PELLATT THE PLUNGER
A Few Stories About a Spectacular Figure in Finance
J. L. RUTLEDGE
YOU can call a man a plunger, or you can call him an incurable optimist. Given a vigorous personality it is merely a matter of viewpoint.
To the friendly heart it is optimism, to the overcautious or unfeeling it is mere reckless plunging.
If the word plunger is used in this article, it is used from neither viewpoint, but merely because it carries with it a certain picturesqueness that is lacking in that other much-abused word. Perhaps also it suggests as well as any word well can the idea of a certain jaunty tilting at fortune to win or lose it all, that some decry and some admire in the character and career of Sir Henry Pellatt.
Sir Henry is not a card player, yet if one might use the terminology pertaining thereto it might be said that in his hey-day he was ready to “sit in” at anything that in his judgment seemed to show signs of promise, and to staysitting when other more wary players had cashed in their winnings or their losses and returned to less exhilarating pursuits.
Perhaps it was this that has suggested to the casually observing public the idea of the plunger rather than the born financier. One of those who has known him well for many years remarked :
“He isn’t a financial genius and never was. He had money when everyone else on the street had it, while the financial genius has the money when everyone else is cleaned out.”
To get any real slant on this man one has to take a glimpse at his early life and the ambitions and interests of his youth. In his young days track sports had not departed to the limbo of practically forgotten things, and in his day Pellatt was the champion “miler” of the continent, as well as making a very creditable showing at other distances and in other contests.
Those who can hark back that far will remember those other days, also, as the hey-day of sport in the smaller towns. Professionalism hadn’t crowded many of these smaller sporting centres to the wall and Ontario towns like Elora,
Fergus, Orangeville, Walkerton and Kincardine had their lacrosse teams and gained a certain measure of immortality thereby. Those were the days too when the game was played as it was first played by its Indian originators, with a pleasantly sanguinary disregard for life and limb. Masks and paddings as a protection were unknown. When the ball came in your direction you caught it or spent the subsequent few weeks munching a clinical thermometer and taking nourishment froma spoon.
Now just what effect all this hard hitting and hard playing had on the after life of the players it is of course impossible to say. But anyone who was a follower of the sport at that time can enumerate the players and tell you how this one is head of a great Chicago bank, that one is the energy and brains of a great trust company, still another is a railway executive; and when you come to the end of the list you will probably hear the name of Henry Mill Pellatt.
He comes last, because to this day after many years in which his name has been more or less regularly and more or less dramatically brought to the public attention, no one appears to know just where to place him. He has many good friends, and a host of hearty enemies. In addition to that he has in some way got himself so inextricably mixed up with the financial interests of the country, that' even his enemies have on numerous occasions come hurrying to his assistance, lest through harm to Pellatt harm should befall them. Perhaps it would be better not to claim that he is a financial wizard, and thus bring on our heads hoots of derision from a varied assortment of enemies, nor yet to speak harshly of him, and give his friends the opportunity of throwing in our teeth his many generous acts. In the financial life of Canada and of the Dominion he has for many years past at least been unquestionably “among those present.” So let it go at that.
_ Sir Henry began business with his father at a comparatively early age, his father Henry Pellatt being associated with Sir Edmund Osier under the firm name of Pellatt and
Osier. Starting with a clerkshiplin the office, it wasn’t long till he had his hands on most of the wheels of the business. At this time the elder Pellatt came to the conclusion that'he had made all the money he needed or wanted and decided to retire, so he sold the business to his son, Sir Edmund Osier having retired from it in the interval. The name was changed to Pellatt and Pellatt', its present style, and young Henry started in to clean up enough money to pay off his indebtedness to his father. He tackled this business with the nerve and confidence in his own judgment that have stayed with him to the present day, and within less than four years he might have had a little gathering for the ceremony of burning the mortgage had he so wished, for every cent of his indebtedness to his father had been paid.
Money was not made as readily in those days as now, nor yet in such pleasant quantities. Despite that fact in those early four years young Pellatt proved, what has frequently been demonstrated since, that he and money seem to have a distinct mutual attraction. If he went near where it happened to be, it seemed to stick to him.
About the time he entered the brokerage business the West was beginning to gain its hold on people’s minds. The Canadian Pacific had only recently been put through and people were beginning to think of it as a land of opportunity. Young Pellatt went and saw it for himself. He came back with an absolutely unwavering confidence. At that time the Northwest Land Company was in its infancy and its common stock could be bought at from $10 to $12 a share. Pellatt bought it, bought all that offered. Every time he dropped into the Stock Exchange he would look up Northwest Land, and whatever shares were offering he bought.
