Chapter 1
The Lake Ontario And River St. Lawrence Line (1838-1840)
Table of Contents

Title Page
Abstract
Acknowledgments
Editorial notes for electronic version
Introduction
1 The Lake Ontario And River St. Lawrence Line (1838-1840)
Introduction
1. The Steamboat Proprietors
2. The Opportunity
3. Operations
4. Disintegration
5. Summary
2 The Sub-contract Model (1841-1849)
3 The Cartel Model (1850-1855)
4 Competition and the Crash (1856-1861)
5 The Canadian Navigation Company (1861-1875)
Conclusions
Notes
Table of Illustrations

1. The Steamboat Proprietors

To place the new line in perspective two elements of the trade require close examination, the opportunities afforded by the period and the nature of the entrepreneurs in the steamboat trade. Although, through the medium of the joint stock association boats perhaps several dozen investors had a stake in the trade, the prevailing entrepreneurial style was determined by little more than a half dozen men.

Without question, the most important figure was the Honourable John Hamilton. At age 36 he was already a thirteen year veteran of the trade. In an era when all the Canadian steamboats on the lake were either joint stock or promoter vessels, John together with his eldest brother Robert, had purchased the aging Frontenac and then built the Queenston.(1) This partnership was financially feasible because of the recent distribution of the principal assets of their father's huge estate. In 1823 John had received 6721 York Currency in his father's good debts as well as almost 5600 acres of land. This was the balance owing after the expenses of his classical education in Edinburgh and mercantile apprenticeship in a Montreal counting house had been met.(2) Even before Robert's retirement in the mid-1830s it appears the brothers had divided their assets, while continuing to operate their boats on complementary schedules.(3) John's position was reinforced by a strategically sound marriage to Frances Macpherson, a sister of the senior partner in Macpherson and Crane, the principal forwarding firm in the Rideau-St. Lawrence freight trade. Through his brothers' and in-laws' marriages Hamilton became connected with the other key compact families in the Niagara and Midland Districts.(4)

These powerful social and mercantile connections prompted his appointment as a Legislative Councillor in 1831. Despite a spotty attendance record and low political profile John Hamilton would serve continuously in the upper house, first provincially then nationally, until his death 51 years later. It is an impressive record until weighed against his actual contributions to the legislative process--chairing the occasional committee on legislation and an irregular attendance on the St. Lawrence Canal Commission.(5) However, his participation did place him in a prominent position whenever the government required the services of any of the area's steamboats.

Although Hamilton was the foremost personal proprietor on the lake, two others were deserving of attention. The first, David John Smith, was the son of a pioneer Upper Canadian merchant who would eventually base his operations in Kingston.(6) Smith, who was involved with several joint stock vessel associations beginning with the Frontenac, had invested heavily in the boom co-inciding with the opening of the Rideau Canal and the first major surge of immigration. In a controversial move two years later he had purchased the St. George from its original owners, a firm in which he had featured prominently.(7) Aside from this he was associated with a succession of provincial banking ventures before being appointed treasurer of the Midland District in 1840, a position from which he would be forced to resign several years later in the midst of a scandal.(8)

Occasionally associated with Smith was one of his brothers- in-law, Donald Bethune. In 1838 the owner of only one vessel, the Britannia, Bethune was poised on the brink of a period of expansion which would see him for a time eclipse even John Hamilton. Like Hamilton, the youngest of several sons, Bethune had had few of his rival's advantages. His father, a Presbyterian cleric, had not had any fortune to bequeath. Instead Donald was trained in the law by Jonas Jones of Brockville and had sought social advancement through patronage and politics.(9) The impulse to divert some of his energies from the law and officeholding into the steamboat trade may have come from Smith, the Jones family or even two of his own brothers. All of these men by the early 1830s were taking leading roles in the management of joint stock boats.(10)

Collectively the five Jones cousins made up another centre of power in the trade. Henry and Sidney Jones controlled the third largest forwarding establishment on the upper St. Lawrence.(11) Together with their cousins, Jonas, Charles and Alpheus they promoted, managed or acted as agents for several of the key joint stock association vessels, including the Brockville,William IV,Sir Robert Peel, and Dolphin.(12) Because of the ownership pattern of these vessels the Jones family's efforts to co-ordinate their activities were seriously hampered, which may account for their low profile in standard histories of the trade. Apart from their marine investments and the insurance company they had promoted to protect them, the Joneses were a major component in the Johnston District family compact, holding several major offices and engaging in a variety of other business ventures.(13)

Two individual promoters stand out from the rest. The more prominent of these was Henry Gildersleeve, a Connecticut Yankee shipwright who had assisted in the construction of the Frontenac. His fortune was amassed by promoting steamboats, which he would subsequently design and build. Although early in his career he had also served as captain, by 1837 Gildersleeve had retired to the roles of managing director and agent. He was unique in another respect, confining his active operations to the sheltered waters of the Bay of Quinte and the inside passage to Kingston. This was not to say that he would not lease vessels for operation on the wider waters of Lake Ontario. In fact, in 1837, John Hamilton and one of his cousins, Captain Herchmer, had chartered the Commodore Barrie from him for just such a service. Apart from the Kingston Marine Railway, a shipbuilding and repair venture, Gildersleeve would also be involved in promoting railroads, and would invest in Kingston utilities and financial institutions. Despite their training in the law, Gildersleeve's two eldest sons would succeed their father as head of his varied business concerns, but unlike their sire would participate more actively on the local political scene.(14)

The region's other major promoter, and the only figure with strong connections in Toronto, was Hugh Richardson. Despite his residence in the capital, it was from Niagara District conservative entrepreneur Samuel Street, that Captain Richardson drew most of his financial support.(15) In contrast to Gildersleeve, who had used the returns from his promotions to diversify his investments, Richardson used his dividends to buy out his partners in an effort to become an individual proprietor. By 1837 he controlled one vessel, the Transit, but like Bethune was poised for expansion.(16)

Socially the principal steamboat entrepreneurs in the rebellion era were a relatively homogeneous group. With the exception of Gildersleeve, they were all prominent conservatives, holding or having held a variety of political appointments and elected offices. Moreover, they represented the less virulent strain of "business" conservatism, deeply rooted in the major metropolitan centres outside Toronto.(17) In terms of familiarity with the trade Bethune was the newcomer, with only five seasons' experience. A shared faith in the province's future growth underlay their dreams of expansion. Nevertheless, most were hedging their bets by accumulating public offices and maintaining a diversity of investments. Those few who were challenging the risks by specializing in the steamboat trade would gradually draw apart from the others as the latter strove to minimize their losses from the sharp economic downturn which preceded the Upper Canadian rebellion.

 


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Chapter 5 appeared in FreshWater.