Works Like a Silkworm in His Own Cocoon
J. HERBERT HODGINS
Sir Herbert Holt plays alone hand in business, but usually rakes in the pot with a Royal Flush, or, at least, a Full House. He doesn’t bluff on a pair of deuces.
A MAN of towering physique stepped from the office building of the Montreal Light, Heat and Power
Company, on Craig Street, Montreal, and walked alone to the nearest corner which leads to an unfrequented by-street.
He strode away from the traffic. Then leisurely—one might almost say, forlornly, in the sense that a boulder alone upon a hilltop appears majestically forlorn—he made his way through the cross sections of the city.
Two men followed. Obviously he was deep in thought for he gave no notice. Highways distract; by-ways are conducive to thinking, planning.
From down-town to up-town in this metropolis of definitely drawn commercial areas, they passed, threading erosiotic sections until they reached Sherbrooke street, the smart thoroughfare. Westward they continued until sharply, the solitary walker turned and disappeared into the ultra-exclusive Mount Royal club. “What’s the game?”
“Merely that I wanted to show you what a strangely all-alone sort of individual is the Dominion’s man of power,” said the leader of the following couple. “As an American banker-visitor to Canada I thought you might be interested in observing the remarkable characteristic of a remarkable man.”
The man whom the curious pair had followed was Sir Herbert Holt, eminent banker-financier, brilliant engineering genius. His walk, off the beaten paths and alone, revealed his strength and his weakness.
Above all else, Sir Herbert Holt is an individualist. Where other men have worked with partners— notably, and contemporaneously, Sir William Mac-' kenzie and Sir. Donald Mann—Sir Herbert Holt has pursued his way alone.
FROM the inception of his career in Canada, a nineteen-year old engineer from the north of Ireland, qualified by a Trinity College education he practised his precepts of individualism. Contracting to build long stretches of the C.P.R., in western Canada, Holt sub-let contracts for portions of the work. Indeed, the process of sub-contracting became extendeduntil individual workers were given contracts for digging so many cubic yards. . It was a Holt conception. Laborers, by the day, were paid two dollars. Those who undertook contracts made as much as twelve dollars a day. They worked harder but their return was greater.
You could not commit Holt to theories of socialized labor. He has too great an appreciation of unfettered initiative.
As the laborer, under the sub-contract plan profited, the C.P.R. automatically profited. The C.P.R.’s gain was the time saved in its construction.
Still the resourceful constructionist, Sir Herbert Holt is outstanding as an individualist, in private as well as in business life. Most men make friends who, as years pass, become pals. But sentiment has rarely influenced Holt. He has no intimates. A man closely associated with Holt in earlier days told me he had not seen or heard from Holt for ten years.
“Holt is like the single horse that won’t work in team,” Sir Donald Mann said the other day as we chatted over his early association with the power engineer. “On the other hand,” he added with a twinkle, “you never know if teams pull together. They never tell; j'ust as it is never a wise thing to tell if you don’t pull with your wife!” and he left me wondering if that long-accepted “Bill and Dan” partnership was in reality a business myth.
In a business sense, Holt’s individualistic theories find expression in the powerful organizations which he conceives, and carries through by the sheer dominance of private ownership. His antagonism to public ownership found expression in a conflict with Sir Adam Beck’s hydro power adventure. Ten years ago he confronted Sir Adam with a ten thousand dollar wager that “the average rate for light and power service in Montreal was lower than the average charge of Toronto Hydro Electric.” Sir Herbert has never been called upon to write the ten thousand dollar check.
Holt’s life may be summed up in one word, “business,” with the qualification perhaps that it has been constructive business. He has been described to me as a “furious worker,” and as one who works not for material reward but for the sheer game of business.
He is the simplest of men in his personal habits. Indeed he was once called “Canada’s most unpretentious millionaire.” Pomp would waste his time. His Montreal residence is unpretentious as homes go in these days of the luxurious rich. Neither Sir Herbert not Lady Holt make any pretence of being “society leaders.” He has
no country home; no summer cottage by lake or mountain. A quiet game of cards is his one “dissipation.”
