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

2. The Opportunity

At first glance the economic conditions in 1838 scarcely seem conducive to major innovations in an enterprise involving as much overhead capital as the steamboat trade. Depressed conditions in the Canadian provinces were compounded by a major international economic downturn. Immigration had retreated from the peaks of the early thirties.(18) This situation was further exacerbated by a failure of the region's staple export, wheat, in the 1835-36 period.(19) Outraged by the Lieutenant-Governor's delaying their suspension of specie payments, and reeling from the assignment of the firm through which they tapped the London money market, the local chartered banks had trimmed their business to a bare minimum.(20) Consequently there was a dearth of money circulating in the province. With the principal staples of import and export both slumping, and with little but personal paper to meet financial obligations, the times did not seem auspicious for a major new venture.

Even as the merchants in the province's commercial centres began calling on their debtors, some farmers in the Toronto hinterland had actively risen in rebellion. The resulting debacle spelled utter ruin for the local radical reform party but was an undisguised blessing for the depressed steamboat trade. One of Hamilton's boats, the Traveller, had only just been laid up for winter when the authorities pressed it into service ferrying troops and messages about the icy storm-lashed waters of Lake Ontario. At various times during the winter other vessels would be requisitioned as well, their owners being well compensated for the hard use in inclement weather.(21)

Throughout this period rumours were circulating of further uprisings in the spring or summer. To counter this more troops were to be brought in as soon as navigation reopened.(22) An exciting opportunity consequently arose for those in the business of transporting people. For years the British Commissariat had been tendering for vessels who, for set fees, would have the exclusive right to convey military personnel and stores about Lake Ontario. From his first entry into the trade Hamilton had been involved in this contract.(23) The 1838 troop contract, it was confidently anticipated, would be worth far more than any offered since the War of 1812. Hamilton, for one, was determined not to let it slip from his grasp.

A call for tenders for the troop contract was finally advertised on the first of March.(24) Despite the prevailing economic conditions Hamilton set about collecting all the available boats. Three he already controlled: the Great Britain and Traveller he owned and the Commodore Barrie had been leased from Gildersleeve and his backers.(25) Three more were chartered for a period of several years, the St. George from Smith and the Cobourg and Hamilton from their respective management committees.(26) Whether he first attempted to charter vessels from the Jones' interests is unclear, but the agreement with them reached by the first of April involved their providing two vessels and taking a two-eighths share of the contract money.(27) However, no sooner had Hamilton's other arrangements become public than it was announced that the Joneses were going to run their vessels in an opposition line combined with two American boats.(28)

The very size of the Hamilton operation soon attracted a second opportunity. Although overshadowed in the short run by the military activity around the lower Great Lakes, the mail contract would be of greater significance in the long term. Ever since steam's introduction to the waters of Upper Canada, the news carried thereby had rapidly outstripped the lumbering stage coaches of the Post Office's contractors. Although occasionally local postmasters had arranged for a boat to accommodate the mail this had never evolved into official policy.(29) Instead, with inconvenience compounded by the exorbitant rates charged for Her Majesty's mails, considerable correspondence was exchanged through an informal network in which the steamboats played a leading role. Even as late as 1840, informal estimates held that the majority of the private correspondence of the region was carried by steamboat passengers and crew, whether for purposes of good will or for small gratuities.(30) Such actions, though pervasive, were a direct contravention of the General Post Office's legislated monopoly of the mails of Britain and the empire. Rather than take positive steps towards rendering their monopoly viable, such as reducing the official rates, the irritated local authorities appealed for permission to prosecute those illegally carrying letters. For political reasons, however, founded in part on nagging doubts about the legality of an imperial agency collecting revenues in the colonies, it was deemed inexpedient to sue any offenders.(31) Eventually the impact of the two Canadian rebellions (with the consequent urgency imparted to official despatches) and the enthusiasm engendered by the first commercial crossings of the Atlantic under steam combined to jolt the Post Office out of its lethargy.

Before much of the 1838 season had passed, the Deputy Post Master General, T.A. Stayner, initiated discussions with Hamilton about the daily conveyance of the mails between Kingston, Toronto and Niagara. Stayner's public report of these discussions implies that he had readily accepted the steamboat proprietor's terms and was prepared to execute a major contract. Hamilton, however, had reservations, fearing that his prior commitments to the Commissariat would interfere with the Post Office's rather inflexible schedule. Left with no reasonable alternative Stayner agreed to send the mails by Hamilton's boats whenever their schedules permitted. Such a haphazard agreement necessitated the perpetuation of the stage coach contracts for those times when the steamboats were not available. As a result, the profit- oriented postal authorities were less than satisfied by the interim arrangements.(32)

Nevertheless, in the aftermath of the rebellions the transportation budgets of both imperial departments, the Post Office and the Commissariat, had increased. Hamilton's Lake Ontario and River St. Lawrence Line was a response to these opportunities.

 


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Chapter 5 appeared in FreshWater.