carlton Trail. Lowe said at one time Alloway owned and operated 6,000 Red River carts and as many oxen.
The Moorhead portion of his business only continued until 1872, when James J. Hill and Norman Kittson, two Canadians living in St. Paul, Minnesota, formed the Red River Transportation Company which operated steamboats on the Red. Hill, Kittson, Donald A. Smith of Winnipeg and George Stephen of Montreal in 1878 bought the St. Paul and Pacific Railway, which they renamed the St. Paul, Minneapolis and Manitoba Railway. They completed the rail link from the United States to Winnipeg
With a new method of bringing freight to Winnipeg established and the prospect of the CPR linking east and west in Canada, the future of Alloway’s Red River cart business was in jeopardy, though it would linger on for a few more years, helping to bring freight to points north of the CPR line under construction in the 1880s.
Alloway also had other business interests at this time: operating a ferry service over the Assiniboine River at Main Street, was a partner with the Ogilvies in the first first flour mill in Winnipeg, and sold carts and wagons to survey parties.
In 1876, he was elected as the alderman for Winnipeg’s South Ward and was a member of Winnipeg’s first volunteer fire brigade.
On a trip to Eastern Canada in 1878, Alloway met and married Elizabeth McLaren, a member of an Ottawa lumber family. He built a home, called “The Derries,” named for the ancestral home in Ireland, for his new bride on Assiniboine Avenue, far from the elite of the period who then lived in Point Douglas. But, soon the elite would abandon Point Douglas and gravitate to the new residential location.
In the same year, he purchased a small loans office for real estate on Main Street, adjacent to the main branch of the Bank of Montreal.
In 1879, Champion joined Alloway and his younger brother in the banking business, forming Alloway & Champion Limited. Profits from the bank were to be divided 40 per cent to William, 40 per cent to Champion and 20 per cent to Charles, who was considered the junior partner.
“Successful partnerships are rare,” said Lowe, “and looking back over the conditions confronting Winnipeg and the West around the period ... it can be asserted that the partnership was well joined, that each partner possessed useful abilities for the times and conditions, and what was lacking in one was available in others.”
Their business was situation in Alloway’s small office for just a year, after which they relocated to 362 Main St. At the time, the Merchant’s Branch was the only chartered bank in the community, established locally on December 14, 1872.
Even with the presence of a charter bank, the financing of loans was mostly through private hands. In fact, the first true financial institution in Winnipeg was a private bank run by Alexander McMicken.
“The man with earned wealth at his command was called upon to make loans to settlers and to fellow pioneers, and as this process continued recognition as a private banker followed,” said Lowe. “Thus in the history of Canada private banks or banking establishments were the forerunners of larger and stronger banks, and some of the chartered banks had their beginnings in private banking firms or bought out private banking firms in order to become established and enlarge their field ... The purposes private banking firms served in the development of Canada cannot be overestimated.”
By 1881, Alloway & Champion had established a branch in Portage la Prairie.
Lowe said the only security available in the West for loans was land. Loans were for a short period, usually between three to six months.
What may be today considered as a troubling aspect of Lowe’s account is the matter-of-fact manner that he deals with Alloway & Champion’s speculation in Metis scrip, which today would be regarded as a somewhat unscrupulous practice. There are many recorded instances of individuals being cheated out of their scrip or scrip being bought at a fraction of its true value.
But, the bankers were far from unique. Many of Winnipeg’s most prominent figures of the era dealt in scrip speculation, including John Christian Schultz, Donald Smith, Arthur Wellington Ross, and Andrew Graham Ballenden Bannatyne. In their time, they saw such speculation as an acceptable business practice. It can also be said that many Metis willingly sold their scrip, happy to have cash in hand.
Smith was a governor of the Hudson’s Bay Company, a financier of the CPR and MP, who became Lord Strathcona; Schultz was a thorn in the side of Louis Riel during 1869-70 as the leader of the Canadian Party, an MP and later lieutenant-governor of Manitoba; Ross was a businessman, MLA and an MP; and Bannatyne was a businessman, fur trader, Winnipeg’s first postmaster and an MP.