Relentless of others, he is equally relentless of himself. He does not believe in annual vacations. Bowing to modern business ethics, however, he concedes his workers a holiday each year. But his own nearest approach to a vacation is one of his director-missions; invariably with some engineering problem to study out.
“When Canada Was in Making”
TIT OLT belongs to that era we are prone to regard as
J“when Canada was in the making”—a misconception insofar as it leads youth to a conviction that those were days of “cushie” jobs and easy money. Holt came to Canada a young man and a stranger. He had no fortune other than immense capacity, boundless energy and an ambition to succeed. From what I have learned of Holt I do not suppose it ever entered his head to look for a soft job. Holt made his opportunities.
Holt typifies the constructive eras of two centuries, the nineteenth and the twentieth.
B.e found his first opportunity in the Dominion’s railroad era, which was the period when the C.P.R. was laid.
And he found his later, and present, opportunity in the industrial era which came to fruition during the war period’s vast expansion.
In both of these eras he employed those talents which are pre-eminently his by profession and by practice— civil engineering.
Holt undertook his first job fifty years ago this coming spring, under James Ross, who, in turn, became one of the great contractors of the C.P.R., and later was recognized as one of Canada’s industrialists, first
0,thc so'called “coaI bai'‘ras” Ji,ra"
Ross, then a young Scotch engineer, had under contract a rambling line of pioneer R I E R railroad, north from Lindsay, Ont., into the lumbering country surrounding Haliburton.
Perhaps it was a “stroke of luck” which started Holt under Ross. I prefer to think it was the Scot’s discerning “once-over” of the young Celt. Those who retain personal recollection of James Ross recall his analytical mind. His son, Commander J. K. L. Ross, to-day, has a similar acuteness, I am told, when it comes to sizing up horses!
When Ross finished the Victoria railway, as the line out of Lindsay was called, he undertook in 1879 to build the Credit Valley railroad out of Toronto. This actually started from Parkdale, which at the time was reached from the city proper by horse buses.
Those pioneer railways which engineers of two generations ago thrust through the sparsely settled districts of old Ontario—the Toronto, Grey and Bruce; the Toronto and Nipissing; the Midland; the Victoria; the Credit Valley and others—to-day, divisions of the greater carriers which eventually absorbed them, were remarkable training grounds for men, who later became outstanding in the Dominion’s upbuilding. It was the physical as well as the financial difficulties which beset the pioneer roads that proved the making of such men as Holt. The work required virility, courage and concentration.
OLT must have demonstrated ability in his earliest work, because Ross picked him for the superintendent’s staff of the more pretentious undertaking, although Holt was just entering his twenties.
Veterans of the rail tell amusing stories—tragedies in their day—of the vicissitudes of the Credit Valley undertaking. At times its credit was so straightened that it could not secure a ton of coal to fire its engines. Earl> travelers recall waiting in the coaches at Parkdale until the agent, with cash collected from the sale of tickets, could buy the necessary fuel to fill the tender. To such a low ebb had its fortunes dwindled in the early eighties that its promoter, the late George Laidlaw, was ready to sell the whole outfit to the Grand Trunk Railway Company for six hundred thousand dollars—five hundred thousand dollars of which were debts.
With such an impecunious road, young Holt was associated for several years. He resided in Toronto with a brother and sister. He is described by those who knew him then as just a plain, hard-working young man, tall and slim, shy and silent; conspicuous because of a profusion of freckles. He attended to the details of management and proved himself capable, efficient, and painstaking, with a fondness for study.
Holt’s early traits of character have consistently motivated his career. It is told of him that when he was working for a monthly salary of thirty-five dollars, he lived on five and saved thirty. William Mackenzie with whom he became associated, likewise, had a monthly salary of thirty-five dollars. Mackenzie spent his thirtyfive dollars and when he found that one of his fellowworkers have saved six hundred dollars he borrowed it. Mackenzie did not, however, borrow the six hundred dollars to squander it. He used it to enter the contracting business in a small way.
