Part 21 (1/2)

352 MERCHANT PRINCES.

took breeding and intelligence for granted, and they genuinely represented the interests of the HBCs shareholders! 97 percent ol”whom were domiciled within the United Kingdom.

Arrayed against these British proprietors and their distinguished proconsuls was a tightly knit posse of Winnipeg's finest. Midwestern squires, they were good if limited men, frontier-tough and d.a.m.ned if they were going to kowtow to these haughty strangers wearing spats and with handkerchiefs up their sleeves. Yet they loved being involved with the Company that had once ruled the West and eventually viewed themselves as a kind of apostolic succession, smoothly following one another as members of the HBCs Canadian Committee. That tenure became such a desirable badge of office among the local business 61ite thatjoe Links, the British board's wittiest member, once quipped: ”In England we gave them knighthoods; in Winnipeg they became directors of the f ludson's Bay Company.”

In a very real way, Canadianization of the Hudson's Bay Company was part of the decolonization of the British Empire. Victory through gradualism.

In the fiftyeight years between formation of the first Canadian Advisory Committee in 1912 and permanent transfer of the Company's charter across the Atlantic in 1970between the governors.h.i.+ps of Lord Strathcona and Lord Amory-a sequence of tippy-toe measures was reluctantly taken to s.h.i.+ft authority from London to Winnipeg. Although provision of a domestic registry for Canadian shareholders had been suggested as early as 1908, it wasn't until forty-five years later, in 1953, that it was actually put into effect. On October 16, 1958, the Hudson's Bay Company board convened in Winnipeg, the first time its directors had met outside London in 288 years.

It took another half-decade before the British shares were listed on the Toronto Stock Exchange. A THE LORDS AND THE GOOD OLD BOYS 353.

11BC Board of Directors' meeting, Winnipeg, October 16, 1958

year later, for the first time the Companys dividend cheques were paid to Canadian shareholders in Canadian dollars instead of British pounds, and it was 1970 before the annual report was printed in Canada.

The transfer ol'substantive decision-making authority didn't really begin until 1930, when Winnipeg was granted power of attorney to deal with the Company's day-to-day operations. In 1957, the Canadi~n Committee's members became directors of the mother firm, though it took a further six years before they were allowed to outnumber their British colleagues. ”The Canadians were always trying to grab more authority,” remembered Peter Wood, for thirty-eight years the Company's senior financial officer, ”but the Brits kept hanging on, putting little roadblocks in the way, standing about with long faces, stressing the risks and disadvantages, so that it was difficult to be enthusiastic. They 354 MERCHANT PRINCES.

were such a distinguished and respected group that it was hard to ignore them. Besides, they held the power.”

The nature of that power was limited at best, authority and responsibility being divided between two continents, with London possessing the former but unable to impose the latter. It was one thing to draft policies in the hush of the 11BCs City boardroom but quite another to police how-or whether-those directives had been followed in the field. Accountability was always the pivotal issue, yet making orders stick was never satisfactorily resolved. The mesmerizing effect of the HBCs unique history made everyone cautious about allowing authority to be dispersed too quickly or too widely. The Canadian Committeemen had the local knowledge but not the breadth of experience to run a malor trading company; the London directors possessed the necessary expertise but were too far removed from the trenches to have much practical input.

The operating heads of the Company in Canada quickly realized that their main leverage lay in how much or how little data they transmitted across the Atlantic, and being astute about it-knowing full well that rationing performance statistics would only make London suspicious-they tried to overwhelm the 11BCs British headquarters with tidal waves of facts. Sheaves of weekly returns enumerated each post's fur intake and each department store's inventory of socks; every transaction was meticulously doc.u.mented and transmitted overseas. What went missing was any feeling about the exciting new economy sprouting up north of the 49th parallel.

That omission was less by design than by the character of the Canadian operation. The Committee, in fact, knew verv little about the new Canada evolving outside Winnipeg's munic.i.p.al boundaries. Its members stubbornly resisted lifting their sights beyond regional concerns, leaving others, as they haughtily declared, ”to THE LORDS AND THE GOOD OLD BOYS 355.

go whoring in the East.” The dynamics of delay ruled the Company's affairs.

