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Competition and Profitability

Table of Contents



Title Page
Author's Note:
Introduction
Origins
Design
Construction
Table 1: Estimated Cost per Ton of Early Canadian Great Lakes Steamboats
Management
Operation
Competition and Profitability
Sale
Conclusions
Notes
Table of Illustrations
Index

In discussions of the Frontenac's rivals, the only name which usually surfaces is the Ontario. This is hardly surprising when most accounts focus on the race to be the first steamer on the Great Lakes. They ignore the fact that, by and large, the steamers worked different sides of the lake and served different ports. There was little need to compete directly, except for the passenger traffic bound from Niagara Falls to Montreal. And for this largely American traffic, the Ontario, which ran through to Ogdensburg, held the advantage.

Some have seen the Charlotte as a sister ship to the Frontenac, owned by the same merchants, and built in the same yard by one of the same shipwrights, Henry Gildersleeve.81 Moreover, the Charlotte ran on a complementary route--up the Bay of Quinte and down the St. Lawrence to Prescott. This, however, seriously distorts the relationship between the two vessels.

The controversy in the Kingston Gazette in the winter of 1816 has already been touched upon. This debate provides valuable insight into the earliest stages of the Charlotte's history. After being hard pressed by his critics, the Frontenac's lone defender charged them with supporting "a band of aliens in conjunction with a few individuals in this Province, unworthy of the name Britons, [who] have it in contemplation to build [a steamboat] on the Canadian shore, with the express design of evading the duties which they expect to see imposed on American shipping..."82 A subsequent rebuttal described the promotion as the work of a few men of "scanty means", who planned a small steamboat, albeit with an American engine.83

The Charlotte was indeed supplied with an American engine. She was owned, not by rich magistrates like Kirby, Markland or Smith, but by small merchants with Ernesttown and Bay of Quinte connections--men like Finkle and his partner, Solomon Johns, Daniel Washburn and Smith Bartlett. 84

When the Charlotte appeared, she began pioneering the "Bay and River" route, as it became known. Despite this, the following winter, the Frontenac's proprietors concocted an ill-conceived scheme to compete with the Charlotte on the river. They engaged a line of Durham boats to forward freight from Kingston to Montreal. One of these was fitted up as "an elegant Passage Boat" which was to leave Kingston on the arrival of the steamer. Given that the Charlotte also attempted to co-ordinate its departures with the Frontenac's advertised schedule, the plan did not have much of a chance. 85

After their first legislative rebuff, the proprietors of the Frontenac seemed most concerned with improving their competitive position relative to the schooners on the lake. Tonnage being a measure of freight carrying capacity, they argued that the duties were particularly onerous for steamboats, much of whose interiors were occupied by the machinery, fuel and passenger cabins. This was weakly buttressed by a plea that the cost of fuel meant that the Frontenac's operating expenses were also much higher than those of schooners. 86 Their protest that a shallow Burlington Bay Canal would promote "a monopoly of the increasing freight of that extensive and fertile country ... in favor of small Vessels" is especially hypocritical.87

Many of these complaints were prompted by very disappointing financial returns. Lamentations were frequently voiced about the Frontenac's financial failure. In a petition to the Legislature after the second season, the management committee defended their case by highlighting the benefits accruing to the province as a whole, while "the prospects which Your Petitioners have of deriving individual advantage therefrom are distant and precarious." 88

Nevertheless, there were operating profits. Stockholder, Alexander Hamilton made a couple of attempts to secure his dividends for the years 1820 to 1824. His claim amounted to 67.9.10, which would indicate a dividend of just under 17% on a share nominally worth 100. 89 But steamboats were capital which depreciated relatively quickly, and the profits had to repay both the value of the original share and a reasonable rate of return. To clear 10%, the average earnings over ten years had to be 20%. Hamilton's claims were for the years after Upper Canada had weathered the unusual summer storms, the bad harvests and the post-war depression, and therefore probably represent her most profitable years.

 


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