This is the way the two men pursued their lives. Sir William Mackenzie, continually evolving impressive developments, carried them out with borrowed capital. Sir Herbert Holt saved and out of savings pursued his plans. To-day with that mighty utility, Montreal Power, of which he is the master brain, he carries out the principles which actuate his personal undertakings. The corporation is seldom a public borrower. The vast public utility has been built up out of accumulated earnings.
Young Holt made good on the Credit Valley railroad. And when James Ross went west in 1883 to become superintendent of construction on the C.P.R., Holt went with him.
Sir Donald Mann had preceded James Ross by four years. Sir Donald undertook his first contract with the C.P.R. in 1879.
In 1884 Holt resigned as assistant chief engineer and entered upon the contracting business on his own account, building difficult pieces of the road through the Rockies and the Selkirks. “That’s where I first met Holt,” Sir Donald told me.
Sir William Mackenzie also began his contracting work for the C.P.R., in 1884. He started building culverts and trestle bridges in the Rockies—“heavy, difficult work, yes, and important,” as the co-worker-
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Works Like a Silkworm In His Own Cocoon
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of his later years described it to me.
Quits Railroad Contracting
FOR nine years Holt built railroads, in the Canadian West, in the state of Maine, and back in the Canadian West again, where he contracted for branch lines. Ross and Holt and Mackenzie and Mann linked forces and built the C.P.R. from McLeod to Calgary; from Calgary to Edmonton; and from Regina to Prince Albert, through Saskatoon, in the years 1899 to 1902.
“Then we all separated,” was Sir Donald Mann’s cryptic description of the dissolution of the quartette as a constructive force in Canadian railroading.
The Dominion encountered a period of business depression. The railways were “finished”—that is if we may regard Canada’s railway construction as finished, when there is the annually recurring demand for branch lines throughout the West!—the West was being rapidly peopled and conditions were adjusting themselves to a new era of national prosperity.
James Ross and Herbert Samuel Holt returned to the East. Ross undertook the rehabilitation of Toronto and Montreal’s transportation system; Holt, a wealthy man, as wealth was measured in those days, interested himself in the gas and electric power situation in Montreal. Soon after his arrival he plunged with characteristic vigor into a conflict with the late Jesse Joseph, for the presidency of the Montreal Gas Company. The gas company had had a fluctuating career since its formation by leading citizens of Montreal in 1848.
Holt visioned a consolidation of the dozen or more small concerns which were producing and distributing gas and electricity—and all of them bickering in ineffectual competition, as newspaper reports of the time bear out. Holt’s was a notable industrial contest and the credit for the victory is shared in no small way by C. R. Hosmer, whose stock market generalship^ in this, as in other financial “wars,” is recalled by Montrealers of the period. Holt acquired control of the Montreal Gas Company and later of the Royal Electric Company, of which Sir Rodolphe Forget had been president, and then proceeded to build up around these two concerns the mammoth organization of to-day, the Montreal Light, Heat and Power Consolidated. with its $64,000,000 paid-up capital.
Holt mastered the modern principles of gas production at Chicago and Philadelphia. A critical time had arrived for gas. It had begun its struggle with electricity,
the newer force in science. Most persons were inclined to believe that the older illuminant had seen its best days and was destined, within the space of a few years, to be wholly succeeded by electric light.
However, by a series of remarkable innovations, gas-making renewed its youth and laid the foundations for a long and successful career.
Holt believed in electricity but studied the new conceptions of gas-making. He quickly realized the importance of the Bunsen burner, the incandescent mantle, the gas stove and the gas fire. The introduction of the quarter-in-the-slot metre resulted in a significant extension of business among the poorer classes and this broadening of the base established the gas companies of the larger cities in the important position they continue to hold.