THE 'I'ENSION TILU PERMEATED RELATIONS between the British directors and Canadian Committeemen even touched their social lives. Sir Eric Faulkner recalled his firstvisit to Winnipeg in the mid-1950s when lie was the HBC's Deputy Governor: ”I was viewed with enormous suspicion by the Canadians and subsequently learned they were told to invite me to their houses for a drink, but under no circ.u.mstances to serve me a meal until they'd taken my measure. I went to have a drink with Stu Searle, who turned out to be a delightful man. After a whisky, he suddenlY exclaimed, 'Do you realize I'm not allowed to ask you to dinner? This is b.l.o.o.d.y nonsense, but since there's no food in the house, let's go out and eat.' We finally changed our minds and had scrambled eggs while sitting on his living-room floor, and that was the beginning of a friends.h.i.+p that lasted all our lives.”

In a letter to thc last British Governor, Lord Amory, the last Chairman of the Winnipeg Committee, David Kilgour, betrayed the Canadians' real feeling about the visitations of London dignitaries. ”I confess,” he wrote, ”we are probably unduly annoyed by individuals who have that austerc superiority which we Western Canadians ascribe to some Englishmen. . . .” Joe Harris, one of the Canadian Committeemen, was more blunt. ”When a North American wants to insult you,” he explained to Amory, ”he calls you a son of a b.i.t.c.h, laughs with you about it over a drink at hinch, and forgets it by evening. A Britisher, on the other hand, does it in the most thoughtful courteous language that can be devised-and writes it into the Minutes.”

The Canadians' standoffish att.i.tude was demonstrated in the smallest gestures. Most of the 356 MERCHANT PRINCES.

Wimipeggers owned lodges in the duck-hunting marshes northwest of Winnipeg, and even though the aristocratic visitors loved shooting, invitations were seldom forthcoming. ”It was soon clear that ... the Winnipeg Establishment didn't want them at their lodges and sent them out to Delta for me to take care of,” wrote A] Hochbaum, then in charge of the local waterfowl research station. ”I remember especially what fine specimens of the human race were Tony Keswick [the HBCs Governor] and Sir Henry Benson [then Deputy Governor]. I kept wondering why Wnnipeg society didn't wish to have them for a weekend. They shot like gentlemen, drank like gentlemen, swore like gentlemen-and didn't mind the outdoor toilets.”

The British visitors tended to be overpolite, slightly patronizing and more than a little puzzled by the Winnipeggers' provincialism. ”I once asked Con Riley, the first time I met him after he was appointed to head the Canadian Committee,” Keswick recalled, ”exactly what Winnipegwas famous for. I've never forgotten his answer. He said very quietly, without looking left or right, 'Nice people,' and left it at that.”

Both groups were so internallv cohesive it was difficult for either side to comprehend the other. Except for one attempted coup dVtat in 1963, the British directors were so compatible they didn't bother taking votes on any significant issue. ”I was going to say we never voted on anything,”

recalled Joe Links, a twentv-eight year board member, ”but we actually did hold one vote when we were getting some new china for serving tea in the boardroom. Some of us wanted green, some wanted yellow. I think the yellows had it.”

The British directors received virtually no perks, and none of them needed either the prestige or the token stipend (S,~500 annually). Yet there never seemed to be a shortage of top-drawer candidates. ”We frankly had the pick of the best men in the ('try,” boasted Lord Amory. ”I THE LORDS AND THE GOOD OLD BOYS 357.

don't remember any directors whom we thought of turning us down, no matter how high their calibre. AA -hereas the Canadian Committee people were big men on1v in Manitoba, but had little contact with the rest of Cana~a.”

The executive committee of the British board met at noon every Tuesday (with the entire directorate attending once a month); sherry was served at quarter to one, though several of the more robust members would have preferred gin and tonic. Seated under the portraits of past Governors and surrounded by silver objects, some dating back to 1670, they discussed Company business, mainly reports of the Canadian Committee, which met each previous Thursday. Over lunch they would lapse into a wider discussion of public affairs, occasionally touching some such tangent as dismissing the latest biography of Lord Keynes for being the work of an Oxford man struggling to understand a Cambridge mind. The east wall of the walnut-panelled boardroom was covered with a map showing the Company's posts and operations, visited yearly by the Governor or his deputy. Most shareholders' annual meetings (still called ”Courts”) were quick and tame affairs'- an elapsed time of seventeen minutes in 1957 was the record for speed. ”One frail old proprietor,” recalled Links, ”used to refer at the annual Court to the previous speaker, equally frail, as 'the adventurer who has just sat down,' probably correctly, since we were 'the Governor and Company of Adventurers of England, trading into Hudson's Bav.- Immediately after the Second World War, bankers became significant on the 11BC board, mainly in the person of Sir Eric Faulkner (later chairman of both Lloyds Bank and Glyn, Mills). He had won a football Blue at Cambridge, partic.i.p.ated in the retreat at Dunkirk, fought against Rommel, done all the important things expected of an all-round English gentleman of his generation, yet he regarded his dozen years with the HBC as very special.