It began to be quite a joke around the Stock Exchange. Northwest Land was not then considered much more than a gambler’s chance, and most of the brokers were looking for young Henry to get singed. However he was looking for it, they reasoned, so there was no use shedding tears over his probable fate.
Every time he entered the Exchange some wit would shout: “Got some Northwest Land, Harry, at 14. Want it?”
“All right,” would come the reply, “I’ll take it.”
He got a lot of it because the people who had only a half-hearted confidence in the West looked at a fractional advance as found money and closed out with enthusiasm. Young Henry tucked his Northwest Land stock away in the safe till the safe walls bulged pleasantly, waiting for his confidence to be justified. If it was a plunger’s chance, as some at that time averred, at least the plunger's chance won. That stock tripled and quadrupled in value and even then did not stop. When he eventually sold out
his Northwest Land stood him in a profit somewhere between three and four hundred thousand dollars.
Developing Power at Niagara
'T'O Sir Henry Pellatt a good deal of credit must be given for the development of electrical power at the Falls. He was at the time president of the Electric Light Company, and of the Electric Development Company, and he had his eyes fixed on what the Americans were doing at the Falls. The fact that the Americans had already one plant on the Canadian side and were contemplating another, with which to supply American citizens with cheap power and light, was like a fox gnawing at his vitals. He didn’t like the feeling, so he decided it was time something was done. He went to Sir William Mackenzie with a proposition.
“I have the Electric Light Company,” he said, “and you have the Toronto Street Railway. That means a sure market for our power. What do you say to forming a syndicate toAbring power from the Niagara River to Toronto?”
Sir William was never one to jump at a minnow until he was dead sure that it really was an honest-to-goodness minnow, so naturally there was some humming and hawing about this proposition, but the upshot of the matter was that the syndicate went through and resulted in the Toronto and Niagara Power Company. And Canada was put on the Hydro-Electric map.
In the fifteen years from 1885 to 1900 the development of Canada was very slow and to a man who wanted to make money fast, and who more even than that wanted to put across a lot of big schemes, Sir Henry was faced with the fact that they were not very happy times. He put his money in this, that and the other thing, and when times grew somewhat hard, he was often in an unpleasantly precarious position. There were doubtless others who were in an equally uncertain situation, but their interests being less widespread the public knew less about them.
In the Days of Panic
TT was in the panic year of 1907 that Sir Henry came
nearest to trickling off the financial horizon. With his usual optimism he had spread himself out pretty thin, figuratively speaking. He held a very considerable amount of Canadian securities as well as American, and when the crash came in the United States and panic spread black ruin over many financial institutions in that country, there grew up as a natural result in Canada a nervous depression, and a tight money situation. Sir Henry had borrowed largely on call from various banks, hypothecating various stocks as security. The banks grew nervous at the situation and began to call these loans, first one and then another. Sir Henry was caught in an adverse market and could not pay. Thereupon the banks began to sell his holdings to cover their loans. But the proportion of Canadian holdings was unusually heavy, and it did not take much of this sort of business to demonstrate very emphatically that the market could not in its present condition absorb these stocks. That was a pretty situation for the banks. They began to realize that if Pellatt failed his failure would cause a general depression that would do them more harm than if they lost the Pellatt loans.
On the Street, however, there was a fairly optimistic feeling, and the brokers generally were not inclined to look upon the situation as serious. It was hard for the banks to seek assistance against this generally optimistic feeling.
It was jast at this time an aggressive investigator on one of the Toronto papers got wind of the situation, and in a Sunday edition of his paper there appeared a small item announcinè the failure of Sir Henry Pellatt. Just where this information was secured, or what basis there was for it at that particular juncture no one has been able to find out. At that time Pellatt certainly had not failed. Small as this item was it burst on the financial community late Saturday night like a thunderclap. If Pellatt failed there were a host of smaller fry who would suffer severely, and probably it would only be the first of a series of failures, and the whole black panic that was overwhelming the neighboring republic would be repeated here.
There was no question now in the minds of any financier, that however sound his holdings might fie in the present, uncertain condition of the market, Pellatt’s large holdings of Canadian securities could not he negotiated. Yet that had to be done to meet the demands of the banks. That was the problem. There were informal gatherings of different financiers during the early hours of Sunday, and on Sunday evening a general gathering There was ja noticeable tension on the gathering. Someone suggested that they ’phone his house to see what was keeping him.