Montreal’s gas company was spurred to efficiency by the incessant pushing of electricity for lighting and power purposes and was compelled to turn its attention to the cheapening of supply and the adoption of more economic methods of production. Holt had to face the entrance of a rival, a new gas company formed by John Coates, whose advent for a time was hailed with delight by the citizens. Expectations formed of it failed, however, and its end was absorption by the older concern.
Successive electric companies appeared as rivals in lighting and power production. In time all have come into the Holt organization. But before the present huge creation was effected, Sir Herbert strenuously fought first one and then another of the creations. Holt faced these business battles with an Irishman’s love of fighting. He is a man who seeing his course pursues it steadfastly, deviating neither to the right nor to the left; overcoming by sheer force.
Sir Donald Mann gives Holt credit for “working from the centre, out; the way for any good general to do.” Curiously, too, whileto ail outward intent, utterly scorning public opinion, Sir Herbert has been careful to nurse the public in developing Montreal Power. His invariable policy has been to lower rates to the consuming public before increasing the shareholders’ dividends.
A Master Mind of Powei
AT SIXTY-NINE years of age, Si" Herbert Holt is still the master mind in making bigger, stronger, more powerful, those mighty modern businesses which he created. It has been given to him to make big things bigger. He has retained his firm grip upon the mechanism of his enterprises by constant personal research.
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He has travelled extensively to study electrical developments.
As the mightiest of his industrial achievements, Montrc-al Power, has an outstanding record. The original shareholders have had enormous return, over the thirty-year period. Each share held by original stockholders of the Montreal Gas Company or the Royal Electric Company is now represented by seven and a half shares in the present company.
In other words, the original share for which it may be assumed a stockholder paid $100, has appreciated until, in principal alone, it now represents $1,140, and in the interim holders have had their regular and increasing dividends. A shareholder still living, owned 180 shares of Royal Electric, which shortly before the merger he valued at $28,000. To-day these 180 shares, now amounting to 1,350 shares of Power Consolidated, figured at the high market price of the past year, have an apparent value of $250,000. This disregards entirely rights to purchase subsequent stock issues at par and does not include annual interest payments.
What has built this equity? Unquestionably, Sir Herbert Holt’s fundamental business policy has been the determining factor—Holt’s policy of accumulating earnings, spending less then he earned and using these earnings to build up properties with which to develop fresh undertakings. Every dollar extracted from earnings for new equipment has been made to earn its way immediately. Sir Herbert dislikes non-productive units in an organization.
No Sentiment in Business
TO THE public canvassers for charities, and thevarious philanthropic“drives,” Holt is a comparatively small giver. He has made no notable benefactions as befitting probably the richest man in the Dominion. By contrast, his fellow townsman, the late Sir William Macdonald, millionaire tobacconist, who in his way was reputed Montreal’s, if not Canada’s, wealthiest individual, gave milliojis to endow McGill University.
When sentiment interferes with business Holt “cuts out” sentiment. The story runs that a Montreal financier, who found himself over-extended at the outbreak of war, went to Holt for funds. The bank had declined the collateral which he had to offer. “I’ll lend the money,” Holt is reported to have said—“at twenty per cent.”
Yet.....another story is that
Holt had a job in a railway station, near Dublin before he came to Canada, and, that while there he was treated with kindness by some people in the Irish village. After he came to Canada one of the first things he did with his savings was to send for the family that had helped him; and he started them up in a business in this country.
These are stories which might be confirmed about any other Canadian. But Holt is too self-contained, too downright shy, to tell a newspaperman whether these things are true.
You seldom read of Holt appearing in public or making a speech for talk’s sake. He is too busy with business. Besides, he has an abiding dislike for personal publicity. As an instance my own experience:
I went to see Holt a short time after a brief sketch about him had appeared in the press. I sought to check up the facts related. He declined politely but firmly to revise any biographical data beyond saying that the write-up was “full of inaccuracies.”
“You have only yourself to blame,” I ventured.