Metis scrip arose out of the Manitoba Act of 1870, which granted 1.4-million acres of land for the benefit of “half-breed” children, who were to be given 240 acres of land each. Mothers and fathers of the children were to receive 160 acres. The latter had the choice of either receiving a land scrip, a coupon redeemable for unclaimed land, or money scrip which had a value of $160.
“This is not to say, however,” wrote historian Thomas Flanagan in his book Riel and Rebellion, “that the half-breeds were suddenly converted into a class of landlords. They retained very little of this new land for any length of time: indeed most of it had been sold to speculators before it was actually received. This speculation was well funded and organized. Lawyers and bankers in Manitoba acted as agents for investors, some of them local people, others residents of Ontario ...
“The agents followed the commissioners around the province in 1875, working from the same list of names. A half-breed could make his disposition and sign away his claim in one day ... The grants of children posed more problems, but the legislature of Manitoba conveniently made it possible for parents to sell their children’s allotments.”
Lowe said Alloway & Champion only became involved in the purchase of Metis scrip and land after the partnership was formed. “The firm ... (was) particularly fortunate in having Charlie Alloway as a partner who could speak most of the Indian dialects... While some of the early writers claim that scrip was sold for as little as bottle of whiskey, he related to me that money and his own food were the only commodity he carried. Thousands of dollars were concealed in his clothing, and what could not be taken care of in this way, was carried in a bundle and used at night as a pillow.”
Usually, the scrip was then sold at a profit to the settlers streaming into the province.
Alloway & Champion primarily acted as agents purchasing scrip for speculators at an agreed price and then received a commission. They also dealt in scrip available for the purchase of land held by the HBC, the CPR or the Canadian government.
An act of the Manitoba legislation was passed in 1873 dealing with municipalities and tax arrears, which allowed Alloway & Champion to become extensive purchasers of land sold through tax sale certificates.
Lowe said agents were employed who had a knowledge of value and quality of lands covered by tax certificates advertised for sale by municipalities. “The very large part of the certificates were always redeemed, many shortly after sale or a few months after sale, and this increased the profits made,” said Lowe. “In a limited number of cases tax title was obtained to the property but profits on resale far exceeded losses.”
The owners of the property sold in a tax sale could redeem their land after two years by paying the original tax arrears and an annual 10-per-cent penalty. If the land was not redeemed six months after a legal notice was served, the land was forfeited to those holding the tax certificate.
“Cash or money scrip was a form of security more adapted and in keeping with private banking enterprise, and this class of scrip was very largely dealt in by Alloway & Champion. The scrip could be applied at its face value, to the purchase of Dominion government lands, and was accepted by the Lands Branch of the government, in payment of all or part of the principal or interest owing them by the purchaser,” wrote Lowe.
He said banks were approached by those intending to purchase government land or those who had purchased land and still owed installments.
“You can very well see that the purchaser owed $1,000 on Dominion government land, was a ready customer to purchase money scrip at say 85 or 95 cents in the dollar and thereby make a saving of 10 per cent to 15 per cent or more, in paying his contract with the government. The quantity of land sales made by the government, would seem to have always been greater in volume than the money scrip available, which resulted in a fairly quick turnover of scrip purchased with satisfactory profit to bankers.”
Their speculation in scrip continued into the 1900s and included land reserved for Canadian veterans of the Boer War, as well as the auction of land surrendered by aboriginals and school lands offered for sale in the same way for the purpose of obtaining money to build schools.
Lowe justified such speculation as assisting in the settlement of the West.
For example, Alloway & Champion had a contract with the Haslam Land Company of St. Paul with the bankers providing the scrip and the company selecting the land for settlement and then sold the land to settlers along a branch railway line between North Portal and Moose Jaw and later along branch lines from Manitoba into Saskatchewan, connected to a main line in Regina.
“This joint venture in purchasing of scrip and the sale of land to settlers obtained through scrip was very successful and quite profitable,” said Lowe, “both for the banking firm and the colonization agents. It must also have been satisfactory for the settlers, as the contracts they entered into gave no trouble and were fully liquidated.”