This suggestion was seized upon eagerly. The reply came back that Sir Henry had not been home that night. It is an illuminating sidelight on the strained nerves of those present that nobody seemed to remember that Sir Henry often stayed at his farm near the city.
There was a profoundly sober tone to the gathering next morning. The arguments ceased and arrangements were finally made for a distribution of certain of his holdings to protect his loans. Pellatt was solvent, and had been saved from failure—but would that save the situation? The unspoken thought never found utterance.
Into that gathering of careworn, haggard faces stepped the man who for days had been standing at the brink of failure -—jaunty, carefree, his face giving evidence of a thoroughly rested and wellcared-for body.
“Sorry to be late,” said Sir Henry>
“but you fellows kept me up so dashed long last night that I overslept.”
What is it, lack of appreciation, callousness, nerve, or the cureless optimism of the plunger? Choose for yourself.
Once When He Fell Asleep
TN fact, this stormy petrel of Canadian
finance is always free and easy in his methods. He has, for instance, the gift of being able to fall asleep on almost any occasion and in almost any place.
It is spoken of as a gift, for everyone will realize what a world of boredom he is spared by the happy faculty. There was one occasion, though, when this gift appeared a disadvantage.
Sir Henry had proceeded to the meeting with pleasant anticipations. Other members of the directorate controlled the preferred stock. He himself controlled the common, and he felt that the profits, after the dividend had been paid on the preferred, should be applied to an increased dividend on the common. There was a soothing feeling in this very thought and, as the chairman rose in his place and led the bored directors through the past year, which they knew as well as he, the directors yawned and gazed out of the windpws. Not so Sir Henry. Under the soothing influence of that monotonous voice he soon dropped off into a sound snooze that was punctuated with pleasant dreams of coming profit.
The chairman ceased speaking but Sir Henry slumbered on. With solicitous care that he should not be wakened the directors proceeded to business. The regular dividend on the preferred was declared. Then came the matter of the disposal of the balance of the profits. If a dividend on the common were declared the sleeping giant would profit largely, and the balance of the directors comparatively little. Suddenly they remembered a clause that provided for the retiring of the preferred at a handsome premium. Everyone there knew that Sir Henry was confidently expecting a dividend on his common stock, was prepared to fight for it, and would unquestionably fight successfully. They looked at the recumbent figure anxiously. No premonition of trouble disturbed his gentle slumbers. The directors thereupon voted the retirement of the preferred.
History draws a kindly veil over the closing scene of that gathering. What Sir Henry thought, and probably said when he learned what had happened, remains a matter of conjecture, conjecture that those who know Sir Henry can paint in lurid colors. His fellow directors, of course, held the trump cards. He had been at the meeting and had not voted, and business takes no cognizance of the virtues and advantages of the forty winks.
Certain men, great and otherwise, have become inextricably associated in the mind’s eye^with one pos-
session; Mohammed and his coffin; Whittington and his cat; George IV and his waistcoats; hence, also, Henry Pellatt and his castle. It is not possible to write anything about Pellatt without lugging in the castle. For one thing it throws so much light on the character of the man himself; a plunger, yes; a piker, no; flamboyant, ambitious, ostentatious ; tenacious and tremendously resourceful. The castle sums up and expresses its owner to the crossing of at.
His methods of getting rid of money, for that seems a more correct way to speak of it, have certainly been spectacular.
When at the time of the Queen’s Jubilee he went to London, taking with him at his own expense the Bugle Band of the Queen’s Own Rifles, the general public believed that he had pretty well taken leave of his senses. Somewhat later, however, he outdid himself by taking over the whole regiment of 600 men at his own expense. At another time he entertained the whole membership of the Ontario Horticultural Society at his home.
Then to make the public still more popeyed over his exploits, he built the castle.
There is no need to describe it. Everyone who has ever been in Toronto has seen it. Certainly everyone has read descriptions of it —Casa Loma. Probably the most elaborate home of any individual on the continent. It has everything.
The story runs that some visitors were being shown over the castle by a guide. They had seen the “Pink room,” and the “Rose room,” and the “Blue room,” with their eyes bulging out with amazement so that you could have knocked them off with a stick. They were shown the swimming-pool, the elevators, and ~ finally came to the billiard room, which is about large enough to house a Horse Show.