“I admit that,” he confessed frankly. “When the newspaper writer came to me I told him of my aversion to publicity of any kind. ‘But I have been commissioned by my editor to get a write-up,’ he urged. ‘Well, then,’ I said, ‘as long as you print nothing libelous I suppose I cannot prevent you—but at least I won’t aid or abet you’. ”
Holt is sufficiently a “public be damned” individual that when Lord Atholstan in the closing weeks of last year, through the Montreal Daily Star, directed an attack upon the public utilities of the Power Consolidated group, Sir Herbert sat back, silent as the sphinx.
It was rumored that Holt planned the purchase of a newspaper for a counter campaign. Nothing would be more removed from a lifetime practice. Holt, face
to face with civic or provincial investigation, I feel certain, would continue to be Holt the unruffled.
Whether the public loves him or hates him, it at least maintains an admiration for his business genius. Recognition of this developed during the Sao Paulo revolution a few months ago. Near-panic arose among Canadian holders of the Brazilian Traction Company’s securities. There was selling pressure upon the exchanges. Then the press gave out an announcement, prematurely, it is true, that Holt would join the Brazilian board. Stock holders were immediately assured, selling of the stock largely stopped and stock market valuations recovered. Sir Herbert did not actually join the directorate; his son took the seat he was expected to take.
Sir Herbert apparently has all the directorships he wants, including a seat on the C.P.R. board. Then, too, entirely apart from his power and industrial activities, he has a Big Business Man’s job, alone, as president of the Royal Bank of Canada.
Holt’s Banking Epic
SIR HERBERT has been a banker since 1902. It has almost faded from the minds of Canadians that when the ill-fated Sovereign Bank opened its doors in January, 1902, the president was H. S. Holt. In its first three years, the Sovereign Bank made spectacular progress; there are those who reckon its career like that of the sky rocket. It was brilliant on the upgrade; but it came a nasty cropper.
Whether or no it was his foresight will probably never be definitely known, inasmuch as Sir Herbert is not a communicative type of individual. The fact remains, however, that in 1905, one of those sudden inexplicable changes took place which set loose all manner of conjectures. All the public ever learned was that the president of the Sovereign Bank had resigned and had immediately become a director of the Royal Bank of Canada. Those who are regarded as “in the know” maintain that Holt could not have foreseen the Sovereign’s unhappy end. Three years elapsed after his resignation before the bank collapsed. Too, it is not consistent with his invariable method to have deserted a ship at a crucial moment; rather he would have delighted in remaining to pilot the menaced craft to port.
It is now said that Holt was marked for presidency of the Royal Bank of Canada when he joined the directorate. In 1906 the Roya' Bank removed its head office from Halifax to Montreal and in 1908 Holt became president.
The Royal Bank of Canada is another example of Hoh’s ability to make a big business bigger. The present expansion began with the absorption of the Union Bank of Halifax, in November, 1910. In 1911 followed the acquisition of the West Indian branches of the Colonial Bank of London, and in September, 1912, the Traders Bank was absorbed. Five years later, in January, 1917, the Royal took over the one hundred year old Quebec Bank and in July, 1918, came to the rescue of the ailing Northern Crown Bank.
In all of these transactions the president took a direct personal interest. Under the Holt policy the Royal Bank of Canada has steadily extended its banking ramifications until it is an influential factor in international finance, with its own branches, in England, United States, France, the West Indies, various South American countries, Newfoundland and Spain.
Holt took hold of the Royal Bank of Canada in 1908 when its paid-up capital was $3,900,000; its reserve fund, $4,390,000 and its assets totalled, $46,351,498. In the intervening years he injected the virus of “big business,” using the mediums of amalgamations and extension to strategic commercial centres. The result is that he has just had the satisfaction of presenting to the shareholders for 1924 a balance sheet showing paid-up capital of $20,400,000; a reserve fund of $20.400,000 and assets aggregating $583,789,509.
Surveying Holt’s life I am reminded of the silk' worm. It works silently but assiduously and creates a silk marvel— but it works within its own cocoon. By curious anomaly. Sir Herbert’s eldest son has just entered British politics.