358 MERCHANT PRINCES.

Sir Edward Peac.o.c.k

”During the 1930s when I first went to Glyn's,” he recalled, ”I thought that if I ever did succeed in getting up the ladder and was allowed to take outside directors.h.i.+ps I would love to be invited one day to join the board of the Hudson's Bay Company. By chance fate dealt the cards that way. I well remember saying laughingly at one of our board meetings, 'G.o.d, what a Company this is, never a moment of peace. There is always turbulence somewhere.”' Sir Martin Jacomb, another distinguished bankerwho also served on the HB(' board, reached a similar conclusion. ”Some inst.i.tutions,” he said, ”although they are only legal ent.i.ties, do have real organic personalities. The Bay transmits that feeling to anyone who comes in contact with it.”

One of the HB(:s great strengths A as the active interest in its financial welfare displayed by the Bank of England. The Old Lady of Threadneedle Street had actually been founded twenty-four years after the THE LORDS AND THE GOOD OLD BOYS 359.

Hudson's Bay Company-a fact successive central bank governors were never allowed to forget-but the two inst.i.tutions remained very close. Half a dozen Bank of England governors and directors had been either gover nors or directors of the HBC, Including SirJohn Henry Pelly, Henry Hulse Berens, (' corge Joachim Goschen, Sir Robert Molesworth Kindersley, Sir Patrick Ashley Cooper, Lord Cobbold and, above all, Sir Edward Peac.o.c.k. The Canadian-born financier had for two decades been a dominant figure in the Bank of England and later became senior partner of Barings, the London money house the Duc de Richelieu, premier of France, had in 1818 dubbed Europe's ”Sixth Great Power,”

alluding to the continent's economic order being ruled by England, France, Prussia, Austria, Russia and Baring Brothers. Peac.o.c.k, who became an 11B(' director in 1931 and stayed on the board for the next nineteen years, was also an adviser to the Royal Family and had been inti inately involved in matters financial and otherwise con cerning Edward V111's abdication. His influence on the 11BC , s economic deliberations over two crucial decades was considerable, and it was highly conservative.

Because of existing tax laws, the English shareholders much preferred capital gains to income, so that stock splits were more desirable than dividends. The Company's capital funds were grossly inadequate to keep it expanding along with the C anadian economy because until 1960 the HBC refused to borrow. ”We all hated hotrowing and considered any loan a blister on the balance sheet,” Keswick confirmed. ”Mum told us you mustn't overspend your allowance, and that was the British discipline. We were against borrowing because we saw all around us people borrowing tremendously and getting into difficulties, and we didn't want our beloved Hudson's Bay Company to get into trouble. We may have missed some tricks, but we were old-timers and had seen accidents happen before.”

360 MERCHANT PRINCES.

The real paradox was that despite their ”blister on the balance sheet”

att.i.tude and the rigid corporate directives that flowed from that bias, the London directors were often less averse to risk than the Winnipeggers. ”It always seemed to me that we were more anxious than the Canadians to modernize and keep tip with the times,” Faulkner recalled.

”Few of the Winnipeg directors got around the country or the Company, and so were inclined to miss opportunities. We could never persuade them to travel much outside Winnipeg. They might have a look-in at the Vancouver store if they happened to be there, but we'd often add a week or two to our tours and go to the really remote places, into the Saguenay country or way up into the Arctic, where we were welcomed by the staff who were delighted to see a director, even an English one.”

THE DICHOTOMY OF THE MENTALITIES at work in Winnipeg and London reached far deeper than that. The Canadian West is a land of long memories. At the turn of the century, Winnipeggers had felt at the very forefront of Canadian civilization. The Winnipeg Telegram proudly reported in its.f anuary 29, 19 10, edition that the city had nineteen millionaires, pointedly adding that Toronto, many times its size, had only twenty-one.