The banking firm also purchased valuable property in Winnipeg. Besides their premises at 362 Main St., they owned 80 adjoining feet; 192 feet on the south side of Portage Avenue, between Fort and Garry streets, as well as 50 feet on Garry Street immediately behind; and 44 feet on the south side of Portage between Garry and Smith streets. Lowe said they paid $90,000 for these properties.
They sold 42 feet along Portage to the Winnipeg Free Press for $55,000. A total of 150 feet on Portage was sold to the Canadian government for $150,000. The 50 feet on Garry Street, on which a two-storey garage had been built, was sold for $38,000.
Lowe himself sold the remaining 44 feet on the south side of Portage between Garry and Smith streets in 1919 for $205,000. He said the sales of downtown land brought a capital return of $500,000 for Alloway & Champion.
The banking firm was also the first to recognize the need of immigrants from Eastern and Central Europe who had been coming to Canada with the support of Brandon MP and Interior Minister Clifford Sifton. As a member of the Sir Wilfrid Laurier Liberal government, Sifton said: “I think that a stalwart peasant in a sheepskin coat, born on the soil, whose forefathers have been farmers for ten generations, with a stout wife and a half-dozen children, is good quality.”
Alloway & Champion first developed a foreign money exchange and then expanded into other areas of service for European immigrants.
“Not all the settlers brought from European countries ... immediately took up land,” said Lowe. There were many employed by the railways who had left their families behind and wanted to send money back to Europe for their support.
Alloway & Champion facilitated this exchange by employing a number of people who spoke and could write European languages and established foreign connections to allow the immigrants to send money orders to their home countries. Because of their confidence in the bank, what surplus funds the immigrants retained went into
savings accounts with Alloway & Champion.
The bank opened a branch near the CPR depot at 667 Main St. to more easily meet the needs of immigrants arriving in Winnipeg. Lowe called this branch one of the busiest in the city.
Lowe’s first job as a teller at Alloway & Champion began at the “foreign” branch in October 1906. Besides Lowe, the staff consisted of five linguists, an English manager and an office boy, “all of whom acquired sufficient knowledge of the language spoken by those of Slavic descent, to do the business of his department or to direct the customer to the linguist in charge of serving his particular need.”
The bankers also became booking agents for Atlantic Steamship Lines, and provided loans to immigrants unable to purchase the full value of tickets to bring their families or other relatives to Canada.
By 1906, Alloway & Champion was no longer dealing in land scrip because this source had dried up, thus more traditional banking was undertaken.
Lowe reported that total assets for 1906 was $890,000 — due to depositors was $335,000 and capital employed in the business was $555,000.
It was also in this year that they took J. Lenfestey as a partner.
At the time, the one private bank in Winnipeg was competing with 18 chartered banks.
By 1912, the capital and undivided profits amounted to $1.125 million. That same year, the firm applied to the provincial government for incorporation to become a limited liability company with paid-up capital of $1.025 million and a reserve of $125,000.
Once approved, William Alloway
became president, Champion was vice-president, and the directors were Charles Alloway, Daniel H. McMillan, Colin H. Campbell, George F. Galt, D.E. Sprague and F.W. Heubach. Lenfestey continued as general manager. Lowe was made secretary in 1910 and served in the head office.
In 1923, the Saskatchewan government passed an act of incorporation, allowing an Alloway & Champion Bank to be established with a head office in Regina and capital of $1 million.
By 1916, Champion had become ill and died in June of that year.
The Alloway & Champion bank
was sold to the Canadian Bank of Commerce in 1919 as a subsidiary with Alloway carrying on as president. This state of affairs did not become public until 1923 when changes were made to the Bank Act, forcing charter banks to declare their subsidiaries.
Charles Alloway succeeded his brother as president in September 1929. When the elder Alloway died on February 6, 1930, the business of the head office was transferred to the Portage and Garry branch of the Canadian Bank of Commerce, while the foreign branch was amalgamated with the Commerce’s Main and Alexander branch. The banking concern of Alloway & Champion had officially came to an end.
The head office at 362 Main St.
was sold and later demolished. The
“foreign” branch on Main, between Logan and Henry avenues, is all that
remains as a reminder of the once great private banking firm, the largest of its kind in the West that had a significant impact on the economic growth of the Prairies.