“What could they possibly need a room this size for?” piped an elderly spinster.
From the back of the line came a dazed voice; “For a meeting of the creditors.”
It differs from the English homes on which it was modelled in that it was not set in a large estate nor surrounded with a forbidding fence. It is set where everyone passing within miles of it must see it, and is bisected by roads running through the estate, so that everyone may enjoy its beauties; at least so say his friends. It is set where the casual passerby can hardly help butting his innocent head against its turrets and thus be made cognizant of the name of Pellatt, say those not so well disposed. Certainly its owner looked upon it as a building that would do credit to the city as well as to himself .
The stables of the castle were first completed, and it looked for a time as though that was about all there was going to be, not but that the stables alone would have been pretentious enough for the average millionaire, for their tiled interior and carpeted floors had more a suggestion of humans than horses. But again there was a change of
fortune and the grey stone-palace began to take shape on the hill. It is outwardly completed now, but inwardly the work still goes on, and probably always will, for Sir Henry has plenty of ideas and the castle is one of his hobbies. There is a goodly fortune sunk in it also. In fact, it has more than once almost jeopardized his fortunes.
On one occasion it is said when his financial arrangements had become somewhat complicated, one of the banks demanded more security to cover its loans. By that time the castle had come to the place where it figured as an asset rather than a liability, so it was agreed that, just as a formality, Sir Henry should give the bank a mortgage on the property. As this was only a temporary matter it was agreed that the mortgage should not be registered. It went to the office of the bank, and fell into the hands of a clerk who, knowing nothing about the agreement, promptly registered it. Once registered the information became public property, and once more the newspapers came out with the story of Pellatt’s probable failure.
Sir Henry is not only the owner of Casa Loma, but of a country estate in King Township, Ontario, that comprises 1,800 acres. This farm is perhaps not run on a basis of bread and butter needs, but more to give rein to Sir Henry’s love of good stockand of outdoor life than for any other reason.
Recently at this farm near Toronto there was a gathering of the township’s agricultural interests, and a display of livestock. The farmers had driven in from all parts of the county with their wives and sweethearts, and the best stock that they could muster. It was a gala day, and there was a crowd that seemed to suggest that there weren’t many people left to do the chores back on the farm. There was an Englishman present, and one of Sir Henry’s friends was doing the honors of the occasion. Noticing a crowd of fine horses, their manes and tails bright with ribbons, and each one decorated with first prize cards, he stopped with pardonable pride.
“I tell you,” he said, “you’d go a long way to find a better looking lot of horses than that, and every one of them gathered from this one township.”
The Englishman had just voiced an enthusiastic assent to this patriotic sentiment when Sir Henry’s voice broke in: “All from one township, H—, all from one farm. Those are all my horses.” He is a lover of horseflesh and livestock generally, and he has had the money to cultivate this taste, and his enthusiasm in the cultivation of better stock has been of value.
A Final Word
THIS is not intended as a sketch of Sir Henry Pellatt, but merely a rather loosely correlated selection of stories relating to what unquestionably is a picturesque career. Nor is it in any sense an attempt at a valuation. One questions if anything in the way of an accurate estimate of him could be made. There are plenty of people who are ready to laugh and scoff at him. There arcplenty also who are ready to yield him their respect and affection.
Good friends and cordial enemies: What more can a man ask?
One of his traits has been purposely left for a last word; for to the scribe and chronicler it is one of most vital importance. He has remained as simple as a boy at heart, with the boy’s good humor and somewhat careless optimism, the boy’s good-fellowship and kindness. It must be said, too, that for all the seeming ostentation of the man there yet remains about him a certain simplicity. His offiee is unprotected by a doorkeeper.
“Want to see Sir Henry ? Well he’s in there. Just go
IN the March 15 issue of MACLEAN’S (just two weeks to wait) will be found a number of quite unusual features. For instance: “Eight Months Adrift in the Arctic,” by Storker Storkersen. The first instalment of a remarkable narrative by the lieutenant of Stefansson, who with a party of men drifted across Beaufort Sea on open ice; written for and appearing exclusively in MACLEAN’S. “The Underground Systemby Mrs. Emily F. Murphy. , The second of Mrs. Murphy’s articles on the drug habit in Canada, in which she shows how the illicit traffic is carried on. “Commerce in the Clouds,” by J. Vernon MacKenzie, an article on the great development of aircraft for commercial purposes in Canada.